Annual General Meeting 2007

Items

Item 5: Capital Reduction

5.1. Cancellation of Shares Repurchased under the 2006/2007 Share Buyback Program and respective amendment of Article 4 para.1of the Articles of Association

A. Motion
The Board of Directors proposes that the 33,020,000 shares repurchased under the buyback program that was authorized by the 2006 Annual General Meeting be cancelled and that, as a result, the share capital of UBS AG be reduced by CHF 3,302,000.00.

Article 4 para.1 of the Articles of Association shall be amended as follows:

Current Version

Proposed new version (changes in italics)

Article 4
Share capital

1

1

The share capital of the Corporation is CHF 210,527,328.60 (two hundred and ten million, five hundred and twenty-seven thousand, three hundred and twenty-eight Swiss francs and sixty centimes), divided into 2,105,273,286 registered shares with a par value of CHF 0.10 each. The share capital is fully paid up.

The share capital of the Corporation is CHF 207,225,328.60 (two hundred and seven million, two hundred and twenty-five thousand, three hundred and twenty-eight Swiss francs and sixty centimes), divided into 2,072,253,286 registered shares with a par value of CHF 0.10 each. The share capital is fully paid up.

B. Explanations
The Annual General Meeting on 19 April 2006 authorized the Board of Directors to buy back a maximum of CHF 5 billion worth of UBS shares via a second trading line on virt-x, in order to subsequently cancel them. As of 7 March 2007, 33,020,000 shares, with an overall market value of CHF 2,415,064,106.50, had been repurchased. The average purchase price was CHF 73 per share (rounded). The value of the shares repurchased under the program was less than the maximum value authorized by the Annual General Meeting.

The Board of Directors now proposes that the Annual General Meeting approve the cancellation of the 33,020,000 repurchased shares and that the share capital in Article 4 para.1 of the Articles of Association be reduced accordingly.

Ernst &Young Ltd. as Statutory Auditors have confirmed in a special audit report prepared for the Annual General Meeting that, from today's perspective, the claims of creditors would remain covered and the liquidity of the Bank assured even with the proposed reduction in capital.

5.2. Approval of a New Share Buyback Program for 2007-2010

A. Motion
The Board of Directors proposes approval of the following resolution:
"The Board of Directors is hereby authorized to buy back a maximum amount of 10% of the issued share capital in the time period ending on 8 March 2010 via a second trading line on virt-x. These shares are to be cancelled definitively and are thus not subject to the 10% threshold for UBS's "own shares" within the meaning of Article 659 of the Swiss Code of Obligations. The necessary amendments to the Articles of Association (reduction of share capital) shall be submitted to the respective Annual General Meetings of 2008-2010 for approval."

B. Explanations
In order to ensure the most efficient capital management, the future repurchase of shares for cancellation is also advisable, to the extent that the capitalization of the Bank permits. The Board of Directors thus proposes that the Annual General Meeting authorize the repurchase of a maximum of 10% of the share capital (210,527,328 shares) over the next three-year period. At the current share price, this corresponds to a total value of approximately CHF15 billion. The buyback program for 2007-2010 was announced on 13 February 2007.

The Board of Directors has decided to submit a three-year buyback program to the Annual General Meeting for approval. This will permit maximum flexibility with respect to capital management, although the Board of Directors continues to have no intention of deviating from the goal of a high capitalization of UBS. The shareholders shall decide on the definitive cancellation of the shares purchased pursuant to the buyback program 2007-2010 at the respective Annual General Meetings of 2008-2010.

This two-step procedure, with the shareholders voting on the general issue at a first Annual General Meeting and deciding on the definitive cancellation of the shares at subsequent Annual General Meetings, has the advantage that, by obtaining shareholders' approval for the future cancellation of a maximum number of shares, these shares no longer fall within the statutory limit of Swiss Company Law which prohibits companies from holding more than 10% of their own shares. The proposed procedure thus provides UBS with greater flexibility, which is in the interest of efficient capital management and of the ongoing trading activities of the Bank.