The European-American Chamber of Commerce

European Country Briefing: Switzerland

Welcome:

Minister Martin von Walterskirchen Regional Director Americas, Switzerland Trade and Investment Promotion Mr. Daniel Bangser Director North America, Switzerland Trade and Investment Promotion Mr. Sbastien Maury Senior Manager, International Corporate Tax , KPMG Switzerland Mr. Douglas Ebert- Senior Advisor Americas , Greater Zurich Area Presenting Sponsor: Host Company: Sponsors:

Country Briefing Agenda

Presentation by Jon Ramey, UBS Director and Complex Manager, Southwest Ohio Presentation by Mr. Daniel Bangster, Mr. Sbastien Maury and Mr. Doug Ebert Interactive Panel Discussion Moderated by Anne Cappel, Executive Director, EACC Cocktail Reception & Networking

Second quarter 2011

GENERALLY ACCESSIBLE

UBS standard presentation

Jon Ramey, Director

Complex Manager Southwest Ohio Complex

July 26, 2011

SECTION 1

Brief introduction to UBS UBS one of the world's leading financial firms UBS facts and figures Worldwide presence Over 150 years of experience

UBS one of the leading financial firms

UBS draws on its 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland. We combine our wealth management, investment banking and asset management businesses with our Swiss operations to deliver superior financial solutions. UBS is present in all major financial centers worldwide. It has offices in over 50 countries, with about 37% of its employees working in the Americas, 37% in Switzerland, 16% in the rest of Europe and 10% in Asia Pacific. UBS employs about 65,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

UBS facts and figures

Know how
Over 150 years experience in private banking About 65,000 people in 50 countries

Financials1
Market capitalization of CHF 59 billion CHF 2,069 billion in assets under management Well capitalized with a BIS Tier 1 capital ratio of 18.1% and a FINMA leverage ratio of 4.8%

Accolades
One of the largest wealth managers in the world One of the largest global institutional asset managers UBS Investment Bank ranked #1 nine years in a row in Institutional Investor's All-Europe Research survey

As at 26.7.2011; UBS quarterly report

Worldwide presence
About 66,000 people in 50 countries

Americas 36% Switzerland 36%

Europe, Middle East and Africa 16% Asia Pacific 12%

Over 150 years of experience

SECTION 2

UBS's business aspiration UBS's strategy UBS governance UBS organization UBS's businesses UBS's strategic principles Integration as a major underlying driver Code of business conduct and ethics of UBS

UBS's business aspiration

Become the leading client-focused global bank

! ! ! !

Strengthen our position as the #1 global bank for HNW/UHNW clients

Continue to have a leading position across all client segments in Switzerland

A top-tier bank in every growth region

A leading client-focused investment bank

10

UBS's strategy
Our business is built on strong relationships
Our joint efforts are focused on
Wealthy investors, institutional and corporate clients, and our domestic Swiss business. Geographically, we aim to be a top tier bank in every growth region. We will optimize the combination of our businesses to generate more value.

In order to refocus our portfolio, we will concentrate our efforts on the following:

Businesses
Build on our strong Wealth Management franchise Transform our Investment Bank into an integrated and client-focused business Manage Wealth Management Americas for increased profitability Monetize improved investment performance in Global Asset Management through gaining new client assets and improving retention of existing client assets

Geographies
Reinforce commitment to our leading position in Switzerland Capture the full value from growth in Asia Pacific and other emerging markets

Clients
Further strengthen our Ultra High Net Worth franchise and increase market share Position Wealth Management Americas as an advice-led Wealth Management platform while focusing on our High Net Worth/Ultra High Net Worth client franchise

11

UBS corporate governance

Board of Directors
The BoD has ultimate responsibility for the success of the UBS Group and for delivering sustainable shareholder value within a framework of prudent and effective controls. It decides on UBSs strategic aims and the necessary financial and human resources upon recommendation of the Group Chief Executive Officer ("Group CEO") and sets the UBS Groups values and standards to ensure that its obligations to its shareholders and others are met. Shareholders elect each member of the BoD, which in turn appoints its Chairman, the Vice Chairman, the Senior Independent Director, and the chairpersons and members of its various committees.

Kaspar Villiger Chairman BoD

Group Executive Board

Under the leadership of the Group CEO, the GEB has executive management responsibility for the UBS Group and its business. It assumes overall responsibility for the development of the UBS Group and business division strategies and the implementation of the approved strategies. All GEB members (with the exception of the Group CEO) are proposed by the Group CEO. The appointments are approved by the BoD.
Sergio P. Ermotti UBS Group CEO

12

UBS organization
Board of Directors Kaspar Villiger, Chairman
Group Executive Board Sergio P. Ermotti Group Chief Executive Officer

Wealth Management & Swiss Bank Lukas Ghwiler CEO UBS Switzerland Juerg Zeltner CEO UBS Wealth Management

Wealth Management Americas

Investment Bank

Global Asset Management John A. Fraser Chairman & Chief Executive Officer

Corporate Center

Bob Mc Cann Chief Executive Officer

Carsten Kengeter Chief Executive Officers

Ulrich Krner Group Chief Operating Officer & Chief Executive Officer, Corporate Center

13

UBS's businesses
Wealth Management & Swiss Bank
Focuses on delivering comprehensive financial services to high net worth and ultra high net worth individuals around the world except to those served by Wealth Management Americas as well as private and corporate clients in Switzerland. Our Wealth Management business unit provides clients in over 40 countries, including Switzerland, with financial advice, products and tools to fit their individual needs. Our Retail & Corporate business unit has a leading position across its client segments in Switzerland.

