Exhibit 2(d)

UBS AG

DESCRIPTION OF SECURITIES REGISTERED UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT

OF 1934

Table of Contents

Page

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Medium-Term Notes, Series A

Description of Debt Securities We May Offer

Please note that in this section entitled “Description of Debt Securities We May Offer,” references to UBS, we, our and us

refer only to UBS AG and not to its consolidated subsidiaries. Also, in this section, references to “holders” and “you” mean

those who own debt securities registered in their own names on the books that we or the trustee maintain for this purpose, and

not those who own beneficial interests in debt securities registered in street name or in debt securities issued in book-entry

form through one or more depositaries. Owners of beneficial interests in the debt securities should read the section below

entitled “Legal Ownership and Book-Entry Issuance.”

References herein to “this prospectus” are deemed to refer to this section “Medium-Term Notes, Series A” and references to

“your prospectus supplement” are deemed to refer to the individual description of notes issuances contained below in this

exhibit.

The Debt Indenture

As required by U.S. federal law for publicly offered bonds and notes, the debt securities are governed by a document called an

indenture. The debt indenture is a contract between us and U.S. Bank Trust National Association, which acts as trustee.

The trustee has two main roles:

Ø

First, the trustee can enforce your rights against us if we default. There are limitations on the extent to which the trustee

acts on your behalf, which we describe below under “—Default, Remedies and Waiver of Default.”

Ø

Second, the trustee performs administrative duties for us, such as sending you interest payments and notices. 

See “—Our Relationship with the Trustee” below for more information about the trustee.

We May Issue Many Series of Debt Securities Under the Debt Indenture

We may issue as many distinct series of debt securities under the debt indenture as we wish. This section summarizes terms of

the debt securities that apply generally to all series. The provisions of the debt indenture allow us not only to issue debt

securities with terms different from those of debt securities previously issued under the debt indenture, but also to “reopen” a

previous issue of a series of debt securities and issue additional debt securities of that series. Most of the financial and other

specific terms of your series, will be described in the prospectus supplement accompanying this prospectus. Those terms may

vary from the terms described here.

We may issue debt securities separately or together with other debt securities.

As you read this section, please remember that the specific terms of your debt security as described in your prospectus

supplement will supplement and, if applicable, may modify or replace the general terms described in this section. If there are

any differences between your prospectus supplement and this prospectus, your prospectus supplement will control. Thus, the

statements we make in this section may not apply to your debt security.

When we refer to a series of debt securities, we mean a series issued under the debt indenture. When we refer to your

prospectus supplement, we mean the prospectus supplement describing the specific terms of the debt security you purchase.

The terms used in your prospectus supplement will have the meanings described in this prospectus, unless otherwise specified.

Unless we indicate otherwise in your prospectus supplement, the debt securities we issue to you will be part of the series of

debt securities referred to as our “medium-term notes, Series A.” The Series A notes are a single distinct series under the debt

indenture, and we may issue Series A notes in such amounts, at such times and on such terms as we wish. The Series A notes

will differ from one another, and from any other series, in their terms, but all of the Series A notes together will constitute a

single series for all purposes under the debt indenture pursuant to which they will be issued.

Amounts That We May Issue

The debt indenture does not limit the aggregate amount of debt securities that we may issue or the number of series or the

aggregate amount of any particular series. We have already issued Series A notes, many of which are currently outstanding.

We intend to issue additional Series A notes, and may issue additional Series A notes at any time, without your consent and

without notifying you. We may also issue debt securities and other securities at any time without your consent and without

notifying you.

The debt indenture and the debt securities do not limit our ability to incur other indebtedness or to issue other securities. Also,

we are not subject to financial or similar restrictions by the terms of the debt securities.

Principal Amount, Stated Maturity and Maturity

The principal amount of a debt security means the principal amount payable at its stated maturity, unless that amount is not

determinable, in which case the principal amount of a debt security is its face amount.

The term “stated maturity” with respect to any debt security means the day on which the principal amount of your debt security

is scheduled to become due. The principal may become due sooner, by reason of redemption or acceleration after a default or

otherwise in accordance with the terms of the debt security. The day on which the principal actually becomes due, whether at

the stated maturity or earlier, is called the “maturity” of the principal.

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We also use the terms “stated maturity” and “maturity” to refer to the days when other payments become due. For example, we

may refer to a regular interest payment date when an installment of interest is scheduled to become due as the “stated maturity”

of that installment.

When we refer to the “stated maturity” or the “maturity” of a debt security without specifying a particular payment, we mean

the stated maturity or maturity, as the case may be, of the principal.

This Section Is Only a Summary

The debt indenture and its associated documents, including your debt security, contain the full legal text governing the matters

described in this section and your prospectus supplement. We have filed a copy of the debt indenture with the SEC as an

exhibit to our registration statement. See “Where You Can Find More Information” above for information on how to obtain a

copy.

This section and your prospectus supplement summarize all the material terms of the debt indenture and your debt security.

They do not, however, describe every aspect of the debt indenture and your debt security. For example, in this section and your

prospectus supplement, we use terms that have been given special meaning in the debt indenture, but we describe the meaning

of only the more important of those terms.

Governing Law

The debt indenture is, and the debt securities will be, governed by New York law. 

Currency of Debt Securities

Amounts that become due and payable on your debt security in cash will be payable in a currency, composite currency, basket

of currencies or currency unit or units specified in your prospectus supplement. We refer to this currency, composite currency,

basket of currencies or currency unit or units as a “specified currency.” The specified currency for your debt security will be

U.S. dollars, unless your prospectus supplement states otherwise. Some debt securities may have different specified currencies

for principal and interest. You will have to pay for your debt securities by delivering the requisite amount of the specified

currency to UBS Securities LLC, UBS Financial Services Inc. or another firm that we name in your prospectus supplement,

unless other arrangements have been made between you and us or you and that firm. We will make payments on your debt

securities in the specified currency, except as described below in “—Payment Mechanics for Debt Securities.” See

“Considerations Relating to Securities Denominated or Payable in or Linked to a Non-U.S. Dollar Currency” below for more

information about risks of investing in this kind of debt securities.

Co-obligation of UBS Switzerland AG

UBS Switzerland AG is fully, unconditionally and irrevocably liable, jointly and severally, with UBS AG, for UBS AG’s

obligations under and with respect to the debt securities with respect to the due and punctual payment of the principal of and

any premium, interest and other amounts payable on, under or in respect of such securities and the due performance and

observance of every covenant of the indenture to be performed or observed by UBS AG with respect to such securities.

The obligations of UBS Switzerland AG as a co-obligor are primary and not merely those of a surety. UBS Switzerland AG

waives the right to require holders to proceed first against UBS AG and UBS Switzerland AG shall be subrogated to all rights

of the holder of a security of a series against UBS AG in respect of any amounts paid to such holder by it pursuant to the terms

of the indenture.

Types of Debt Securities

We may issue any of the three types of debt securities described below. A debt security may have elements of each of the three

types of debt securities described below. For example, a debt security may bear interest at a fixed rate for some periods and at a

floating rate in others. Similarly, a debt security may provide for a payment of principal at maturity linked to an index and also

bear interest at a fixed or floating rate.

Fixed Rate Debt Securities

A debt security of this type will bear interest at a fixed rate described in the applicable prospectus supplement. This type

includes zero coupon debt securities, which bear no interest and are instead issued at a price lower than the principal amount.

See “—Original Issue Discount Debt Securities” below for more information about zero coupon and other original issue

discount debt securities.

Each fixed rate debt security, except any zero coupon debt security, will bear interest from its original issue date or from the

most recent date to which interest on the debt security has been paid or made available for payment. Interest will accrue on the

principal of a fixed rate debt security at the fixed yearly rate stated in the applicable prospectus supplement, until the principal

is paid or made available for payment or the security has been converted or exchanged. Each payment of interest due on an

interest payment date or the date of maturity will include interest accrued from and including the last date to which interest has

been paid, or made available for payment, or from the issue date if none has been paid or made available for payment, to but

excluding the interest payment date or the date of maturity. We will compute interest on fixed rate debt securities on the basis

of a 360-day year of twelve 30-day months. We will pay interest on each interest payment date and at maturity as described

below under “—Payment Mechanics for Debt Securities.”

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Floating Rate Debt Securities

Interest Rate Formulas.

A debt security of this type will bear interest at rates that are determined by reference to an interest

rate formula. In some cases, the rates may also be adjusted by adding or subtracting a spread or multiplying by a spread

multiplier and may be subject to a minimum rate or a maximum rate. If your debt security is a floating rate debt security, the

formula and any adjustments that apply to the interest rate will be specified below.

Each floating rate debt security will bear interest from its original issue date or from the most recent date to which interest on

the debt security has been paid or made available for payment. Interest will accrue on the principal of a floating rate debt

security at the yearly rate determined according to the interest rate formula stated in the applicable prospectus supplement,

until the principal is paid or made available for payment. We will pay interest on each interest payment date and at maturity as

described below under “—Payment Mechanics for Debt Securities.”

Calculation of Interest.

Calculations relating to floating rate debt securities will be made by the calculation agent, an

institution that we appoint as our agent for this purpose. That institution may include any affiliate of ours, such as UBS

Securities LLC. The prospectus supplement for a particular floating rate debt security will name the institution that we have

appointed to act as the calculation agent for that debt security as of its original issue date. We may appoint a different

institution to serve as calculation agent from time to time after the original issue date of the debt security without your consent

and without notifying you of the change. Absent manifest error, all determinations of the calculation will be final and binding

on you and us, without any liability on the part of the calculation agent.

For each floating rate debt security, the calculation agent will determine, on the corresponding interest calculation or

determination date, as described in the applicable prospectus supplement, the interest rate that takes effect on each interest

reset date. In addition, the calculation agent will calculate the amount of interest that has accrued during each interest period—

i.e.

, the period from and including the original issue date, or the last date to which interest has been paid or made available for

payment, to but excluding the payment date. For each interest period, the calculation agent will calculate the amount of

accrued interest by multiplying the face or other specified amount of the floating rate debt security by an accrued interest factor

for the interest period. This factor will equal the sum of the interest factors calculated for each day during the interest period.

The interest factor for each day will be expressed as a decimal and will be calculated by dividing the interest rate, also

expressed as a decimal, applicable to that day by 360 or by the actual number of days in the year, as specified in the applicable

prospectus supplement.

Upon the request of the holder of any floating rate debt security, the calculation agent will provide the interest rate then in

effect for that debt security—and, if determined, the interest rate that will become effective on the next interest reset date. The

calculation agent’s determination of any interest rate, and its calculation of the amount of interest for any interest period, will

be final and binding in the absence of manifest error.

All percentages resulting from any calculation relating to a debt security will be rounded upward or downward, as appropriate,

to the next higher or lower one hundred-thousandth of a percentage point,

e.g.

, 9.876541% (or .09876541) being rounded down

to 9.87654% (or .0987654) and 9.876545% (or .09876545) being rounded up to 9.87655% (or .0987655). All amounts used in

or resulting from any calculation relating to a floating rate debt security will be rounded upward or downward, as appropriate,

to the nearest cent, in the case of U.S. dollars, or to the nearest corresponding hundredth of a unit, in the case of a currency

other than U.S. dollars, with one-half cent or one-half of a corresponding hundredth of a unit or more being rounded upward.

In determining the base rate that applies to a floating rate debt security during a particular interest period, the calculation agent

may obtain rate quotes from various banks or dealers active in the relevant market, as described in the applicable prospectus

supplement. Those reference banks and dealers may include the calculation agent itself and its affiliates, as well as any

underwriter, dealer or agent participating in the distribution of the relevant floating rate debt securities and its affiliat es, and

they may include UBS AG or its affiliates.

Indexed Debt Securities

A debt security of this type provides that the principal amount payable at its maturity, and/or the amount of interest payable on

an interest payment date, will be determined by reference to:

Ø

securities of one or more issuers;

Ø

one or more currencies;

Ø

one or more commodities;

Ø

any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event

or circumstance; and/or

Ø

one or more indices or baskets of the items described above.

If you are a holder of an indexed debt security, you may receive an amount at maturity (including upon acceleration following

an event of default) that is greater than or less than the face amount of your debt security depending upon the formula used to

determine the amount payable and the value of the applicable index at maturity. The value of the applicable index will

fluctuate over time.

An indexed debt security may provide either for cash settlement or for physical settlement by delivery of the underlying

property or another property of the type listed above. An indexed debt security may also provide that the form of settlement

may be determined at our option or at the holder’s option. Some indexed debt securities may be convertible, exercisable or

exchangeable, at our option or the holder’s option, into or for securities of an issuer other than UBS AG.

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If you purchase an indexed debt security, your prospectus supplement will include information about the relevant index, about

how amounts that are to become payable will be determined by reference to the price or value of that index and about the terms

on which the security may be settled physically or in cash. The prospectus supplement will also identify the calculation agent

that will calculate the amounts payable with respect to the indexed debt security and may exercise significant discretion in

doing so. The calculation agent may be UBS Securities LLC or another of our affiliates. See “Considerations Relating to

Indexed Securities” for more information about risks of investing in debt securities of this type.

Original Issue Discount Debt Securities

A fixed rate debt security, a floating rate debt security or an indexed debt security may be an original issue discount debt

security. A debt security of this type is issued at a price lower than its principal amount and provides that, upon redemption or

acceleration of its maturity, an amount less than its principal amount will be payable. An original issue discount debt security

may be a zero coupon debt security. A debt security issued at a discount to its principal may, for U.S. federal income tax

purposes, be considered an original issue discount debt security, regardless of the amount payable upon redemption or

acceleration of maturity. See “U.S. Tax Considerations —Taxation of Debt Securities — Original Issue Discount” below for a

brief description of the U.S. federal income tax consequences of owning an original issue discount debt security.

Information in Your Prospectus Supplement 

Your prospectus supplement will describe the specific terms of your debt security, which will include some or all of the

following:

Ø

any limit on the total principal amount of the debt securities of the same series;

Ø

the stated maturity;

Ø

the specified currency or currencies for principal and interest, if not U.S. dollars;

Ø

the price at which we originally issue your debt security, expressed as a percentage of the principal amount, and the

original issue date;

Ø

whether your debt security is a fixed rate debt security, a floating rate debt security or an indexed debt security;

Ø

if your debt security is a fixed rate debt security, the yearly rate at which your debt security will bear interest, if any,

and the interest payment dates;

Ø

if your debt security is a floating rate debt security, the interest rate basis; any applicable index currency or maturity,

spread or spread multiplier or initial base rate, maximum rate or minimum rate; the interest reset, determination,

calculation and payment dates; the day count used to calculate interest payments for any period; the business day

convention; and the calculation agent;

Ø

if your debt security is an indexed debt security, the principal amount, if any, we will pay you at maturity, the amount

of interest, if any, we will pay you on an interest payment date or the formula we will use to calculate these amounts, if

any, and the terms on which your debt security will be exchangeable for or payable in cash, securities or other property;

Ø

if your debt security may be converted into or exercised or exchanged for debt or equity securities of one or more third

parties, the terms on which conversion, exercise or exchange may occur, including whether conversion, exercise or

exchange is mandatory, at the option of the holder or at our option, the period during which conversion, exercise or

exchange may occur, the initial conversion, exercise or exchange price or rate and the circumstances or manner in

which the amount of securities issuable upon conversion, exercise or exchange may be adjusted;

Ø

if your debt security is also an original issue discount debt security, the yield to maturity;

Ø

if applicable, the circumstances under which your debt security may be redeemed at our option or repaid at the holder’s

option before the stated maturity, including any redemption commencement date, repayment date(s), redemption

price(s) and redemption period(s);

Ø

the authorized denominations, if other than $1,000 and integral multiples of $1,000;

Ø

the depositary for your debt security, if other than DTC, and any circumstances under which the holder may request

securities in non-global form, if we choose not to issue your debt security in book-entry form only;

Ø

if your debt security will be issued in bearer form, any special provisions relating to bearer securities;

Ø

if applicable, the circumstances under which we will pay additional amounts on any debt securities held by a person

who is not a United States person for tax purposes and under which we can redeem the debt securities if we have to pay

additional amounts;

Ø

the names and duties of any co-trustees, depositaries, authenticating agents, paying agents, transfer agents or registrars

for your debt security, as applicable; and

Ø

any other terms of your debt security, which could be different from those described in this prospectus.

If you purchase your debt security—or any of our other securities we describe in this prospectus—in a market-making

transaction, you will receive information about the price you pay and your trade and settlement dates in a separate confirmation

of sale. A market-making transaction is one in which we, UBS Securities LLC, UBS Financial Services Inc. or another of our

affiliates resells a security that it has previously acquired from another holder. A market-making transaction in a particular

security occurs after the original issuance and sale of the security.

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Extension of Maturity

If specified in the applicable prospectus supplement, we will have the option to extend the stated maturity of your debt security

for one or more periods of whole years up to but not beyond the final maturity date specified in the prospectus supplement. We

call a debt security whose maturity we may extend an extendible debt security. We call the period of time as to which we may

extend the maturity the extension period. The following procedures will apply to extendible debt securities, unless otherwise

indicated in the applicable prospectus supplement.

We may extend the maturity of an extendible debt security by notifying the paying agent between 45 and 60 days before the

stated maturity then in effect. The stated maturity may be the original stated maturity, as described in the prospectus

supplement, or a maturity that we previously extended by following these procedures. If we notify the paying agent that we

will extend the maturity, the paying agent will send a notice to each holder by first class mail, postage prepaid, or by other

means agreed upon between us and the paying agent, at least 30 days before the stated maturity then in effect. The notice sent

by the paying agent will provide the following information:

Ø

our election to extend the maturity of the extendible debt security;

Ø

the extended maturity date or, if the maturity date had previously been extended, the new extended maturity date;

Ø

the interest rate that will apply during the extension period or, in the case of a floating rate debt security, the spread

and/or spread multiplier, if any, applicable during the extension period; and

Ø

the provisions, if any, for redemption and repayment during the extension period.

Once the paying agent has mailed the notice to each holder, the extension of the maturity date will take place automatically.

All of the terms of the debt security will be the same as the terms of the debt security as originally issued, except those terms

that are described in the notice sent by the paying agent to each holder and except as described in the following paragraph.

Not later than 10:00 a.m., New York City time, on the twentieth calendar day before the maturity date then in effect for an

extendible debt security or, if that day is not a business day, on the next succeeding business day, we may revoke the interest

rate set forth in the extension notice sent by the paying agent to each holder and establish a higher interest rate for the

extension period. If we elect to establish a higher interest rate, the paying agent will send a notice to each holder by first class

mail, postage prepaid, or by other means agreed between us and the paying agent, of the higher interest rate in the case of a

floating rate debt security, the higher spread and/or spread multiplier, if any. The notice of the higher rate cannot be revoked.

All extendible debt securities as to which the maturity date has been extended will bear the higher rate for the extension period,

whether or not tendered for repayment.

If we elect to extend the maturity date of an extendible debt security, each holder may elect repayment of all or part of its debt

security on the maturity date then in effect at a price equal to the principal amount plus any accrued and unpaid interest to that

date. To elect repayment, a holder must give notice to the paying agent between 25 and 35 days before the maturity date in

effect. The notice must consist of either:

Ø

the debt security along with the completed form entitled “Option to Elect Repayment,” which will be attached to your

debt security.

Ø

a telegram, facsimile transmission or letter from a member of a national securities exchange, the Financial Industry

Regulatory Authority, Inc. or a commercial bank or trust company in the United States setting forth the name of the

holder, the principal amount of the debt security, the principal amount of the debt security to be repaid, the certificate

number or a description of the tenor and terms of the debt security, a statement that the option to elect repayment is

being elected and a guarantee that the debt security, together with the completed form entitled “Option to Elect

Repayment” will be received by the paying agent no later than the fifth business day after the date of the telegram,

facsimile transmission or letter. The telegram, facsimile transmission or letter will become effective upon receipt, by

that fifth business day, of the debt security and complete form.

The holder may revoke the election of repayment by sending to the paying agent written notice by 3:00 p.m., New York City

time, on the twentieth day before the maturity date then in effect or, if that day is not a business day, on the next succeeding

business day.

If an extendible debt security is represented by a global debt security, the depositary or its nominee, as the holder, will be the

only person that can exercise the right to elect repayment or revoke such an election. Any indirect owners who own beneficial

interests in the global debt security and wish to make such an election must give proper and timely instructions to the banks or

brokers through which they hold their interests, requesting that they notify the depositary to make a repayment election or

revoke such an election on their behalf. Different firms have different deadlines for accepting instructions from their

customers, and you should take care to act promptly enough to ensure that your request is given effect by the depositary before

the applicable deadline for exercise.

Redemption and Repayment

Unless otherwise indicated in your prospectus supplement, your debt security will not be entitled to the benefit of any sinking

fund—that is, we will not deposit money on a regular basis into any separate custodial account to repay your debt securities. In

addition, we will not be entitled to redeem your debt security before its stated maturity (except for certain tax reasons, as

described below) unless your prospectus supplement specifies a redemption date or redemption commencement date. You will

not be entitled to require us to buy your debt security from you, before its stated maturity, unless your prospectus supplement

specifies one or more repayment dates.

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If your prospectus supplement specifies one or more redemption dates, a redemption commencement date or a repayment date,

it will also specify one or more redemption prices or repayment prices, which may be expressed as a percentage of the

principal amount of your debt security. It may also specify one or more redemption periods during which the redemption prices

relating to a redemption of debt securities during those periods will apply.

If your prospectus supplement specifies one or more redemption dates, your debt security will be redeemable at our option on

any of those dates. If your prospectus supplement specifies a redemption commencement date, your debt security will be

redeemable at our option at any time on or after that date. If we redeem your debt security, we will do so at the specified

redemption price. If different prices are specified for different redemption periods, the price we pay will be the price that

applies to the redemption period during which your debt security is redeemed.

If your prospectus supplement specifies a repayment date, your debt security will be repayable at your option on the specified

repayment date at the specified repayment price, together with interest accrued to the repayment date.

If we exercise an option to redeem any debt security, we will give the trustee and the holders written notice of the principal

amount of the debt security to be redeemed, not less than 5 business days nor more than 60 days before the applicable

redemption date unless otherwise specified in your prospectus supplement. We will give the notice in the manner described

below in “—Notices.”

If a debt security represented by a global debt security is subject to repayment at the holder’s option, the depositary or its

nominee, as the holder, will be the only person that can exercise the right to repayment. Any indirect holders who own

beneficial interests in the global debt security and wish to exercise a repayment right must give proper and timely instructions

to the banks or brokers through which they hold their interests, requesting that they notify the depositary to exercise the

repayment right on their behalf. Different firms have different deadlines for accepting instructions from their customers, and

you should take care to act promptly enough to ensure that your request is given effect by the depositary before the applicable

deadline for exercise.

Street name and other indirect holders should contact their banks or brokers for information about how to exercise a repayment

right in a timely manner.

We or our affiliates may purchase debt securities from investors who are willing to sell from time to time, either in the open

market at prevailing prices or in private transactions at negotiated prices. Debt securities that we or they purchase may, at our

discretion, be held, resold or cancelled.

Optional Tax Redemption

In addition to the situations described above under “—Redemption and Repayment,” we also have the option to redeem the

debt securities in two situations described below, unless otherwise indicated in your prospectus supplement. The redemption

price for the debt securities, other than original issue discount debt securities, will be equal to the principal amount of the debt

securities being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. The

redemption price for original issue discount debt securities will be specified below. Furthermore, we must give you between 10

and 60 days’ notice before redeeming the debt securities unless otherwise specified in your prospectus supplement.

Ø

The first situation is where, as a result of a change in, execution of or amendment to any laws or treaties or the official

application or interpretation of any laws or treaties, we would be required to pay additional amounts as described below

under “—Payment of Additional Amounts.”

This applies only in the case of changes, executions, amendments, applications or interpretations that occur on or after

the date specified in the prospectus supplement for the applicable debt securities and in a relevant jurisdiction, as

defined in “—Payment of Additional Amounts” below. If UBS is succeeded by another entity, the applicable

jurisdiction will be the jurisdiction in which the successor entity is organized, and the applicable date will be the date

the entity became a successor.

We would not have the option to redeem in this case if we could have avoided the payment of additional amounts or

the deduction or withholding by using reasonable measures available to us.

Ø

The second situation is where a person located outside of a relevant jurisdiction into which UBS is merged or to whom

it has conveyed, transferred or leased its property is required to pay an additional amount. We would have the option to

redeem the debt securities even if we are required to pay additional amounts immediately after the merger, conveyance,

transfer or lease. We are not required to use reasonable measures to avoid the obligation to pay additional amounts in

this situation.

Payment of Additional Amounts

A relevant jurisdiction may require UBS to withhold amounts from payments on the principal or interest on a debt security for

taxes or any other governmental charges. If the relevant jurisdiction requires a withholding of this type, UBS may be required

to pay you an additional amount so that the net amount you receive will be the amount specified in the debt security to which

you are entitled.

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By relevant jurisdiction, we mean Switzerland or a jurisdiction in which the UBS branch through which debt securities are

issued is located. UBS will not have to pay additional amounts in respect of taxes or other governmental charges that are

required to be deducted or withheld by any paying agent from a payment on a debt security, if such payment can be made

without such deduction or withholding by any other paying agent, or in respect of taxes or other governmental charges that

would not have been imposed but for

Ø

the existence of any present or former connection between you and the relevant jurisdiction, other than the mere

holding of the debt security and the receipt of payments on it;

Ø

any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, duty, assessment or governmental

charge;

Ø

a failure to comply with any reasonable certification, documentation, information or other reporting requirement

concerning your nationality, residence, identity or connection with the relevant jurisdiction, if such compliance is

required as a precondition to relief or exemption from such taxes or other governmental charges (including, without

limitation, a certification that you are not resident in the relevant jurisdiction or are not an individual resident of a

member state of the European Union);

Ø

any taxes which would not have been imposed but for your presentation, or a presentation on your behalf, of a debt

security payment on a date more than 15 days after the date on which such payment on the debt security becomes due

and payable or on which the payment is duly provided for, whichever occurs later; or

Ø

any combination of the items listed above.

In addition, no additional amounts will be required to be paid on account of any deduction or withholding imposed or required

pursuant to Sections 1471 through 1474 of the Internal Revenue Code (as defined below under “U.S. Tax Considerations”),

any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of

the Internal Revenue Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental

agreement entered into in connection with the implementation of such Sections of the Internal Revenue Code.

These provisions will also apply to any taxes or governmental charges imposed by any jurisdiction in which a successor to

UBS is organized. The prospectus supplement relating to the debt security may describe additional circumstances in which

UBS would not be required to pay additional amounts.

Mergers and Similar Transactions

We are generally permitted to merge or consolidate with another firm. We are also permitted to sell our assets substantially as

an entirety to another firm. With regard to any series of debt securities, we may not take any of these actions, however, unless

all the following conditions are met:

Ø

If the successor firm in the transaction is not UBS, the successor firm must be organized as a corporation, partnership

or trust and must expressly assume our obligations under the debt securities of that series and the debt indenture. The

successor firm must be organized under the laws of Switzerland.

Ø

Immediately after the transaction, no default under the debt securities of that series has occurred and is continuing. For

this purpose, “default under the debt securities of that series” means an event of default with respect to that series or

any event that would be an event of default with respect to that series if the requirements for giving us default notice

and for our default having to continue for a specific period of time were disregarded. We describe these matters below

under “—Default, Remedies and Waiver of Default.”

If the conditions described above are satisfied with respect to the debt securities of any series, we will not need to obtain the

approval of the holders of those debt securities in order to merge or consolidate or to sell our assets. Also, these conditions will

apply only if we wish to merge or consolidate with another firm or sell our assets substantially as an entirety to another firm.

We will not need to satisfy these conditions if we enter into other types of transactions, including any transaction in which we

acquire the stock or assets of another firm, any transaction that involves a change of control of UBS but in which we do not

merge or consolidate and any transaction in which we sell less than substantially all our assets.

Also, if we merge, consolidate or sell our assets substantially as an entirety and the successor firm is a non-Swiss entity,

neither we nor any successor would have any obligation to compensate you for any resulting adverse tax consequences to the

debt securities.

Defeasance and Covenant Defeasance

If indicated in the applicable prospectus supplement for a debt security, the provisions for full defeasance and covenant

defeasance described below will apply to that debt security. In general, we expect these provisions to apply to each debt

security that has a specified currency of U.S. dollars and is not a floating rate or indexed debt security.

Full Defeasance

If there is a change in U.S. federal tax law, as described below, we can legally release ourselves from all payment and other

obligations on your debt security. This is called full defeasance. To do so, each of the following must occur:

Ø

We must deposit in trust for the benefit of all holders of those debt securities, money, U.S. government or U.S.

government agency notes or bonds or a combination of money and U.S. government or U.S. government agency notes

or bonds that will, in each case, in the opinion of a nationally recognized firm of independent public accountants,

generate enough cash to make interest, principal and any other payments on those debt securities on their various due

dates.

8

Ø

There must be a change in current U.S. federal tax law or an Internal Revenue Service ruling that lets us make the

above deposit without causing the holders to be taxed on those debt securities any differently than if we did not make

the deposit and just repaid the debt securities ourselves. Under current federal tax law, the deposit and our legal release

from your debt securities would be treated as though we took back your debt security and gave you your share of the

cash and notes or bonds deposited in trust. In that event, you could recognize gain or loss on your debt security.

Ø

We must deliver to the trustee a legal opinion of our counsel confirming the tax law change described above.

If we ever fully defease your debt security, you would have to rely solely on the trust deposit for payments on your debt

security. You would not be able to look to us for payment in the event of any shortfall.

Covenant Defeasance

Under current U.S. federal tax law, we can make the same type of deposit described above and be released from any restrictive

covenants relating to your debt security that may be described in your prospectus supplement. This is called covenant

defeasance. In that event, you would lose the protection of those restrictive covenants. In order to achieve covenant defeasance

for any debt securities, we must do both of the following:

Ø

We must deposit in trust for the benefit of all holders of those debt securities, money, U.S. government or U.S.

government agency notes or bonds or a combination of money and U.S. government or U.S. government agency notes

or bonds that will, in each case, in the opinion of a nationally recognized firm of independent public accountants,

generate enough cash to make interest, principal and any other payments on those debt securities on their various due

dates.

Ø

We must deliver to the trustee a legal opinion of our counsel confirming that under U.S. federal income tax law as then

in effect we may make the above deposit without causing you to be taxed on those debt securities any differently than if

we did not make the deposit and just repaid those debt securities ourselves.

If we accomplish covenant defeasance with regard to your debt security, the following provisions of the debt indenture and

your debt security would no longer apply:

Ø

Any covenants that your prospectus supplement may state are applicable to your debt security; and

Ø

The events of default resulting from a breach of covenants, described below in the fourth bullet point under “—Default,

Remedies and Waiver of Default—Events of Default.”

Any right we have to redeem will survive covenant defeasance with regard to those debt securities.

If we accomplish covenant defeasance on your debt security, you can still look to us for repayment of your debt security in the

event of any shortfall in the trust deposit. You should note, however, that if one of the remaining events of default occurred,

such as our bankruptcy, and your debt security became immediately due and payable, there may be a shortfall. Depending on

the event causing the default you may not be able to obtain payment of the shortfall.

Default, Remedies and Waiver of Default

You will have special rights if an event of default with respect to your series of debt securities occurs and is not cured, as

described in this subsection.

