Beginning in 2009, UBS will adopt a new compensation model for the Board of Directors and the Group Executive Board.

UBS’s new compensation model will be focused on the long-term and more closely aligned with the value creation of the firm.

The fundamental changes are:

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The Chairman of the Board of Directors is no longer bound to the same incentive system as the Group Executive Board and will no longer receive variable compensation components.
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Variable cash compensation for the Group Executive Board is based on a bonus / malus system.
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A similar concept to the above-mentioned bonus / malus system is effective for variable equity compensation

The Chairman of the Board and the members of the Group Executive Board will not receive any variable compensation for 2008. The size, composition and allocation of 2008 variable compensation for other employees will be determined by the Board of Directors once 2008 Group results are known and after consultation with the Swiss Federal Banking Commission (SFBC).

The new compensation system was discussed with the SFBC in accordance with the requirements listed in the action plan of the Swiss authorities and the standards for the financial sector which are currently being established. These discussions will be continued and the salary system will be regularly assessed with respect to these standards.

The complete report can be found on the UBS website at: www.ubs.com/compensationreport