Wealth Management Americas

Provides advice-based relationships through financial advisors who deliver a fully integrated set of products and services specifically designed to address the needs of ultra high net worth, high net worth and core affluent individuals and families. It includes the Wealth Management US business, as well as the domestic Canadian business and the international business booked in the United States.

Global Asset Management

A large-scale asset manager with businesses diversified across regions, capabilities and distribution channels. It offers investment capabilities and investment styles across all major traditional and alternative asset classes. These include equities, fixed income, currency, hedge fund, real estate, infrastructure and private equity investment capabilities that can also be combined in multi-asset strategies. The fund services unit provides legal fund set-up and accounting and reporting for all retail and institutional funds.

Investment Bank
Provides securities and other financial products and research in equities, fixed income, rates, foreign exchange and precious metals. It also provides advisory services and access to the world's capital markets for corporate and institutional clients, governments, financial intermediaries, alternative asset managers and private investors.

Corporate Center

Provides and manages support and control functions for Group in such areas as risk control, finance, legal and compliance, funding, capital and balance sheet management, management of foreign currencies, communication and branding, human resources, information technology, real estate, procurement corporate development and service centers. Most costs and personnel of the Corporate Center are allocated to the business divisions.

14

UBS's strategic principles

Reputation, integration, execution
Put the clients at the center of everything we do Reputation Treat reputation and people as our most valuable assets Ensure discipline and implement best-in-class governance processes Take a holistic portfolio view in decision-making Integration Deliver the best of all of UBS to our clients Enhance structures & processes for further cost and capital efficiency Ensure consistent high-quality delivery externally & internally Execution Build a strong performance-oriented culture Retain, develop and hire the best talent at all levels

15

Integration as a major underlying driver

Wealth Management From: One brand as the main integrating factor
Silo-business culture

To: Integration as the key underlying force of UBS

Common business goals and holistic group portfolio view Systematic approach with explicit structures/ incentives to enforce integration Delivering the best of UBS to all our clients Full value creation potential through explicit integration measures

Limited integration efforts No systematic cross-divisional client coverage Limited synergy potential captured

Investment Bank

Global Asset Management

16

Code of Business Conduct and Ethics of UBS

The Code defines the way UBS does business
It sets out the principles and practices that UBS expects all of its employees and directors to follow unreservedly. It underscores the critical importance of responsible corporate behavior. It sets out the way we behave in pursuing business opportunities and all our dealings with stakeholders. It is the basis for all UBS policies, guidelines and statements relating to each of our employees' personal commitment to appropriate and responsible corporate behavior. And all related internal and external policies and rules must be complied with.

17

SECTION 3

Our identity Vision and mission Our values Corporate responsibility at UBS

UBS: defining our identity

Our essence What we want to be known for:

Our vision As a firm, we want to be:

Our strategy Collectively, we focus on:

Our values Each of us is committed to:

Return on relationships
Relationships are the basis of our business: We believe that investing in relationships gives the best return for our clients, our people and our shareholders.

The choice of clients worldwide

Thats why we put the needs of our clients and building long-term relationships at the heart of our business. We deliver all our expertise, and execute to the most exacting standards.

Reputation Integration Execution

Our joint efforts are focused on wealthy investors, institutional and corporate clients, and our domestic Swiss business. Geographically, we aim to be a top tier bank in every growth region.

Truth Clarity Performance

19

Our values
Each of us is committed to truth, clarity and performance
Higher standards are the foundation for long term, mutually rewarding relationships. These three values shape the behaviour of everyone at UBS as they work to reach our firm's vision.

Truth
Accuracy. Authenticity. Certainty We behave with respect and integrity. We are accurate, realistic and accountable. We always act fairly and abide by the law.

Clarity
Ease. Simplicity. Directness We make it easy to do business with UBS. We are concise, precise and to the point. We are reliable and consistent.

Performance
Achievement. Execution. Attainment We will always give our best. We will perform to the highest professional standards. We will lead the market through superior service and execution.

20

Corporate Responsibility at UBS

Responsible behavior creates sustainable value for UBS and its stakeholders

Corporate Responsibility
Code of Business Conduct & Ethics
Legal & regulatory responsibilities
Compliance with laws, rules & regulations Combating financial crime Tax compliance

Ethical responsibilities
Ethical standards UBS values Fairness and integrity in client relations

Workplace responsibilities
Responsible employment practices Diversity & equal opportunity Health & safety

Societal responsibilities
Environment Human rights Responsible supply chain Community investment