Events of Default

Unless your prospectus supplement says otherwise, when we refer to an event of default with respect to any series of debt

securities, we mean any of the following:

Ø

We do not pay the principal or any premium (including delivering any security or other property deliverable) on any

debt security of that series at its maturity;

Ø

We do not pay interest on any debt securities of that series within 30 days after it becomes due and payable;

Ø

We do not deposit a sinking fund payment with regard to any debt securities of that series on its due date, but only if

the payment is required in the applicable prospectus supplement;

Ø

We remain in breach of any other covenant we make in the debt indenture for the benefit of the debt securities of that

series, for 60 days after we receive a notice of default stating that we are in breach and requiring us to remedy the

breach. The notice must be sent by the trustee or the holders of not less than 10% in principal amount of the relevant

series of debt securities then outstanding;

Ø

We file for bankruptcy or certain other bankruptcy, insolvency or reorganization events relating to UBS occur; or

Ø

If the applicable prospectus supplement states that any additional event of default applies to your series, that event of

default occurs.

Remedies If an Event of Default Occurs

If an event of default has occurred with respect to any series of debt securities and has not been cured or waived, the trustee or

the holders of not less than 25% in principal amount of all debt securities of that series then outstanding may declare the entire

principal amount of the debt securities of that series to be due immediately. If an event of default occurs because of

bankruptcy, insolvency or reorganization events relating to UBS, the entire principal amount of the debt securities of that series

will be automatically accelerated, without any action by the trustee or any holder.

Each of the situations described above is called an acceleration of the maturity of the affected series of debt securities. If the

maturity of any series is accelerated and a judgment for payment has not yet been obtained, the holders of a majority in

principal amount of the debt securities of that series may cancel the acceleration for the entire series.

9

If an event of default occurs, the trustee will have special duties. The trustee will be obligated to use those of its rights and

powers under the debt indenture, and to use the same degree of care and skill in doing so, that a prudent person would use in

that situation in conducting his or her own affairs.

Except as described in the prior paragraph, the trustee is not required to take any action under the debt indenture at the request

of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This is called an

indemnity. If the trustee is provided with an indemnity reasonably satisfactory to it, the holders of a majority in principal

amount of all debt securities of the relevant series may direct the time, method and place of conducting any lawsuit or other

formal legal action seeking any remedy available to the trustee with respect to that series. These majority holders may also

direct the trustee in performing any other action under the debt indenture with respect to the debt securities of that series.

Before you bypass the trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights

or protect your interests relating to any debt security, all of the following must occur:

Ø

The holder of your debt security must give the trustee written notice that an event of default has occurred, and the event

of default must not have been cured or waived.

Ø

The holders of not less than 25% in principal amount of all debt securities of your series must make a written request

that the trustee take action because of the default, and they or other holders must offer to the trustee indemnity

reasonably satisfactory to the trustee against the cost and other liabilities of taking that action.

Ø

The trustee must not have taken action for 60 days after the above steps have been taken.

Ø

During those 60 days, the holders of a majority in principal amount of the debt securities of your series must not have

given the trustee directions that are inconsistent with the written request of the holders of not less than 25% in principal

amount of all debt securities of your series.

You are, however, entitled at any time to bring a lawsuit for the payment of money due on your debt security on or after its due

date.

Waiver of Default

The holders of not less than a majority in principal amount of the debt securities of any series may waive a default for all debt

securities of that series. If this happens, the default will be treated as if it has not occurred. No one can waive a payment default

on your debt security, however, without the approval of the particular holder of that debt security.

We Will Give the Trustee Information About Defaults Annually

We will furnish to the trustee every year a written statement of two of our officers certifying that to their knowledge we are in

compliance with the debt indenture and the debt securities, or else specifying any default under the debt indenture.

Book-entry and other indirect holders should consult their banks or brokers for information on how to give notice or direction

to or make a request of the trustee and how to declare or cancel an acceleration of the maturity of the debt securities. Book-

entry and other indirect owners are described below under “Legal Ownership and Book-Entry Issuance.”

Modification and Waiver of Covenants

There are three types of changes we can make to the debt indenture and the debt securities of any series.

Changes Requiring Each Holder’s Approval

First, there are changes that cannot be made without the approval of each holder of a debt security affected by the change. Here

is a list of those types of changes:

Ø

change the stated maturity for any principal or interest payment on a debt security;

Ø

reduce the principal amount, the amount payable on acceleration of the maturity after a default, the interest rate or the

redemption price for a debt security;

Ø

permit redemption of a debt security if not previously permitted;

Ø

impair any right a holder may have to require repayment of his or her debt security;

Ø

impair any right that a holder of an indexed or any other debt security may have to exchange or convert the debt

security for or into securities or other property;

Ø

change the currency of any payment on a debt security other than as permitted by the debt security;

Ø

change the place of payment on a debt security, if it is in non-global form;

Ø

impair a holder’s right to sue for payment of any amount due on his or her debt security;

Ø

reduce the percentage in principal amount of the debt securities of any one or more affected series, taken separately or

together, as applicable, the approval of whose holders is needed to change the debt indenture or those debt securities;

Ø

reduce the percentage in principal amount of the debt securities of any one or more affected series, taken separately or

together, as applicable, the consent of whose holders is needed to waive our compliance with the debt indenture or to

waive defaults; and

Ø

change the provisions of the debt indenture dealing with modification and waiver in any other respect, except to

increase any required percentage referred to above or to add to the provisions that cannot be changed or waived without

approval of the holder of each affected debt security.

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Changes Not Requiring Approval of Holders

The second type of change does not require any approval by holders of the debt securities of an affected series. This type of

change is limited to clarifications and changes that would not adversely affect the debt securities of that series in any material

respect. We also do not need any approval to make changes that affect only debt securities to be issued under the debt

indenture after the changes take effect.

We may also make changes or obtain waivers that do not adversely affect a particular debt security, even if they affect other

debt securities. In those cases, we do not need to obtain the approval of the holder of the unaffected debt security; we need only

obtain any required approvals from the holders of the affected debt securities.

Changes Requiring Majority Approval

Any other change to the debt indenture and the debt securities would require the following approval:

Ø

If the change affects only the debt securities of a particular series, it must be approved by the holders of 66⅔% in

principal amount of the debt securities of that series.

Ø

If the change affects the debt securities of more than one series of debt securities issued under the debt indenture, it

must be approved by the holders of 66⅔% in principal amount of all series affected by the change, with the debt

securities of all the affected series voting together as one class for this purpose (and of any affected series that by its

terms is entitled to vote separately as a series, as described below).

In each case, the required approval must be given by written consent.

Majority approval would be required for us to obtain a waiver of any of our covenants in the debt indenture. Our covenants

include the promises we make about merging, which we describe above under “—Mergers and Similar Transactions.” If the

holders approve a waiver of a covenant, we will not have to comply with that covenant. The holders, however, cannot approve

a waiver of any provision in a particular debt security, or in the debt indenture as it affects that debt security, that we cannot

change without the approval of the holder of that debt security as described above under “—Changes Requiring Each Holder’s

Approval,” unless that holder approves the waiver.

Book-entry and other indirect holders should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the debt indenture or the debt securities or request a waiver.

Special Rules for Action by Holders

When holders take any action under the debt indenture, such as giving a notice of default, declaring an acceleration, approving

any change or waiver or giving the trustee an instruction, we will apply the following rules.

Only Outstanding Debt Securities Are Eligible

Only holders of outstanding debt securities of the applicable series will be eligible to participate in any action by holders of

debt securities of that series. Also, we will count only outstanding debt securities in determining whether the various

percentage requirements for taking action have been met. For these purposes, a debt security will not be “outstanding”:

Ø

if it has been surrendered for cancellation;

Ø

if we have deposited or set aside, in trust for its holder, money for its payment or redemption;

Ø

if we have fully defeased it as described above under “—Defeasance and Covenant Defeasance—Full Defeasance”; or

Ø

if we or one of our affiliates, such as UBS Securities LLC or UBS Financial Services Inc., is the beneficial owner.

Special Series Voting Rights

We may issue series of debt securities that are entitled, by their terms, to vote separately on matters (for example, modification

or waiver of provisions in the debt indenture) that would otherwise require a vote of all affected series, voting together as a

single class. Any such series would be entitled to vote together with all other affected series, voting together as one class, and

would also be entitled to vote separately, as a series only. These special voting rights will be described in the applicable

prospectus supplement. For a series that does not have these special rights, voting will occur as described in the preceding

section, but subject to any separate voting rights of any series having special rights. We may issue a series having these or

other special voting rights without obtaining the consent of or giving notice to holders of outstanding series.

Eligible Principal Amount of Some Debt Securities

In some situations, we may follow special rules in calculating the principal amount of a debt security that is to be treated as

outstanding for the purposes described above. This may happen, for example, if the principal amount is payable in a non-U.S.

dollar currency, increases over time or is not to be fixed until maturity. For any debt security of the kind described below, we

will decide how much principal amount to attribute to the debt security as follows:

Ø

For an original issue discount debt security, we will use the principal amount that would be due and payable on the

action date if the maturity of the debt security were accelerated to that date because of a default.

Ø

For a debt security whose principal amount is not known, we will use any amount that we indicate in the prospectus

supplement for that debt security. The principal amount of a debt security may not be known, for example, because it is

based on an index that changes from time to time and the principal amount is not to be determined until a later date.

Ø

For debt securities with a principal amount denominated in one or more non-U.S. dollar currencies or currency units,

we will use the U.S. dollar equivalent, which we will determine.

11

Determining Record Dates for Action by Holders

We will generally be entitled to set any day as a record date for the purpose of determining the holders that are entitled to take

action under the debt indenture. In certain limited circumstances, only the trustee will be entitled to set a record date for action

by holders. If we or the trustee set a record date for an approval or other action to be taken by holders, that vote or action may

be taken only by persons or entities who are holders on the record date and must be taken during the period that we specify for

this purpose, or that the trustee specifies if it sets the record date. We or the trustee, as applicable, may shorten or lengthen this

period from time to time. This period, however, may not extend beyond the 180th day after the record date for the action. In

addition, record dates for any global debt security may be set in accordance with procedures established by the depositary from

time to time. Accordingly, record dates for global debt securities may differ from those for other debt securities.

Form, Exchange and Transfer of Debt Securities

We will issue each debt security in global—

i.e.

, book-entry—form only, unless we specify otherwise in the applicable

prospectus supplement. Debt securities in book-entry form will be represented by a global security registered in the name of a

depositary, which will be the holder of all the debt securities represented by the global security. Those who own beneficial

interests in a global debt security will do so through participants in the depositary’s securities clearance system, and the rights

of these indirect owners will be governed solely by the applicable procedures of the depositary and its participants. We

describe book-entry securities below under “Legal Ownership and Book-Entry Issuance.” Unless we specify otherwise in the

applicable prospectus supplement, The Depository Trust Company, New York, New York, known as DTC, will be the

depositary for all debt securities in global form.

In addition, we will generally issue each debt security in registered form, without coupons, unless we specify otherwise in the

applicable prospectus supplement. If we issue a debt security in bearer form, the applicable prospectus supplement will

describe the provisions that would apply to that security.

If a debt security is issued as a global debt security, only the depositary—

e.g.

, DTC, Euroclear and Clearstream—will be

entitled to transfer and exchange the debt security or exercise any other rights of a holder as described in this subsection, since

the depositary will be the sole holder of the debt security.

If any debt securities cease to be issued in global form, then unless we indicate otherwise in your prospectus supplement, they

will be issued:

Ø

only in fully registered form;

Ø

without interest coupons; and

Ø

unless we indicate otherwise in your prospectus supplement, in denominations of $1,000 and integral multiples of

$1,000.

Holders may exchange their debt securities for debt securities of smaller denominations (subject to the limit above) or

combined into fewer debt securities of larger denominations, as long as the total principal amount is not changed. You may not

exchange your debt securities for securities of a different series or having different terms, unless your prospectus supplement

says you may.

Holders may exchange or transfer their debt securities at the office of the trustee. They may also replace lost, stolen, destroyed

or mutilated debt securities at that office. We have appointed the trustee to act as our agent for registering debt securities in the

names of holders and transferring and replacing debt securities. We may appoint another entity to perform these functions or

perform them ourselves.

Holders will not be required to pay a service charge to transfer or exchange their debt securities, but they may be required to

pay for any tax or other governmental charge associated with the exchange or transfer. The transfer or exchange, and any

replacement, will be made only if our transfer agent is satisfied with the holder’s proof of legal ownership. The transfer agent

may require an indemnity before replacing any debt securities.

If we have designated additional transfer agents for your debt security, they will be named in your prospectus supplement. We

may appoint additional transfer agents or cancel the appointment of any particular transfer agent. We may also approve a

change in the office through which any transfer agent acts.

If the debt securities of any series are redeemable and we redeem less than all those debt securities, we may block the transfer

or exchange of those debt securities during the period beginning 15 days before the day we mail the notice of redemption and

ending on the day of that mailing or during any other period specified in the applicable prospectus supplement, in order to

freeze the list of holders who will receive the mailing. We may also refuse to register transfers of or exchange any debt security

selected for redemption, except that we will continue to permit transfers and exchanges of the unredeemed portion of any debt

security being partially redeemed.

The rules for exchange described above apply to exchanges of debt securities for other debt securities of the same series and

kind. If a debt security is convertible, exercisable or exchangeable into or for a different kind of security, such as one that we

have not issued, or for other property, the rules governing that type of conversion, exercise or exchange will be described in the

applicable prospectus supplement.

12

Payment Mechanics for Debt Securities 

Who Receives Payments?

If interest is due on a debt security on an interest payment date, we will pay the interest to the person in whose name the debt

security is registered at the close of business on the regular record date described below relating to the interest payment date. If

interest is due at maturity but on a day that is not an interest payment date, we will pay the interest to the person entitled to

receive the principal of the debt security. If principal or another amount besides interest is due on a debt security at maturity,

we will pay the amount to the holder of the debt security against surrender of the debt security at a proper place of payment (or,

in the case of a global debt security, in accordance with the applicable policies of the depositary).

Payment Dates and Regular Record Dates for Interest

Unless we specify otherwise in the applicable prospectus supplement, interest on any fixed rate debt security will be payable

semiannually each May 15 and November 15 and at maturity, and the regular record date relating to an interest payment date

for any fixed rate debt security will be the May 1 or November 1 next preceding that interest payment date. The regular record

date relating to an interest payment date for any floating rate debt security will be the 15th calendar day before that interest

payment date. These record dates will apply whether or not a particular record date is a business day. For the purpose of

determining the holder at the close of business on a regular record date when business is not being conducted, the close of

business will mean 5:00 P.M., New York City time, on that day.

The term “business day” means, for any debt security, a day that meets all the following applicable requirements:

Ø

for all debt securities, is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking

institutions in New York City generally are authorized or obligated by law, regulation or executive order to close and

that satisfies any other criteria specified in your prospectus supplement;

Ø

if the debt security is a floating rate debt security whose interest rate is based on LIBOR, is also a day on which

dealings in the relevant index currency specified in the applicable prospectus supplement are transacted in the London

interbank market;

Ø

if the debt security is a floating rate debt security whose interest rate is based on SOFR, is also any day except for a

Saturday, a Sunday or a day on which the Securities Industry and Financial Markets Association recommends that the

fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government

securities;

Ø

if the debt security has a specified currency other than U.S. dollars or euros, is also a day on which banking institutions

are not authorized or obligated by law, regulation or executive order to close in the principal financial center of the

country issuing the specified currency;

Ø

if the debt security either is a floating rate debt security whose interest rate is based on EURIBOR or has a specified

currency of euros, is also a day on which the Trans-European Automated Real-time Gross settlement Express Transfer

(TARGET) System, or any successor system, is open for business;

Ø

if the debt security is held through Euroclear, is also not a day on which banking institutions in Brussels, Belgium are

generally authorized or obligated by law, regulation or executive order to close; and

Ø

if the debt security is held through Clearstream, is also not a day on which banking institutions in Luxembourg are

generally authorized or obligated by law, regulation or executive order to close.

How We Will Make Payments Due in U.S. Dollars

We will follow the practices described in this subsection when paying amounts due in U.S. dollars. Payments of amounts due

in other currencies will be made as described in the next subsection.

Payments on Global Debt Securities.

We will make payments on a global debt security in accordance with the applicable

policies of the depositary as in effect from time to time. Under those policies, we will pay directly to the depositary, or its

nominee, and not to any indirect owners who own beneficial interests in the global debt security. An indirect owner’s right to

receive those payments will be governed by the rules and practices of the depositary and its participants, as described under

“Legal Ownership and Book-Entry Issuance—What Is a Global Security?”

Payments on Non-Global Debt Securities.

We will make payments on a debt security in non-global, registered form as

follows. We will pay interest that is due on an interest payment date by check mailed on the interest payment date to the holder

at his or her address shown on the trustee’s records as of the close of business on the regular record date. We will make all

other payments by check at the paying agent described below, against surrender of the debt security. All payments by check

will be made in next-day funds—that is, in funds that become available on the day after the check is cashed.

Alternatively, if a non-global debt security has a face amount of at least $1,000,000 and the holder asks us to do so, we will

pay any amount that becomes due on the debt security by wire transfer of immediately available funds to an account at a bank

in New York City, on the due date. To request wire payment, the holder must give the paying agent appropriate wire transfer

instructions at least five business days before the requested wire payment is due. In the case of any interest payment due on an

interest payment date, the instructions must be given by the person who is the holder on the relevant regular record date. In the

case of any other payment, payment will be made only after the debt security is surrendered to the paying agent. Any wire

instructions, once properly given, will remain in effect unless and until new instructions are given in the manner described

above.

13

Book-entry and other indirect owners should consult their banks or brokers for information on how they will receive payments

on their debt securities.

How We Will Make Payments Due in Other Currencies

We will follow the practices described in this subsection when paying amounts that are due in a specified currency other than

U.S. dollars.

Payments on Global Debt Securities.

We will make payments on a global debt security in accordance with the applicable

policies of the depositary as in effect from time to time. We understand that these policies, as currently in effect at DTC, are as

follows:

Unless otherwise indicated in your prospectus supplement, if you are an indirect owner of global debt securities denominated

in a specified currency other than U.S. dollars and if you have the right to elect to receive payments in that other currency and

you do make that election, you must notify the participant through which your interest in the global debt security is held of

your election:

Ø

on or before the applicable regular record date, in the case of a payment of interest, or

Ø

on or before the 16th day prior to stated maturity, or any redemption or repayment date, in the case of payment of

principal or any premium.

You may elect to receive all or only a portion of any interest, principal or premium payment in a specified currency other than

U.S. dollars.

Your participant must, in turn, notify DTC of your election on or before the third DTC business day after that regular record

date, in the case of a payment of interest, and on or before the 12th DTC business day prior to stated maturity, or on the

redemption or repayment date if your debt security is redeemed or repaid earlier, in the case of a payment of principal or any

premium.

DTC, in turn, will notify the paying agent of your election in accordance with DTC’s procedures.

If complete instructions are received by the participant and forwarded by the participant to DTC, and by DTC to the paying

agent, on or before the dates noted above, the paying agent, in accordance with DTC’s instructions, will make the payments to

you or your participant by wire transfer of immediately available funds to an account maintained by you or your participant

with a bank located in the country issuing the specified currency or in another jurisdiction acceptable to us and the paying

agent.

If the foregoing steps are not properly completed, we expect DTC to inform the paying agent that payment is to be made in

U.S. dollars. In that case, we or our agent will convert the payment to U.S. dollars in the manner described below under “—

Conversion to U.S. Dollars.” We expect that we or our agent will then make the payment in U.S. dollars to DTC, and that DTC

in turn will pass it along to its participants.

Book-entry and other indirect holders of a global debt security denominated in a currency other than U.S. dollars should

consult their banks or brokers for information on how to request payment in the specified currency.

Payments on Non-Global Debt Securities.

Except as described in the second to last paragraph under this heading, we will

make payments on debt securities in non-global form in the applicable specified currency. We will make these payments by

wire transfer of immediately available funds to any account that is maintained in the applicable specified currency at a bank

designated by the holder and is acceptable to us and the trustee. To designate an account for wire payment, the holder must

give the paying agent appropriate wire instructions at least five business days before the requested wire payment is due. In the

case of any interest payment due on an interest payment date, the instructions must be given by the person who is the holder on

the regular record date. In the case of any other payment, the payment will be made only after the debt security is surrendered

to the paying agent. Any instructions, once properly given, will remain in effect unless and until new instructions are properly

given in the manner described above.

If a holder fails to give instructions as described above, we will notify the holder at the address in the trustee’s records and will

make the payment within five business days after the holder provides appropriate instructions. Any late payment made in these

circumstances will be treated under the debt indenture as if made on the due date, and no interest will accrue on the late

payment from the due date to the date paid.

Although a payment on a debt security in non-global form may be due in a specified currency other than U.S. dollars, we will

make the payment in U.S. dollars if the holder asks us to do so. To request U.S. dollar payment, the holder must provide

appropriate written notice to the trustee at least five business days before the next due date for which payment in U.S. dollars is

requested. In the case of any interest payment due on an interest payment date, the request must be made by the person who is

the holder on the regular record date. Any request, once properly made, will remain in effect unless and until revoked by notice

properly given in the manner described above.

Indirect owners of a non-global debt security with a specified currency other than U.S. dollars should contact their banks or

brokers for information about how to receive payments in the specified currency or in U.S. dollars.

14

Conversion to U.S. Dollars.

When we are asked by a holder to make payments in U.S. dollars of an amount due in another

currency, either on a global debt security or a non-global debt security as described above, we will determine the U.S. dollar

amount the holder receives as follows. The exchange rate agent described below will request currency bid quotations expressed

in U.S. dollars from three or, if three are not available, then two, recognized foreign exchange dealers in New York City, any

of which may be the exchange rate agent, which may be UBS Securities LLC, an affiliate of UBS, as of 11:00 A.M., New

York City time, on the second business day before the payment date. Currency bid quotations will be requested on an

aggregate basis, for all holders of debt securities requesting U.S. dollar payments of amounts due on the same date in the same

specified currency. The U.S. dollar amount the holder receives will be based on the highest acceptable currency bid quotation

received by the exchange rate agent. If the exchange rate agent determines that at least two acceptable currency bid quotations

are not available on that second business day, the payment will be made in the specified currency.

To be acceptable, a quotation must be given as of 11:00 A.M., New York City time, on the second business day before the due

date and the quoting dealer must commit to execute a contract at the quotation in the total amount due in that currency on all

series of debt securities. If some but not all of the relevant debt securities are LIBOR debt securities, SOFR debt securities or

EURIBOR debt securities, the second preceding business day will be determined for this purpose as if none of those debt

securities were LIBOR debt securities, SOFR debt securities or EURIBOR debt securities.

A holder that requests payment in U.S. dollars will bear all associated currency exchange costs, which will be deducted from

the payment.

When the Specified Currency Is Not Available.

If we are obligated to make any payment in a specified currency other than

U.S. dollars, and the specified currency or any successor currency is not available to us or cannot be paid to you due to

circumstances beyond our control—such as the imposition of exchange controls or a disruption in the currency markets—we

will be entitled to satisfy our obligation to make the payment in that specified currency by making the payment in U.S. dollars,

on the basis specified in the applicable prospectus supplement.

For a specified currency other than U.S. dollars, the exchange rate will be the noon buying rate for cable transfers of the

specified currency in New York City as quoted by the Federal Reserve Bank of New York on the then-most recent day on

which that bank has quoted that rate.

The foregoing will apply to any debt security, whether in global or non-global form, and to any payment, including a payment

at maturity. Any payment made under the circumstances and in a manner described above will not result in a default under any

debt security or the debt indenture.

Exchange Rate Agent.

If we issue a debt security in a specified currency other than U.S. dollars, we will appoint a financial

institution to act as the exchange rate agent and will name the institution initially appointed when the debt security is originally

issued in the applicable prospectus supplement. We may select UBS Securities LLC or another of our affiliates to perform this

role. We may change the exchange rate agent from time to time after the original issue date of the debt security without your

consent and without notifying you of the change.

All determinations made by the exchange rate agent will be at its sole discretion unless we state in your prospectus supplement

that any determination is subject to our approval. In the absence of manifest error, those determinations will be conclusive for

all purposes and binding on you and us, without any liability on the part of the exchange rate agent.

Payment When Offices Are Closed

If any payment is due on a debt security on a day that is not a business day, we will make the payment on the next day that is a

business day. Unless specified otherwise in the applicable prospectus supplement, payments postponed to the next business

day in this situation will be treated under the debt indenture as if they were made on the original due date. Postponement of this

kind will not result in a default under any debt security or the debt indenture, and no interest will accrue on the postponed

amount from the original due date to the next day that is a business day. The term business day has a special meaning, which

we describe above under “—Payment Dates and Regular Record Dates for Interest.”

Paying Agent

We may appoint one or more financial institutions to act as our paying agents, at whose designated offices debt securities in

non-global entry form may be surrendered for payment at their maturity. We call each of those offices a paying agent. We may

add, replace or terminate paying agents from time to time. We may also choose to act as our own paying agent. Initially, we

have appointed the trustee, at its corporate trust office in New York City, as the paying agent. We must notify the trustee of

changes in the paying agents.

Settlement Mechanics

The settlement mechanics applicable to debt securities calling for physical settlement will be described in the applicable

prospectus supplement.

Unclaimed Payments

Regardless of who acts as paying agent, all money paid by us to a paying agent that remains unclaimed at the end of two years

after the amount is due to a holder will be repaid to us. After that two-year period, the holder may look only to us for payment

and not to the trustee, any other paying agent or anyone else.

15

Notices

Notices to be given to holders of a global debt security will be given only to the depositary, in accordance with its applicable

policies as in effect from time to time. Notices to be given to holders of debt securities not in global form will be sent by mail

to the respective addresses of the holders as they appear in the trustee’s records, and will be deemed given when mailed.

Neither the failure to give any notice to a particular holder, nor any defect in a notice given to a particular holder, will affect

the sufficiency of any notice given to another holder.

Book-entry and other indirect holders should consult their banks or brokers for information on how they will receive notices.

Our Relationship with the Trustee

U.S. Bank Trust National Association has provided commercial banking and other services for us and our affiliates in the past

and may do so in the future. Among other things, U.S. Bank Trust National Association holds debt securities issued by us and

serves as trustee or agent with regard to other obligations of UBS or its subsidiaries.

U.S. Bank Trust National Association is serving as the trustee for the debt securities and the warrants issued under our warrant

indenture. Consequently, if an actual or potential event of default occurs with respect to any of these securities, the trustee may

be considered to have a conflicting interest for purposes of the Trust Indenture Act of 1939. In that case, the trustee may be

required to resign under one or more of the indentures, and we would be required to appoint a successor trustee. For this

purpose, a “potential” event of default means an event that would be an event of default if the requirements for giving us

default notice or for the default having to exist for a specific period of time were disregarded.

Legal Ownership and Book-Entry Issuance

In this section, we describe special considerations that will apply to registered securities issued in global—i.e., book-entry—

form. First we describe the difference between legal ownership and indirect ownership of registered securities. Then we

describe special provisions that apply to global securities.

Who is The Legal Owner of a Registered Security?

Each debt security or warrant in registered form will be represented either by a certificate issued in definitive form to a

particular investor or by one or more global securities representing the entire issuance of securities. We refer to those who have

securities registered in their own names, on the books that we or the trustee, warrant agent or other agent maintain for this

purpose, as the “holders” of those securities. These persons are the legal holders of the securities. We refer to those who,

indirectly through others, own beneficial interests in securities that are not registered in their own names as indirect owners of

those securities. As we discuss below, indirect owners are not legal holders, and investors in securities issued in book-entry

form or in street name will be indirect owners.

Book-Entry Owners

We will issue each security in book-entry form only. This means securities will be represented by one or more global securities

registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that

participate in the depositary’s book -entry system. These participating institutions, in turn, hold beneficial interests in the

securities on behalf of themselves or their customers.

Under each indenture or warrant agreement, only the person in whose name a security is registered is recognized as the holder

of that security. Consequently, for securities issued in global form, we will recognize only the depositary as the holder of the

securities and we will make all payments on the securities, including deliveries of any property other than cash, to the

depositary. The depositary passes along the payments it receives to its participants, which in turn pass the payments along to

their customers who are the beneficial owners. The depositary and its participants do so under agreements they have made with

one another or with their customers; they are not obligated to do so under the terms of the securities.

As a result, investors will not own securities directly. Instead, they will own beneficial interests in a global security, through a

bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an interest through a

participant. As long as the securities are issued in global form, investors will be indirect owners, and not holders, of the

securities.

Street Name Owners

In the future we may terminate a global security or issue securities initially in non -global form. In these cases, investors may

choose to hold their securities in their own names or in street name. Securities held by an investor in street name would be

registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold

only a beneficial interest in those securities through an account he or she maintains at that institution.

16

For securities held in street name, we will recognize only the intermediary banks, brokers and other financial institutions in

whose names the securities are registered as the holders of those securities and we will make all payments on those securities,

including deliveries of any property other than cash, to them. These institutions pass along the payments they receive to their

customers who are the beneficial owners, but only because they agree to do so in their customer agreements or because they

are legally required to do so. Investors who hold securities in street name will be indirect owners, not holders, of those

securities.

Legal Holders

Our obligations, as well as the obligations of the trustee and the obligations, if any, of any warrant agents and any other third

parties employed by us, the trustee or any of those agents, run only to the holders of the securities. We do not have obligations

to investors who hold indirect interests in global securities, in street name or by any other indirect means. This will be the case

whether an investor chooses to be an indirect owner of a security or has no choice because we are issuing the securities only in

global form.

For example, once we make a payment or give a notice to the holder, we have no further responsibility for that payment or

notice even if that holder is required, under agreements with depositary participants or customers or by law, to pass it along to

the indirect owners but does not do so. Similarly, if we want to obtain the approval of the holders for any purpose—for

example, to amend the indenture for a series of debt securities or warrants or the warrant agreement for a series of warrants or

to relieve us of the consequences of a default or of our obligation to comply with a particular provision of the indenture—we

would seek the approval only from the holders, and not the indirect owners, of the relevant securities. Whether and how the

holders contact the indirect owners is up to the holders.

When we refer to “you” in this prospectus, we mean those who invest in the securities being offered by this prospectus,

whether they are the holders or only indirect owners of those securities. When we refer to “your securities” in this prospectus,

we mean the securities in which you will hold a direct or indirect interest.

Special Considerations for Indirect Owners

If you hold securities through a bank, broker or other financial institution, either in book-entry form or in street name, you

should check with your own institution to find out:

Ø

how it handles securities payments and notices;

Ø

whether it imposes fees or charges;

Ø

whether and how you can instruct it to exercise any rights to purchase or sell warrant property under a warrant or to

exchange or convert a security for or into other property;

Ø

how it would handle a request for the holders’ consent, if ever required;

Ø

whether and how you can instruct it to send you securities registered in your own name so you can be a holder, if that

is permitted in the future;

Ø

how it would exercise rights under the securities if there were a default or other event triggering the need for holders

to act to protect their interests; and

Ø

if the securities are in book-entry form, how the depositary’s rules and procedures will affect these matters.

What Is a Global Security?

We will issue each security in book-entry form only. Each security issued in book-entry form will be represented by a global

security that we deposit with and register in the name of one or more financial institutions or clearing systems, or their

nominees, which we select. A financial institution or clearing system that we select for any security for this purpose is called

the “depositary” for that security. A security will usually have only one depositary but it may have more.

