Item 2 Stock Dividend Creation of Authorized Capital Approval of Article 4b of the Articles of Association

A. Motion
The Board of Directors proposes the creation of authorized capital in an amount not to exceed 5% of the issued share capital by means of the following addition to the Articles of Association.

Article 4b (new)
Authorized Capital
The Board of Directors shall be authorized, at any time until 27 February 2010, to increase the share capital by a maximum of CHF 10,370,000 through the issuance of a maximum of 103,700,000 fully paid registered shares with a par value of CHF 0.10 each.

The shareholders shall be granted subscription rights for the acquisition of the new shares in proportion to their shareholdings. The Board of Directors shall be authorized to determine the particulars of the exercise of the subscription rights. Subscription rights that have not been exercised will be used as the Board of Directors determines to be in the interest of the Corporation. The Board of Directors is entitled to issue these shares in partial amounts. The Board of Directors shall determine the date of issue of the new shares. The issue price of the new shares is CHF 0.10 and the contribution for the new shares shall be made by converting into share capital freely available reserves in a maximum amount of CHF 10,370,000. The new shares shall be entitled to dividends as from the financial year in which they are issued.

The subscription and acquisition of the new shares, as well as any subsequent transfer of the shares, are subject to the registration requirements set out in Article 5 of these Articles of Association.

B. Explanations
The Board of Directors proposes to create authorized share capital in order to allow for distribution of a stock dividend. Upon approval of the proposed authorized share capital, the Board of Directors will increase the share capital by allotting to each existing share one entitlement. A certain number of entitlements will give its holder the right to receive one additional UBS AG share for free. The entitlements will be tradable on virt-x and therefore allow shareholders to choose whether they wish to receive new UBS AG shares or monetize the value of the entitlements by selling them in the market. The initial theoretical value of one entitlement is expected broadly to reflect the CHF value of the dividend for the financial year 2006 subject to market developments.

The increase of the share capital will not exceed 5% of the share capital issued at the time the entitlements are allotted, or a ratio of one free new share for a minimum of every 20 shares already owned. The exchange ratio will be determined by the Board of Directors, and shareholders will be informed thereof on or by the date of the Annual General Meeting (AGM). No additional shareholders' resolution is necessary at the AGM. It is expected that the record date for allotting the entitlements will be 25 April 2008. Treasury shares held by UBS AG on the relevant record date will not be allotted entitlements for new shares.

For further information please refer to Letter to Shareholders dated 10 January 2008 and the Shareholder Information Brochure dated 31 January 2008 under the heading "Stock Dividend".