Communications, training & awareness raising

21

Caution regarding forward looking statements/Disclaimer

Cautionary Statement Regarding Forward-Looking Statements | This report contains statements that constitute forward-looking statements, including but not limited to managements outlook for UBSs financial performance and statements relating to the anticipated effect of transactions and strategic initiatives on UBSs business and future development. While these forward-looking statements represent UBSs judgments and expectations concerning the matters described, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from UBSs expectations. These factors include, but are not limited to: (1) developments in the markets in which UBS operates or to which it is exposed, including movements in securities prices or liquidity, credit spreads, currency exchange rates and interest rates and the effect of economic conditions and market developments on the financial position or creditworthiness of UBSs clients and counterparties; (2) changes in the availability of capital and funding, including any changes in UBSs credit spreads and ratings; (3) the ability of UBS to retain earnings and reduce its risk-weighted assets in order to comply with recommended Swiss capital requirements without adversely affecting its business; (4) changes in financial regulation in Switzerland, the US, the UK and other major financial centers which may impose constraints on or necessitate changes in the scope and location of UBSs business activities and in its legal and booking structures, including the imposition of more stringent capital and liquidity requirements, incremental tax requirements and constraints on remuneration, some of which may affect UBS in a different manner or degree than they affect competing institutions; (5) the liability to which UBS may be exposed due to legal claims and regulatory investigations, including those stemming from market dislocation and losses incurred by clients and counterparties during the financial crisis; (6) the outcome and possible consequences of pending or future inquiries or actions concerning UBSs crossborder banking business by tax or regulatory authorities in various jurisdictions; (7) the degree to which UBS is successful in effecting organizational changes and implementing strategic plans, and whether those changes and plans will have the effects intended; (8) UBSs ability to retain and attract the employees necessary to generate revenues and to manage, support and control its businesses; (9) changes in accounting standards or policies, and accounting determinations affecting the recognition of gain or loss, the valuation of goodwill and other matters; (10) limitations on the effectiveness of UBSs internal processes for risk management, risk control, measurement and modeling, and of financial models generally; (11) changes in the size, capabilities and effectiveness of UBSs competitors, including whether UBS will be successful in keeping pace with competitors in updating its technology, particularly in trading businesses; and (12) the occurrence of operational failures, such as fraud, unauthorized trading and systems failures, either within UBS or within a counterparty. Our business and financial performance could be affected by other factors identified in our past and future filings and reports, including those filed with the SEC. More detailed information about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including UBSs Annual Report on Form 20-F for the year ended 31 December 2010. UBS is not under any obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. Disclaimer | This document and the information contained herein are provided solely for information purposes, and are not to be construed as a solicitation of an offer to buy or sell any securities or other financial instruments in Switzerland, the United States or any other jurisdiction. No investment decision relating to securities of or relating to UBS AG or its affiliates should be made on the basis of this document. Refer to the UBS's annual and quarterly financial reports, including UBS's fourth quarter 2010 report for additional information. These reports are available at http://www.ubs.com/1/e/investors/topics.html. UBS undertakes no obligation to update the information contained herein. UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. UBS 2010. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.

22

Switzerland Business and Tax Update

Cincinnati, OH October 13, 2011

Switzerland in a nutshell
In the heart of Europe 7.5m inhabitants Would fit 238 times into the US territory! 4 official languages Politically not part of the EU but economically (fully) integrated own currency (CHF) Direct and very stable democracy neutral Tops the overall ranking in The WEF Global Competitiveness Report 20112012

Switzerland in a nutshell

Ohio 41,330 square miles (107,044 km) Longest E-W extention: 210 mi (338 km) Longest N-S extention: 230 mi (370 km) Nominal GDP per Capita: $41000

Switzerland 15'940 square miles (41,285 km) Longest E-W extention: 216 mi (348 km) Longest N-S extention: 137 mi (220 km) Nominal GDP per Capita: $66600

Swiss-U.S. Impact
In 2010, Switzerland was the single biggest FDI investor in the U.S.

Swiss-U.S. Impact
Switzerland is second largest foreign direct investor in the U.S. manufacturing sector Swiss investment in U.S. $189 billion, more than all of Latin America and Australia combined Annual trade in goods U.S.-Switzerland is worth approx. US$33.5 billion Switzerland purchases more U.S. private services than China and Indonesia combined Eighth largest destination for US foreign direct investment abroad Over 500 Swiss companies in the U.S. have created about 500,000 American jobs Over 800 U.S. companies in Switzerland have created about 75,000 Swiss jobs

Swiss Global Impact

Worlds Most Competitive Economy
The Global Competitiveness Report, World Economic Forum Country /Economy Switzerland Singapore Sweden 2011/2012 Rank 1 2 3 4 5 6 7 8 9 10 2010/2011 Rank 1 3 2 7 4 5 8 9 6 12

Europes Most Innovative Country

Pro Inno Europe: European Innovation Scoreboard 2010

Finland United States Germany Netherlands Denmark Japan United Kingdom

Income Taxation General Principles at a Glance (1)

Overall Ordinary Effective Tax Rates
Basel 20.7% 22.3% Jura Jura SO 22.2% Neuchtel Neuchatel 20.8% Vaud 23.5%
Vaud

Schaffhausen 16.0%
Aargau

BL 22.6% Bern 21.6%

Bern

Aargau 19.7%

Z rich Zrich

Thurgau Thurgau 16.6% 12.7%

21.2%

AR AI

Luzern Luzern 16%

St. St. Gallen Zug Zug Gallen 15.6% 16.9% Schwyz Schwyz Glarus Glarus NW 14.1% 19.6% OW Uri 12.7% Uri

Fribourg
Fribourg

15.8%

Graubnden 16.4%

Ticino Valais Valais 21.6%

24.2% Genve

Tessin 20.8%

Income Taxation General Principles at a Glance (2)

Three levels of income taxation, leading to an ordinary overall Effective Tax Rates (ETR) ranging between 11.6% and 25.4% (depending on location) Trend: Reduction
Examples Canton of Luzern 2009 18.4% 2010 Canton of Neuchatel 22.2% 2010 16% 2014 18.4% 2012 12% 2016 15.6%