Each series of securities will have one or more of the following as the depositaries:

Ø

The Depository Trust Company, New York, New York, which is known as “DTC”;

Ø

a financial institution holding the securities on behalf of Morgan Guaranty Trust Company of New York, acting out

of its Brussels, Belgium, office, as operator of the Euroclear system, which is known as “Euroclear”;

Ø

a financial institution holding the securities on behalf of Clearstream Banking, société anonyme, which is known as

“Clearstream”; and

17

Ø

any other clearing system or financial institution named in the applicable prospectus supplement. The depositaries

named above may also be participants in one another’s systems. Thus, for example, if DTC is the depositary for a

global security, investors may hold beneficial interests in that security through Euroclear or Clearstream, as DTC

participants.

The depositary or depositaries for your securities will be named in your prospectus supplement; if none is named, the

depositary will be DTC.

A global security may represent one or any other number of individual securities. Generally, all securities represented by the

same global security will have the same terms. We may, however, issue a global security that represents multiple securities of

the same kind, such as debt securities, that have different terms and are issued at different times. We call this kind of global

security a master global security. Your prospectus supplement will not indicate whether your securities are represented by a

master global security.

A global security may not be transferred to or registered in the name of anyone other than the depositary or its nominee, unless

special termination situations arise. We describe those situations below under “—Holder’s Option to Obtain a Non-Global

Security; Special Situations When a Global Security Will Be Terminated.” As a result of these arrangements, the depositary, or

its nominee, will be the sole registered owner and holder of all securities represented by a global security, and investors will be

permitted to own only indirect interests in a global security. Indirect interests must be held by means of an account with a

broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does.

Thus, an investor whose security is represented by a global security will not be a holder of the security, but only an indirect

owner of an interest in the global security.

If the prospectus supplement for a particular security indicates that the security will be issued in global form only, then the

security will be represented by a global security at all times unless and until the global security is terminated. We describe the

situations in which this can occur below under “—Holder’s Option to Obtain a Non-Global Security; Special Situations When

a Global Security Will Be Terminated.” If termination occurs, we may issue the securities through another book-entry clearing

system or decide that the securities may no longer be held through any book-entry clearing system.

Special Considerations for Global Securities

As an indirect owner, an investor’s rights relating to a global security will be governed by the account rules of the depositary

and those of the investor’s financial institution or other intermediary through which it holds its interest (such as Euroclear or

Clearstream, if DTC is the depositary), as well as general laws relating to securities transfers. We do not recognize this type of

investor or any intermediary as a holder of securities and instead deal only with the depositary that holds the global security.

If securities are issued only in the form of a global security, an investor should be aware of the following:

Ø

An investor cannot require the securities to be registered in his or her own name, and cannot obtain non-global

certificates for his or her interest in the securities, except in the special situations we describe below.

Ø

An investor will be an indirect holder and must look to his or her own bank or broker for payments on the securities

and protection of his or her legal rights relating to the securities, as we describe above under “—Who Is the Legal

Owner of a Registered Security?”

Ø

An investor may not be able to sell interests in the securities to some insurance companies and other institutions that

are required by law to own their securities in non-book-entry form.

Ø

An investor may not be able to pledge his or her interest in a global security in circumstances where certificates

representing the securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to

be effective.

Ø

The depositary’s policies will govern payments, deliveries, transfers, exchanges, notices and other matters relating to

an investor’s interest in a global security, and those policies may change from time to time. We, the trustee and any

warrant agents will have no responsibility for any aspect of the depositary’s policies, actions or records of ownership

interests in a global security. We, the trustee and any warrant agents also do not supervise the depositary in any way.

Ø

The depositary will require that those who purchase and sell interests in a global security within its book-entry system

use immediately available funds and your broker or bank may require you to do so as well.

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Ø

Financial institutions that participate in the depositary’s book-entry system and through which an investor holds its

interest in the global securities, directly or indirectly, may also have their own policies affecting payments, deliveries,

transfers, exchanges, notices and other matters relating to the securities, and those policies may change from time to

time. For example, if you hold an interest in a global security through Euroclear or Clearstream, when DTC is the

depositary, Euroclear or Clearstream, as applicable, will require those who purchase and sell interests in that security

through them to use immediately available funds and comply with other policies and procedures, including deadlines

for giving instructions as to transactions that are to be effected on a particular day. There may be more than one

financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the

policies or actions or records of ownership interests of any of those intermediari es.

Holder’s Option to Obtain a Non-Global Security; Special Situations When a Global Security Will Be Terminated

If we issue any series of securities in book-entry form but we choose to give the beneficial owners of that series the right to

obtain non-global securities, any beneficial owner entitled to obtain non-global securities may do so by following the

applicable procedures of the depositary, any transfer agent or registrar for that series and that owner’s bank, broker or other

financial institution through which that owner holds its beneficial interest in the securities. If you are entitled to request a non-

global certificate and wish to do so, you will need to allow sufficient lead time to enable us or our agent to prepare the

requested certificate.

In addition, in a few special situations described below, a global security will be terminated and interests in it will be

exchanged for certificates in non-global form representing the securities it represented. After that exchange, the choice of

whether to hold the securities directly or in street name will be up to the investor. Investors must consult their own banks or

brokers to find out how to have their interests in a global security transferred on termination to their own names, so that they

will be holders. We have described the rights of holders and street name investors above under “—Who Is the Legal Owner of

a Registered Security?”

The special situations for termination of a global security are as follows:

Ø

if the depositary notifies us that it is unwilling, unable or no longer qualified to continue as depositary for that global

security and we do not appoint another institution to act as depositary within 60 days; or

Ø

in the case of a global security representing debt securities or warrants issued under an indenture, if an event of

default has occurred with regard to these debt securities or warrants and has not been cured or waived.

If a global security is terminated, only the depositary, and not we, the trustee for any debt securities or warrants or the warrant

agent for any warrants, is responsible for deciding the names of the institutions in whose names the securities represented by

the global security will be registered and, therefore, who will be the holders of those securities.

Considerations Relating to Euroclear and Clearstream

Euroclear and Clearstream are securities clearance systems in Europe. Both systems clear and settle securities transactions

between their participants through electronic, book-entry delivery of securities against payment.

Euroclear and Clearstream may be depositaries for a global security. In addition, if DTC is the depositary for a global security,

Euroclear and Clearstream may hold interests in the global security as participants in DTC.

As long as any global security is held by Euroclear or Clearstream as depositary, you may hold an interest in the global

security only through an organization that participates, directly or indirectly, in Euroclear or Clearstream. If Euroclear or

Clearstream is the depositary for a global security and there is no depositary in the United States, you will not be able to hold

interests in that global security through any securities clearance system in the United States.

Payments, deliveries, transfers, exchanges, notices and other matters relating to the securities made through Euroclear or

Clearstream must comply with the rules and procedures of those systems. Those systems could change their rules and

procedures at any time. We have no control over those systems or their participants and we take no responsibility for their

activities. Transactions between participants in Euroclear or Clearstream, on one hand, and participants in DTC, on the other

hand, when DTC is the depositary, would also be subject to DTC’s rules and procedures.

Special Timing Considerations for Transactions in Euroclear and Clearstream

Investors will be able to make and receive through Euroclear and Clearstream payments, deliveries, transfers, exchanges,

notices and other transactions involving any securities held through those systems only on days when those systems are open

for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for

business in the United States.

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In addition, because of time-zone differences, U.S. investors who hold their interests in the securities through these systems

and wish to transfer their interests, or to receive or make a payment or delivery or exercise any other right with respect to their

interests, on a particular day may find that the transaction will not be effected until the next business day in Luxembourg or

Brussels, as applicable. Thus, investors who wish to exercise rights that expire on a particular day may need to act before the

expiration date. In addition, investors who hold their interests through both DTC and Euroclear or Clearstream may need to

make special arrangements to finance any purchases or sales of their interests between the U.S. and European clearing systems,

and those transactions may settle later than would be the case for transactions within one clearing system.

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1. UBS AG FI Enhanced Large Cap Growth ETN due June 19, 2024

Principal Terms:

Initial Trade Date

: June 10, 2014

Initial Settlement Date

: June 13, 2014

Term

: 10 years, subject to your right to receive payment for your Securities upon redemption, acceleration upon minimum

indicative value or exercise by UBS of its call right. 

Denomination/Principal Amount

: $100.00 per Security

Maturity Date

: June 19, 2024, subject to adjustment

Underlying Index

: The return on the Securities is linked to the Russell 1000 Growth Total Return Index. The level of the Index

reflects both the price performance of the Index Constituent Securities and the reinvestment of dividends on the Index Constituent

Securities. 

Annual Tracking Rate

: 0.85% per annum

Financing Spread

: 0.44% per annum

Loss Rebalancing Fee

: Upon each occurrence of a Loss Rebalancing Event, you will incur a 0.05% reduction in the LR Current

Principal Amount of Your Securities and may also have a further reduction due to a breakage computation. See “General Terms

of the Securities — Loss Rebalancing Event Upon Large Decreases in the Indicative Value” for the definition of the Loss

Rebalancing Fee and all other defined pertaining to the Loss Rebalancing Event.

First Redemption Date

: June 20, 2014 for Regular Redemptions, June 26, 2014 for Large Redemptions

Final Redemption Date

: June 14, 2024

First Call Date

: The first date that UBS may exercise its Call Right is June 15, 2015

Quarterly Initial Closing Level for the Initial Calendar Quarter

: 826.0448, the Index Closing Level (as defined below) on the

Initial Trade Date.

Quarterly Reset Dates

: For each calendar quarter, the Quarterly Reset Date is the first Trading Day of that quarter beginning on

October 1, 2014 and ending on April 1, 2024, subject to adjustment.

Quarterly Valuation Dates

: For each Quarterly Reset Date, the Quarterly Valuation Date is the last Trading Day of the previous

calendar quarter, beginning on September 30, 2014 and ending on March 28, 2024, subject to adjustment.

Floor Level

: The “Floor Level” is equal to $20.00 (subject to adjustment as described under “Valuation of the Index and the

Securities — Split or Reverse Split of the Securities”).

Index Sponsor

: Russell Investments, a subsidiary of Russell Investment Group (“Russell”).

Listing

: The Securities have been approved for listing, subject to official notice of issuance, on NYSE Arca under the symbol

“FBGX”

Calculation Date

: June 10, 2024, unless that day is not a Trading Day, in which case the Calculation Date will be the next

Trading Day, subject to adjustment.

Index Symbol

: RU10GRTR (NYSE and Bloomberg)

Intraday Indicative Value Symbol

: FBGXIV (Bloomberg)

CUSIP No

.: 902677780

ISIN No

.: US9026777808

General Terms of the Securities

In this section, references to “holders” or “you” mean those who own the Securities registered in their own names, on the

books that we or the trustee maintain for this purpose, and not those who own beneficial interests in the Securities registered in

street name or in the Securities issued in book-entry form through DTC or another depositary. Owners of beneficial interests in

the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under “Medium-Term Notes, Series

A” above.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series A” that we may issue, from time to

time, under the indenture more particularly described under “Medium-Term Notes, Series A” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series A are

described under “Medium-Term Notes, Series A” above. The terms described here supplement those described in “Medium-Term

Notes, Series A” above and, if the terms described here are inconsistent with those described there, the terms described here are

controlling.

Interest or Coupons

We will not pay you any interest or coupons during the term of the Securities. 

21

Payment at Maturity

The “Maturity Date” for each series of Securities will be the third Trading Day after the last Trading Day in the applicable

Measurement Period, which we refer to in this section “— Payment at Maturity” as the “Final Measurement Period”. The

scheduled Maturity Date is identified in “ Principal Terms” above.

For each Security, unless earlier called, redeemed or accelerated, you will receive at maturity a cash payment equal to:

(a) the product of (i) the Current Principal Amount and (ii) the Index Factor as of the last Trading Day in the Final

Measurement Period, minus

(b) the Accrued Fees as of such last Trading Day.

If the amount calculated above is less than zero, the payment at maturity will be zero.

You may lose some or all of your initial investment at maturity. Because the Accrued Fees reduce your final payment, the

quarterly compounded leveraged return of the Index will need to offset the negative effect of the Accrued Fees and Loss

Rebalancing Fees, if applicable, in order for you to receive an aggregate amount over the term of the Securities of any series

equal to at least the initial investment of your Securities. If the quarterly compounded leveraged return of the Index is

insufficient to offset the negative effect of the Accrued Fees and the Loss Rebalancing Fees, if applicable, or if the quarterly

compounded leveraged return of the Index is negative, you will lose some or all of your investment.

The Accrued Fees will be calculated as of the last Trading Day in the Final Measurement Period as the sum of (i) the Accrued

Tracking Fee as of such last Trading Day and (ii) the Accrued Financing Charge as of such last Trading Day.

The “Financing Level” is, as of any date of determination, an amount that equals the Current Principal Amount.

The “Accrued Financing Charge” as of the last Trading Day of the Final Measurement Period is an amount equal to the

product of (a) the Financing Level as of the preceding Quarterly Reset Date, (b) a fraction, the numerator of which is the total

number of calendar days from, but excluding, the immediately preceding Quarterly Valuation Date to, and including, such last

Trading Day of such Final Measurement Period and the denominator of which is 360, and (c) the Financing Rate.

On the Initial Trade Date, the Accrued Financing Charge for each Security will be $0.

The “Accrued Tracking Fee” as of the last Trading Day in the Final Measurement Period is an amount equal to (a) the

aggregate sum of (i) the Current Indicative Value as of the immediately preceding Trading Day for each date starting from, but

excluding, the immediately preceding Quarterly Valuation Date to, and including, such last Trading Day in such Final

Measurement Period

times

(ii) the Annual Tracking Rate,

divided by

(b) 365.

The “Annual Tracking Rate” is a per annum rate described in “ Principal Terms” above.

The “Current Indicative Value” is, as determined by the Calculation Agent as of any date of determination, an amount per

Security of any series equal to the product of (i) the Current Principal Amount and (ii) the Index Factor as of such date,

calculated using the Index Closing Level on such date as the Index Valuation Level.

The “Principal Amount” of each Security is $100.00. Each series of the Securities may be issued and sold over time at then-

current market prices, which may be significantly higher or lower than the Principal Amount.

For the Initial Calendar Quarter, the Current Principal Amount will equal $100.00 per Security of the applicable series. For

each subsequent calendar quarter, the Current Principal Amount for each Security of that series will be reset as follows on the

Quarterly Reset Date:

New

Current Principal Amount =

previous

Current Principal Amount × Index Factor on the applicable Quarterly

Valuation Date — Accrued Fees on the applicable Quarterly Valuation Date

If any series of the Securities undergoes a split or reverse split, the Current Principal Amount of that series will be adjusted

accordingly.

For each calendar quarter, the “Quarterly Reset Date” is the first Trading Day of the quarter specified in “ Principal Terms”

above, subject to adjustment as described under “— Market Disruption Event” ; provided, however, that no Quarterly Reset

Date will occur on or after the Call Valuation Date or the Acceleration Date.

For each Quarterly Reset Date, the “Quarterly Valuation Date” is the last Trading Day of the previous calendar quarter subject to

adjustment as described under “— Market Disruption Event”. The Quarterly Valuation Date is specified in “ Principal Terms”

above .

The Index Factor will be calculated as follows:

1 + (2 × Index Performance Ratio)

The Index Performance Ratio on any Quarterly Valuation Date, any Redemption Valuation Date, or as of the last Trading Day

in the applicable Measurement Period, as applicable, will be:

Index Valuation Level — Quarterly Initial Closing Level 

Quarterly Initial Closing Level

22

The “Index Valuation Level” will equal the arithmetic mean of the Index Closing Levels measured on each Trading Day

during the applicable Measurement Period, or the Index Closing Level on any Quarterly Valuation Date or any Redemption

Valuation Date, as determined by the Calculation Agent, provided that:

(1) for Regular Redemptions, if the Redemption Valuation Date falls in a Final Measurement Period, Call

Measurement Period, or Acceleration Measurement Period, for the purposes of calculating the Index

Performance Ratio as of the Redemption Valuation Date, the Index Valuation Level on the Redemption

Valuation Date during such Measurement Period shall equal (a) (i) for each elapsed Trading Day in the

Measurement Period from and including the Call Valuation Date, Acceleration Date or Calculation Date, as

applicable, to but excluding the Redemption Valuation Date (the “Applicable Date”), the sum of the Index

Closing Levels on such Trading Day(s)

plus

(ii) the Index Closing Level on the Applicable Date

times

the

number of remaining Trading Days in the Measurement Period from and including the Applicable Date

divided

by

(b) the number of Trading Days in the Measurement Period; and

(2) For a Large Redemption, if the Redemption Valuation Date occurs during an Acceleration Measurement

Period, Call Measurement Period, or Final Measurement Period, the Redemption Amount shall equal the

Acceleration Amount, Call Settlement or payment at maturity, as applicable.

Unless specified otherwise in “ Principal Terms” above, the applicable “Measurement Period” means the five Trading Days

from and including the Call Valuation Date, Acceleration Date, Redemption Valuation Date (for a Large Redemption) or the

Calculation Date, as applicable, subject to adjustment as described under “General Terms of the Securities — Market

Disruption Event”.

The “Quarterly Initial Closing Level” for the Initial Calendar Quarter is specified in “ Principal Terms” above and will be the

Index Closing Level on the applicable Initial Trade Date. For each subsequent calendar quarter, the Quarterly Initial Closing

Level on the Quarterly Reset Date will equal the Index Closing Level on the Quarterly Valuation Date for the previous

calendar quarter.

The “Index Closing Level” is, for any series of the Securities, the closing level of the relevant Index as published by the Index

Sponsor.

The “Index Sponsor” will be the entity that calculates the level of the relevant Index is specified in “ Principal Terms” above.

The “Calculation Date” is specified in “ Principal Terms” above.

The “Current Indicative Value”, as determined by the Calculation Agent as of any date of determination, is an amount per

Security equal to the product of (i) the Current Principal Amount and (ii) the Index Factor of such date, using the Index

Closing Level of such date as the Index Valuation Level.

Unless specified otherwise in “ Principal Terms” above, “Trading Day” means any day on which (i) trading is generally

conducted on NYSE Arca and (ii) trading is generally conducted on the markets on which the Index Constituent Securities in

the relevant Index are traded, in each case as determined by the Calculation Agent.

Early Redemption at the Option of the Holders

You may elect to require UBS to redeem your Securities, subject to a minimum redemption amount of at least 12,500 Securities

of the same series. If you elect to have your Securities redeemed and have done so under the redemption procedures described

below under “—Redemption Procedures”, you will receive payment for your Securities on the Redemption Date. The first and

final Redemption Dates are specified in “ Principal Terms” above. For any early redemptions, the applicable “Redemption

Valuation Date” means the first Trading Day following the date on which you deliver a redemption notice to UBS in compliance

with the redemption procedures. For any Large Redemption (as defined below), the Redemption Valuation Date will be the first

Trading Day in the applicable Large Redemption Measurement Period. If a Redemption Valuation Date for a Large

Redemption occurs during an Acceleration Measurement Period, Call Measurement Period or Final Measurement Period, the

Redemption Amount shall equal the Acceleration Amount, Call Settlement or payment at maturity, as applicable.

To satisfy the minimum redemption amount of 12,500 Securities, your broker or other financial intermediary may bundle your

Securities for redemption with those of other investors to reach this minimum amount of 12,500 Securities of the same series;

however, there can be no assurance that they can or will do so. We may from time to time in our sole discretion reduce, in part

or in whole, the minimum redemption amount of 12,500

Securities of any series. Any such reduction will be applied on a

consistent basis for all holders of the Securities of the affected series at the time

the reduction becomes effective.

23

The Securities will be redeemed and the holders will receive payment for their Securities on the third Business Day following

the corresponding Redemption Valuation Date (or the last Trading Day in the applicable Large Redemption Measurement

Period for a Large Redemption), or if such third day is not a Business Day, the next following Business Day (the “Redemption

Date”). In addition, if a call notice has been issued, if acceleration has been triggered, or the Final Measurement Period has

commenced, in each case with respect to any series of the Securities, for Regular Redemptions the last permitted Redemption

Valuation Date for that series of Securities will be the second Trading Day in the applicable Call Measurement Period,

Acceleration Measurement Period, or the Final Measurement Period, as applicable. For a Large Redemption, If the

Redemption Valuation Date occurs during an Acceleration Measurement Period, Call Measurement Period, or Final

Measurement Period, the Redemption Amount shall equal the Acceleration Amount, Call Settlement or payment at maturity, as

applicable and the Redemption Date will be the third Business Day following the last Trading Day in the applicable

Measurement Period. Any applicable Redemption Valuation Date is subject to adjustment as described under “— Market

Disruption Event”.

A “Regular Redemption” means an early redemption of Securities of a given series in an amount greater than or equal to the

minimum redemption amount of 12,500 Securities but less than the large redemption amount of 2,000,000 Securities.

A “Large Redemption” means an early redemption of Securities of a given series in an amount equal to or greater than

2,000,000 Securities. For purposes of determining whether an early redemption is a Regular Redemption or a Large

Redemption, UBS will aggregate all redemption requests received prior to 12:00 noon (New York City time) on a given

Trading Day.

Regular Redemptions

If you exercise your right to have us redeem your Securities and such redemption qualifies as a Regular Redemption, subject to

your compliance with the procedures described under “— Redemption Procedures”, for each applicable Security you will

receive a cash payment on the relevant Redemption Date equal to

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the applicable Redemption Valuation Date,

minus

(b) the Accrued Fees as of such Redemption Valuation Date, minus

(c) the Redemption Fee.

Large Redemptions

If you exercise your right to have us redeem your Securities and such redemption qualifies as a Large Redemption, subject to

your compliance with the procedures described under “— Redemption Procedures”, for each applicable Security you will

receive a cash payment on the relevant Redemption Date equal to

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Trading Day in the applicable

Measurement Period, which we refer to in this section “— Early Redemption at the Option of the Holders” as

the “Large Redemption Measurement Period”, minus

(b) the Accrued Fees as of such last Trading Day, minus

(c) the Redemption Fee.

We refer to the cash payments described above as the “Redemption Amount”.

If the amount calculated above is less than zero, the payment upon early redemption will be zero. We will inform you of such

Redemption Amount two Business Days preceding the applicable Redemption Date.

You may lose some or all of your initial investment upon early redemption. Because the Accrued Fees and the Redemption Fee

reduce your final payment, the quarterly compounded leveraged return of the Index will need to be sufficient to offset the

negative effect of the Accrued Fees and the Redemption Fee, if applicable, in order for you to receive an aggregate amount

over the term of the Securities equal to your initial investment in the Securities. If the quarterly compounded leveraged return

of the Index is insufficient to offset such a negative effect or if the quarterly compounded leveraged return of the Index is

negative, you will lose some or all of your investment upon early redemption.

The Accrued Fees will be calculated as of any Redemption Valuation Date (or for a Large Redemption, the last Trading Day in the

Large Measurement Period) as the sum of (i) the Accrued Tracking Fee as of such date and (ii) the Accrued Financing Charge as of

such date.

24

The “Accrued Tracking Fee” as of any Redemption Valuation Date is an amount equal to (a) the aggregate sum of (i) the Current

Indicative Value as of the immediately preceding Trading Day for each date starting from, but excluding, the immediately

preceding Quarterly Valuation Date (or, if the Redemption Valuation Date falls in the Initial Calendar Quarter, the Initial Trade

Date) to, and including such Redemption Valuation Date (or for a Large Redemption, the last Trading Day in the Large

Measurement Period)

times

(ii) the Annual Tracking Rate,

divided by

(b) 365.

The “Accrued Financing Charge” as of any Redemption Valuation Date (or for a Large Redemption, the last Trading Day in the

Large Measurement Period) is an amount equal to the product of (a) the Financing Level as of the preceding Quarterly Reset Date,

(b) a fraction, the numerator of which is the total number of calendar days from, but excluding, the immediately preceding

Quarterly Valuation Date (or if the Redemption Valuation Date or last Trading Day of the applicable Large Measurement Period

occurs prior to the initial Quarterly Valuation Date, the period from, and excluding, the Initial Trade Date) to, and including, such

Redemption Valuation Date (or for a Large Redemption, the last Trading Day in the Large Measurement Period), and the

denominator of which is 360, and (c) the Financing Rate.

The “Redemption Fee” means, as of any date of determination for a series of Securities, an amount per Security equal to the

product of (a) 0.125%, (b) the Current Principal Amount and (c) the Index Factor as of the applicable Redemption Valuation

Date (or for a Large Redemption, the last Trading Day in the Large Measurement Period).

We discuss these matters in the accompanying prospectus under “Description of Debt Securities We May Offer — Redemption

and Repayment”.

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.

Any series of Securities may trade at, above, or below its indicative value.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption to UBS via email no later than 12:00 noon (New York City time) on the Trading Day

immediately preceding the applicable Redemption Valuation Date. If we receive your notice by the time specified in

the preceding sentence, we will respond by sending you a confirmation of redemption;

Ø

deliver the signed confirmation of redemption to us via facsimile in the specified form by 5:00 p.m. (New York City

time) on the same day. We or our affiliate must acknowledge receipt in order for your confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Valuation Date (or the applicable last Trading Day in the Large Redemption Measurement Period for

Large Redemptions) at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 10:00 a.m. (New York

City time) on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your notice of redemption after 12:00 noon (New York City time), or your confirmation of

redemption after 5:00 p.m. (New York City time), on the Trading Day prior to the applicable Redemption Valuation Date, your

notice will not be effective, you will not be able to redeem your Securities until the following Redemption Date and your

broker will need to complete all the required steps if you should wish to redeem your Securities on any subsequent Redemption

Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as it may deem necessary

in its sole discretion. All instructions given to participants from beneficial owners of Securities relating to the right to redeem

their Securities will be irrevocable.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities of any series upon not less than eighteen calendar days’

prior notice to the holders of the Securities of that series, such redemption to occur on any Trading Day specified in “ Principal

Terms” above through and including the Calculation Date specified in “ Principal Terms” above. Upon early redemption in the

event we exercise this right, you will receive a cash payment equal to

(a) the product of (i) the Current Principal Amount and (ii) the Index Factor as of the last Trading Day in the applicable

Measurement Period, which we refer to in this section “— UBS’s Call Right” as the “Call Measurement Period”,

minus

(b) the Accrued Fees as of such last Trading Day.

We refer to this cash payment as the “Call Settlement Amount”.

If the amount calculated above is less than zero, the payment upon UBS’s exercise of its call right will be zero.

If UBS issues a call notice on any Trading Day, the “Call Valuation Date” will be the fifth Trading Day following the Trading

Day on which the call notice is issued.

25

We will inform you of such Call Settlement Amount on the first Business Day following the last Trading Day in the Call

Measurement Period.

The holders will receive payment for their Securities on a date that is at least three, but not greater than six, Trading Days

following the last Trading Day in the Call Measurement Period (the “Call Settlement Date”). We will inform you of such Call

Settlement Date in the call notice. If a Market Disruption Event is continuing or occurs on the scheduled Call Valuation Date

with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as described under “—

Market Disruption Event”.

You may lose some or all of your initial investment at call. Because the Accrued Fees and Loss Rebalancing Fees, if

applicable, reduce your final payment, the quarterly compounded leveraged return of the Index will need to offset the negative

effect of the Accrued Fees and Loss Rebalancing Fees, if applicable, in order for you to receive an aggregate amount over the

term of the Securities equal to at least initial investment of your Securities. If the quarterly compounded leveraged return of the

Index is insufficient to offset the negative effect of the Accrued Fees and Loss Rebalancing Fees, if applicable, or if the

quarterly compounded leveraged return of the Index is negative, you will lose some or all of your investment at call.

The Accrued Fees will be calculated as of the last Trading Day in the Call Measurement Period as the sum of (i) the Accrued

Tracking Fee as of such last Trading Day and (ii) the Accrued Financing Charge as of such last Trading Day.

The “Accrued Tracking Fee” as of the last Trading Day in the Call Measurement Period is an amount equal to (a) the aggregate sum

of (i) the Current Indicative Value as of the immediately preceding Trading Day for each date starting from, but excluding, the

immediately preceding Quarterly Valuation Date to, and including such Call Valuation Date

times

(ii) the Annual Tracking Rate,

divided by

(b) 365.

The “Accrued Financing Charge” as of the last Trading Day of the Call Measurement Period is an amount equal to the product

of (a) the Financing Level as of the preceding Quarterly Reset Date, (b) a fraction, the numerator of which is the total number

of calendar days from, but excluding, the immediately preceding Quarterly Valuation Date to, and including, such last Trading

Day of such Call Measurement Period and the denominator of which is 360, and (c) the Financing Rate.

Acceleration Upon Minimum Indicative Value

If, at any time, the indicative value for any series of the Securities on any Trading Day equals the Floor Level or less (such day,

an “Acceleration Date”), all issued and outstanding Securities of that series will be automatically accelerated and mandatorily

redeemed by UBS (even if the indicative value of that series would later exceed the Floor Level on such Acceleration Date or

any subsequent Trading Day during the applicable Measurement Period, which we refer to in this section “— Acceleration

Upon Minimum Indicative Value” as the “Acceleration Measurement Period”) for a cash payment equal to

(a) the product of (i) the Current Principal Amount and (ii) the Index Factor as of the last Trading Day of the

Acceleration Measurement Period, minus

(b) the Accrued Fees as of such last Trading Day.

We refer to this cash payment as the “Acceleration Amount”. The “Floor Level” of any series of the Securities will be

specified in “ Principal Terms” above. If any series of the Securities undergoes a split or reverse split, the Floor Level of that

series will be adjusted accordingly. If the minimum indicative value threshold of any series of Securities has been breached,

you will receive on the Acceleration Settlement Date only the Acceleration Amount in respect of your investment in that series

of Securities.

You may lose some or all of your initial investment upon an acceleration upon minimum indicative value. Because the

Accrued Fees and Loss Rebalancing Fees, if applicable, reduce your final payment, the quarterly compounded leveraged return

of the Index will need to offset the negative effect of the Accrued Fees and Loss Rebalancing Fees, if applicable, in order for

you to receive an aggregate amount over the term of the Securities equal to at least the initial investment of your Securities. If

the quarterly compounded leveraged return of the Index is insufficient to offset the negative effect of the Accrued Fees and the

Loss Rebalancing Fees, if applicable, or if the quarterly compounded leveraged return of the Index is negative, you will lose

some or all of your investment upon an acceleration upon minimum indicative value.

The Accrued Fees will be calculated as of any date of determination for any series of Securities as the sum of (i) the Accrued

Tracking Fee as of the last Trading Day of the Acceleration Measurement Period and (ii) the Accrued Financing Charge as of

the last Trading Day of the Acceleration Measurement Period.

The “Accrued Tracking Fee” as of the last Trading Day of the Acceleration Measurement Period will be an amount equal to (a)

the aggregate sum of (i) the Current Indicative Value as of the immediately preceding Trading Day for each date starting from,

but excluding, the immediately preceding Quarterly Valuation Date (or, if the Acceleration Date falls in the Initial Calendar

Quarter, the Initial Trade Date) to, and including, such last Trading Day in such Measurement Period, as applicable,

times

(ii)

the Annual Tracking Rate,

divided by

(b) 365.

The “Accrued Financing Charge” as of the last Trading Day of the Acceleration Measurement Period is an amount equal to the

product of (a) the Financing Level as of the preceding Quarterly Reset Date, (b) a fraction, the numerator of which is the total

number of calendar days from, but excluding, the immediately preceding Quarterly Valuation Date (or if the Acceleration Date

occurs prior to the initial Quarterly Valuation Date, the period from, and excluding, the Initial Trade Date) to, and including,

such last Trading Day of such Measurement Period as applicable, and the denominator of which is 360, and (c) the Financing

Rate.

