Annual General Meeting 2001

Items

Item 6: Capital reduction

A. Proposal
7.1. Cancellation of shares repurchased under the 2000 share buyback program
The Board of Directors proposes that the 18,421,783 shares repurchased under the buyback program approved by the 2000 Annual General Meeting be definitively cancelled, that the share capital be reduced accordingly and that Article 4 of the Articles of Association be amended to reflect this.

7.2. Establishment of a 2001 share buyback program The Board of Directors proposes that the following resolution be approved:
The Board of Directors shall be authorized to buy back a maximum amount of CHF 5 billion in UBS shares via a second trading line on the stock exchange. These shares are to be cancelled definitively and are not therefore regarded as own shares within the meaning of Article 659 of the Swiss Code of Obligations. The required amendment to the Articles of Association (reduction of share capital) will be submitted to the AGM in 2002 for approval."

B. Explanations
The Annual General Meeting on 18 April 2000 authorized the Board of Directors to buy back a total amount of CHF 4 billion or 9,673,934 shares (19,347,868 shares following the share split on 8 May 2000) via a second trading line on the stock exchange and subsequently to cancel them. A total of 18,421,783 shares with an overall value of CHF 3,999,425,972 were repurchased under this program between 17 January and 28 June 2000. The average purchase price was CHF 217. The General Meeting is now being requested to approve the definitive cancellation of these shares and the corresponding reduction in capital.

At the same time, the Board of Directors requests the Annual General Meeting to authorize it to again repurchase a maximum amount of CHF 5 billion in UBS shares in 2001. At the closing price on 14 February 2001 on the SWX Swiss Ex-change, this corresponds to approximately 18,200,000 registered shares with a par value of CHF 10 or to 4.2% of the total share capital. The share buyback program was announced on 22 February 2001.

UBS believes that the repurchase of excess capital in the market and the subsequent reduction in capital is in the interests of shareholders, who would benefit from higher earnings per share.

The Board of Directors has decided to again proceed in two stages, with shareholders taking the decision in principle at the first Annual General Meeting and deciding on the definitive cancellation of the shares at the next General Meeting. By obtaining shareholders' approval for the cancellation of a maximum number of shares, these shares no longer fall under the statutory limit, which prohibits companies from holding more than 10% of their own shares. This provides greater flexibility, which UBS believes to be in the interests of efficient capital management and the ongoing trading activities of the Bank.

The auditors Ernst & Young Ltd. have confirmed in a special audit report to the Board of Directors that at the time of their reporting the claims of creditors are fully covered even after the reduction in capital and that the liquidity of the Bank is assured.