Tax planning: Privileged tax regimes Holding company > ETR of 7.8% Mixed company > ETR of 8% - 12% Principal company > ETR of 5% -10% Tax holidays possible (on cantonal/communal and federal level)

Mixed company as tax planning tool

80% of income

Swiss (IP) Mixed Company

80% of expenses

A multi purpose vehicle No Swiss substance requirement (foreign CFC rules to be considered) No restriction regarding type of IP Not limited to IP income No obligation to further develop the IP in- or outside of Switzerland

Foreign Company
Base statutory mixed company rate: Examples Canton of Zug (quota of 10%) Canton of Schaffhausen (quota of 10%) Canton of Aargau (quota of 10%) Canton of Luzern (cantonal flat tax of 1.5%)

Foreign Company

8.7% 8.7% 9.1% 8.5%

Reduction of tax base leads to substantially lower ETR Depreciation of IP Branch exemption Hybrid instrument Principal structures

Principal company
Research Centre (contract R&D)

Suppliers purchase of materials Delivery of materials

Principal Trading functions and risks

IP

Sales and Marketing (limited risk distribution) Sale 1 (flash title) Sale 2

Delivery of goods Manufacturing (consignment) Distribution Centers

Delivery of goods

Customers

legal title physical flow

ETR of 5%-10% (depending on location and set-up) Further reduction through base erosion planning

Principal company (cont.)

Substantive, and not just contractual, reallocation of function, risk, IP and the respective income (as opposed to fully-fledged local distributors) Foreign branch exemption if foreign sales entities are operating under limited risk buy-sell arrangement 50% exemption of sales and sales related income

Royalties typically in sales price included

Effective Tax Rate

Approx. 6% (SH) as starting point Further reduction possible through tax base erosion planning

Principal structure very suitable as post-acquisition structure

Base erosion: Lux Hybrid

Parent Co

Equity in Lux and loan payable in Switzerland In Lux / NL income qualifies for participation exemption Interest expenses are tax deductible in Switzerland (thin cap rules to be respected)

Lux/NL Company

Interest

Hybrid loan

Swiss Company

New license box Canton of Nidwalden (1)

Net licensing income taxed separately at an effective tax rate of 8.84% Net income defined as gross income less proportion of admin and finance expenses, attributable tax expense and directly attributable depreciation and license fee expenses R&D expenses not included in this definition => fully deductible against other (ordinarily taxed) income Very broad definition of IP (in line with OECD definition), including amongst others: Copyright Secret formula or process Patents Trademarks Design or model Plans Information concerning industrial, commercial or scientific experience

New license box Canton of Nidwalden (2)

Applies to acquired and self-developed IP No further development of IP required Tax provisions allowed for future R&D expenses no time or amount restrictions (justification needed) Outlook: Various other cantons in process of implementation similar solution discussed at federal level (leading to ETR ranging from approx. 2.5% to 5%, depending on location)

Swiss corporate taxation short update/outlook

Trend towards reduction of corporate income tax rates Various cantons have already reduced (Lucerne) or have decided to reduce the rate in the coming years (Neuchatel, Schaffhausen) Initial discussions to reduce the federal tax rate by half Increase of VAT (from 7.6% to 8% effective January 1st, 2011) still by far the lowest rate in Europe (min. 15% in the EU) Abolishment of issuance stamp duty (within the next 5 years) and net wealth tax (initial discussions) Amendment of the participation exemption system (change from an indirect to a direct exemption system/reduction of minimum holding requirements

Due Diligence: What Makes or Breaks a Project? What is driving the decision?
Customer need? Proximity to the Market? Technology (R&D)? Regulatory Environment? Availability of workforce? Fiscal Advantages?

Due Diligence: Other Typical Considerations Switzerland Wins on Soft Factors Too
Business-friendly legal system and labor relations Highly productive, multi-lingual workforce Excellent protection of intellectual property rights Efficient capital markets World renowned universities and R&D Great quality of life and international schools A strategic Europe or EMEA location

Swiss Investment in the Tri-State Area

and about 100 more!

US Investment in Switzerland
West

Northwest

Central/East

Proctor & Gamble Caterpillar Cisco Fedex Honeywell Cardinal Health Dupont General Mills Medtronic Eaton PPG Industries Eastman Kodak Stryker Ebay

AIG Parker Hannifin Kelly Agilent Technologies Polo Ralph Lauren Cargill Energizer Chiquita Autodesk Palm one Colgate-Palmolive Owens-Illinois Verisign Columbia

Huntsman Fisher Clinical/ Thermo Fisher Becton Dickinson Genzymes Synthes Fossil Group

IBM General Motors Google Teredata Dow Pfizer Invacare Kraft Foods 3M Lexmark International Merck International Paper

Baxter Healthcare Ashland Johnson & Johnson Thomson Reuters MAG AGCO Ecolab Citrix Abbott Garmin Nordson Tyco Amgen

South

Alpharma Abercrombie & Fitch Guess? VF Corporation Acer America Allied Telesis

Latest News from the U.S.