26

The “Acceleration Settlement Date” will be the third Trading Day following the last Trading Day of the Acceleration

Measurement Period.

Subject to the prior verification by the Calculation Agent that the indicative value of equal or less than the Floor Level was

accurately calculated by the relevant calculation agent specified in “ Principal Terms” above and in each case with respect to a

series of Securities, UBS must provide notice to the holders of that series of the Securities that the minimum indicative value

threshold has been breached not less than five calendar days prior to the Acceleration Settlement Date. For a detailed

description of how the intraday indicative value of the Securities is calculated see “Valuation of the Index and the Securities”.

Loss Rebalancing Event Upon Large Decreases in the Indicative Value

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current leverage

to approximately 2.0 based on the Index Performance Ratio as of the LR Valuation Date. This means that after a Loss

Rebalancing Event, a constant percentage increase in the Index Closing Level will have less of a positive effect on the value of

your Securities relative to before the occurrence of the Loss Rebalancing Event. In addition, each time a Loss Rebalancing Event

occurs, you will incur a Loss Rebalancing Fee, as defined below.

A “Loss Rebalancing Event” means if, at any time, the closing indicative value for any series of the Securities on any Trading

Day decreases 40% in value from the closing indicative value of that series of the Securities on the previous Quarterly

Valuation Date. A Loss Rebalancing Event may occur irrespective of whether a Market Disruption Event also occurs on that

Trading Day.

With respect to a Loss Rebalancing Event, the “LR Valuation Date” is the first Trading Day following a Loss Rebalancing

Event, subject to adjustment as described under “— Market Disruption Event”.

With respect to a LR Valuation Date, the “LR Reset Date” is the first Trading Day following a LR Valuation Date, subject to

adjustment as described under “— Market Disruption Event”.

On the LR Reset Date, the Current Principal Amount for each Security of that series will be reset as follows: 

New

Current Principal Amount = 99.995% x LR Current Principal Amount.

LR Current Principal Amount

= previous

Current Principal Amount × Index Factor on the applicable LR Valuation

Date — Accrued Fees on the applicable LR Valuation Date.

If the amount calculated above is less than zero, the payment at maturity will be zero.

On the LR Reset Date, the LR Current Principal Amount will be reset exactly like the “

New

Current Principal Amount” on a

Quarterly Reset Date, except that:

(1) the LR Reset Date will be the Quarterly Reset Date;

(2) the Index Factor and Index Performance Ratio will be calculated on the LR Valuation Date;

(3) the Index Valuation Level for purposes of calculating the Index Performance Ratio will be computed using

the Index Closing Level on the LR Valuation Date;

(4) for the next reset date, the Quarterly Initial Closing Level on the applicable reset date will equal the Index

Closing Level on the LR Valuation Date;

(5) Accrued Fees (the Accrued Tracking Fees and Accrued Financing Charge) will be computed as of the LR

Valuation Date as if the LR Valuation Date was a Quarterly Valuation Date; and

(6) the Financing Level will be reduced the new Current Principal Amount.

The Financing Rate will equal the sum of (a) 0.44% and (b) the three-month CME Term SOFR rate plus a 0.2616%

adjustment, on the day that is two U.S. Government Securities Business Days prior to the immediately preceding Quarterly

Valuation Date.

"CME Term SOFR" means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

"U.S. Government Securities Business Day" means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Note that each time a Loss Rebalancing Event occurs, you will incur a 0.05% reduction in the LR Current Principal Amount of

your Securities and you also may have a further reduction due to the breakage computation in the preceding proviso. We will

refer to these reductions as a “Loss Rebalancing Fee”.

27

Loss Rebalancing Events can occur multiple times. This means both that (i) the Current Principal Amount may be reset more

frequently than quarterly and (ii) the cumulative effect of compounding and fees will have increased as a result of the Loss

Rebalancing Event(s). Each Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of

resetting the then-current leverage to approximately 2.0 based on the Index Performance Ratio as of the LR Valuation Date.

This means that your Securities will entitle you to less of a positive gain in value relative to before the occurrence of the Loss

Rebalancing Event. In addition, each time a Loss Rebalancing Event occurs, you will incur a Loss Rebalancing Fee. This fee

will reduce the amount of your return (or increase your loss) on the Maturity Date, early redemption, acceleration or exercise

by UBS of its call right.

Calculation Agent

UBS Securities LLC will act as the Calculation Agent. The Calculation Agent will determine, among other things, the Index

Valuation Level, the Index Performance Ratio, the Index Factor, the Current Principal Amount, the Current Indicative Value,

the Accrued Fees, the Accrued Financing Charge, the Financing Level, the Financing Rate, the Accrued Tracking Fee, the

Redemption Fee, if any, the Loss Rebalancing Fee, if any, the payment at maturity, if any, that we will pay you at maturity,

the Redemption Amount, if any, that we will pay you upon redemption, the Call Settlement Amount, if any, that we will pay

you on the Call Settlement Date, if applicable, or the Acceleration Amount, if any, that we will pay you on the Acceleration

Settlement Date, if applicable, based on the relevant Index levels calculated by the Calculation Agent, as adjusted, and

whether any day is a Business Day or Trading Day. The Calculation Agent will also be responsible for determining whether a

Market Disruption Event has occurred, whether the relevant Index has been discontinued or is otherwise unavailable and

whether there has been a material change in the relevant Index. All determinations made by the Calculation Agent will be at

the sole discretion of the Calculation Agent for any series of the Securities and will, in the absence of manifest error, be

conclusive for all purposes and binding on you and on us. We may appoint a different Calculation Agent for any series of the

Securities from time to time without your consent and without notifying you.

The Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee may

conclusively rely, of the amount to be paid at maturity, early redemption, acceleration, or upon exercise by UBS of its call right

on or prior to 12:00 p.m., New York City time, on the Business Day immediately preceding the Maturity Date, any

Redemption Date, the Acceleration Settlement Date or the Call Settlement Date, as applicable.

All dollar amounts related to determination amounts payable per Security for any series of Securities will be rounded to the

nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded up to .7655); and

all dollar amounts paid on the aggregate principal amount of such Securities per holder will be rounded to the nearest cent,

with one-half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the relevant Index has occurred or is continuing on an Averaging Date

(as defined below), the Index Closing Level for such Averaging Date will be determined by the Calculation Agent or one of its

affiliates on the first succeeding Trading Day on which a Market Disruption Event does not occur or is not continuing (the

“Deferred Averaging Date”) with respect to the relevant Index irrespective of whether, pursuant to such determination, the

Deferred Averaging Date would fall on a date originally scheduled to be an Averaging Date. If the postponement described in

the preceding sentence results in the Index Closing Level being calculated on a day originally scheduled to be an Averaging

Date, for purposes of determining the Index Closing Level on any Averaging Date, the Calculation Agent or one of its affiliates,

as the case may be, will apply the Index Closing Level for such Deferred Averaging Date (i) on the date(s) of the original

Market Disruption Event and (ii) such Averaging Date. For example, if the applicable Measurement Period for purposes of

calculating the Call Settlement Amount is based on the arithmetic mean of the Index Closing Levels on October 3, October 4,

October 5, October 6 and October 7, and there is a Market Disruption Event with respect to the relevant Index on October 3, but

no other Market Disruption Event during such Measurement Period, then the Index Closing Level on October 4 will be used

twice to calculate the Call Settlement Amount, and the Call Settlement Amount will be determined based on the arithmetic mean

of the Index Closing Levels on October 4, October 4, October, 5, October 6 and October 7. The same approach would be applied

if there is a Market Disruption Event during any Measurement Period.

If the Redemption Valuation Date, for purposes of calculating a Redemption Amount for a Regular Redemption, is based on

the Index Closing Level on October 3 and there is a Market Disruption Event with respect to the Index on October 3, then the

Index Closing Level on October 4 will be used to calculate the Redemption Amount. If a Market Disruption Event occurs on

any Quarterly Valuation Date, or LR Valuation Date, the Index Closing Level for such date will be determined by the

Calculation Agent or one of its affiliates on the first succeeding Trading Day on which a Market Disruption Event does not

occur or is not continuing.

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the final Averaging

Date, Quarterly Valuation Date, the Redemption Valuation Date, or LR Valuation Date, as applicable, occurring more than eight

Trading Days following the day originally scheduled to be such final Averaging Date or other applicable date. If the eighth

Trading Day following the date originally scheduled to be the final Averaging Date, Quarterly Valuation Date, Redemption

Valuation Date, or LR Valuation Date, as applicable, a Market Disruption Event has occurred or is continuing with respect to the

relevant Index on such eighth Trading Day, the Calculation Agent or one of its affiliates will determine the Index Closing Level

based on its estimate of the Index Closing Level that would have prevailed on such eighth Trading Day but for such Market

Disruption Event. If any Quarterly Valuation Date or LR Valuation Date is postponed as described above, the succeeding

Quarterly Reset Date or LR Reset Date will occur on the next Trading Day following the postponed Quarterly Valuation Date or

LR Valuation Date, as applicable.

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An “Averaging Date” means each of the Trading Day(s) during any Measurement Period, subject to adjustment as described

herein.

Notwithstanding the occurrence of one or more of the events below, which may, in the Calculation Agent’s discretion,

constitute a Market Disruption Event with respect to the relevant Index, the Calculation Agent in its discretion may waive its

right to postpone the Index Closing Level if it determines that one or more of the below events has not and is not likely to

materially impair its ability to determine the Index Closing Level on such date.

Any of the following will be a Market Disruption Event with respect to the relevant Index, in each case as determined by the

Calculation Agent:

(a) suspension, absence or material limitation of trading in a material number of the Index Constituent Securities for more

than two hours or during the one-half hour before the close of trading in the applicable market or markets;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the relevant Index or to a

material number of Index Constituent equity interests in the primary market or markets for those contracts for more

than two hours of trading or during the one-half hour before the close of trading in that market;

(c) the relevant Index is not published; or

(d) in any other event, if the Calculation Agent determines that the event materially interferes with our ability or the

ability of any of our affiliates to unwind all or a material portion of a hedge with respect to the Securities that we or

our affiliates have effected or may effect as described in the section entitled “Use of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the relevant Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

(b) a decision to permanently discontinue trading in the options or futures contracts relating to the relevant Index or any

Index Constituent equity interests.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

relevant Index or any Index Constituent equity interests are traded will not include any time when that market is itself closed for

trading under ordinary circumstances.

Discontinuance of or Adjustments to the Relevant Index; Alteration of Method of Calculation

If the Index Sponsor or another entity that publishes the Index discontinues publication of the relevant Index, or if our right to use

the Index is suspended or terminated, and the Index Sponsor or such other entity publishes a successor or substitute index that the

Calculation Agent determines to be comparable to the discontinued relevant Index (such index being referred to herein as a

“Successor Index”), then the Index Closing Level for such Successor Index will be determined by the Calculation Agent by

reference to the Successor Index on the dates and at the times as of which the Index Closing Levels for such Successor Index are

to be determined.

Upon any selection by the Calculation Agent of a Successor Index, the Calculation Agent will cause written notice thereof to

be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor discontinues publication of the relevant Index, or if our right to use the Index is suspended or terminated,

prior to, and such discontinuation or unavailability is continuing on, any Quarterly Valuation Date, any Averaging Date, any

Redemption Valuation Date or any other relevant date on which the Index Closing Level is to be determined and the

Calculation Agent determines that no Successor Index is available at such time, or the Calculation Agent has previously

selected a Successor Index and publication of such Successor Index is discontinued prior to, and such discontinuation is

continuing on any relevant date on which the Index Closing Level is to be determined, then the Calculation Agent will

determine the Index Closing Level using the closing level and published share weighting of each Index Constituent Security

included in the relevant Index or Successor Index, as applicable, immediately prior to such discontinuation or unavailability, as

adjusted for certain corporate actions. In such event, the Calculation Agent will cause notice thereof to be furnished to the

trustee, to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the relevant Index or Successor Index, as

applicable, may adversely affect the value of the Securities.

29

If at any time the method of calculating the relevant Index or a Successor Index, or the value thereof, is changed in a material

respect, or if the relevant Index or a Successor Index is in any other way modified so that the level of the relevant Index or

such Successor Index does not, in the opinion of the Calculation Agent, fairly represent the level of the relevant Index or such

Successor Index had such changes or modifications not been made, then the Calculation Agent will make such calculations and

adjustments as, in the judgment of the Calculation Agent, may be necessary in order to arrive at a level of an index comparable

to the relevant Index or such Successor Index, as the case may be, as if such changes or modifications had not been made, and

the Calculation Agent will calculate the levels for the relevant Index or such Successor Index with reference to the relevant

Index or such Successor Index, as adjusted. The Calculation Agent will accordingly calculate the relevant Index levels,

Accrued Fees and the Redemption Fee and/or the Loss Rebalancing Fees, if applicable, based on the Index levels calculated by

the Calculation Agent, as adjusted. Accordingly, if the method of calculating the relevant Index or a Successor Index is

modified so that the level of the relevant Index or such Successor Index is a fraction of what it would have been if there had

been no such modification (

e.g.

, due to a split in the relevant Index), which, in turn, causes the level of the relevant Index or

such Successor Index to be a fraction of what it would have been if there had been no such modification, then the Calculation

Agent will make such calculations and adjustments in order to arrive at a level for the relevant Index or such Successor Index

as if it had not been modified (

e.g.

, as if such split had not occurred).

Redemption Price Upon Optional Tax Redemption

We have the right to redeem any series of the Securities in the circumstances described under “Description of Debt Securities We

May Offer — Optional Tax Redemption” in the accompanying prospectus. If we exercise this right, the redemption price of that

series of the Securities will be determined by the Calculation Agent in a manner reasonably calculated to preserve your and our

relative economic position.

Default Amount on Acceleration

If an event of default occurs and the maturity of any series of the Securities is accelerated, we will pay the default amount in

respect of the principal of the that series of Securities at maturity. We describe the default amount below under “— Default

Amount”.

For the purpose of determining whether the holders of our Medium-Term Notes, Series A are entitled to take any action under

the indenture, we will treat the outstanding principal amount of each series of Securities as the outstanding principal amount of

the Medium-Term Notes, Series A constituted by that series of Securities. Although the terms of the Securities may differ from

those of the other Medium-Term Notes, Series A, holders of specified percentages in principal amount of all Medium-Term

Notes, Series A, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series A, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series A, accelerating the maturity of the Medium-Term Notes, Series A after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium Term Notes, Series A” under “Description of

Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants”.

Default Amount

The default amount for any series of the Securities on any day will be an amount, in U.S. dollars for the principal of the

Securities, equal to the cost of having a qualified financial institution, of the kind and selected as described below, expressly

assume all our payment and other obligations with respect to the Securities as of that day and as if no default or acceleration

had occurred, or to undertake other obligations providing substantially equivalent economic value to you with respect to the

Securities of the accelerated series. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking, plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities of the accelerated series, which we describe below, the holders of that

series of the Securities and/or we may request a qualified financial institution to provide a quotation of the amount it would

charge to effect this assumption or undertaking. If either party obtains a quotation, it must notify the other party in writing of

the quotation. The amount referred to in the first bullet point above will equal the lowest — or, if there is only one, the only —

quotation obtained, and as to which notice is so given, during the default quotation period. With respect to any quotation,

however, the party not obtaining the quotation may object, on reasonable and significant grounds, to the assumption or

undertaking by the qualified financial institution providing the quotation and notify the other party in writing of those grounds

within two Business Days after the last day of the default quotation period, in which case that quotation will be disregarded in

determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Business Days after the due date as described above.

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If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five Business Days after that first Business Day, however, the default quotation period will continue as described

in the prior sentence and this sentence.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a division of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency. 

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity, early redemption, acceleration or upon exercise by UBS of its call right

will be made to accounts designated by you and approved by us, or at the corporate trust office of the trustee in New York City,

but only when the Securities are surrendered to the trustee at that office. We also may make any payment or delivery in

accordance with the applicable procedures of the depositary.

Business Day

When we refer to a Business Day with respect to the Securities, we mean a day that is a Business Day of the kind described in

“Medium Term Notes, Series A” under “Description of Debt Securities We May Offer — Payment Mechanics for Debt

Securities”.

Defeasance

Neither full defeasance nor covenant defeasance, as described in “Medium Term Notes, Series A” under “Description of Debt

Securities We May Offer — Defeasance and Covenant Defeasance”, will apply to the Securities.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue any series of the Securities. We intend to issue the Securities initially in an

amount having the aggregate offering price specified in “ Principal Terms” above. However, we may issue additional

Securities in amounts that exceed the amount specified in “ Principal Terms” above at any time, without your consent and

without notifying you. The Securities do not limit our ability to incur other indebtedness or to issue other Securities. Also, we

are not subject to financial or similar restrictions by the terms of the Securities. For more information, please refer to “Medium

Term Notes, Series A” under “Description of Debt Securities We May Offer — Amounts That We May Issue”.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities of any series

and will have the same CUSIP number and will trade interchangeably with that series of the Securities immediately upon

settlement. Any additional issuances will increase the aggregate Principal Amount of the outstanding Securities of the class,

plus the aggregate Principal Amount of any Securities bearing the same CUSIP number that are issued pursuant to any future

issuances of Securities bearing the same CUSIP number. The price of any additional offering will be determined at the time of

pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch. 

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices applicable

to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and secondary market

trading between DTC participants.

Additional Terms of the Securities

The general terms of the Securities described above are modified by the specific definitions and terms below.

“Intraday Indicative Value” means the approximate intrinsic economic value of the Securities calculated by NYSE Arca, Inc.

and published on Bloomberg (based in part on information provided by the Index Sponsor) or a successor via the facilities on

the Consolidated Tape Association under the symbol “FBGXIV”.

“Trading Day” means any day on which (i) trading is generally conducted on NYSE Arca and (ii) trading is generally

conducted on the Primary Exchanges on which the Index Constituent Securities are traded, in each case as determined by the

Calculation Agent.

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“Primary Exchange” means, with respect to each Index Constituent Security or each constituent underlying a successor index,

the primary exchange or market of trading for such Index Constituent Security or such constituent underlying a successor

index.

32

Medium-Term Notes, Series B

Description of Debt Securities We May Offer

Please note that in this section entitled “Description of Debt Securities We May Offer,” references to UBS, we, our and us

refer only to UBS AG and not to its consolidated subsidiaries. In particular, the debt securities are obligations solely of UBS

AG, and not of any of its subsidiaries, including, without limitation, UBS Switzerland AG. Also, in this section, references to

“holders” and “you” mean those who own debt securities registered in their own names on the books that we or the trustee

maintain for this purpose, and not those who own beneficial interests in debt securities registered in street name or in debt

securities issued in book-entry form through one or more depositaries. Owners of beneficial interests in the debt securities

should read the section below entitled “Legal Ownership and Book-Entry Issuance.”

References herein to “this prospectus” are deemed to refer to this section “Medium-Term Notes, Series B” and references to

“your prospectus supplement” are deemed to refer to the individual description of notes issuances contained below in this

exhibit.

The Debt Indenture

As required by U.S. federal law for publicly offered bonds and notes, the debt securities are governed by a document called an

indenture. The debt indenture is a contract between us and U.S. Bank Trust National Association, which acts as trustee.

The trustee has two main roles:

Ø

First, the trustee can enforce your rights against us if we default. There are limitations on the extent to which the trustee

acts on your behalf, which we describe below under “—Default, Remedies and Waiver of Default.”

Ø

Second, the trustee performs administrative duties for us, such as sending you interest payments and notices. 

See “—Our Relationship with the Trustee” below for more information about the trustee.

We May Issue Many Series of Debt Securities Under the Debt Indenture

We may issue as many distinct series of debt securities under the debt indenture as we wish. This section summarizes terms of

the debt securities that apply generally to all series. The provisions of the debt indenture allow us not only to issue debt

securities with terms different from those of debt securities previously issued under the debt indenture, but also to “reopen” a

previous issue of a series of debt securities and issue additional debt securities of that series. Most of the financial and other

specific terms of your series, will be described in the prospectus supplement accompanying this prospectus. Those terms may

vary from the terms described here.

We may issue debt securities separately or together with other debt securities.

As you read this section, please remember that the specific terms of your debt security as described in your prospectus

supplement will supplement and, if applicable, may modify or replace the general terms described in this section. If there are

any differences between your prospectus supplement and this prospectus, your prospectus supplement will control. Thus, the

statements we make in this section may not apply to your debt security.

When we refer to a series of debt securities, we mean a series issued under the debt indenture. When we refer to your

prospectus supplement, we mean the prospectus supplement describing the specific terms of the debt security you purchase.

The terms used in your prospectus supplement will have the meanings described in this prospectus, unless otherwise specified.

Unless we indicate otherwise in your prospectus supplement, the debt securities we issue to you will be part of the series of

debt securities referred to as our “medium-term notes, Series B.” The Series B notes are a single distinct series under the debt

indenture, and we may issue Series B notes in such amounts, at such times and on such terms as we wish. The Series B notes

will differ from one another, and from any other series, in their terms, but all of the Series B notes together will constitute a

single series for all purposes under the debt indenture pursuant to which they will be issued.

Amounts That We May Issue

The debt indenture does not limit the aggregate amount of debt securities that we may issue or the number of series or the

aggregate amount of any particular series. We have already issued Series B notes, many of which are currently outstanding.

We intend to issue additional Series B notes, and may issue additional Series B notes at any time, without your consent and

without notifying you. We may also issue debt securities and other securities at any time without your consent and without

notifying you.

The debt indenture and the debt securities do not limit our ability to incur other indebtedness or to issue other securities. Also,

we are not subject to financial or similar restrictions by the terms of the debt securities.

Principal Amount, Stated Maturity and Maturity

The principal amount of a debt security means the principal amount payable at its stated maturity, unless that amount is not

determinable, in which case the principal amount of a debt security is its face amount.

33

The term “stated maturity” with respect to any debt security means the day on which the principal amount of your debt security

is scheduled to become due. The principal may become due sooner, by reason of redemption or acceleration after a default or

otherwise in accordance with the terms of the debt security. The day on which the principal actually becomes due, whether at

the stated maturity or earlier, is called the “maturity” of the principal.

We also use the terms “stated maturity” and “maturity” to refer to the days when other payments become due. For example, we

may refer to a regular interest payment date when an installment of interest is scheduled to become due as the “stated maturity”

of that installment.

When we refer to the “stated maturity” or the “maturity” of a debt security without specifying a particular payment, we mean

the stated maturity or maturity, as the case may be, of the principal.

This Section Is Only a Summary

The debt indenture and its associated documents, including your debt security, contain the full legal text governing the matters

described in this section and your prospectus supplement. We have filed a copy of the debt indenture with the SEC as an

exhibit to our registration statement. See “Where You Can Find More Information” above for information on how to obtain a

copy.

This section and your prospectus supplement summarize all the material terms of the debt indenture and your debt security.

They do not, however, describe every aspect of the debt indenture and your debt security. For example, in this section and your

prospectus supplement, we use terms that have been given special meaning in the debt indenture, but we describe the meaning

of only the more important of those terms.

Governing Law

The debt indenture is, and the debt securities will be, governed by New York law. 

Currency of Debt Securities

Amounts that become due and payable on your debt security in cash will be payable in a currency, composite currency, basket

of currencies or currency unit or units specified in your prospectus supplement. We refer to this currency, composite currency,

basket of currencies or currency unit or units as a “specified currency.” The specified currency for your debt security will be

U.S. dollars, unless your prospectus supplement states otherwise. Some debt securities may have different specified currencies

for principal and interest. You will have to pay for your debt securities by delivering the requisite amount of the specified

currency to UBS Securities LLC, UBS Financial Services Inc. or another firm that we name in your prospectus supplement,

unless other arrangements have been made between you and us or you and that firm. We will make payments on your debt

securities in the specified currency, except as described below in “—Payment Mechanics for Debt Securities.” See

“Considerations Relating to Securities Denominated or Payable in or Linked to a Non-U.S. Dollar Currency” below for more

information about risks of investing in this kind of debt securities.

Types of Debt Securities

We may issue any of the three types of debt securities described below. A debt security may have elements of each of the three

types of debt securities described below. For example, a debt security may bear interest at a fixed rate for some periods and at a

floating rate in others. Similarly, a debt security may provide for a payment of principal at maturity linked to an index and also

bear interest at a fixed or floating rate.

Fixed Rate Debt Securities

A debt security of this type will bear interest at a fixed rate described in the applicable prospectus supplement. This type

includes zero coupon debt securities, which bear no interest and are instead issued at a price lower than the principal amount.

See “—Original Issue Discount Debt Securities” below for more information about zero coupon and other original issue

discount debt securities.

Each fixed rate debt security, except any zero coupon debt security, will bear interest from its original issue date or from the

most recent date to which interest on the debt security has been paid or made available for payment. Interest will accrue on the

principal of a fixed rate debt security at the fixed yearly rate stated in the applicable prospectus supplement, until the principal

is paid or made available for payment or the security has been converted or exchanged. Each payment of interest due on an

interest payment date or the date of maturity will include interest accrued from and including the last date to which interest has

been paid, or made available for payment, or from the issue date if none has been paid or made available for payment, to but

excluding the interest payment date or the date of maturity. We will compute interest on fixed rate debt securities on the basis

of a 360-day year of twelve 30-day months. We will pay interest on each interest payment date and at maturity as described

below under “—Payment Mechanics for Debt Securities.”

Floating Rate Debt Securities

Interest Rate Formulas.

A debt security of this type will bear interest at rates that are determined by reference to an interest

rate formula. In some cases, the rates may also be adjusted by adding or subtracting a spread or multiplying by a spread

multiplier and may be subject to a minimum rate or a maximum rate. If your debt security is a floating rate debt security, the

formula and any adjustments that apply to the interest rate will be specified below.

34

Each floating rate debt security will bear interest from its original issue date or from the most recent date to which interest on

the debt security has been paid or made available for payment. Interest will accrue on the principal of a floating rate debt

security at the yearly rate determined according to the interest rate formula stated in the applicable prospectus supplement,

until the principal is paid or made available for payment. We will pay interest on each interest payment date and at maturity as

described below under “—Payment Mechanics for Debt Securities.”

Calculation of Interest.

Calculations relating to floating rate debt securities will be made by the calculation agent, an

institution that we appoint as our agent for this purpose. That institution may include any affiliate of ours, such as UBS

Securities LLC. The prospectus supplement for a particular floating rate debt security will name the institution that we have

appointed to act as the calculation agent for that debt security as of its original issue date. We may appoint a different

institution to serve as calculation agent from time to time after the original issue date of the debt security without your consent

and without notifying you of the change. Absent manifest error, all determinations of the calculation will be final and binding

on you and us, without any liability on the part of the calculation agent.

For each floating rate debt security, the calculation agent will determine, on the corresponding interest calculation or

determination date, as described in the applicable prospectus supplement, the interest rate that takes effect on each interest

reset date. In addition, the calculation agent will calculate the amount of interest that has accrued during each interest period—

i.e.

, the period from and including the original issue date, or the last date to which interest has been paid or made available for

payment, to but excluding the payment date. For each interest period, the calculation agent will calculate the amount of

accrued interest by multiplying the face or other specified amount of the floating rate debt security by an accrued interest factor

for the interest period. This factor will equal the sum of the interest factors calculated for each day during the interest period.

The interest factor for each day will be expressed as a decimal and will be calculated by dividing the interest rate, also

expressed as a decimal, applicable to that day by 360 or by the actual number of days in the year, as specified in the applicable

prospectus supplement.

Upon the request of the holder of any floating rate debt security, the calculation agent will provide the interest rate then in

effect for that debt security—and, if determined, the interest rate that will become effective on the next interest reset date. The

calculation agent’s determination of any interest rate, and its calculation of the amount of interest for any interest period, will

be final and binding in the absence of manifest error.

All percentages resulting from any calculation relating to a debt security will be rounded upward or downward, as appropriate,

to the next higher or lower one hundred-thousandth of a percentage point,

e.g.

, 9.876541% (or .09876541) being rounded down

to 9.87654% (or .0987654) and 9.876545% (or .09876545) being rounded up to 9.87655% (or .0987655). All amounts used in

or resulting from any calculation relating to a floating rate debt security will be rounded upward or downward, as appropriate,

to the nearest cent, in the case of U.S. dollars, or to the nearest corresponding hundredth of a unit, in the case of a currency

other than U.S. dollars, with one-half cent or one-half of a corresponding hundredth of a unit or more being rounded upward.

In determining the base rate that applies to a floating rate debt security during a particular interest period, the calculation agent

may obtain rate quotes from various banks or dealers active in the relevant market, as described in the applicable prospectus

supplement. Those reference banks and dealers may include the calculation agent itself and its affiliates, as well as any

underwriter, dealer or agent participating in the distribution of the relevant floating rate debt securities and its affiliat es, and

they may include UBS AG or its affiliates.

Indexed Debt Securities

A debt security of this type provides that the principal amount payable at its maturity, and/or the amount of interest payable on

an interest payment date, will be determined by reference to:

Ø

securities of one or more issuers;

Ø

one or more currencies;

Ø

one or more commodities;

Ø

any other financial, economic or other measure or instrument, including the occurrence or non-occurrence of any event

or circumstance; and/or

Ø

one or more indices or baskets of the items described above.

If you are a holder of an indexed debt security, you may receive an amount at maturity (including upon acceleration following

an event of default) that is greater than or less than the face amount of your debt security depending upon the formula used to

determine the amount payable and the value of the applicable index at maturity. The value of the applicable index will

fluctuate over time.

An indexed debt security may provide either for cash settlement or for physical settlement by delivery of the underlying

property or another property of the type listed above. An indexed debt security may also provide that the form of settlement

may be determined at our option or at the holder’s option. Some indexed debt securities may be convertible, exercisable or

exchangeable, at our option or the holder’s option, into or for securities of an issuer other than UBS AG.

If you purchase an indexed debt security, your prospectus supplement will include information about the relevant index, about

how amounts that are to become payable will be determined by reference to the price or value of that index and about the terms

on which the security may be settled physically or in cash. The prospectus supplement will also identify the calculation agent

that will calculate the amounts payable with respect to the indexed debt security and may exercise significant discretion in

doing so. The calculation agent may be UBS Securities LLC or another of our affiliates. See “Considerations Relating to

Indexed Securities” for more information about risks of investing in debt securities of this type.

35

Original Issue Discount Debt Securities

A fixed rate debt security, a floating rate debt security or an indexed debt security may be an original issue discount debt

security. A debt security of this type is issued at a price lower than its principal amount and provides that, upon redemption or

acceleration of its maturity, an amount less than its principal amount will be payable. An original issue discount debt security

may be a zero coupon debt security. A debt security issued at a discount to its principal may, for U.S. federal income tax

purposes, be considered an original issue discount debt security, regardless of the amount payable upon redemption or

acceleration of maturity. See “U.S. Tax Considerations —Taxation of Debt Securities — Original Issue Discount” below for a

brief description of the U.S. federal income tax consequences of owning an original issue discount debt security.