Switzerland Scored 99 Foreign Direct Investment Projects in 2010 New investments in 2011 include Cytori European Sales Headquarters (Zug) Fletcher/CSI European Operations (Basel) Kayak European Headquarters (Zurich) Newell Rubbermaid EMEA Headquarters (Geneva) Special Materials Company European Commercial/Logistics (Martigny) with more to come

In conclusion IT MUST MAKE GOOD BUSINESS SENSE!

Swiss Map

Second quarter 2011

GENERALLY ACCESSIBLE

UBS standard presentation

Jon Ramey, Director

Complex Manager Southwest Ohio Complex

July 26, 2011

SECTION 1

Brief introduction to UBS UBS one of the world's leading financial firms UBS facts and figures Worldwide presence Over 150 years of experience

UBS one of the leading financial firms

UBS draws on its 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland. We combine our wealth management, investment banking and asset management businesses with our Swiss operations to deliver superior financial solutions. UBS is present in all major financial centers worldwide. It has offices in over 50 countries, with about 37% of its employees working in the Americas, 37% in Switzerland, 16% in the rest of Europe and 10% in Asia Pacific. UBS employs about 65,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

UBS facts and figures

Know how
Over 150 years experience in private banking About 65,000 people in 50 countries

Financials1
Market capitalization of CHF 59 billion CHF 2,069 billion in assets under management Well capitalized with a BIS Tier 1 capital ratio of 18.1% and a FINMA leverage ratio of 4.8%

Accolades
One of the largest wealth managers in the world One of the largest global institutional asset managers UBS Investment Bank ranked #1 nine years in a row in Institutional Investor's All-Europe Research survey

As at 26.7.2011; UBS quarterly report

Worldwide presence
About 66,000 people in 50 countries

Americas 36% Switzerland 36%

Europe, Middle East and Africa 16% Asia Pacific 12%

Over 150 years of experience

SECTION 2

UBS's business aspiration UBS's strategy UBS governance UBS organization UBS's businesses UBS's strategic principles Integration as a major underlying driver Code of business conduct and ethics of UBS

UBS's business aspiration

Become the leading client-focused global bank

! ! ! !

Strengthen our position as the #1 global bank for HNW/UHNW clients

Continue to have a leading position across all client segments in Switzerland

A top-tier bank in every growth region

A leading client-focused investment bank

UBS's strategy
Our business is built on strong relationships
Our joint efforts are focused on
Wealthy investors, institutional and corporate clients, and our domestic Swiss business. Geographically, we aim to be a top tier bank in every growth region. We will optimize the combination of our businesses to generate more value.

In order to refocus our portfolio, we will concentrate our efforts on the following:

Businesses
Build on our strong Wealth Management franchise Transform our Investment Bank into an integrated and client-focused business Manage Wealth Management Americas for increased profitability Monetize improved investment performance in Global Asset Management through gaining new client assets and improving retention of existing client assets

Geographies
Reinforce commitment to our leading position in Switzerland Capture the full value from growth in Asia Pacific and other emerging markets

Clients
Further strengthen our Ultra High Net Worth franchise and increase market share Position Wealth Management Americas as an advice-led Wealth Management platform while focusing on our High Net Worth/Ultra High Net Worth client franchise

UBS corporate governance

Board of Directors
The BoD has ultimate responsibility for the success of the UBS Group and for delivering sustainable shareholder value within a framework of prudent and effective controls. It decides on UBSs strategic aims and the necessary financial and human resources upon recommendation of the Group Chief Executive Officer ("Group CEO") and sets the UBS Groups values and standards to ensure that its obligations to its shareholders and others are met.
Kaspar Villiger Chairman BoD

Shareholders elect each member of the BoD, which in turn appoints its Chairman, the Vice Chairman, the Senior Independent Director, and the chairpersons and members of its various committees.

Group Executive Board

Under the leadership of the Group CEO, the GEB has executive management responsibility for the UBS Group and its business. It assumes overall responsibility for the development of the UBS Group and business division strategies and the implementation of the approved strategies. All GEB members (with the exception of the Group CEO) are proposed by the Group CEO. The appointments are approved by the BoD.
Sergio P. Ermotti UBS Group CEO

UBS organization
Board of Directors Kaspar Villiger, Chairman
Group Executive Board Sergio P. Ermotti Group Chief Executive Officer

Wealth Management & Swiss Bank Lukas Ghwiler CEO UBS Switzerland Juerg Zeltner CEO UBS Wealth Management

Wealth Management Americas

Investment Bank

Global Asset Management John A. Fraser Chairman & Chief Executive Officer

Corporate Center

Bob Mc Cann Chief Executive Officer

Carsten Kengeter Chief Executive Officers

Ulrich Krner Group Chief Operating Officer & Chief Executive Officer, Corporate Center

10

UBS's businesses
Wealth Management & Swiss Bank
Focuses on delivering comprehensive financial services to high net worth and ultra high net worth individuals around the world except to those served by Wealth Management Americas as well as private and corporate clients in Switzerland. Our Wealth Management business unit provides clients in over 40 countries, including Switzerland, with financial advice, products and tools to fit their individual needs. Our Retail & Corporate business unit has a leading position across its client segments in Switzerland.

Wealth Management Americas

Provides advice-based relationships through financial advisors who deliver a fully integrated set of products and services specifically designed to address the needs of ultra high net worth, high net worth and core affluent individuals and families. It includes the Wealth Management US business, as well as the domestic Canadian business and the international business booked in the United States.

Global Asset Management

A large-scale asset manager with businesses diversified across regions, capabilities and distribution channels. It offers investment capabilities and investment styles across all major traditional and alternative asset classes. These include equities, fixed income, currency, hedge fund, real estate, infrastructure and private equity investment capabilities that can also be combined in multi-asset strategies. The fund services unit provides legal fund set-up and accounting and reporting for all retail and institutional funds.

Investment Bank
Provides securities and other financial products and research in equities, fixed income, rates, foreign exchange and precious metals. It also provides advisory services and access to the world's capital markets for corporate and institutional clients, governments, financial intermediaries, alternative asset managers and private investors.

Corporate Center

Provides and manages support and control functions for Group in such areas as risk control, finance, legal and compliance, funding, capital and balance sheet management, management of foreign currencies, communication and branding, human resources, information technology, real estate, procurement corporate development and service centers. Most costs and personnel of the Corporate Center are allocated to the business divisions.

11

UBS's strategic principles

Reputation, integration, execution
Put the clients at the center of everything we do Reputation Treat reputation and people as our most valuable assets Ensure discipline and implement best-in-class governance processes Take a holistic portfolio view in decision-making Integration Deliver the best of all of UBS to our clients Enhance structures & processes for further cost and capital efficiency Ensure consistent high-quality delivery externally & internally Execution Build a strong performance-oriented culture Retain, develop and hire the best talent at all levels

12

Integration as a major underlying driver

Wealth Management From: One brand as the main integrating factor
Silo-business culture

To: Integration as the key underlying force of UBS

Common business goals and holistic group portfolio view Systematic approach with explicit structures/ incentives to enforce integration Delivering the best of UBS to all our clients Full value creation potential through explicit integration measures

Limited integration efforts

No systematic cross-divisional client coverage

Limited synergy potential captured

Investment Bank

Global Asset Management

13

Code of Business Conduct and Ethics of UBS

The Code defines the way UBS does business
It sets out the principles and practices that UBS expects all of its employees and directors to follow unreservedly. It underscores the critical importance of responsible corporate behavior. It sets out the way we behave in pursuing business opportunities and all our dealings with stakeholders. It is the basis for all UBS policies, guidelines and statements relating to each of our employees' personal commitment to appropriate and responsible corporate behavior. And all related internal and external policies and rules must be complied with.

14

SECTION 3

Our identity Vision and mission Our values Corporate responsibility at UBS

UBS: defining our identity

Our essence What we want to be known for:

Our vision As a firm, we want to be:

Our strategy Collectively, we focus on:

Our values Each of us is committed to:

Return on relationships
Relationships are the basis of our business: We believe that investing in relationships gives the best return for our clients, our people and our shareholders.

The choice of clients worldwide

Thats why we put the needs of our clients and building long-term relationships at the heart of our business. We deliver all our expertise, and execute to the most exacting standards.

Reputation Integration Execution

Our joint efforts are focused on wealthy investors, institutional and corporate clients, and our domestic Swiss business. Geographically, we aim to be a top tier bank in every growth region.

Truth Clarity Performance

16

Our values
Each of us is committed to truth, clarity and performance
Higher standards are the foundation for long term, mutually rewarding relationships. These three values shape the behaviour of everyone at UBS as they work to reach our firm's vision.

Truth
Accuracy. Authenticity. Certainty We behave with respect and integrity. We are accurate, realistic and accountable. We always act fairly and abide by the law.

Clarity
Ease. Simplicity. Directness We make it easy to do business with UBS. We are concise, precise and to the point. We are reliable and consistent.

Performanc Achievement. Execution. Attainment e will always give our best. We will perform to the We
highest professional standards. We will lead the market through superior service and execution.

17

Corporate Responsibility at UBS

Responsible behavior creates sustainable value for UBS and its stakeholders

Corporate Responsibility
Code of Business Conduct & Ethics
Legal & regulatory responsibilities
Compliance with laws, rules & regulations Combating financial crime Tax compliance

Ethical responsibilities
Ethical standards UBS values Fairness and integrity in client relations

Workplace responsibilities
Responsible employment practices Diversity & equal opportunity Health & safety

Societal responsibilities
Environment Human rights Responsible supply chain Community investment