Information in Your Prospectus Supplement 

Your prospectus supplement will describe the specific terms of your debt security, which will include some or all of the

following:

Ø

any limit on the total principal amount of the debt securities of the same series;

Ø

the stated maturity;

Ø

the specified currency or currencies for principal and interest, if not U.S. dollars;

Ø

the price at which we originally issue your debt security, expressed as a percentage of the principal amount, and the

original issue date;

Ø

whether your debt security is a fixed rate debt security, a floating rate debt security or an indexed debt security;

Ø

if your debt security is a fixed rate debt security, the yearly rate at which your debt security will bear interest, if any,

and the interest payment dates;

Ø

if your debt security is a floating rate debt security, the interest rate basis; any applicable index currency or maturity,

spread or spread multiplier or initial base rate, maximum rate or minimum rate; the interest reset, determination,

calculation and payment dates; the day count used to calculate interest payments for any period; the business day

convention; and the calculation agent;

Ø

if your debt security is an indexed debt security, the principal amount, if any, we will pay you at maturity, the amount

of interest, if any, we will pay you on an interest payment date or the formula we will use to calculate these amounts, if

any, and the terms on which your debt security will be exchangeable for or payable in cash, securities or other property;

Ø

if your debt security may be converted into or exercised or exchanged for debt or equity securities of one or more third

parties, the terms on which conversion, exercise or exchange may occur, including whether conversion, exercise or

exchange is mandatory, at the option of the holder or at our option, the period during which conversion, exercise or

exchange may occur, the initial conversion, exercise or exchange price or rate and the circumstances or manner in

which the amount of securities issuable upon conversion, exercise or exchange may be adjusted;

Ø

if your debt security is also an original issue discount debt security, the yield to maturity;

Ø

if applicable, the circumstances under which your debt security may be redeemed at our option or repaid at the holder’s

option before the stated maturity, including any redemption commencement date, repayment date(s), redemption

price(s) and redemption period(s);

Ø

the authorized denominations, if other than $1,000 and integral multiples of $1,000;

Ø

the depositary for your debt security, if other than DTC, and any circumstances under which the holder may request

securities in non-global form, if we choose not to issue your debt security in book-entry form only;

Ø

if your debt security will be issued in bearer form, any special provisions relating to bearer securities;

Ø

if applicable, the circumstances under which we will pay additional amounts on any debt securities held by a person

who is not a United States person for tax purposes and under which we can redeem the debt securities if we have to pay

additional amounts;

Ø

the names and duties of any co-trustees, depositaries, authenticating agents, paying agents, transfer agents or registrars

for your debt security, as applicable; and

Ø

any other terms of your debt security, which could be different from those described in this prospectus.

If you purchase your debt security—or any of our other securities we describe in this prospectus—in a market-making

transaction, you will receive information about the price you pay and your trade and settlement dates in a separate confirmation

of sale. A market-making transaction is one in which we, UBS Securities LLC, UBS Financial Services Inc. or another of our

affiliates resells a security that it has previously acquired from another holder. A market-making transaction in a particular

security occurs after the original issuance and sale of the security.

Extension of Maturity

If specified in the applicable prospectus supplement, we will have the option to extend the stated maturity of your debt security

for one or more periods of whole years up to but not beyond the final maturity date specified in the prospectus supplement. We

call a debt security whose maturity we may extend an extendible debt security. We call the period of time as to which we may

extend the maturity the extension period. The following procedures will apply to extendible debt securities, unless otherwise

indicated in the applicable prospectus supplement.

36

We may extend the maturity of an extendible debt security by notifying the paying agent between 45 and 60 days before the

stated maturity then in effect. The stated maturity may be the original stated maturity, as described in the prospectus

supplement, or a maturity that we previously extended by following these procedures. If we notify the paying agent that we

will extend the maturity, the paying agent will send a notice to each holder by first class mail, postage prepaid, or by other

means agreed upon between us and the paying agent, at least 30 days before the stated maturity then in effect. The notice sent

by the paying agent will provide the following information:

Ø

our election to extend the maturity of the extendible debt security;

Ø

the extended maturity date or, if the maturity date had previously been extended, the new extended maturity date;

Ø

the interest rate that will apply during the extension period or, in the case of a floating rate debt security, the spread

and/or spread multiplier, if any, applicable during the extension period; and

Ø

the provisions, if any, for redemption and repayment during the extension period.

Once the paying agent has mailed the notice to each holder, the extension of the maturity date will take place automatically.

All of the terms of the debt security will be the same as the terms of the debt security as originally issued, except those terms

that are described in the notice sent by the paying agent to each holder and except as described in the following paragraph.

Not later than 10:00 a.m., New York City time, on the twentieth calendar day before the maturity date then in effect for an

extendible debt security or, if that day is not a business day, on the next succeeding business day, we may revoke the interest

rate set forth in the extension notice sent by the paying agent to each holder and establish a higher interest rate for the

extension period. If we elect to establish a higher interest rate, the paying agent will send a notice to each holder by first class

mail, postage prepaid, or by other means agreed between us and the paying agent, of the higher interest rate in the case of a

floating rate debt security, the higher spread and/or spread multiplier, if any. The notice of the higher rate cannot be revoked.

All extendible debt securities as to which the maturity date has been extended will bear the higher rate for the extension period,

whether or not tendered for repayment.

If we elect to extend the maturity date of an extendible debt security, each holder may elect repayment of all or part of its debt

security on the maturity date then in effect at a price equal to the principal amount plus any accrued and unpaid interest to that

date. To elect repayment, a holder must give notice to the paying agent between 25 and 35 days before the maturity date in

effect. The notice must consist of either:

Ø

the debt security along with the completed form entitled “Option to Elect Repayment,” which will be attached to your

debt security.

Ø

a telegram, facsimile transmission or letter from a member of a national securities exchange, the Financial Industry

Regulatory Authority, Inc. or a commercial bank or trust company in the United States setting forth the name of the

holder, the principal amount of the debt security, the principal amount of the debt security to be repaid, the certificate

number or a description of the tenor and terms of the debt security, a statement that the option to elect repayment is

being elected and a guarantee that the debt security, together with the completed form entitled “Option to Elect

Repayment” will be received by the paying agent no later than the fifth business day after the date of the telegram,

facsimile transmission or letter. The telegram, facsimile transmission or letter will become effective upon receipt, by

that fifth business day, of the debt security and complete form.

The holder may revoke the election of repayment by sending to the paying agent written notice by 3:00 p.m., New York City

time, on the twentieth day before the maturity date then in effect or, if that day is not a business day, on the next succeeding

business day.

If an extendible debt security is represented by a global debt security, the depositary or its nominee, as the holder, will be the

only person that can exercise the right to elect repayment or revoke such an election. Any indirect owners who own beneficial

interests in the global debt security and wish to make such an election must give proper and timely instructions to the banks or

brokers through which they hold their interests, requesting that they notify the depositary to make a repayment election or

revoke such an election on their behalf. Different firms have different deadlines for accepting instructions from their

customers, and you should take care to act promptly enough to ensure that your request is given effect by the depositary before

the applicable deadline for exercise.

Redemption and Repayment

Unless otherwise indicated in your prospectus supplement, your debt security will not be entitled to the benefit of any sinking

fund—that is, we will not deposit money on a regular basis into any separate custodial account to repay your debt securities. In

addition, we will not be entitled to redeem your debt security before its stated maturity (except for certain tax reasons, as

described below) unless your prospectus supplement specifies a redemption date or redemption commencement date. You will

not be entitled to require us to buy your debt security from you, before its stated maturity, unless your prospectus supplement

specifies one or more repayment dates.

If your prospectus supplement specifies one or more redemption dates, a redemption commencement date or a repayment date,

it will also specify one or more redemption prices or repayment prices, which may be expressed as a percentage of the

principal amount of your debt security. It may also specify one or more redemption periods during which the redemption prices

relating to a redemption of debt securities during those periods will apply.

37

If your prospectus supplement specifies one or more redemption dates, your debt security will be redeemable at our option on

any of those dates. If your prospectus supplement specifies a redemption commencement date, your debt security will be

redeemable at our option at any time on or after that date. If we redeem your debt security, we will do so at the specified

redemption price. If different prices are specified for different redemption periods, the price we pay will be the price that

applies to the redemption period during which your debt security is redeemed.

If your prospectus supplement specifies a repayment date, your debt security will be repayable at your option on the specified

repayment date at the specified repayment price, together with interest accrued to the repayment date.

If we exercise an option to redeem any debt security, we will give the trustee and the holders written notice of the principal

amount of the debt security to be redeemed, not less than 3 business days nor more than 60 days before the applicable

redemption date unless otherwise specified in your prospectus supplement. We will give the notice in the manner described

below in “—Notices.”

If a debt security represented by a global debt security is subject to repayment at the holder’s option, the depositary or its

nominee, as the holder, will be the only person that can exercise the right to repayment. Any indirect holders who own

beneficial interests in the global debt security and wish to exercise a repayment right must give proper and timely instructions

to the banks or brokers through which they hold their interests, requesting that they notify the depositary to exercise the

repayment right on their behalf. Different firms have different deadlines for accepting instructions from their customers, and

you should take care to act promptly enough to ensure that your request is given effect by the depositary before the applicable

deadline for exercise.

Street name and other indirect holders should contact their banks or brokers for information about how to exercise a repayment

right in a timely manner.

We or our affiliates may purchase debt securities from investors who are willing to sell from time to time, either in the open

market at prevailing prices or in private transactions at negotiated prices. Debt securities that we or they purchase may, at our

discretion, be held, resold or cancelled.

Optional Tax Redemption

In addition to the situations described above under “—Redemption and Repayment,” we also have the option to redeem the

debt securities in two situations described below, unless otherwise indicated in your prospectus supplement. The redemption

price for the debt securities, other than original issue discount debt securities, will be equal to the principal amount of the debt

securities being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. The

redemption price for original issue discount debt securities will be specified in the prospectus supplement for such debt

securities. Furthermore, we must give you between 10 and 60 days’ notice before redeeming the debt securities unless

otherwise specified in your prospectus supplement.

Ø

The first situation is where, as a result of a change in, execution of or amendment to any laws or treaties or the official

application or interpretation of any laws or treaties, we would be required to pay additional amounts as described below

under “—Payment of Additional Amounts.”

This applies only in the case of changes, executions, amendments, applications or interpretations that occur on or after

the date specified in the prospectus supplement for the applicable debt securities and in a relevant jurisdiction, as

defined in “—Payment of Additional Amounts” below. If UBS is succeeded by another entity, the applicable

jurisdiction will be the jurisdiction in which the successor entity is organized, and the applicable date will be the date

the entity became a successor.

We would not have the option to redeem in this case if we could have avoided the payment of additional amounts or

the deduction or withholding by using reasonable measures available to us.

Ø

The second situation is where a person located outside of a relevant jurisdiction into which UBS is merged or to whom

it has conveyed, transferred or leased its property is required to pay an additional amount. We would have the option to

redeem the debt securities even if we are required to pay additional amounts immediately after the merger, conveyance,

transfer or lease. We are not required to use reasonable measures to avoid the obligation to pay additional amounts in

this situation.

Payment of Additional Amounts

A relevant jurisdiction may require UBS to withhold amounts from payments on the principal or interest on a debt security for

taxes or any other governmental charges. If the relevant jurisdiction requires a withholding of this type, UBS may be required

to pay you an additional amount so that the net amount you receive will be the amount specified in the debt security to which

you are entitled.

By relevant jurisdiction, we mean Switzerland or a jurisdiction in which the UBS branch through which debt securities are

issued is located. UBS will not have to pay additional amounts in respect of taxes or other governmental charges that are

required to be deducted or withheld by any paying agent from a payment on a debt security, if such payment can be made

without such deduction or withholding by any other paying agent. Furthermore, UBS will not pay additional amounts for or on

account of:

Ø

the existence of any present or former connection between you and the relevant jurisdiction, other than the mere

holding of the debt security and the receipt of payments on it;

38

Ø

any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax, duty, assessment or governmental

charge;

Ø

your failure, or the failure of any intermediary, custodian or broker, to comply with any reasonable certification,

documentation, information or other reporting requirement concerning your nationality, residence, identity or

connection with the relevant jurisdiction, if such compliance is required as a precondition to relief or exemption from

such taxes or other governmental charges (including, without limitation, a certification that you are not resident in the

relevant jurisdiction or are not an individual resident of a member state of the European Union);

Ø

your status as a bank purchasing the debt security in the ordinary course of its lending business;

Ø

your actual or constructive ownership of 10% or more of the combined voting power of all classes of stock of UBS

entitled to vote;

Ø

any taxes imposed on contingent interest as described in section 871(h)(4) of the Internal Revenue Code (as defined

below under “U.S. Tax Considerations”);

Ø

any taxes which would not have been imposed but for your presentation, or a presentation on your behalf, of a debt

security payment on a date more than 15 days after the date on which such payment on the debt security becomes due

and payable or on which the payment is duly provided for, whichever occurs later; or

Ø

any combination of the items listed above.

In addition, no additional amounts will be required to be paid on account of any deduction or withholding imposed or required

pursuant to Sections 1471 through 1474 of the Internal Revenue Code (as defined below under “U.S. Tax Considerations”),

any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of

the Internal Revenue Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental

agreement entered into in connection with the implementation of such Sections of the Internal Revenue Code.

These provisions will also apply to any taxes or governmental charges imposed by any jurisdiction in which a successor to

UBS is organized. The prospectus supplement relating to the debt security may describe additional circumstances in which

UBS would not be required to pay additional amounts.

Mergers and Similar Transactions

We are generally permitted to merge or consolidate with another firm. We are also permitted to sell our assets substantially as

an entirety to another firm. With regard to any series of debt securities, we may not take any of these actions, however, unless

all the following conditions are met:

Ø

If the successor firm in the transaction is not UBS, the successor firm must be organized as a corporation, partnership

or trust and must expressly assume our obligations under the debt securities of that series and the debt indenture. The

successor firm must be organized under the laws of Switzerland.

Ø

Immediately after the transaction, no default under the debt securities of that series has occurred and is continuing. For

this purpose, “default under the debt securities of that series” means an event of default with respect to that series or

any event that would be an event of default with respect to that series if the requirements for giving us default notice

and for our default having to continue for a specific period of time were disregarded. We describe these matters below

under “—Default, Remedies and Waiver of Default.”

If the conditions described above are satisfied with respect to the debt securities of any series, we will not need to obtain the

approval of the holders of those debt securities in order to merge or consolidate or to sell our assets. Also, these conditions will

apply only if we wish to merge or consolidate with another firm or sell our assets substantially as an entirety to another firm.

We will not need to satisfy these conditions if we enter into other types of transactions, including any transaction in which we

acquire the stock or assets of another firm, any transaction that involves a change of control of UBS but in which we do not

merge or consolidate and any transaction in which we sell less than substantially all our assets.

Also, if we merge, consolidate or sell our assets substantially as an entirety and the successor firm is a non-Swiss entity,

neither we nor any successor would have any obligation to compensate you for any resulting adverse tax consequences to the

debt securities.

Defeasance and Covenant Defeasance

If indicated in the applicable prospectus supplement for a debt security, the provisions for full defeasance and covenant

defeasance described below will apply to that debt security. In general, we expect these provisions to apply to each debt

security that has a specified currency of U.S. dollars and is not a floating rate or indexed debt security.

Full Defeasance

If there is a change in U.S. federal tax law, as described below, we can legally release ourselves from all payment and other

obligations on your debt security. This is called full defeasance. To do so, each of the following must occur:

Ø

We must deposit in trust for the benefit of all holders of those debt securities, money, U.S. government or U.S.

government agency notes or bonds or a combination of money and U.S. government or U.S. government agency notes

or bonds that will, in each case, in the opinion of a nationally recognized firm of independent public accountants,

generate enough cash to make interest, principal and any other payments on those debt securities on their various due

dates.

39

Ø

There must be a change in current U.S. federal tax law or an Internal Revenue Service ruling that lets us make the

above deposit without causing the holders to be taxed on those debt securities any differently than if we did not make

the deposit and just repaid the debt securities ourselves. Under current federal tax law, the deposit and our legal release

from your debt securities would be treated as though we took back your debt security and gave you your share of the

cash and notes or bonds deposited in trust. In that event, you could recognize gain or loss on your debt security.

Ø

We must deliver to the trustee a legal opinion of our counsel confirming the tax law change described above.

If we ever fully defease your debt security, you would have to rely solely on the trust deposit for payments on your debt

security. You would not be able to look to us for payment in the event of any shortfall.

Covenant Defeasance

Under current U.S. federal tax law, we can make the same type of deposit described above and be released from any restrictive

covenants relating to your debt security that may be described in your prospectus supplement. This is called covenant

defeasance. In that event, you would lose the protection of those restrictive covenants. In order to achieve covenant defeasance

for any debt securities, we must do both of the following:

Ø

We must deposit in trust for the benefit of all holders of those debt securities, money, U.S. government or U.S.

government agency notes or bonds or a combination of money and U.S. government or U.S. government agency notes

or bonds that will, in each case, in the opinion of a nationally recognized firm of independent public accountants,

generate enough cash to make interest, principal and any other payments on those debt securities on their various due

dates.

Ø

We must deliver to the trustee a legal opinion of our counsel confirming that under U.S. federal income tax law as then

in effect we may make the above deposit without causing you to be taxed on those debt securities any differently than if

we did not make the deposit and just repaid those debt securities ourselves.

If we accomplish covenant defeasance with regard to your debt security, the following provisions of the debt indenture and

your debt security would no longer apply:

Ø

Any covenants that your prospectus supplement may state are applicable to your debt security; and

Ø

The events of default resulting from a breach of covenants, described below in the fourth bullet point under “—Default,

Remedies and Waiver of Default—Events of Default.”

Any right we have to redeem will survive covenant defeasance with regard to those debt securities.

If we accomplish covenant defeasance on your debt security, you can still look to us for repayment of your debt security in the

event of any shortfall in the trust deposit. You should note, however, that if one of the remaining events of default occurred,

such as our bankruptcy, and your debt security became immediately due and payable, there may be a shortfall. Depending on

the event causing the default you may not be able to obtain payment of the shortfall.

Default, Remedies and Waiver of Default

You will have special rights if an event of default with respect to your series of debt securities occurs and is not cured, as

described in this subsection.

Events of Default

Unless your prospectus supplement says otherwise, when we refer to an event of default with respect to any series of debt

securities, we mean any of the following:

Ø

We do not pay the principal or any premium (including delivering any security or other property deliverable) on any

debt security of that series at its maturity;

Ø

We do not pay interest on any debt securities of that series within 30 days after it becomes due and payable;

Ø

We do not deposit a sinking fund payment with regard to any debt securities of that series on its due date, but only if

the payment is required in the applicable prospectus supplement;

Ø

We remain in breach of any other covenant we make in the debt indenture for the benefit of the debt securities of that

series, for 60 days after we receive a notice of default stating that we are in breach and requiring us to remedy the

breach. The notice must be sent by the trustee or the holders of not less than 10% in principal amount of the relevant

series of debt securities then outstanding;

Ø

We file for bankruptcy or certain other bankruptcy, insolvency or reorganization events relating to UBS occur; or

Ø

If the applicable prospectus supplement states that any additional event of default applies to your series, that event of

default occurs.

Remedies If an Event of Default Occurs

If an event of default has occurred with respect to any series of debt securities and has not been cured or waived, the trustee or

the holders of not less than 25% in principal amount of all debt securities of that series then outstanding may declare the entire

principal amount of the debt securities of that series to be due immediately. If an event of default occurs because of

bankruptcy, insolvency or reorganization events relating to UBS, the entire principal amount of the debt securities of that series

will be automatically accelerated, without any action by the trustee or any holder.

Each of the situations described above is called an acceleration of the maturity of the affected series of debt securities. If the

maturity of any series is accelerated and a judgment for payment has not yet been obtained, the holders of a majority in

principal amount of the debt securities of that series may cancel the acceleration for the entire series.

40

If an event of default occurs, the trustee will have special duties. The trustee will be obligated to use those of its rights and

powers under the debt indenture, and to use the same degree of care and skill in doing so, that a prudent person would use in

that situation in conducting his or her own affairs.

Except as described in the prior paragraph, the trustee is not required to take any action under the debt indenture at the request

of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This is called an

indemnity. If the trustee is provided with an indemnity reasonably satisfactory to it, the holders of a majority in principal

amount of all debt securities of the relevant series may direct the time, method and place of conducting any lawsuit or other

formal legal action seeking any remedy available to the trustee with respect to that series. These majority holders may also

direct the trustee in performing any other action under the debt indenture with respect to the debt securities of that series.

Before you bypass the trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights

or protect your interests relating to any debt security, all of the following must occur:

Ø

The holder of your debt security must give the trustee written notice that an event of default has occurred, and the event

of default must not have been cured or waived.

Ø

The holders of not less than 25% in principal amount of all debt securities of your series must make a written request

that the trustee take action because of the default, and they or other holders must offer to the trustee indemnity

reasonably satisfactory to the trustee against the cost and other liabilities of taking that action.

Ø

The trustee must not have taken action for 60 days after the above steps have been taken.

Ø

During those 60 days, the holders of a majority in principal amount of the debt securities of your series must not have

given the trustee directions that are inconsistent with the written request of the holders of not less than 25% in principal

amount of all debt securities of your series.

You are, however, entitled at any time to bring a lawsuit for the payment of money due on your debt security on or after its due

date.

Waiver of Default

The holders of not less than a majority in principal amount of the debt securities of any series may waive a default for all debt

securities of that series. If this happens, the default will be treated as if it has not occurred. No one can waive a payment default

on your debt security, however, without the approval of the particular holder of that debt security.

We Will Give the Trustee Information About Defaults Annually

We will furnish to the trustee every year a written statement of two of our officers certifying that to their knowledge we are in

compliance with the debt indenture and the debt securities, or else specifying any default under the debt indenture.

Book-entry and other indirect holders should consult their banks or brokers for information on how to give notice or direction

to or make a request of the trustee and how to declare or cancel an acceleration of the maturity of the debt securities. Book-

entry and other indirect owners are described below under “Legal Ownership and Book-Entry Issuance.”

Modification and Waiver of Covenants

There are three types of changes we can make to the debt indenture and the debt securities of any series.

Changes Requiring Each Holder’s Approval

First, there are changes that cannot be made without the approval of each holder of a debt security affected by the change. Here

is a list of those types of changes:

Ø

change the stated maturity for any principal or interest payment on a debt security;

Ø

reduce the principal amount, the amount payable on acceleration of the maturity after a default, the interest rate or the

redemption price for a debt security;

Ø

permit redemption of a debt security if not previously permitted;

Ø

impair any right a holder may have to require repayment of his or her debt security;

Ø

impair any right that a holder of an indexed or any other debt security may have to exchange or convert the debt

security for or into securities or other property;

Ø

change the currency of any payment on a debt security other than as permitted by the debt security;

Ø

change the place of payment on a debt security, if it is in non-global form;

Ø

impair a holder’s right to sue for payment of any amount due on his or her debt security;

Ø

reduce the percentage in principal amount of the debt securities of any one or more affected series, taken separately or

together, as applicable, the approval of whose holders is needed to change the debt indenture or those debt securities;

Ø

reduce the percentage in principal amount of the debt securities of any one or more affected series, taken separately or

together, as applicable, the consent of whose holders is needed to waive our compliance with the debt indenture or to

waive defaults; and

Ø

change the provisions of the debt indenture dealing with modification and waiver in any other respect, except to

increase any required percentage referred to above or to add to the provisions that cannot be changed or waived without

approval of the holder of each affected debt security.

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Changes Not Requiring Approval of Holders

The second type of change does not require any approval by holders of the debt securities of an affected series. This type of

change is limited to clarifications and changes that would not adversely affect the debt securities of that series in any material

respect. We also do not need any approval to make changes that affect only debt securities to be issued under the debt

indenture after the changes take effect.

We may also make changes or obtain waivers that do not adversely affect a particular debt security, even if they affect other

debt securities. In those cases, we do not need to obtain the approval of the holder of the unaffected debt security; we need only

obtain any required approvals from the holders of the affected debt securities.

Changes Requiring Majority Approval

Any other change to the debt indenture and the debt securities would require the following approval:

Ø

If the change affects only the debt securities of a particular series, it must be approved by the holders of 66⅔% in

principal amount of the debt securities of that series.

Ø

If the change affects the debt securities of more than one series of debt securities issued under the debt indenture, it

must be approved by the holders of 66⅔% in principal amount of all series affected by the change, with the debt

securities of all the affected series voting together as one class for this purpose (and of any affected series that by its

terms is entitled to vote separately as a series, as described below).

In each case, the required approval must be given by written consent.

Majority approval would be required for us to obtain a waiver of any of our covenants in the debt indenture. Our covenants

include the promises we make about merging, which we describe above under “—Mergers and Similar Transactions.” If the

holders approve a waiver of a covenant, we will not have to comply with that covenant. The holders, however, cannot approve

a waiver of any provision in a particular debt security, or in the debt indenture as it affects that debt security, that we cannot

change without the approval of the holder of that debt security as described above under “—Changes Requiring Each Holder’s

Approval,” unless that holder approves the waiver.

Book-entry and other indirect holders should consult their banks or brokers for information on how approval may be granted or

denied if we seek to change the debt indenture or the debt securities or request a waiver.

Special Rules for Action by Holders

When holders take any action under the debt indenture, such as giving a notice of default, declaring an acceleration, approving

any change or waiver or giving the trustee an instruction, we will apply the following rules.

Only Outstanding Debt Securities Are Eligible

Only holders of outstanding debt securities of the applicable series will be eligible to participate in any action by holders of

debt securities of that series. Also, we will count only outstanding debt securities in determining whether the various

percentage requirements for taking action have been met. For these purposes, a debt security will not be “outstanding”:

Ø

if it has been surrendered for cancellation;

Ø

if we have deposited or set aside, in trust for its holder, money for its payment or redemption;

Ø

if we have fully defeased it as described above under “—Defeasance and Covenant Defeasance—Full Defeasance”; or

Ø

if we or one of our affiliates, such as UBS Securities LLC or UBS Financial Services Inc., is the beneficial owner.

Special Series Voting Rights

We may issue series of debt securities that are entitled, by their terms, to vote separately on matters (for example, modification

or waiver of provisions in the debt indenture) that would otherwise require a vote of all affected series, voting together as a

single class. Any such series would be entitled to vote together with all other affected series, voting together as one class, and

would also be entitled to vote separately, as a series only. These special voting rights will be described in the applicable

prospectus supplement. For a series that does not have these special rights, voting will occur as described in the preceding

section, but subject to any separate voting rights of any series having special rights. We may issue a series having these or

other special voting rights without obtaining the consent of or giving notice to holders of outstanding series.

Eligible Principal Amount of Some Debt Securities

In some situations, we may follow special rules in calculating the principal amount of a debt security that is to be treated as

outstanding for the purposes described above. This may happen, for example, if the principal amount is payable in a non-U.S.

dollar currency, increases over time or is not to be fixed until maturity. For any debt security of the kind described below, we

will decide how much principal amount to attribute to the debt security as follows:

Ø

For an original issue discount debt security, we will use the principal amount that would be due and payable on the

action date if the maturity of the debt security were accelerated to that date because of a default.

Ø

For a debt security whose principal amount is not known, we will use any amount that we indicate in the prospectus

supplement for that debt security. The principal amount of a debt security may not be known, for example, because it is

based on an index that changes from time to time and the principal amount is not to be determined until a later date.

Ø

For debt securities with a principal amount denominated in one or more non-U.S. dollar currencies or currency units,

we will use the U.S. dollar equivalent, which we will determine.

42

Determining Record Dates for Action by Holders

We will generally be entitled to set any day as a record date for the purpose of determining the holders that are entitled to take

action under the debt indenture. In certain limited circumstances, only the trustee will be entitled to set a record date for action

by holders. If we or the trustee set a record date for an approval or other action to be taken by holders, that vote or action may

be taken only by persons or entities who are holders on the record date and must be taken during the period that we specify for

this purpose, or that the trustee specifies if it sets the record date. We or the trustee, as applicable, may shorten or lengthen this

period from time to time. This period, however, may not extend beyond the 180th day after the record date for the action. In

addition, record dates for any global debt security may be set in accordance with procedures established by the depositary from

time to time. Accordingly, record dates for global debt securities may differ from those for other debt securities.

Form, Exchange and Transfer of Debt Securities

We will issue each debt security in global—

i.e.

, book-entry—form only, unless we specify otherwise in the applicable

prospectus supplement. Debt securities in book-entry form will be represented by a global security registered in the name of a

depositary, which will be the holder of all the debt securities represented by the global security. Those who own beneficial

interests in a global debt security will do so through participants in the depositary’s securities clearance system, and the rights

of these indirect owners will be governed solely by the applicable procedures of the depositary and its participants. We

describe book-entry securities below under “Legal Ownership and Book-Entry Issuance.” Unless we specify otherwise in the

applicable prospectus supplement, The Depository Trust Company, New York, New York, known as DTC, will be the

depositary for all debt securities in global form.

In addition, we will generally issue each debt security in registered form, without coupons, unless we specify otherwise in the

applicable prospectus supplement. If we issue a debt security in bearer form, the applicable prospectus supplement will

describe the provisions that would apply to that security.

If a debt security is issued as a global debt security, only the depositary—

e.g.

, DTC, Euroclear and Clearstream—will be

entitled to transfer and exchange the debt security or exercise any other rights of a holder as described in this subsection, since

the depositary will be the sole holder of the debt security.

If any debt securities cease to be issued in global form, then unless we indicate otherwise in your prospectus supplement, they

will be issued:

Ø

only in fully registered form;

Ø

without interest coupons; and

Ø

unless we indicate otherwise in your prospectus supplement, in denominations of $1,000 and integral multiples of

$1,000.

Holders may exchange their debt securities for debt securities of smaller denominations (subject to the limit above) or

combined into fewer debt securities of larger denominations, as long as the total principal amount is not changed. You may not

exchange your debt securities for securities of a different series or having different terms, unless your prospectus supplement

says you may.

Holders may exchange or transfer their debt securities at the office of the trustee. They may also replace lost, stolen, destroyed

or mutilated debt securities at that office. We have appointed the trustee to act as our agent for registering debt securities in the

names of holders and transferring and replacing debt securities. We may appoint another entity to perform these functions or

perform them ourselves.

Holders will not be required to pay a service charge to transfer or exchange their debt securities, but they may be required to

pay for any tax or other governmental charge associated with the exchange or transfer. The transfer or exchange, and any

replacement, will be made only if our transfer agent is satisfied with the holder’s proof of legal ownership. The transfer agent

may require an indemnity before replacing any debt securities.

If we have designated additional transfer agents for your debt security, they will be named in your prospectus supplement. We

may appoint additional transfer agents or cancel the appointment of any particular transfer agent. We may also approve a

change in the office through which any transfer agent acts.

If the debt securities of any series are redeemable and we redeem less than all those debt securities, we may block the transfer

or exchange of those debt securities during the period beginning 15 days before the day we mail the notice of redemption and

ending on the day of that mailing or during any other period specified in the applicable prospectus supplement, in order to

freeze the list of holders who will receive the mailing. We may also refuse to register transfers of or exchange any debt security

selected for redemption, except that we will continue to permit transfers and exchanges of the unredeemed portion of any debt

security being partially redeemed.

The rules for exchange described above apply to exchanges of debt securities for other debt securities of the same series and

kind. If a debt security is convertible, exercisable or exchangeable into or for a different kind of security, such as one that we

have not issued, or for other property, the rules governing that type of conversion, exercise or exchange will be described in the

applicable prospectus supplement.

43

Payment Mechanics for Debt Securities 

Who Receives Payments?

If interest is due on a debt security on an interest payment date, we will pay the interest to the person in whose name the debt

security is registered at the close of business on the regular record date described below relating to the interest payment date. If

interest is due at maturity but on a day that is not an interest payment date, we will pay the interest to the person entitled to

receive the principal of the debt security. If principal or another amount besides interest is due on a debt security at maturity,

we will pay the amount to the holder of the debt security against surrender of the debt security at a proper place of payment (or,

in the case of a global debt security, in accordance with the applicable policies of the depositary).