Communications, training & awareness raising

18

Caution regarding forward looking statements/Disclaimer

Cautionary Statement Regarding Forward-Looking Statements | This report contains statements that constitute forward-looking statements, including but not limited to managements outlook for UBSs financial performance and statements relating to the anticipated effect of transactions and strategic initiatives on UBSs business and future development. While these forward-looking statements represent UBSs judgments and expectations concerning the matters described, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from UBSs expectations. These factors include, but are not limited to: (1) developments in the markets in which UBS operates or to which it is exposed, including movements in securities prices or liquidity, credit spreads, currency exchange rates and interest rates and the effect of economic conditions and market developments on the financial position or creditworthiness of UBSs clients and counterparties; (2) changes in the availability of capital and funding, including any changes in UBSs credit spreads and ratings; (3) the ability of UBS to retain earnings and reduce its risk-weighted assets in order to comply with recommended Swiss capital requirements without adversely affecting its business; (4) changes in financial regulation in Switzerland, the US, the UK and other major financial centers which may impose constraints on or necessitate changes in the scope and location of UBSs business activities and in its legal and booking structures, including the imposition of more stringent capital and liquidity requirements, incremental tax requirements and constraints on remuneration, some of which may affect UBS in a different manner or degree than they affect competing institutions; (5) the liability to which UBS may be exposed due to legal claims and regulatory investigations, including those stemming from market dislocation and losses incurred by clients and counterparties during the financial crisis; (6) the outcome and possible consequences of pending or future inquiries or actions concerning UBSs cross-border banking business by tax or regulatory authorities in various jurisdictions; (7) the degree to which UBS is successful in effecting organizational changes and implementing strategic plans, and whether those changes and plans will have the effects intended; (8) UBSs ability to retain and attract the employees necessary to generate revenues and to manage, support and control its businesses; (9) changes in accounting standards or policies, and accounting determinations affecting the recognition of gain or loss, the valuation of goodwill and other matters; (10) limitations on the effectiveness of UBSs internal processes for risk management, risk control, measurement and modeling, and of financial models generally; (11) changes in the size, capabilities and effectiveness of UBSs competitors, including whether UBS will be successful in keeping pace with competitors in updating its technology, particularly in trading businesses; and (12) the occurrence of operational failures, such as fraud, unauthorized trading and systems failures, either within UBS or within a counterparty. Our business and financial performance could be affected by other factors identified in our past and future filings and reports, including those filed with the SEC. More detailed information about those factors is set forth in documents furnished by UBS and filings made by UBS with the SEC, including UBSs Annual Report on Form 20-F for the year ended 31 December 2010. UBS is not under any obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. Disclaimer | This document and the information contained herein are provided solely for information purposes, and are not to be construed as a solicitation of an offer to buy or sell any securities or other financial instruments in Switzerland, the United States or any other jurisdiction. No investment decision relating to securities of or relating to UBS AG or its affiliates should be made on the basis of this document. Refer to the UBS's annual and quarterly financial reports, including UBS's fourth quarter 2010 report for additional information. These reports are available at http://www.ubs.com/1/e/investors/topics.html. UBS undertakes no obligation to update the information contained herein. UBS specifically prohibits the redistribution or reproduction of this material in whole or in part without the prior written permission of UBS and UBS accepts no liability whatsoever for the actions of third parties in this respect. UBS 2010. The key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.

19

Switzerland Business and Tax Update

Cincinnati, OH October 13, 2011

Switzerland in a nutshell
In the heart of Europe
7.5m inhabitants

Would fit 238 times into the US territory! 4 official languages

Politically not part of the EU but economically (fully) integrated own currency (CHF) Direct and very stable democracy neutral Tops the overall ranking in The WEF Global Competitiveness Report 20112012

Switzerland in a nutshell

Ohio 41,330 square miles (107,044 km) Longest E-W extention: 210 mi (338 km) Longest N-S extention: 230 mi (370 km) Nominal GDP per Capita: $41000

Switzerland 15'940 square miles (41,285 km) Longest E-W extention: 216 mi (348 km) Longest N-S extention: 137 mi (220 km) Nominal GDP per Capita: $66600

Swiss-U.S. Impact
In 2010, Switzerland was the single biggest FDI investor in the U.S.

Swiss-U.S. Impact
Switzerland is second largest foreign direct investor in the U.S. manufacturing sector Swiss investment in U.S. $189 billion, more than all of Latin America and Australia combined Annual trade in goods U.S.-Switzerland is worth approx. US$33.5 billion Switzerland purchases more U.S. private services than China and Indonesia combined Eighth largest destination for US foreign direct investment abroad Over 500 Swiss companies in the U.S. have created about 500,000 American jobs Over 800 U.S. companies in Switzerland have created about 75,000 Swiss jobs

Swiss Global Impact

Worlds Most Competitive Economy
The Global Competitiveness Report, World Economic Forum
Country /Economy Switzerland Singapore Sweden 2011/2012 Rank 1 2 3 2010/2011 Rank 1 3 2

Europes Most Innovative Country

Pro Inno Europe: European Innovation Scoreboard 2010

Finland
United States Germany Netherlands Denmark Japan United Kingdom

4
5 6 7 8 9 10

7
4 5 8 9 6 12

Income Taxation General Principles at a Glance (1)

Overall Ordinary Effective Tax Rates
Basel 20.7%
Aargau

Schaffhausen

16.0%
Thurgau Thurgau 16.6%
Z rich Zrich

22.3% Jura Jura

SO

BL

Aargau 19.7%

AR AI 12.7%

22.6%
Bern 21.6% Luzern Luzern 16%

21.2%

22.2% Neuchtel Neuchatel 20.8%

Vaud

Bern

St. St. Gallen Zug Zug Gallen 15.6% 16.9% Schwyz Schwyz Glarus Glarus NW 14.1% 19.6% OW Uri 12.7% Uri

Vaud 23.5%

Fribourg

Fribourg

15.8%

Graubnden 16.4%

Ticino

24.2% Genve

Valais

Valais 21.6%

Tessin 20.8%

Income Taxation General Principles at a Glance (2)

Three levels of income taxation, leading to an ordinary overall Effective Tax Rates (ETR) ranging between 11.6% and 25.4% (depending on location)

Trend: Reduction
Examples Canton of Luzern 2009 18.4% 2010 2010 16% 2014 2012 12% 2016

Canton of Neuchatel

22.2%

18.4%

15.6%

Tax planning: Privileged tax regimes Holding company > ETR of 7.8%

Mixed company > ETR of 8% - 12%

Principal company > ETR of 5% -10%

Tax holidays possible (on cantonal/communal and federal level)

Mixed company as tax planning tool

A multi purpose vehicle
80% of income

Swiss (IP) Mixed Company

80% of expenses

No Swiss substance requirement (foreign CFC rules to be considered)

No restriction regarding type of IP

Foreign Company
Base statutory mixed company rate: Examples

Foreign Company

Not limited to IP income

No obligation to further develop the IP in- or outside of Switzerland

Canton of Zug (quota of 10%)

Canton of Schaffhausen (quota of 10%) Canton of Aargau (quota of 10%) Canton of Luzern (cantonal flat tax of 1.5%)

8.7%
8.7% 9.1% 8.5%

Reduction of tax base leads to substantially lower ETR Depreciation of IP Branch exemption Hybrid instrument Principal structures

Principal company
Research Centre (contract R&D)

Suppliers

Principal Trading functions and risks

purchase of materials

IP

Sales and Marketing (limited risk distribution) Sale 1 (flash title)

Sale 2

Delivery of materials Delivery of goods Manufacturing (consignment)

legal title physical flow

Delivery of goods

Customers

Distribution Centers

ETR of 5%-10% (depending on location and set-up) Further reduction through base erosion planning

Principal company (cont.)

Substantive, and not just contractual, reallocation of function, risk, IP and the respective income (as opposed to fully-fledged local distributors)

Foreign branch exemption if foreign sales entities are operating under limited risk buy-sell arrangement
50% exemption of sales and sales related income

Royalties typically in sales price included

Effective Tax Rate

Approx. 6% (SH) as starting point Further reduction possible through tax base erosion planning

Principal structure very suitable as post-acquisition structure

Base erosion: Lux Hybrid

Equity in Lux and loan payable in Switzerland In Lux / NL income qualifies for participation exemption Interest expenses are tax deductible in Switzerland (thin cap rules to be respected)

Parent Co

Lux/NL Company

Interest

Hybrid loan

Swiss Company

New license box Canton of Nidwalden (1)

Net licensing income taxed separately at an effective tax rate of 8.84% Net income defined as gross income less proportion of admin and finance expenses, attributable tax expense and directly attributable depreciation and license fee expenses R&D expenses not included in this definition => fully deductible against other (ordinarily taxed) income Very broad definition of IP (in line with OECD definition), including amongst others: Copyright Secret formula or process Patents Trademarks Design or model Plans Information concerning industrial, commercial or scientific experience

New license box Canton of Nidwalden (2)

Applies to acquired and self-developed IP

No further development of IP required

Tax provisions allowed for future R&D expenses no time or amount restrictions (justification needed)
Outlook: Various other cantons in process of implementation similar solution discussed at federal level (leading to ETR ranging from approx. 2.5% to 5%, depending on location)

Swiss corporate taxation short update/outlook

Trend towards reduction of corporate income tax rates
Various cantons have already reduced (Lucerne) or have decided to reduce the rate in the coming years (Neuchatel, Schaffhausen) Initial discussions to reduce the federal tax rate by half Increase of VAT (from 7.6% to 8% effective January 1 st, 2011) still by far the lowest rate in Europe (min. 15% in the EU) Abolishment of issuance stamp duty (within the next 5 years) and net wealth tax (initial discussions) Amendment of the participation exemption system (change from an indirect to a direct exemption system/reduction of minimum holding requirements

Due Diligence: What Makes or Breaks a Project?

What is driving the decision?
Customer need? Proximity to the Market? Technology (R&D)? Regulatory Environment?

Availability of workforce?
Fiscal Advantages?

Due Diligence: Other Typical Considerations Switzerland Wins on Soft Factors Too
Business-friendly legal system and labor relations Highly productive, multi-lingual workforce

Excellent protection of intellectual property rights

Efficient capital markets World renowned universities and R&D Great quality of life and international schools

A strategic Europe or EMEA location

Swiss Investment in the Tri-State Area

and about 100 more!

US Investment in Switzerland
West

Northwest

Central/East

Proctor & Gamble Caterpillar Cisco Fedex Honeywell Cardinal Health Dupont General Mills Medtronic Eaton PPG Industries Eastman Kodak Stryker Ebay

AIG Parker Hannifin Kelly Agilent Technologies Polo Ralph Lauren Cargill Energizer Chiquita Autodesk Palm one Colgate-Palmolive Owens-Illinois Verisign Columbia

Huntsman Fisher Clinical/ Thermo Fisher Becton Dickinson Genzymes Synthes Fossil Group

IBM General Motors Google Teredata Dow Pfizer Invacare Kraft Foods 3M Lexmark International Merck International Paper

Baxter Healthcare Ashland Johnson & Johnson Thomson Reuters MAG AGCO Ecolab Citrix Abbott Garmin Nordson Tyco Amgen

South

Alpharma Abercrombie & Fitch Guess? VF Corporation Acer America Allied Telesis

Latest News from the U.S.

Switzerland Scored 99 Foreign Direct Investment Projects in 2010

New investments in 2011 include Cytori European Sales Headquarters (Zug) Fletcher/CSI European Operations (Basel) Kayak European Headquarters (Zurich) Newell Rubbermaid EMEA Headquarters (Geneva) Special Materials Company European Commercial/Logistics (Martigny) with more to come

In conclusion
IT MUST MAKE GOOD BUSINESS SENSE!

Swiss Map