Payment Dates and Regular Record Dates for Interest

Unless we specify otherwise in the applicable prospectus supplement, interest on any fixed rate debt security will be payable

semiannually each May 15 and November 15 and at maturity, and the regular record date relating to an interest payment date

for any fixed rate debt security will be the May 1 or November 1 next preceding that interest payment date. The regular record

date relating to an interest payment date for any floating rate debt security will be the 15th calendar day before that interest

payment date. These record dates will apply whether or not a particular record date is a business day. For the purpose of

determining the holder at the close of business on a regular record date when business is not being conducted, the close of

business will mean 5:00 P.M., New York City time, on that day.

The term “business day” means, for any debt security, a day that meets all the following applicable requirements:

Ø

for all debt securities, is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking

institutions in New York City generally are authorized or obligated by law, regulation or executive order to close and

that satisfies any other criteria specified in your prospectus supplement;

Ø

if the debt security is a floating rate debt security whose interest rate is based on the London Inter-Bank Offered Rate

(“LIBOR”), is also a day on which dealings in the relevant index currency specified in the applicable prospectus

supplement are transacted in the London interbank market;

Ø

if the debt security is a floating rate debt security whose interest rate is based on the Secured Overnight Financing Rate

("SOFR"), is also any day except for a Saturday, a Sunday or a day on which the Securities Industry and Financial

Markets Association recommends that the fixed income departments of its members be closed for the entire day for

purposes of trading in U.S. government securities;

Ø

if the debt security has a specified currency other than U.S. dollars or euros, is also a day on which banking institutions

are not authorized or obligated by law, regulation or executive order to close in the principal financial center of the

country issuing the specified currency;

Ø

if the debt security either is a floating rate debt security whose interest rate is based on EURIBOR or has a specified

currency of euros, is also a day on which the Trans-European Automated Real-time Gross settlement Express Transfer

(TARGET) System, or any successor system, is open for business;

Ø

if the debt security is held through Euroclear, is also not a day on which banking institutions in Brussels, Belgium are

generally authorized or obligated by law, regulation or executive order to close; and

Ø

if the debt security is held through Clearstream, is also not a day on which banking institutions in Luxembourg are

generally authorized or obligated by law, regulation or executive order to close.

How We Will Make Payments Due in U.S. Dollars

We will follow the practices described in this subsection when paying amounts due in U.S. dollars. Payments of amounts due

in other currencies will be made as described in the next subsection.

Payments on Global Debt Securities.

We will make payments on a global debt security in accordance with the applicable

policies of the depositary as in effect from time to time. Under those policies, we will pay directly to the depositary, or its

nominee, and not to any indirect owners who own beneficial interests in the global debt security. An indirect owner’s right to

receive those payments will be governed by the rules and practices of the depositary and its participants, as described under

“Legal Ownership and Book-Entry Issuance—What Is a Global Security?”

Payments on Non-Global Debt Securities.

We will make payments on a debt security in non-global, registered form as

follows. We will pay interest that is due on an interest payment date by check mailed on the interest payment date to the holder

at his or her address shown on the trustee’s records as of the close of business on the regular record date. We will make all

other payments by check at the paying agent described below, against surrender of the debt security. All payments by check

will be made in next-day funds—that is, in funds that become available on the day after the check is cashed.

Alternatively, if a non-global debt security has a face amount of at least $1,000,000 and the holder asks us to do so, we will

pay any amount that becomes due on the debt security by wire transfer of immediately available funds to an account at a bank

in New York City, on the due date. To request wire payment, the holder must give the paying agent appropriate wire transfer

instructions at least five business days before the requested wire payment is due. In the case of any interest payment due on an

interest payment date, the instructions must be given by the person who is the holder on the relevant regular record date. In the

case of any other payment, payment will be made only after the debt security is surrendered to the paying agent. Any wire

instructions, once properly given, will remain in effect unless and until new instructions are given in the manner described

above.

44

Book-entry and other indirect owners should consult their banks or brokers for information on how they will receive payments

on their debt securities.

How We Will Make Payments Due in Other Currencies

We will follow the practices described in this subsection when paying amounts that are due in a specified currency other than

U.S. dollars.

Payments on Global Debt Securities.

We will make payments on a global debt security in accordance with the applicable

policies of the depositary as in effect from time to time. We understand that these policies, as currently in effect at DTC, are as

follows:

Unless otherwise indicated in your prospectus supplement, if you are an indirect owner of global debt securities denominated

in a specified currency other than U.S. dollars and if you have the right to elect to receive payments in that other currency and

you do make that election, you must notify the participant through which your interest in the global debt security is held of

your election:

Ø

on or before the applicable regular record date, in the case of a payment of interest, or

Ø

on or before the 16th day prior to stated maturity, or any redemption or repayment date, in the case of payment of

principal or any premium.

You may elect to receive all or only a portion of any interest, principal or premium payment in a specified currency other than

U.S. dollars.

Your participant must, in turn, notify DTC of your election on or before the third DTC business day after that regular record

date, in the case of a payment of interest, and on or before the 12th DTC business day prior to stated maturity, or on the

redemption or repayment date if your debt security is redeemed or repaid earlier, in the case of a payment of principal or any

premium.

DTC, in turn, will notify the paying agent of your election in accordance with DTC’s procedures.

If complete instructions are received by the participant and forwarded by the participant to DTC, and by DTC to the paying

agent, on or before the dates noted above, the paying agent, in accordance with DTC’s instructions, will make the payments to

you or your participant by wire transfer of immediately available funds to an account maintained by you or your participant

with a bank located in the country issuing the specified currency or in another jurisdiction acceptable to us and the paying

agent.

If the foregoing steps are not properly completed, we expect DTC to inform the paying agent that payment is to be made in

U.S. dollars. In that case, we or our agent will convert the payment to U.S. dollars in the manner described below under “—

Conversion to U.S. Dollars.” We expect that we or our agent will then make the payment in U.S. dollars to DTC, and that DTC

in turn will pass it along to its participants.

Book-entry and other indirect holders of a global debt security denominated in a currency other than U.S. dollars should

consult their banks or brokers for information on how to request payment in the specified currency.

Payments on Non-Global Debt Securities.

Except as described in the second to last paragraph under this heading, we will

make payments on debt securities in non-global form in the applicable specified currency. We will make these payments by

wire transfer of immediately available funds to any account that is maintained in the applicable specified currency at a bank

designated by the holder and is acceptable to us and the trustee. To designate an account for wire payment, the holder must

give the paying agent appropriate wire instructions at least five business days before the requested wire payment is due. In the

case of any interest payment due on an interest payment date, the instructions must be given by the person who is the holder on

the regular record date. In the case of any other payment, the payment will be made only after the debt security is surrendered

to the paying agent. Any instructions, once properly given, will remain in effect unless and until new instructions are properly

given in the manner described above.

If a holder fails to give instructions as described above, we will notify the holder at the address in the trustee’s records and will

make the payment within five business days after the holder provides appropriate instructions. Any late payment made in these

circumstances will be treated under the debt indenture as if made on the due date, and no interest will accrue on the late

payment from the due date to the date paid.

Although a payment on a debt security in non-global form may be due in a specified currency other than U.S. dollars, we will

make the payment in U.S. dollars if the holder asks us to do so. To request U.S. dollar payment, the holder must provide

appropriate written notice to the trustee at least five business days before the next due date for which payment in U.S. dollars is

requested. In the case of any interest payment due on an interest payment date, the request must be made by the person who is

the holder on the regular record date. Any request, once properly made, will remain in effect unless and until revoked by notice

properly given in the manner described above.

Indirect owners of a non-global debt security with a specified currency other than U.S. dollars should contact their banks or

brokers for information about how to receive payments in the specified currency or in U.S. dollars.

45

Conversion to U.S. Dollars.

When we are asked by a holder to make payments in U.S. dollars of an amount due in another

currency, either on a global debt security or a non-global debt security as described above, we will determine the U.S. dollar

amount the holder receives as follows. The exchange rate agent described below will request currency bid quotations expressed

in U.S. dollars from three or, if three are not available, then two, recognized foreign exchange dealers in New York City, any

of which may be the exchange rate agent, which may be UBS Securities LLC, an affiliate of UBS, as of 11:00 A.M., New

York City time, on the second business day before the payment date. Currency bid quotations will be requested on an

aggregate basis, for all holders of debt securities requesting U.S. dollar payments of amounts due on the same date in the same

specified currency. The U.S. dollar amount the holder receives will be based on the highest acceptable currency bid quotation

received by the exchange rate agent. If the exchange rate agent determines that at least two acceptable currency bid quotations

are not available on that second business day, the payment will be made in the specified currency.

To be acceptable, a quotation must be given as of 11:00 A.M., New York City time, on the second business day before the due

date and the quoting dealer must commit to execute a contract at the quotation in the total amount due in that currency on all

series of debt securities. If some but not all of the relevant debt securities are LIBOR debt securities, SOFR debt securities or

EURIBOR debt securities, the second preceding business day will be determined for this purpose as if none of those debt

securities were LIBOR debt securities, SOFR debt securities or EURIBOR debt securities.

A holder that requests payment in U.S. dollars will bear all associated currency exchange costs, which will be deducted from

the payment.

When the Specified Currency Is Not Available.

If we are obligated to make any payment in a specified currency other than

U.S. dollars, and the specified currency or any successor currency is not available to us or cannot be paid to you due to

circumstances beyond our control—such as the imposition of exchange controls or a disruption in the currency markets—we

will be entitled to satisfy our obligation to make the payment in that specified currency by making the payment in U.S. dollars,

on the basis specified in the applicable prospectus supplement.

For a specified currency other than U.S. dollars, the exchange rate will be the noon buying rate for cable transfers of the

specified currency in New York City as quoted by the Federal Reserve Bank of New York on the then-most recent day on

which that bank has quoted that rate.

The foregoing will apply to any debt security, whether in global or non-global form, and to any payment, including a payment

at maturity. Any payment made under the circumstances and in a manner described above will not result in a default under any

debt security or the debt indenture.

Exchange Rate Agent.

If we issue a debt security in a specified currency other than U.S. dollars, we will appoint a financial

institution to act as the exchange rate agent and will name the institution initially appointed when the debt security is originally

issued in the applicable prospectus supplement. We may select UBS Securities LLC or another of our affiliates to perform this

role. We may change the exchange rate agent from time to time after the original issue date of the debt security without your

consent and without notifying you of the change.

All determinations made by the exchange rate agent will be at its sole discretion unless we state in your prospectus supplement

that any determination is subject to our approval. In the absence of manifest error, those determinations will be conclusive for

all purposes and binding on you and us, without any liability on the part of the exchange rate agent.

Payment When Offices Are Closed

If any payment is due on a debt security on a day that is not a business day, we will make the payment on the next day that is a

business day. Unless specified otherwise in the applicable prospectus supplement, payments postponed to the next business

day in this situation will be treated under the debt indenture as if they were made on the original due date. Postponement of this

kind will not result in a default under any debt security or the debt indenture, and no interest will accrue on the postponed

amount from the original due date to the next day that is a business day. The term business day has a special meaning, which

we describe above under “—Payment Dates and Regular Record Dates for Interest.”

Paying Agent

We may appoint one or more financial institutions to act as our paying agents, at whose designated offices debt securities in

non-global entry form may be surrendered for payment at their maturity. We call each of those offices a paying agent. We may

add, replace or terminate paying agents from time to time. We may also choose to act as our own paying agent. Initially, we

have appointed the trustee, at its corporate trust office in New York City, as the paying agent. We must notify the trustee of

changes in the paying agents.

Settlement Mechanics

The settlement mechanics applicable to debt securities calling for physical settlement will be described in the applicable

prospectus supplement.

Unclaimed Payments

Regardless of who acts as paying agent, all money paid by us to a paying agent that remains unclaimed at the end of two years

after the amount is due to a holder will be repaid to us. After that two-year period, the holder may look only to us for payment

and not to the trustee, any other paying agent or anyone else.

46

Notices

Notices to be given to holders of a global debt security will be given only to the depositary, in accordance with its applicable

policies as in effect from time to time. Notices to be given to holders of debt securities not in global form will be sent by mail

to the respective addresses of the holders as they appear in the trustee’s records, and will be deemed given when mailed.

Neither the failure to give any notice to a particular holder, nor any defect in a notice given to a particular holder, will affect

the sufficiency of any notice given to another holder.

Book-entry and other indirect holders should consult their banks or brokers for information on how they will receive notices.

Our Relationship with the Trustee

U.S. Bank Trust National Association has provided commercial banking and other services for us and our affiliates in the past

and may do so in the future. Among other things, U.S. Bank Trust National Association holds debt securities issued by us and

serves as trustee or agent with regard to other obligations of UBS or its subsidiaries.

U.S. Bank Trust National Association is serving as the trustee for the debt securities and the warrants issued under our warrant

indenture. Consequently, if an actual or potential event of default occurs with respect to any of these securities, the trustee may

be considered to have a conflicting interest for purposes of the Trust Indenture Act of 1939. In that case, the trustee may be

required to resign under one or more of the indentures, and we would be required to appoint a successor trustee. For this

purpose, a “potential” event of default means an event that would be an event of default if the requirements for giving us

default notice or for the default having to exist for a specific period of time were disregarded.

Legal Ownership and Book-Entry Issuance

In this section, we describe special considerations that will apply to registered securities issued in global—i.e., book-entry—

form. First we describe the difference between legal ownership and indirect ownership of registered securities. Then we

describe special provisions that apply to global securities.

Who is The Legal Owner of a Registered Security?

Each debt security or warrant in registered form will be represented either by a certificate issued in definitive form to a

particular investor or by one or more global securities representing the entire issuance of securities. We refer to those who have

securities registered in their own names, on the books that we or the trustee, warrant agent or other agent maintain for this

purpose, as the “holders” of those securities. These persons are the legal holders of the securities. We refer to those who,

indirectly through others, own beneficial interests in securities that are not registered in their own names as indirect owners of

those securities. As we discuss below, indirect owners are not legal holders, and investors in securities issued in book-entry

form or in street name will be indirect owners.

Book-Entry Owners

We will issue each security in book-entry form only. This means securities will be represented by one or more global securities

registered in the name of a financial institution that holds them as depositary on behalf of other financial institutions that

participate in the depositary’s book -entry system. These participating institutions, in turn, hold beneficial interests in the

securities on behalf of themselves or their customers.

Under each indenture or warrant agreement, only the person in whose name a security is registered is recognized as the holder

of that security. Consequently, for securities issued in global form, we will recognize only the depositary as the holder of the

securities and we will make all payments on the securities, including deliveries of any property other than cash, to the

depositary. The depositary passes along the payments it receives to its participants, which in turn pass the payments along to

their customers who are the beneficial owners. The depositary and its participants do so under agreements they have made with

one another or with their customers; they are not obligated to do so under the terms of the securities.

As a result, investors will not own securities directly. Instead, they will own beneficial interests in a global security, through a

bank, broker or other financial institution that participates in the depositary’s book-entry system or holds an interest through a

participant. As long as the securities are issued in global form, investors will be indirect owners, and not holders, of the

securities.

Street Name Owners

In the future we may terminate a global security or issue securities initially in non -global form. In these cases, investors may

choose to hold their securities in their own names or in street name. Securities held by an investor in street name would be

registered in the name of a bank, broker or other financial institution that the investor chooses, and the investor would hold

only a beneficial interest in those securities through an account he or she maintains at that institution.

47

For securities held in street name, we will recognize only the intermediary banks, brokers and other financial institutions in

whose names the securities are registered as the holders of those securities and we will make all payments on those securities,

including deliveries of any property other than cash, to them. These institutions pass along the payments they receive to their

customers who are the beneficial owners, but only because they agree to do so in their customer agreements or because they

are legally required to do so. Investors who hold securities in street name will be indirect owners, not holders, of those

securities.

Legal Holders

Our obligations, as well as the obligations of the trustee and the obligations, if any, of any warrant agents and any other third

parties employed by us, the trustee or any of those agents, run only to the holders of the securities. We do not have obligations

to investors who hold indirect interests in global securities, in street name or by any other indirect means. This will be the case

whether an investor chooses to be an indirect owner of a security or has no choice because we are issuing the securities only in

global form.

For example, once we make a payment or give a notice to the holder, we have no further responsibility for that payment or

notice even if that holder is required, under agreements with depositary participants or customers or by law, to pass it along to

the indirect owners but does not do so. Similarly, if we want to obtain the approval of the holders for any purpose—for

example, to amend the indenture for a series of debt securities or warrants or the warrant agreement for a series of warrants or

to relieve us of the consequences of a default or of our obligation to comply with a particular provision of the indenture—we

would seek the approval only from the holders, and not the indirect owners, of the relevant securities. Whether and how the

holders contact the indirect owners is up to the holders.

When we refer to “you” in this prospectus, we mean those who invest in the securities being offered by this prospectus,

whether they are the holders or only indirect owners of those securities. When we refer to “your securities” in this prospectus,

we mean the securities in which you will hold a direct or indirect interest.

Special Considerations for Indirect Owners

If you hold securities through a bank, broker or other financial institution, either in book-entry form or in street name, you

should check with your own institution to find out:

Ø

how it handles securities payments and notices;

Ø

whether it imposes fees or charges;

Ø

whether and how you can instruct it to exercise any rights to purchase or sell warrant property under a warrant or to

exchange or convert a security for or into other property;

Ø

how it would handle a request for the holders’ consent, if ever required;

Ø

whether and how you can instruct it to send you securities registered in your own name so you can be a holder, if that

is permitted in the future;

Ø

how it would exercise rights under the securities if there were a default or other event triggering the need for holders

to act to protect their interests; and

Ø

if the securities are in book-entry form, how the depositary’s rules and procedures will affect these matters.

What Is a Global Security?

We will issue each security in book-entry form only. Each security issued in book-entry form will be represented by a global

security that we deposit with and register in the name of one or more financial institutions or clearing systems, or their

nominees, which we select. A financial institution or clearing system that we select for any security for this purpose is called

the “depositary” for that security. A security will usually have only one depositary but it may have more.

Each series of securities will have one or more of the following as the depositaries:

Ø

The Depository Trust Company, New York, New York, which is known as “DTC”;

Ø

a financial institution holding the securities on behalf of Morgan Guaranty Trust Company of New York, acting out

of its Brussels, Belgium, office, as operator of the Euroclear system, which is known as “Euroclear”;

Ø

a financial institution holding the securities on behalf of Clearstream Banking, société anonyme, which is known as

“Clearstream”; and

48

Ø

any other clearing system or financial institution named in the applicable prospectus supplement. The depositaries

named above may also be participants in one another’s systems. Thus, for example, if DTC is the depositary for a

global security, investors may hold beneficial interests in that security through Euroclear or Clearstream, as DTC

participants.

The depositary or depositaries for your securities will be named in your prospectus supplement; if none is named, the

depositary will be DTC.

A global security may represent one or any other number of individual securities. Generally, all securities represented by the

same global security will have the same terms. We may, however, issue a global security that represents multiple securities of

the same kind, such as debt securities, that have different terms and are issued at different times. We call this kind of global

security a master global security. Your prospectus supplement will not indicate whether your securities are represented by a

master global security.

A global security may not be transferred to or registered in the name of anyone other than the depositary or its nominee, unless

special termination situations arise. We describe those situations below under “—Holder’s Option to Obtain a Non-Global

Security; Special Situations When a Global Security Will Be Terminated.” As a result of these arrangements, the depositary, or

its nominee, will be the sole registered owner and holder of all securities represented by a global security, and investors will be

permitted to own only indirect interests in a global security. Indirect interests must be held by means of an account with a

broker, bank or other financial institution that in turn has an account with the depositary or with another institution that does.

Thus, an investor whose security is represented by a global security will not be a holder of the security, but only an indirect

owner of an interest in the global security.

If the prospectus supplement for a particular security indicates that the security will be issued in global form only, then the

security will be represented by a global security at all times unless and until the global security is terminated. We describe the

situations in which this can occur below under “—Holder’s Option to Obtain a Non-Global Security; Special Situations When

a Global Security Will Be Terminated.” If termination occurs, we may issue the securities through another book-entry clearing

system or decide that the securities may no longer be held through any book-entry clearing system.

Special Considerations for Global Securities

As an indirect owner, an investor’s rights relating to a global security will be governed by the account rules of the depositary

and those of the investor’s financial institution or other intermediary through which it holds its interest (such as Euroclear or

Clearstream, if DTC is the depositary), as well as general laws relating to securities transfers. We do not recognize this type of

investor or any intermediary as a holder of securities and instead deal only with the depositary that holds the global security.

If securities are issued only in the form of a global security, an investor should be aware of the following:

Ø

An investor cannot require the securities to be registered in his or her own name, and cannot obtain non-global

certificates for his or her interest in the securities, except in the special situations we describe below.

Ø

An investor will be an indirect holder and must look to his or her own bank or broker for payments on the securities

and protection of his or her legal rights relating to the securities, as we describe above under “—Who Is the Legal

Owner of a Registered Security?”

Ø

An investor may not be able to sell interests in the securities to some insurance companies and other institutions that

are required by law to own their securities in non-book-entry form.

Ø

An investor may not be able to pledge his or her interest in a global security in circumstances where certificates

representing the securities must be delivered to the lender or other beneficiary of the pledge in order for the pledge to

be effective.

Ø

The depositary’s policies will govern payments, deliveries, transfers, exchanges, notices and other matters relating to

an investor’s interest in a global security, and those policies may change from time to time. We, the trustee and any

warrant agents will have no responsibility for any aspect of the depositary’s policies, actions or records of ownership

interests in a global security. We, the trustee and any warrant agents also do not supervise the depositary in any way.

Ø

The depositary will require that those who purchase and sell interests in a global security within its book-entry system

use immediately available funds and your broker or bank may require you to do so as well.

49

Ø

Financial institutions that participate in the depositary’s book-entry system and through which an investor holds its

interest in the global securities, directly or indirectly, may also have their own policies affecting payments, deliveries,

transfers, exchanges, notices and other matters relating to the securities, and those policies may change from time to

time. For example, if you hold an interest in a global security through Euroclear or Clearstream, when DTC is the

depositary, Euroclear or Clearstream, as applicable, will require those who purchase and sell interests in that security

through them to use immediately available funds and comply with other policies and procedures, including deadlines

for giving instructions as to transactions that are to be effected on a particular day. There may be more than one

financial intermediary in the chain of ownership for an investor. We do not monitor and are not responsible for the

policies or actions or records of ownership interests of any of those intermediari es.

Holder’s Option to Obtain a Non-Global Security; Special Situations When a Global Security Will Be Terminated

If we issue any series of securities in book-entry form but we choose to give the beneficial owners of that series the right to

obtain non-global securities, any beneficial owner entitled to obtain non-global securities may do so by following the

applicable procedures of the depositary, any transfer agent or registrar for that series and that owner’s bank, broker or other

financial institution through which that owner holds its beneficial interest in the securities. If you are entitled to request a non-

global certificate and wish to do so, you will need to allow sufficient lead time to enable us or our agent to prepare the

requested certificate.

In addition, in a few special situations described below, a global security will be terminated and interests in it will be

exchanged for certificates in non-global form representing the securities it represented. After that exchange, the choice of

whether to hold the securities directly or in street name will be up to the investor. Investors must consult their own banks or

brokers to find out how to have their interests in a global security transferred on termination to their own names, so that they

will be holders. We have described the rights of holders and street name investors above under “—Who Is the Legal Owner of

a Registered Security?”

The special situations for termination of a global security are as follows:

Ø

if the depositary notifies us that it is unwilling, unable or no longer qualified to continue as depositary for that global

security and we do not appoint another institution to act as depositary within 60 days; or

Ø

in the case of a global security representing debt securities or warrants issued under an indenture, if an event of

default has occurred with regard to these debt securities or warrants and has not been cured or waived.

If a global security is terminated, only the depositary, and not we, the trustee for any debt securities or warrants or the warrant

agent for any warrants, is responsible for deciding the names of the institutions in whose names the securities represented by

the global security will be registered and, therefore, who will be the holders of those securities.

Considerations Relating to Euroclear and Clearstream

Euroclear and Clearstream are securities clearance systems in Europe. Both systems clear and settle securities transactions

between their participants through electronic, book-entry delivery of securities against payment.

Euroclear and Clearstream may be depositaries for a global security. In addition, if DTC is the depositary for a global security,

Euroclear and Clearstream may hold interests in the global security as participants in DTC.

As long as any global security is held by Euroclear or Clearstream as depositary, you may hold an interest in the global

security only through an organization that participates, directly or indirectly, in Euroclear or Clearstream. If Euroclear or

Clearstream is the depositary for a global security and there is no depositary in the United States, you will not be able to hold

interests in that global security through any securities clearance system in the United States.

Payments, deliveries, transfers, exchanges, notices and other matters relating to the securities made through Euroclear or

Clearstream must comply with the rules and procedures of those systems. Those systems could change their rules and

procedures at any time. We have no control over those systems or their participants and we take no responsibility for their

activities. Transactions between participants in Euroclear or Clearstream, on one hand, and participants in DTC, on the other

hand, when DTC is the depositary, would also be subject to DTC’s rules and procedures.

Special Timing Considerations for Transactions in Euroclear and Clearstream

Investors will be able to make and receive through Euroclear and Clearstream payments, deliveries, transfers, exchanges,

notices and other transactions involving any securities held through those systems only on days when those systems are open

for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for

business in the United States.

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In addition, because of time-zone differences, U.S. investors who hold their interests in the securities through these systems

and wish to transfer their interests, or to receive or make a payment or delivery or exercise any other right with respect to their

interests, on a particular day may find that the transaction will not be effected until the next business day in Luxembourg or

Brussels, as applicable. Thus, investors who wish to exercise rights that expire on a particular day may need to act before the

expiration date. In addition, investors who hold their interests through both DTC and Euroclear or Clearstream may need to

make special arrangements to finance any purchases or sales of their interests between the U.S. and European clearing systems,

and those transactions may settle later than would be the case for transactions within one clearing system.

51

1. ETRACS UBS Bloomberg Constant Maturity Commodity Index (CMCI) Total Return

ETN Series B due April 5, 2038

Specific Terms of the Securities

In this section, references to “holders” or “you” mean those who own the Securities registered in their own names, on the

books that we or the trustee maintain for this purpose, and not those who own beneficial interests in the Securities registered in

street name or in the Securities issued in book-entry form through The Depository Trust Company (“DTC”) or another

depositary. Owners of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry

Issuance” under “Medium-Term Notes, Series B” above.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in ”Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

These Securities are part of a single series of senior debt securities issued under our indenture dated as of June 12, 20015

between us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

Coupon

We will not pay you interest during the term of the Securities.

Denomination

The Stated Principal Amount of the Securities is $25 per Security.

Payment at Maturity or Upon Early Redemption

At maturity or upon early redemption, you will receive a cash payment per $25 Stated Principal Amount of your Securities

equal to the Redemption Amount, which is calculated on the Final Valuation Date or the applicable Valuation Date, as the case

may be, and based on the percentage change in the level of the Index from the Initial Trade Date relative to such Valuation

Date.

The “Redemption Amount” will equal:

($25.00 × Index Performance Ratio) – Fee Amount

For purposes of calculating the Redemption Amount at maturity or upon early redemption, the Index Performance Ratio will

be determined as of the corresponding Final Valuation Date or Valuation Date, as the case may be. If the amount so calculated

is equal to or less than zero, the payment at maturity will be zero.

The “Index Performance Ratio” will be calculated as follows:

Index Ending Level

Index Starting Level

The “Index Starting Level” is 1,436.54, the closing level of the Index measured on April 1, 2008.

The “Index Ending Level” will equal the closing level of the Index on the applicable Trading Day.

The “Fee Amount” accrues on a daily basis. The initial Fee Amount will be $0.9565 and beginning on and including the Initial

Trade Date will increase each subsequent calendar date by an amount equal to: (0.55%/365) x $25.00 x Index Performance

Ratio on that day. For the purpose of calculating the Fee Amount, the Index Performance Ratio on any day that is not a Trading

Day is the Index Performance Ratio as of the immediately preceding Trading Day.

Unlike ordinary debt securities, the Securities do not pay interest and do not guarantee any return of principal at maturity or

upon an early redemption.

52

The Securities are fully exposed to any decline in the level of the Index. You may lose some or all of your investment if the

Index level on the Final Valuation Date or the applicable Valuation Date, as the case may be, is less than the Index Starting

Level or if the Index level does not increase by an amount sufficient to offset the negative effect of the Fee Amount. In

addition, the Fee Amount will be calculated and accumulated based on a daily Index level and therefore will depend on the

daily fluctuations of the Index level. If the amount calculated above is equal to or less than zero, the payment at maturity, call

or upon early redemption will be zero.

To receive at least your Stated Principal Amount at maturity or upon early redemption, the Index must increase by a certain

amount to offset the reduction to the Redemption Amount caused by the Fee Amount.

Maturity Date

The “Maturity Date” is April 5, 2038, unless that day is not a Business Day, in which case the Maturity Date will be the next

following Business Day. If the third Trading Day before April 5, 2038 does not qualify as the Final Valuation Date as

determined in accordance with “— Final Valuation Date” below, then the Maturity Date will be the third Trading Day

following the Final Valuation Date or, if such day is not a Business Day, the next following Trading Day that is also a Business

Day. The Calculation Agent may postpone the Final Valuation Date — and therefore the Maturity Date — if a market

disruption event occurs or is continuing on a day that would otherwise be the Final Valuation Date. We describe market

disruption events under “— Market Disruption Event” below.

Final Valuation Date

We currently expect the “Final Valuation Date” to be March 31, 2038, unless the Calculation Agent determines that a market

disruption event occurs or is continuing on that day. In that event, the Final Valuation Date will be the first following Trading

Day on which the Calculation Agent determines that a market disruption event does not occur and is not continuing. In no

event, however, will the Final Valuation Date for the Securities be postponed by more than five (5) Trading Days.

Underlying Index 

The return on the Securities is linked to the performance of the UBS Bloomberg Constant Maturity Commodity Index (CMCI)

Total Return (the “Index”). The Index is designed to be a diversified benchmark for commodities as an asset class. The Index,

which is rebalanced monthly, is comprised of futures contracts on 27 components, representing 24 commodities, with up to

five different maturities for each individual commodity. The Index is a “total return” index. The overall return on the Index is

generated by two components: (i) uncollateralized returns on the futures contracts comprising the Index and (ii) a daily fixed-

income return, which reflects the interest earned on a hypothetical 91-day Treasury Bill portfolio theoretically deposited as

margin for hypothetical positions in the futures contracts comprising the Index. 

Early Redemption

You may elect to require UBS to redeem your Securities, in whole or in part, prior to the Maturity Date on any Trading Day

through and including the final Redemption Date, subject to a minimum redemption amount of at least 50,000 Securities. If

you elect to have UBS redeem your Securities, you will receive a cash payment equal to the Redemption Amount, which will

be determined on the applicable Valuation Date and paid on the applicable Redemption Date. You must comply with the

redemption procedures described below in order to redeem your Securities. To satisfy the minimum redemption amount, your

broker or other financial intermediary may bundle your Securities for redemption with those of other investors to reach this

minimum amount of 50,000 Securities. We may from time to time in our sole discretion reduce, in part or in whole, the

minimum redemption amount of 50,000 Securities. Any such reduction will be applied on a consistent basis for all holders of

the Securities at the time the reduction becomes effective.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption to UBS via email no later than 12:00 p.m. (New York City time) on any Trading Day. If

we receive your notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption to us via facsimile in the specified form by 5:00 p.m. (New York City

time) on the same day. We or our affiliate must acknowledge receipt in order for your confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 10:00 a.m. (New York

City time) on the applicable Redemption Date.

53

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your notice of redemption after 12:00 p.m. (New York City time), or your confirmation of

redemption after 5:00 p.m. (New York City time), on the Trading Day prior to the applicable Valuation Date, your notice will

not be effective, you will not be able to redeem your Securities until the following Redemption Date and your broker will need

to complete all the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In

addition, UBS may request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole

discretion. All instructions given to participants from beneficial owners of Securities relating to the right to redeem their

Securities will be irrevocable.

Redemption Dates

The “Redemption Dates” will be the third Trading Day following a Valuation Date (other than the Final Valuation Date) or, if

such day is not a Business Day, the next following Trading Day that is a Business Day. The final Redemption Date will be the

third Trading Day following the Valuation Date that immediately precedes the Final Valuation Date or, if such day is not a

Business Day, the next following Trading Day that is a Business Day. The Calculation Agent may postpone the applicable

Valuation Date — and therefore the applicable Redemption Date — if a market disruption event occurs or is continuing on a

day that would otherwise be the applicable Valuation Date. We describe market disruption events under “— Market Disruption

Event” below.

Valuation Dates

For any early redemption, the applicable “Valuation Date” means the first Trading Day immediately following the Trading

Day on which you deliver a redemption notice to UBS in compliance with the redemption procedures. In the event UBS

exercises its Call Right (as defined below), the Valuation Date means the third Trading Day prior to the Call Settlement Date

(as defined below). If the Calculation Agent determines that a market disruption event occurs or is continuing on a Valuation

Date, the applicable Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a

market disruption event does not occur and is not continuing. In no event, however, will the applicable Valuation Date for the

Securities be postponed by more than five (5) Trading Days. The Final Valuation Date is March 31, 2038.

UBS’s Call Right

On any Trading Day on or after October 17, 2016 through and including the Maturity Date (any such day, the “Call Settlement

Date”), UBS may at its option redeem all, but not less than all, issued and outstanding Securities. To exercise its Call Right,

UBS must provide notice to the holders of the Securities not less than five (5) Trading Days prior to the Call Settlement Date

specified by UBS in such notice. If UBS elects to redeem the Securities on the Call Settlement Date, the Holder will receive a

cash payment equal to the Redemption Amount, which will be calculated on the applicable Valuation Date and paid on the Call

Settlement Date. The Calculation Agent may postpone the applicable Valuation Date — and therefore the Call Settlement Date

— if a market disruption event occurs and is continuing on a day that would otherwise be the applicable Valuation Date.

In the event we exercise our Call Right, references to payment upon early redemption also refer to payment upon our exercise

of our call right. See “— Payment at Maturity or Upon Early Redemption.” We discuss redemption ”Medium-Term Notes,

Series B” above under “Description of the Debt Securities We May Offer–Redemption and Payment.”

Market Disruption Event

The Calculation Agent will determine the Index Ending Level on the applicable Valuation Date or the Final Valuation Date, as

the case may be. If the level of the Index has declined, you may lose some or all of your investment. If the level of the Index

has increased, it must have increased by an amount sufficient to offset the Fee Amount in order to receive a positive return on

your Securities. As described above, the applicable Valuation Date or the Final Valuation Date, as the case may be, may be

postponed and thus the determination of the Index Ending Level may be postponed if the Calculation Agent determines that,

on the applicable Valuation Date or the Final Valuation Date, as the case may be, a market disruption event has occurred or is

continuing. Notwithstanding the occurrence of one or more of the events below, which may, in the Calculation Agent’s

discretion, constitute a market disruption event, the Calculation Agent in its discretion may waive its right to postpone the

determination of the Index Ending Level if it determines that one or more of the below events has not and is not likely to

materially impair its ability to determine the Index Ending Level on such date. If such a postponement occurs, the Calculation

Agent will use the closing level of the Index on the first Trading Day on which no market disruption event occurs or is

continuing. In no event, however, will the determination of the Index Ending Level be postponed by more than five (5) Trading

Days.

If the determination of the Index Ending Level is postponed to the last possible day, but a market disruption event occurs or is

continuing on that day, that day will nevertheless be the date on which the Index Ending Level will be determined by the

Calculation Agent. In such an event, the Calculation Agent will make a good faith estimate in its sole discretion of the Index

Ending Level that would have prevailed in the absence of the market disruption event.

Any of the following will be a market disruption event:

54

Ø

the absence or suspension of, or material limitation or disruption in the trading of any exchange-traded futures contract

included in the Index;

Ø

the settlement price of any such contract has increased or decreased by an amount equal to the maximum permitted

price change from the previous day’s settlement price;

Ø

the Index is not published;

Ø

the settlement price is not published for any individual exchange-traded futures contract included in the Index;

Ø

the occurrence of any event on any day or any number of consecutive days as determined by the Calculation Agent in

its sole and reasonable discretion that affects our currency hedging (if any) with respect to U.S. dollars or the currency

of any futures contract included in the Index; or

Ø

in any other event, if the Calculation Agent determines in its sole discretion that the event materially interferes with our

ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with respect to the Securities

that we or our affiliates have effected or may effect .

The following events will not be market disruption events:

Ø

a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

Ø

a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Commodity.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to a

basket or any Index Commodities are traded will not include any time when that market is itself closed for trading under

ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in ”Medium-Term Notes, Series B” above. If we exercise this right, the redemption price of the

Securities will be determined by the Calculation Agent in a manner reasonably calculated to preserve your and our relative

economic position.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Series B medium-term notes, holders of specified percentages in principal amount of all Series B

medium-term notes, together in some cases with other series of our debt securities, will be able to take action affecting all the

Series B medium-term notes, including the Securities. This action may involve changing some of the terms that apply to the

Series B medium-term notes, accelerating the maturity of the Series B medium-term notes after a default or waiving some of

our obligations under the indenture. We discuss these matters in ”Medium-Term Notes, Series B” above under “Description of

Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars for the principal of the Securities, equal to

the cost of having a qualified financial institution, of the kind and selected as described below, expressly assume all our

payment and other obligations with respect to the Securities as of that day and as if no default or acceleration had occurred, or

to undertake other obligations providing substantially equivalent economic value to you with respect to the Securities. That

cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two (2) Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

55

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two (2) Business Day objection period have not ended before

the applicable Valuation Date or the Final Valuation Date, as the case may be, then the default amount will equal the Stated

Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or any successor, or any other

comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index; Alteration of Method of Calculation

If the Index Administrator discontinues publication of the Index and it or any other person or entity publishes a substitute index

that the Calculation Agent determines is comparable to the Index and approves as a successor index, then the Calculation

Agent will determine the Index Performance Ratio, Index Ending Level and the amount payable at maturity or upon early

redemption by reference to such successor index.

If the Calculation Agent determines that the publication of the Index is discontinued and that there is no successor index on any

date when the value of the Index is required to be determined, the Calculation Agent will instead make the necessary

determination by reference to a group of commodities and options or another index and will apply a computation methodology

that the Calculation Agent determines will as closely as reasonably possible replicate the Index.

If the Calculation Agent determines that the exchange-traded futures contracts included in the Index or the method of

calculating the Index has been changed at any time in any respect — and whether the change is made by the Index

Administrator under its existing policies or following a modification of those policies, is due to the publication of a successor

index, is due to events affecting one or more of the Index Commodities or is due to any other reason — that causes the Index

not to fairly represent the value of the Index had such changes not been made or that otherwise affects the calculation of the

performance of the Index, the Index Ending Level or the amount payable at maturity or upon early redemption, then the

Calculation Agent may make adjustments in the method of calculating the Index that it believes are appropriate to ensure that

the Index Performance Ratio used to determine the amount payable on the Maturity Date or upon early redemption is

equitable. All determinations and adjustments to be made by the Calculation Agent with respect to the performance of the

Index, Index Ending Level, the amount payable at maturity or upon early redemption or otherwise relating to the level of the

Index may be made by the Calculation Agent in its sole discretion.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption will be made to accounts designated by you

and approved by us, or at the office of the trustee in New York City, but only when the Securities are surrendered to the trustee

at that office. We also may make any payment or delivery in accordance with the applicable procedures of the depositary.

Trading Day

Trading Day means a day on which (i) the value of the Index is published by Bloomberg or Reuters, (ii) trading is generally

conducted on NYSE Arca and (iii) trading is generally conducted on the markets on which the futures contracts comprising the

Index are traded, in each case as determined by the Calculation Agent in its sole discretion.

56

Business Day

When we refer to a Business Day with respect to the Securities, we mean a day that is a Business Day of the kind described in

“Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in “Medium-Term Notes, Series

B” above.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in “Medium-Term

Notes, Series B”, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead

be paid on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described

under “— Maturity Date,” “— Redemption Date” and “— Valuation Date” above.

Role of Calculation Agent

Our affiliate, UBS Securities LLC, will serve as the Calculation Agent for the Securities. We may change the Calculation

Agent after the original issue date of the Securities without notice. The Calculation Agent will make all determinations

regarding the value of the Securities at maturity or upon early redemption, market disruption events, Trading Days, the default

amount, the Index Starting Level, the Index Ending Level and the amount payable in respect of your Securities. Absent

manifest error, all determinations of the Calculation Agent will be final and binding on you and us, without any liability on the

part of the Calculation Agent. You will not be entitled to any compensation from us for any loss suffered as a result of any of

the above determinations by the Calculation Agent.

Reissuances or Reopened Issues

We may at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate stated principal amount specified on the cover of the prospectus supplement. We may issue additional Securities in

amounts that exceed such amount at any time, without your consent and without notifying you. The Securities do not limit our

ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar restrictions by the

terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer — Amounts That

We May Issue” in ”Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate stated principal amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

57

2. ETRACS Bloomberg Commodity Index Total Return

SM

 ETN Series B

due October 31, 2039

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“DTC”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

The Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described in the accompanying prospectus. This prospectus supplement

summarizes specific financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described in “Description of Debt Securities We May Offer” in the accompanying prospectus. The terms

described here (

i.e.

, in this prospectus supplement) supplement those described in the accompanying prospectus and, if the

terms described here are inconsistent with those described there, the terms described here are controlling.

Coupon

We will not pay you interest during the term of the Securities.

Denomination

The Stated Principal Amount per Security is $25.00.

Payment at Maturity, Call or Upon Early Redemption

At maturity, call or upon early redemption, you will receive a cash payment per $25.00 principal amount of your Securities

equal to the Redemption Amount, which is calculated on the Final Valuation Date or the applicable Valuation Date, as the case

may be, and based on the percentage change in the level of the Index from the Initial Trade Date relative to such Valuation

Date.

The “

Redemption Amount

” will equal:

($25.00 × Index Performance Ratio) — Fee Amount

For purposes of calculating the Redemption Amount at maturity or upon early redemption, the Index Performance Ratio will

be determined as of the corresponding Final Valuation Date or Valuation Date, as the case may be.

The “

Fee Amount

” is equal to 0.50% per annum, which accrues on a daily basis, with the Fee Amount equal to $1.0823 on

the Initial Trade Date, and then increasing, on each subsequent calendar day, by an amount equal to: (0.50%/365) × $25.00 ×

Index Performance Ratio on that day. If such day is not a Trading Day, the Index Performance Ratio will be calculated as of

the immediately preceding Trading Day.

The “

Index Performance Ratio

” will be calculated as follows:

Index Ending Level

Index Starting Level

The “

Index Starting Level

” is 264.194, the closing level of the Index on October 28, 2009.

The “

Index Ending Level

” will equal the closing level of the Index on the applicable Valuation Date.

Unlike ordinary debt securities, the Securities do not pay interest and do not guarantee any return of principal at

maturity, call or upon an early redemption.

The Securities are fully exposed to any decline in the level of the Index. You may lose some or all of your investment if

the Index level declines from the Initial Trade Date relative to the Final Valuation Date or the applicable Valuation

Date, as the case may be, or if the Index does not increase as of such date by an amount sufficient to offset the

cumulative effect of the Fee Amount.

To receive at least your initial investment at maturity or upon early redemption, the Index must increase by a certain amount to

offset the reduction to the Redemption Amount caused by the Fee Amount.

58

Maturity Date

The Maturity Date is October 31, 2039, unless that day is not a Business Day, in which case the Maturity Date will be the next

following Business Day. If the third Trading Day before October 31, 2039 does not qualify as the Final Valuation Date as

determined in accordance with “— Final Valuation Date” below, then the Maturity Date will be the third Trading Day

following the Final Valuation Date or, if such day is not a Business Day, the next following Trading Day that is also a Business

Day. The calculation agent may postpone the Final Valuation Date — and therefore the Maturity Date — if a market disruption

event occurs or is continuing on a day that would otherwise be the Final Valuation Date. We describe market disruption events

under “— Market Disruption Event” below.

Final Valuation Date

We currently expect the Final Valuation Date to be the Trading Day that falls on October 26, 2039, unless the calculation

agent determines that a market disruption event occurs or is continuing on that day. In that event, the Final Valuation Date

will be the first following Trading Day on which the calculation agent determines that a market disruption event does not

occur and is not continuing. In no event, however, will the Final Valuation Date for the Securities be postponed by more

than five Trading Days.

Underlying Index

The return on the Securities is linked to the performance of the Bloomberg Commodity Index Total ReturnSM. The Index

is composed of the prices of twenty-one exchange-traded futures contracts on physical commodities. An exchange-traded

futures contract is a bilateral agreement providing for the purchase and sale of a specified type and quantity of a

commodity or financial instrument during a stated delivery month for a fixed price. The twenty-three commodities

included in the Index for 2020 are as follows: aluminum, brent crude oil, coffee, copper, corn, cotton, gold, HRW wheat,

lean hogs, live cattle, low sulfur gas oil, natural gas, nickel, RBOB gasoline, silver, soybeans, soybean meal, soybean oil,

sugar, wheat, WTI crude oil, ULS diesel and zinc. The Index is a “total return” index. The overall return on the Index is

generated by two components: (i) unleveraged returns on futures contracts on the physical commodities comprising the

Index and (ii) the returns that correspond to the weekly announced interest rate for specified 3-month U.S. Treasury Bills.

Early Redemption

You may elect to require UBS to redeem your Securities, in whole or in part, prior to the Maturity Date on any Trading Day,

provided that the Trading Day is also a Business Day, through and including the final Redemption Date, subject to a minimum

redemption amount of at least 50,000 Securities. If you elect to have UBS redeem your Securities, you will receive a cash

payment equal to the Redemption Amount, which will be determined on the applicable Valuation Date and paid on the

applicable Redemption Date. You must comply with the redemption procedures described below in order to redeem your

Securities. To satisfy the minimum redemption amount, your broker or other financial intermediary may bundle your Securities

for redemption with those of other investors to reach this minimum amount of 50,000 Securities. UBS reserves the right from

time to time to waive this minimum redemption amount in its sole discretion on a case-by-case basis. You should not assume

you will be entitled to the benefit of any such waiver.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, to UBS via email no later than 12:00 noon (New York City time) on any Trading Day.

If we receive your notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption to us via facsimile in the specified form by 5:00 p.m. (New York City

time) on the same day. We or our affiliate must acknowledge receipt in order for your confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

59

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your notice of redemption after 12:00 noon (New York City time), or your confirmation of

redemption after 5:00 p.m. (New York City time), on the Trading Day prior to the applicable Valuation Date, your notice will

not be effective, you will not be able to redeem your Securities until the following Redemption Date and your broker will need

to complete all the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In

addition, UBS may request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole

discretion. All instructions given to participants from beneficial owners of Securities relating to the right to redeem their

Securities will be irrevocable.

Redemption Dates

The applicable Redemption Date will be the third Trading Day following a Valuation Date (other than the Final Valuation

Date) or, if such day is not a Business Day, the next following Trading Day that is a Business Day. The final Redemption Date

will be the third Trading Day following the Valuation Date that immediately precedes the Final Valuation Date or, if such day

is not a Business Day, the next following Trading Day that is a Business Day. You should not assume that you will be entitled

to any such acceleration. The calculation agent may postpone the applicable Valuation Date — and therefore the applicable

Redemption Date — if a market disruption event occurs or is continuing on a day that would otherwise be the applicable

Valuation Date. We describe market disruption events under “— Market Disruption Event” below.

Valuation Dates

For any early redemption, the applicable “

Valuation Date

” means the first Trading Day immediately following the Trading

Day on which you deliver a redemption notice to UBS in compliance with the redemption procedures. You may, however,

request that we accelerate the Redemption Date to the date on which the notice of redemption is received by UBS rather than

the first Trading Day on which you deliver a redemption notice to us in compliance with the redemption procedures. You

should not assume that you will be entitled to any such acceleration. We will be under no obligation to approve any such

request, or to make any announcement regarding any decision by us to approve any such request. As a result, when considering

making an investment in the Securities, you should assume that we will not choose to approve any request to accelerate the

Redemption Valuation Date, or that if we do approve any such request, we will choose not to do so with respect to any

redemption requests that you submit. In the event UBS exercises its call right, the Valuation Date means the third Trading Day

prior to the Call Settlement Date (as defined below). If the calculation agent determines that a market disruption event occurs

or is continuing on a Valuation Date, the applicable Valuation Date will be the first following Trading Day on which the

calculation agent determines that a market disruption event does not occur and is not continuing. In no event, however, will the

applicable Valuation Date for the Securities be postponed by more than five Trading Days. The Final Valuation Date is

October 26, 2039.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than ten calendar days’ prior notice to the

holders of the Securities, such redemption to occur on any Trading Day (or if such day is not a Business Day, the next Trading

Day that is also a Business Day) that we may specify through and including the Maturity Date (the “

Call Settlement Date

”).

Upon early redemption in the event we exercise our call right, you will receive a cash payment equal to the Redemption

Amount, which will be calculated on the applicable Valuation Date and paid on the Call Settlement Date. The calculation agent

may postpone the applicable Valuation Date — and therefore the Call Settlement Date — if a market disruption event occurs

and is continuing on a day that would otherwise be the applicable Valuation Date.

In the event we exercise our call right, references to payment upon early redemption also refer to payment upon our exercise of

our call right. See “— Payment at Maturity, Call or Upon Early Redemption” above. We discuss these matters in “Medium-

Term Notes, Series B” above under “Description of the Debt Securities We May Offer — Redemption and Repayment.”

Market Disruption Event

The calculation agent will determine the Index Ending Level on the applicable Valuation Date or the Final Valuation Date, as

the case may be. If the level of the Index has declined, you will lose some or all of your investment. If the level of the Index

has increased, it must have increased by an amount sufficient to offset the Fee Amount in order to receive a positive return on

your Securities. As described above, the applicable Valuation Date or the Final Valuation Date, as the case may be, may be

postponed and thus the determination of the Index Ending Level may be postponed if the calculation agent determines that, on

the applicable Valuation Date or the Final Valuation Date, as the case may be, a market disruption event has occurred or is

continuing. Notwithstanding the occurrence of one or more of the events below, which may, in the calculation agent’s

discretion, constitute a market disruption event, the calculation agent in its discretion may waive its right to postpone the

determination of the Index Ending Level if it determines that one or more of the below events has not and is not likely to

materially impair its ability to determine the Index Ending Level on such date. If such a postponement occurs, the calculation

agent will use the closing level of the Index on the first Trading Day on which no market disruption event occurs or is

continuing. In no event, however, will the determination of the Index Ending Level be postponed by more than five Trading

Days.

60

If the determination of the Index Ending Level is postponed to the last possible day, but a market disruption event occurs or is

continuing on that day, that day will nevertheless be the date on which the Index Ending Level will be determined by the

calculation agent. In such an event, the calculation agent will make a good faith estimate in its sole discretion of the Index

Ending Level that would have prevailed in the absence of the market disruption event.

Any of the following will be a market disruption event:

Ø

the absence or suspension of, or material limitation or disruption in the trading of any exchange-traded futures contract

included in the Index;

Ø

the settlement price of any such contract has increased or decreased by an amount equal to the maximum permitted

price change from the previous day’s settlement price;

Ø

the Index is not published;

Ø

the settlement price is not published for any individual exchange-traded futures contract included in the Index;

Ø

the occurrence of any event on any day or any number of consecutive days as determined by the calculation agent in its

sole and reasonable discretion that affects our currency hedging (if any) with respect to U.S. dollars or the currency of

any futures contract included in the Index; or

Ø

in any other event, if the calculation agent determines in its sole discretion that the event materially interferes with our

ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with respect to the Securities

that we or our affiliates have effected or may effect as described below under “Use of Proceeds and Hedging”.

The following events will not be market disruption events:

Ø

a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

Ø

a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Commodity.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to a

basket or any Index Commodities are traded will not include any time when that market is itself closed for trading under

ordinary circumstances.

If a market disruption event affecting any Index Commodity occurs during the fifth through the ninth Business Days of each

month (the “

Hedge Roll Period

”) in any month other than January, then the daily roll of the relevant Designated Contract for

such Index Commodity will be postponed until the next available Business Day on which a market disruption event does not

occur, and the calculation of the Index will be adjusted to reflect this. The Hedge Roll Period will be extended only if a market

disruption event affects an Index Commodity on the scheduled final Business Day comprising the Hedge Roll Period.

If a market disruption event affecting any Index Commodity occurs during the January Hedge Roll Period, then the rolling

or rebalancing of the relevant Designated Contract will occur in all cases over five Business Days on which no market

disruption event exists at a rate of 20% per day. The January Hedge Roll Period, and the resulting rebalancing that is

scheduled to occur, will be extended in all cases until the affected Designated Contract finishes rolling over five Business

Days not affected by a market disruption event.

If a market disruption event occurs on a CIM Determination Date in respect of any lead future for an Index Commodity used in

the calculation of the CIMs, then the settlement prices used to calculate the CIMs for such year will be from the first prior

Business Day on which a market disruption event had not occurred in any such futures.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in “Medium-Term Notes, Series B” above. If we exercise this right, the redemption price of the

Securities will be determined by the calculation agent in a manner reasonably calculated to preserve your and our relative

economic position.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

61

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars for the principal of the Securities, equal to

the cost of having a qualified financial institution, of the kind and selected as described below, expressly assume all our

payment and other obligations with respect to the Securities as of that day and as if no default or acceleration had occurred, or

to undertake other obligations providing substantially equivalent economic value to you with respect to the Securities. That

cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five Business Days after that first Business Day, however, the default quotation period will continue as described

in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

applicable Valuation Date or the Final Valuation Date, as the case may be, then the default amount will equal the Stated

Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., or any successor, or any other

comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index; Alteration of Method of Calculation

If BISL (the Index administrator) discontinues publication of the Index and it or any other person or entity publish a substitute

index that the calculation agent determines is comparable to the Index and approves as a successor index then the calculation

agent will determine the Index Performance Ratio, Index Ending Level and the amount payable at maturity, call or upon early

redemption by reference to such successor index.

62

If the calculation agent determines that the publication of the Index is discontinued and that there is no successor index on any

date when the value of the Index is required to be determined, the calculation agent will instead make the necessary

determination by reference to a group of commodities and options or another index and will apply a computation methodology

that the calculation agent determines will as closely as reasonably possible replicate the Index.

If the calculation agent determines that the exchange-traded futures contracts included in the Index or the method of

calculating the Index has been changed at any time in any respect — and whether the change is made by the Index

administrator under its existing policies or following a modification of those policies, is due to the publication of a successor

index, is due to events affecting one or more of the Index Commodities or is due to any other reason — that causes the Index

not to fairly represent the value of the Index had such changes not been made or that otherwise affects the calculation of the

performance of the Index, the Index Ending Level or the amount payable at maturity, call or upon early redemption, then the

calculation agent may make adjustments in the method of calculating the Index that it believes are appropriate to ensure that

the Index Performance Ratio used to determine the amount payable on maturity, call or upon early redemption is equitable. All

determinations and adjustments to be made by the calculation agent with respect to the performance of the Index, Index Ending

Level, the amount payable at maturity, call or upon early redemption or otherwise relating to the level of the Index may be

made by the calculation agent in its sole discretion.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity, call or upon early redemption will be made to accounts designated by

you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Trading Day

“Trading Day” means a day on which (i) the value of the Index is published by Bloomberg L.P. or Reuters, (ii) trading is

generally conducted on NYSE Arca and (iii) trading is generally conducted on the markets on which the futures contracts

comprising the Index are traded, in each case as determined by the calculation agent in its sole discretion.

Business Day

When we refer to a “Business Day” with respect to the Securities, we mean a day that is a “business day” of the kind described

in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in “Medium-Term Notes, Series

B” above.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in in “Medium-

Term Notes, Series B” above, any payment on the Securities that would otherwise be due on a day that is not a Business Day

may instead be paid on the next day that is a Business Day, with the same effect as if paid on the original due date, except as

described under “— Maturity Date,” “— Redemption Date” and “— Valuation Date” above.

Role of Calculation Agent

Our affiliate, UBS Securities LLC, will serve as the calculation agent for the Securities. We may change the calculation agent

after the original issue date of the Securities without notice. The calculation agent will make all determinations regarding the

value of the Securities at maturity, call or upon early redemption, market disruption events, Trading Days, the default amount,

the Index Starting Level, the Index Ending Level and the amount payable in respect of your Securities. Absent manifest error,

all determinations of the calculation agent will be final and binding on you and us, without any liability on the part of the

calculation agent. You will not be entitled to any compensation from us for any loss suffered as a result of any of the above

determinations by the calculation agent.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We may issue additional Securities in amounts that exceed

the Stated Principal amount on the cover at any time, without your consent and without notifying you. The Securities do not

limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the Securities and will have the same CUSIP

number and will trade interchangeably with the Securities immediately upon settlement. Any additional issuances will increase

the aggregate Stated Principal Amount of the outstanding Securities of the class, plus the aggregate Stated Principal Amount of

any Securities bearing the same CUSIP number that are issued pursuant to (i) any over -allotment option we may grant to an

agent and (ii) any future issuances of Securities bearing the same CUSIP number. The price of any additional offering will be

determined at the time of pricing of that offering.

63

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

64

3. ETRACS Alerian MLP Infrastructure Index ETN Series B due April 2, 2040

Specific Terms of the Securities

In this section, references to “holders” or “you” mean those who own the Securities registered in their own names, on the

books that we or the trustee maintain for this purpose, and not those who own beneficial interests in the Securities registered in

street name or in the Securities issued in book-entry form through The Depository Trust Company (“DTC”) or another

depositary. Owners of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry

Issuance” under “Medium-Term Notes, Series B” above.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or call, or upon early redemption. Instead, at

maturity, you will receive a cash payment the amount of which will vary depending on the performance of the VWAP Level

calculated in accordance with the formula set forth below and will be reduced by the Accrued Tracking Fee as of the last Index

Business Day in the Final Measurement Period. We refer to this cash payment as the “Cash Settlement Amount.” If the amount

so calculated is equal to or less than zero, the Cash Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment on the Redemption Date equal to the Redemption Amount as described below under

“— Early Redemption at the Option of the Holders.”

If the amount so calculated is equal to or less than zero, the Redemption Amount will be zero and you will not receive a cash

payment.

The Securities may pay a cash coupon during their term.

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the difference between the Reference Distribution Amount, calculated as of the corresponding Coupon

Valuation Date, and the Accrued Tracking Fee, calculated as of the corresponding Coupon Valuation Date (the “Coupon

Amount”).

To the extent the Reference Distribution Amount on any Coupon Valuation Date is equal to or less than the Accrued Tracking

Fee on the corresponding Coupon Valuation Date, there will be no Coupon Amount payment made on the corresponding

Coupon Payment Date, and an amount equal to the difference between the Accrued Tracking Fee and the Reference

Distribution Amount (the “Tracking Fee Shortfall”) will be included in the Accrued Tracking Fee for the next Coupon

Valuation Date. This process will be repeated to the extent necessary until the Reference Distribution Amount for a Coupon

Valuation Date is greater than the Accrued Tracking Fee for the corresponding Coupon Valuation Date. The final Coupon

Amount will be included in the Cash Settlement Amount.

The “Coupon Payment Date” means the 15th Index Business Day following each Coupon Valuation Date, provided that the

final Coupon Payment Date will be the Maturity Date, subject to adjustment as described herein. The first Coupon Payment

Date will be January 22, 2016.

The “Coupon Record Date” means the ninth Index Business Day following each Coupon Valuation Date.

The “Coupon Ex-Date,” with respect to a Coupon Amount, means the first Exchange Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the second Exchange Business Day prior to the applicable Coupon Record Date.

The “Coupon Valuation Date” means the 30th of March, June, September and December of each calendar year during the term

of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such date, provided

that the final Coupon Valuation Date will be the Calculation Date, subject to adjustment as described herein. The first Coupon

Valuation Date will be December 30, 2015.

65

The “Reference Distribution Amount” means (i) as of the first Coupon Valuation Date, an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index constituents held by such

Reference Holder on the “record date” with respect to any Index constituent, for those cash distributions whose “ex-dividend

date” occurs during the period from and excluding September 30, 2015 to and including the first Coupon Valuation Date; and

(ii) as of any other Coupon Valuation Date, an amount equal to the gross cash distributions that a Reference Holder would

have been entitled to receive in respect of the Index constituents held by such Reference Holder on the “record date” with

respect to any Index constituent for those cash distributions whose “ex-dividend date” occurs during the period from and

excluding the immediately preceding Coupon Valuation Date to and including such Coupon Valuation Date.

Notwithstanding the foregoing, with respect to cash distributions for an Index constituent which is scheduled to be paid prior to

the applicable Coupon Ex-Date, if, and only if, the issuer of such Index constituent fails to pay the distribution to holders of

such Index constituent by the scheduled payment date for such distribution, such distribution will be assumed to be zero for the

purposes of calculating the applicable Reference Distribution Amount.

The “Reference Holder” is, as of any date of determination, a hypothetical holder of a number of units of each Index

constituent equal to (i) the published unit weighting of that Index constituent as of that date,

divided by

(ii) the product of (a)

the Index Divisor as of that date, and (b) the Initial VWAP Level divided by 25.

“record date” means, with respect to a distribution on an Index constituent, the date on which a holder of the Index constituent

must be registered as a unitholder of such Index constituent in order to be entitled to receive such distribution.

“ex-dividend date” means, with respect to a distribution on an Index constituent, the first Business Day on which transactions

in such Index constituent trade on the Primary Exchange without the right to receive such distribution.

The “Quarterly Tracking Fee” means, as of any date of determination, an amount per Security equal to the product of (i)

0.2125% (equivalent to 0.85% per annum) and (ii) the Current Indicative Value as of the immediately preceding Index

Business Day.

The “Current Indicative Value,” as determined by the Security Calculation Agent, means, as of any date of determination, an

amount per Security equal to the product of (i) the Stated Principal Amount multiplied by (ii) a fraction, the numerator of

which is equal to the VWAP Level (as defined under “— Cash Settlement Amount at Maturity”) as of such date and the

denominator of which is equal to the Initial VWAP Level. As of October 7, 2015, the Current Indicative Value was 29.8737.

The “Accrued Tracking Fee” is:

(1) with respect to the first Coupon Valuation Date, an amount equal to:

the Quarterly Tracking Fee calculated as of the first Coupon Valuation Date (for the avoidance of doubt, the

calculation of the Accrued Tracking Fee with respect to the first Coupon Valuation Date will be for a full quarter

beginning from and excluding September 30, 2015);

(2) with respect to any Coupon Valuation Date, other than the first and last Coupon Valuation Dates, an amount equal to

the Quarterly Tracking Fee as of such Coupon Valuation Date

plus

the Tracking Fee Shortfall as of the immediately

preceding Coupon Valuation Date, if any; and

(3) with respect to the last Coupon Valuation Date, an amount equal to:

(a) the product of

(i) the Quarterly Tracking Fee as of such Coupon Valuation Date and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the

immediately preceding Coupon Valuation Date to and including such Coupon Valuation Date, and

the denominator of which is 90,

plus

(b) the Tracking Fee Shortfall as of the immediately preceding Coupon Valuation Date. If there is a Tracking

Fee Shortfall on the last Coupon Valuation Date, it will be taken into account in determining the Cash

Settlement Amount, as described below.

The Accrued Tracking Fee also takes into account the performance of the Index, as measured by the VWAP Level.

Cash Settlement Amount at Maturity

The “Maturity Date” is April 2, 2040, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called or redeemed, you will receive at maturity a cash payment equal to:

(a) the product of

(i) the Stated Principal Amount and

(ii) the Index Performance Ratio as of the last Index Business Day in the Final Measurement Period,

plus

66

(b) the final Coupon Amount,

minus

(c) the Accrued Tracking Fee as of the last Index Business Day in the Final Measurement Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Final Measurement Period, if any.

We refer to this cash payment as the “Cash Settlement Amount.” If the amount so calculated is equal to or less than zero, the

payment at maturity will be zero.

The “Stated Principal Amount” of each Security is $25.00.

You may lose some or all of your investment at maturity. The negative effect of the Accrued Tracking Fee will reduce

your final payment. If the increase in the level of the Index (as measured by the Final VWAP Level, as compared to the

Initial VWAP Level) is insufficient to offset the negative effect of the Accrued Tracking Fee (less any Coupon Amounts,

any Stub Reference Distribution Amount and/or Adjusted Coupon Amount, as applicable, you may be entitled to

receive), or if the Final VWAP Level is less than the Initial VWAP Level, you may lose some or all of your investment at

maturity.

The “Index Performance Ratio” on any Index Business Day is calculated as follows:

Final VWAP Level

Initial VWAP Level

The “VWAP” with respect to each Index constituent, as of any date of determination, is the volume-weighted average price of

one unit of such Index constituent as determined by the VWAP Calculation Agent based on the Primary Exchange for each

Index constituent. For information about how the VWAP will be calculated to the extent a Disrupted Day exists with respect to

an Index constituent, please see “— Market Disruption Event.”

The “Initial VWAP Level” is 487.420, the VWAP Level on March 31, 2010, as determined by the VWAP Calculation Agent.

See “— VWAP Calculation Agent” below.

The “Final VWAP Level,” as determined by the VWAP Calculation Agent, will be the arithmetic mean of the VWAP Levels

measured on each Index Business Day during the Final Measurement Period or Call Measurement Period or on any applicable

Redemption Measurement Date, as applicable.

The “VWAP Level,” as determined by the VWAP Calculation Agent as of any Index Business Day, is equal to (1) the sum of

the products of (i) the VWAP of each Index constituent as of such date and (ii) the published share weighting of that Index

constituent as of such date divided by (2) the Index Divisor as of such date, or expressed as a formula, as follows:

where:

n

is the number of Index constituents;

VWAP

i,t

 is the VWAP of Index constituent i as of Index Business Day t;

W

i,t

 is the published share weighting of Index constituent i as of Index Business Day t; and

Index Divisor

t

 is the Index Divisor as of Index Business Day t.

As of October 7, 2015, the VWAP Level was 582.442.

The “Index Divisor,” as of any date of determination, is the divisor used by the Index Calculation Agent to calculate the level

of the Index.

The “Accrued Tracking Fee” as of the last Index Business Day in the Final Measurement Period is an amount equal to:

(a) the product of

(i) the Quarterly Tracking Fee calculated as of the last Index Business Day in the Final Measurement Period and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the Calculation

Date to and including the last Index Business Day in the Final Measurement Period, and the denominator of

which is 90,

plus

(b) the Tracking Fee Shortfall as of the last Coupon Valuation Date, if any.

The Accrued Tracking Fee also takes into account the performance of the Index, as measured by the VWAP Level.

67

The “Final Measurement Period” means the five (5) Index Business Days from and including the Calculation Date, subject to

adjustment as described under “— Market Disruption Event.”

The “Stub Reference Distribution Amount” means, as of the last Index Business Day in the Final Measurement Period or Call

Measurement Period, as applicable, an amount equal to the gross cash distributions that a Reference Holder would have been

entitled to receive in respect of the Index constituents held by such Reference Holder on the “record date” with respect to any

Index constituent, for those cash distributions whose “ex-dividend date” occurs during the period from and excluding the first

Index Business Day in the Final Measurement Period or Call Measurement Period, as applicable, to and including the last

Index Business Day in the Final Measurement Period or Call Measurement Period, as applicable, provided, that for the purpose

of calculating the Stub Reference Distribution Amount, the Reference Holder will be deemed to hold 4/5 ths, 3/5 ths, 2/5 ths

and 1/5 th of the shares of each Index constituent it would otherwise hold on the second, third, fourth and fifth Index Business

Day, respectively, in such Final Measurement Period or Call Measurement Period.

The “Index Calculation Agent” means the entity that calculates and publishes the level of the Index, which is currently S&P.

The “Calculation Date” means March 23, 2040, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

“Index Business Day” means any day on which the Primary Exchange and each Related Exchange are scheduled to be open for

trading.

“Exchange Business Day” means any day on which the Primary Exchange or market for trading of the Securities is scheduled

to be open for trading.

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

“Primary Exchange” means, with respect to each Index constituent or each constituent underlying a successor index, the

primary exchange or market of trading such Index constituent or such constituent underlying a successor index.

“Related Exchange” means, with respect to each Index constituent or each constituent underlying a successor index, each

exchange or quotation system where trading has a material effect (as determined by the Security Calculation Agent) on the

overall market for futures or options contracts relating to such Index constituent or such constituent underlying a successor

index.

Underlying Index

The Alerian MLP Infrastructure Index measures the performance of energy infrastructure master limited partnerships

(“MLPs”), and is calculated by S&P Dow Jones Indices using a float -adjusted, capitalization-weighted methodology. We refer

to the MLPs included in the Index as the “Index constituents.” The Index constituents earn the majority of their cash flow from

gathering and processing, liquefaction, midstream services, pipeline transportation, rail terminating and storage of energy

commodities.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Business Day no

later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City time,

on the Business Day immediately preceding the applicable Redemption Valuation Date, provided that you request that we

redeem a minimum of 50,000 Securities. For any applicable redemption request, the “Redemption Valuation Date” will be the

first Index Business Day following the date that the applicable Redemption Notice and Redemption Confirmation are

delivered. To satisfy the minimum redemption amount, your broker or other financial intermediary may bundle your Securities

for redemption with those of other investors to reach this minimum amount of 50,000 Securities. We may from time to time in

our sole discretion reduce, in part or in whole, the minimum redemption amount of 50,000 Securities. Any such reduction will

be applied on a consistent basis for all holders of the Securities at the time the reduction becomes effective.

The Securities will be redeemed and the holders will receive payment for their Securities on the third Business Day following

the applicable Redemption Measurement Date (the “Redemption Date”). The first Redemption Date will be October 15, 2015.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index constituents, such Redemption Valuation Date may be postponed as described under “— Market Disruption

Event.”

The applicable “Redemption Measurement Date” means the Index Business Day following the applicable Redemption

Valuation Date, subject to adjustments as described under “— Market Disruption Event.”

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

(a) the product of

(i) the Stated Principal Amount and

(ii) the Index Performance Ratio as of the Redemption Measurement Date,

plus

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(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Redemption Valuation

Date if on the Redemption Measurement Date the Coupon Ex-Date with respect to such Coupon Amount has not yet

occurred,

plus

(c) the Adjusted Coupon Amount, if any,

minus

(d) the Accrued Tracking Fee as of the Redemption Measurement Date,

minus

(e) the Redemption Fee Amount.

We refer to this cash payment as the “Redemption Amount.” We have determined to offer all holders of the Securities the

option, upon early redemption and solely for purposes of determining the Redemption Amount, but not for any other purpose,

to elect that the Index Performance Ratio (which is used to calculate the Redemption Amount) be calculated using the Index

Closing Level on the Redemption Measurement Date instead of the Final VWAP Level. If the redeeming holder so elects, the

Index Performance Ratio will be calculated, for purposes of determining the Redemption Amount, as:

Index Closing Level on the Redemption Measurement Date

Initial VWAP Level

The “Index Closing Level” is the closing level of the Index as reported on the NYSE and Bloomberg; provided, however, that

if the closing level of the Index as reported on the NYSE (or any successor) differs from the closing level of the Index as

reported on Bloomberg (or any successor), then the Index Closing Level will be the closing level of the Index as calculated by

the Index Calculation Agent.

If the amount calculated above is equal to or less than zero, the payment upon early redemption will be zero.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Measurement

Date.

You may lose some or all of your investment upon early redemption. The combined negative effect of the Accrued

Tracking Fee and the Redemption Fee Amount will reduce your final Redemption Amount. If the level of the Index (as

measured by the Final VWAP Level as compared to the Initial VWAP Level) does not increase by an amount sufficient

to offset the combined negative effect of the Accrued Tracking Fee and the Redemption Fee Amount (less any Coupon

Amounts, any Stub Reference Distribution Amount, as applicable, and/or any Adjusted Coupon Amount, you may be

entitled to receive), you may lose some or all of your investment upon early redemption.

The Accrued Tracking Fee as of the Redemption Measurement Date is an amount equal to:

(a) the product of

(i) the Quarterly Tracking Fee calculated as of the Redemption Measurement Date, and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the Redemption

Valuation Date to and including the Redemption Measurement Date, and the denominator of which is 90,

plus

(b) the Adjusted Tracking Fee Shortfall, if any.

The “Adjusted Coupon Amount,” with respect to any Redemption Valuation Date, is an amount in cash equal to the difference

between the Adjusted Reference Distribution Amount, calculated as of such Redemption Valuation Date, and the Adjusted

Tracking Fee, calculated as of such Redemption Valuation Date. To the extent the Adjusted Reference Distribution Amount is

less than the Adjusted Tracking Fee, the Redemption Amount will not include an Adjusted Coupon Amount, and the Adjusted

Tracking Fee Shortfall will be included in the calculation of the Accrued Tracking Fee as of the applicable Redemption

Measurement Date.

The “Adjusted Reference Distribution Amount,” as of any Redemption Valuation Date, is an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index constituents held by such

Reference Holder on the “record date” with respect to an Index constituent, for those cash distributions whose “ex-dividend

date” occurs during the period from and excluding the immediately preceding Coupon Valuation Date (or if the Redemption

Valuation Date occurs prior to the first Coupon Valuation Date, the period from and excluding September 30, 2015) to and

including such Redemption Valuation Date.

The “Adjusted Tracking Fee” is:

(1) as of any Redemption Valuation Date occurring prior to the first Coupon Valuation Date, an amount equal to:

the product of

(i) the Quarterly Tracking Fee as of such Redemption Valuation Date and

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(ii) a fraction, the numerator of which is the total number of calendar days from and excluding September 30,

2015 to and including such Redemption Valuation Date, and the denominator of which is 90; and

(2) as of any Redemption Valuation Date occurring on or after the first Coupon Valuation Date, an amount equal to:

(a) the Tracking Fee Shortfall as of the immediately preceding Coupon Valuation Date

plus

(b) the product of

(i) the Quarterly Tracking Fee as of such Redemption Valuation Date and

(iii) a fraction, the numerator of which is the total number of calendar days from and excluding the

immediately preceding Coupon Valuation Date to and including such Redemption Valuation Date,

and the denominator of which is 90.

The “Adjusted Tracking Fee Shortfall,” as of any Redemption Valuation Date, is the difference between the Adjusted Tracking

Fee and the Adjusted Reference Distribution Amount, to the extent that the Adjusted Reference Distribution Amount,

calculated as of such Redemption Valuation Date, is less than the Adjusted Tracking Fee, calculated as of such Redemption

Valuation Date.

The “Redemption Fee Amount” means an amount equal to 0.125% of the Stated Principal Amount of the Securities.

Some of the defined terms used in this section have different applications when used in determining the Call Settlement

Amount. For the definitions of the terms relevant to a call, please refer to “— UBS’s Call Right” below.

We discuss redemption in “Medium-Term Notes, Series B” above under “Description of Debt Securities We May Offer —

Redemption and Payment.”

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the repurchase feature in this manner.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “Redemption Notice” to UBS via email no later than 12:00 noon

(New York City time) on the Business Day immediately preceding the applicable Redemption Valuation Date. If we

receive your notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “Redemption Confirmation,” to us via facsimile

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 10:00 a.m. (New York

City time) on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your notice of redemption after 12:00 noon (New York City time), or your confirmation of

redemption after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your notice will not be effective, you will not be able to redeem your Securities until the following Redemption Date and your

broker will need to complete all the required steps if you should wish to redeem your Securities on any subsequent Redemption

Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as it may deem necessary

in its sole discretion. All instructions given to participants from beneficial owners of Securities relating to the right to redeem

their Securities will be irrevocable.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen (18) calendar days’ prior

notice to the holders of the Securities, such redemption to occur on any Business Day that we may specify on or after October

17, 2016 through and including the Maturity Date (the “Call Settlement Date”). Upon early redemption in the event we

exercise this right, you will receive a cash payment equal to:

(a) the product of

(i) the Stated Principal Amount and

(ii) the Index Performance Ratio as of the last Index Business Day in the Call Measurement Period,

plus

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(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Call Valuation Date if on

the last Index Business Day in the Call Measurement Period the Coupon Ex-Date with respect to such Coupon

Amount has not yet occurred,

plus

(c) the Adjusted Coupon Amount, if any,

minus

(d) the Accrued Tracking Fee as of the last Index Business Day in the Call Measurement Period,

plus

(e) the Stub Reference Distribution Amount as of the last Index Business Day in the Call Measurement Period, if any.

We refer to this cash payment as the “Call Settlement Amount.”

If the amount calculated above is equal to or less than zero, the payment upon early redemption will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “Call Settlement Date”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index constituents, such Call Valuation Date may be postponed as described

under “— Market Disruption Event.”

The “Call Measurement Period” means the five (5) Index Business Days from and including the Call Valuation Date, subject

to adjustments as described under “— Market Disruption Event.”

You may lose some or all of your investment upon a call. The negative effect of the Accrued Tracking Fee will reduce

your final payment. If the increase in the Final VWAP Level, as compared to the Initial VWAP Level, is insufficient to

offset the negative effect of the Accrued Tracking Fee (less any Coupon Amounts, any Stub Reference Distribution

Amount and/or any Adjusted Coupon Amount, you may be entitled to receive), or if the Final VWAP Level is less than

the Initial VWAP Level, you may lose some or all of your investment upon a call.

The Accrued Tracking Fee as of the last Index Business Day in the Call Measurement Period is an amount equal to:

(a) the product of

(i) the Quarterly Tracking Fee calculated as of the last Index Business Day in such Call Measurement Period,

and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the Call

Valuation Date to and including the last Index Business Day in such Call Measurement Period, and the

denominator of which is 90,

plus

(b) the Adjusted Tracking Fee Shortfall (as defined below), if any.

The Accrued Tracking Fee also takes into account the performance of the Index, as measured by the VWAP Level.

The “Adjusted Coupon Amount,” with respect to the Call Valuation Date, is an amount in cash equal to the difference between

the Adjusted Reference Distribution Amount (as defined below), calculated as of the Call Valuation Date, and the Adjusted

Tracking Fee (as defined in the preceding paragraph), calculated as of such Call Valuation Date. To the extent the Adjusted

Reference Distribution Amount is less than the Adjusted Tracking Fee, the Call Settlement Amount will not include an

Adjusted Coupon Amount, and the Adjusted Tracking Fee Shortfall (as defined below) will be included in the calculation of

the Accrued Tracking Fee as of the last Index Business Day in the Call Measurement Period.

The “Adjusted Reference Distribution Amount,” as of the Call Valuation Date, is an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index constituents held by such

Reference Holder on the “record date” with respect to an Index constituent, for those cash distributions whose “ex-dividend

date” occurs during the period from and excluding the immediately preceding Coupon Valuation Date to and including the Call

Valuation Date.

The “Adjusted Tracking Fee” is, as of the Call Valuation Date, an amount equal to:

(a) the Tracking Fee Shortfall as of the immediately preceding Coupon Valuation Date

plus

(b) the product of

(i) the Quarterly Tracking Fee as of such Call Valuation Date and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the immediately

preceding Coupon Valuation Date to and including such Call Valuation Date, and the denominator of which

is 90.

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The “Adjusted Tracking Fee Shortfall,” as of the Call Valuation Date, is the difference between the Adjusted Tracking Fee and

the Adjusted Reference Distribution Amount, to the extent that the Adjusted Reference Distribution Amount, calculated as of

such Call Valuation Date, is less than the Adjusted Tracking Fee, calculated as of such Call Valuation Date.

Some of the defined terms used in this section have different applications when used in determining the Redemption Amount.

For the definition of the terms relevant to early redemption, please refer to “— Early Redemption at the Option of the

Holders” above.

Security Calculation Agent

UBS Securities LLC will act as the “Security Calculation Agent.” The Security Calculation Agent will determine, among other

things, the Current Indicative Value, the Index Performance Ratio, the Coupon Amount, the Adjusted Coupon Amount, if any,

the Reference Distribution Amount, the Stub Reference Distribution Amount, if any, the Adjusted Reference Distribution

Amount, the Accrued Tracking Fee (including the Quarterly Tracking Fee, any Tracking Fee Shortfall and any Adjusted

Tracking Fee Shortfall), the Adjusted Tracking Fee, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we

will pay you at maturity, the Final Measurement Period, the Coupon Payment Dates, the Coupon Valuation Dates, the Coupon

Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon redemption, if applicable, the

Call Settlement Date, the Call Valuation Date, the Call Measurement Period and the Call Settlement Amount, if any, that we

will pay you in the event that UBS calls the Securities, and whether any day is a Business Day, Exchange Business Day or

Index Business Day. The Security Calculation Agent will also be responsible for determining whether a Market Disruption

Event has occurred, whether the Index has been discontinued and whether there has been a material change in the Index. All

determinations made by the Security Calculation Agent will be at the sole discretion of the Security Calculation Agent and

will, in the absence of manifest error, be conclusive for all purposes and binding on you and on us. We may appoint a different

Security Calculation Agent from time to time without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or call, or upon early redemption, or on a Coupon Payment Date on

or prior to 12:00 p.m., New York City time, on the Business Day immediately preceding the Maturity Date, any Redemption

Date, any Call Settlement Date or any Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Adjusted Coupon Amount, if any, the Reference

Distribution Amount, the Stub Reference Distribution Amount, if any, the Adjusted Reference Distribution Amount, the

Accrued Tracking Fee (including the Quarterly Tracking Fee, any Tracking Fee Shortfall and any Adjusted Tracking Fee

Shortfall), the Adjusted Tracking Fee, the Redemption Amount and Redemption Fee Amount, if any, per security, the Call

Settlement Amount, if any, per security, and the Cash Settlement Amount, if any, per security, will be rounded to the nearest

ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded up to .7655); and all dollar

amounts paid on the aggregate principal amount of Securities per holder will be rounded to the nearest cent, with one-half cent

rounded upward.

VWAP Calculation Agent

The NYSE will on each day that is not a Disrupted Day (as defined below) act as the “VWAP Calculation Agent.” The VWAP

Calculation Agent will determine the VWAP of any Index constituent, the VWAP Level and the Final VWAP Level on any

Index Business Day on which such VWAP, VWAP Level and Final VWAP Level are to be determined during the term of the

Securities. The VWAP Calculation Agent determined the Initial VWAP Level of 487.420 as of March 31, 2010. All

determinations made by the VWAP Calculation Agent will be at the sole discretion of the VWAP Calculation Agent and will,

in the absence of manifest error, be conclusive for all purposes and binding on you and on us. We may appoint a different

VWAP Calculation Agent from time to time without your consent and without notifying you.

All calculations with respect to the VWAP of any Index constituent, any VWAP Level, and the Final VWAP Level will be

rounded to the nearest thousandth, with five ten-thousandths rounded upward (e.g., .8765 would be rounded to .877).

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Market Disruption Event

To the extent a Disrupted Day (as defined below) exists with respect to an Index constituent on an Averaging Date (as defined

below) or on a Redemption Measurement Date, the VWAP and published share weighting with respect to such Index

constituent (and only with respect to such Index constituent) for such Averaging Date or Redemption Measurement Date will

be determined by the Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day that is not a

Disrupted Day (the “Deferred Averaging Date”) with respect to such Index constituent irrespective of whether pursuant to such

determination, the Deferred Averaging Date would fall on a date originally scheduled to be an Averaging Date. If the

postponement described in the preceding sentence results in the VWAP of a particular Index constituent being calculated on a

day originally scheduled to be an Averaging Date, for purposes of determining the VWAP Levels on the Index Business Days

during the Final Measurement Period or Call Measurement Period, or on the Redemption Measurement Date, as applicable, the

Security Calculation Agent or one of its affiliates, as the case may be, will apply the VWAP and the published share weighting

with respect to such Index constituent for such Deferred Averaging Date to the calculation of the VWAP Level (i) on the

date(s) of the original disruption with respect to such Index constituent and (ii) such Averaging Date. For example, if the Final

Measurement Period or Call Measurement Period, as applicable, for purposes of calculating the Cash Settlement Amount or

Call Settlement Amount, respectively, is based on the arithmetic mean of the VWAP Levels on June 6, 2016, June 7, 2016,

June 8, 2016, June 9, 2016 and June 10, 2016 and there is a Market Disruption Event for an Index constituent on June 6, 2016,

but no other Market Disruption Event during the Final Measurement Period or Call Measurement Period, as applicable, then

the VWAP for such disrupted Index constituent on June 7, 2016 will be used more than once to calculate the Cash Settlement

Amount or Call Settlement Amount, respectively, and such Cash Settlement Amount or Call Settlement Amount, as applicable,

will be determined based on the arithmetic mean of the VWAP for such disrupted Index constituent on June 7, 2016, June 7,

2016, June 8, 2016, June 9, 2016 and June 10, 2016.

If the Redemption Measurement Date for purposes of calculating a Redemption Amount is based on the VWAP Level on June

6, 2016 and there is a Market Disruption Event for an Index constituent on June 6, 2016, then the VWAP for such disrupted

Index constituent on June 7, 2016 will be used to calculate the Redemption Amount.

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the final

Averaging Date or the Redemption Measurement Date, as applicable, with respect to any Index constituent occurring more

than three (3) Index Business Days following the day originally scheduled to be such final Averaging Date or Redemption

Measurement Date. If the third Index Business Day following the date originally scheduled to be the final Averaging Date, or

the Redemption Measurement Date, as applicable, is not an Index Business Day or is a Disrupted Day with respect to such

Index constituent, the Security Calculation Agent or one of its affiliates will determine the VWAP and share weighting with

respect to any Index constituent required to be determined for the purpose of calculating the applicable VWAP Level based on

its good faith estimate of the VWAP and share weighting of each such Index constituent that would have prevailed on the

Primary Exchange on such third Index Business Day but for such suspension or limitation.

An “Averaging Date” means each of the Index Business Days during the Final Measurement Period or Call Measurement

Period, as applicable, subject to adjustment as described herein.

A “Disrupted Day” with respect to any Index constituent is any Index Business Day on which the Primary Exchange or any

Related Exchange fails to open for trading during its regular trading session or on which a Market Disruption Event has

occurred and is continuing, and, in both cases, the occurrence of which is determined by the Security Calculation Agent to

have a material effect on the VWAP Level.

With respect to an Index constituent, a “Market Disruption Event” means:

(a) the occurrence or existence of a condition specified below:

(i) any suspension, absence or limitation of trading on the Primary Exchange for trading in the Index

constituent, whether by reason of movements in price exceeding limits permitted by the Primary Exchange or

otherwise,

(ii) any suspension, absence or limitation of trading on the Related Exchange for trading in futures or options

contracts related to the Index constituent, whether by reason of movements in price exceeding limits

permitted by such Related Exchange or otherwise, or

(iii) any event (other than an event described in (b) below) that disrupts or impairs (as determined by the Security

Calculation Agent) the ability of market participants in general (A) to effect transactions in, or obtain market

values for, the relevant Index constituent or (B) to effect transactions in, or obtain market values for, futures

or options contracts relating to the relevant Index constituent; or

(b) the closure on any Index Business Day of the Primary Exchange or any Related Exchange prior to its Scheduled

Closing Time unless such earlier closing time is announced by the Primary Exchange or such Related Exchange at

least one hour prior to the earlier of (i) the actual closing time for the regular trading session on the Primary Exchange

or such Related Exchange on such Index Business Day and (ii) the submission deadline for orders to be entered into

the Primary Exchange or such Related Exchange system for execution at the close of trading on such Index Business

Day;

in each case determined by the Security Calculation Agent in its sole discretion; and

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(c) a determination by the Security Calculation Agent in its sole discretion that the event described above materially

interfered with our ability or the ability of any of our affiliates to adjust or unwind all or a material portion of any

hedge with respect to the Securities.

For purposes of the above definition:

(a) a limitation on the hours or number of days of trading will not constitute a Market Disruption Event if it results from

an announced change in the regular business hours of the Primary Exchange or Related Exchange, and

(b) for purposes of clause (a) above, limitations pursuant to the rules of any Primary Exchange or Related Exchange

similar to NYSE Rule 80B or Nasdaq Rule 4120 (or any applicable rule or regulation enacted or promulgated by any

other self-regulatory organization or any government agency of scope similar to NYSE Rule 80B or Nasdaq Rule

4120 as determined by the Security Calculation Agent) on trading during significant market fluctuations will

constitute a suspension, absence or material limitation of trading.

“Scheduled Closing Time” means, with respect to the Primary Exchange or the Related Exchange, on any Index Business Day,

the scheduled weekday closing time of the Primary Exchange or such Related Exchange on such Index Business Day, without

regard to after hours or any other trading outside of the regular trading session hours.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in “Medium-Term Notes, Series B” above. If we exercise this right, the redemption price of the

Securities will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our

relative economic position.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.” In addition to the

default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to the final Coupon

Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was the last Index

Business Day in the Final Measurement Period and the four Index Business Days immediately preceding the date of

acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the fourth Index

Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated final

Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant final

Coupon Valuation Date.

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars for the principal of the Securities, equal to

the cost of having a qualified financial institution, of the kind and selected as described below, expressly assume all our

payment and other obligations with respect to the Securities as of that day and as if no default or acceleration had occurred, or

to undertake other obligations providing substantially equivalent economic value to you with respect to the Securities. That

cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking, plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the

Securities in preparing any documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two (2) Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

74

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two (2) Business Day objection period have not ended before

the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by S&P or any successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index; Alteration of Method of Calculation

If S&P discontinues publication of or otherwise fails to publish the Index, or S&P does not make the Index constituents, their

share weighting and/or the Index Divisor available to the VWAP Calculation Agent, and the Index Sponsor, S&P or another

entity publishes a successor or substitute index that the Security Calculation Agent determines to be comparable to the

discontinued Index and for which the Index constituents, their share weighting, and/or the Index Divisor are available to the

VWAP Calculation Agent (such index being referred to herein as a “successor index”), then the VWAP Level for such

successor index will be determined by the VWAP Calculation Agent by reference to the sum of the products of the VWAPs of

the components underlying such successor index on the Primary Exchanges and each such component’s respective weighting

within the successor index (which sum will be adjusted by any index divisor used by such successor index) on the dates and at

the times as of which the VWAP Levels for such successor index are to be determined.

Upon any selection by the Security Calculation Agent of a successor Index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If S&P discontinues publication of the Index or does not make the Index constituents, their share weightings and/or Index

Divisor available to the VWAP Calculation Agent prior to, and such discontinuation or unavailability is continuing on the

Calculation Date or any Index Business Day during the Final Measurement Period or Call Measurement Period, or on the

Redemption Measurement Date, as applicable, or any other relevant date on which the VWAP Level is to be determined and

the Security Calculation Agent determines that no successor index is available at such time, or the Security Calculation Agent

has previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during the Final Measurement Period or Call

Measurement Period, or on the Redemption Measurement Date, as applicable, or any other relevant date on which the VWAP

Level is to be determined, then the Security Calculation Agent will determine the relevant VWAP Levels using the VWAP and

published share weighting of each Index constituent included in the Index or successor index, as applicable, immediately prior

to such discontinuation or unavailability, as adjusted for certain corporate actions. In such event, the Security Calculation

Agent will cause notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

75

If at any time the method of calculating the Index or a successor index, or the value thereof, is changed in a material respect, or

if the Index or a successor index is in any other way modified so that the VWAP Level of the Index or such successor index

does not, in the opinion of the Security Calculation Agent, fairly represent the VWAP Level of the Index or such successor

index had such changes or modifications not been made, then the Security Calculation Agent will make such calculations and

adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in order to arrive at a VWAP

level of an index comparable to the Index or such successor index, as the case may be, as if such changes or modifications had

not been made, and the Security Calculation Agent will calculate the VWAP Levels for the Index or such successor index with

reference to the Index or such successor index, as adjusted. The Security Calculation Agent will accordingly calculate the Final

VWAP Level, the Current Indicative Value, the Index Performance Ratio, the Coupon Amount, the Adjusted Coupon Amount,

if any, the Reference Distribution Amount, the Stub Reference Distribution Amount, if any, the Adjusted Reference

Distribution Amount, the Accrued Tracking Fee (including the Quarterly Tracking Fee, any Tracking Fee Shortfall and any

Adjusted Tracking Fee Shortfall), the Adjusted Tracking Fee, the Redemption Fee Amount, if any, the Cash Settlement

Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, upon early redemption, if applicable, and the

Call Settlement Amount, if any, that we will pay you in the event UBS calls the Securities, based on the relevant VWAP

Levels calculated by the VWAP Calculation Agent, as adjusted. Accordingly, if the method of calculating the Index or a

successor index is modified so that the level of the Index or such successor index is a fraction of what it would have been if

there had been no such modification (e.g., due to a split in the Index), which, in turn, causes the VWAP Level of the Index or

such successor index to be a fraction of what it would have been if there had been no such modification, then the Security

Calculation Agent will make such calculations and adjustments in order to arrive at a VWAP Level for the Index or such

successor index as if it had not been modified (e.g., as if such split had not occurred).

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or call, or upon early redemption will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Business Day

When we refer to a Business Day with respect to the Securities, we mean a day that is a Business Day of the kind described in

“Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in “Medium-Term Notes, Series

B”.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in “Medium-Term

Notes, Series B” above, any payment on the Securities that would otherwise be due on a day that is not a Business Day may

instead be paid on the next day that is a Business Day, with the same effect as if paid on the original due date, except as

described under “— Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of

the Holders” above.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate stated principal amount specified on the cover of this prospectus supplement. We may issue additional Securities in

amounts that exceed such amount any time, without your consent and without notifying you. The Securities do not limit our

ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar restrictions by the

terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer — Amounts That

We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate stated principal amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

76

4. ETRACS MarketVector Business Development Companies Liquid Index ETN

due April 26, 2041

Specific Terms of the Securities

In this section, references to “holders” or “you” mean those who own the Securities registered in their own names, on the

books that we or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered

in street name or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another

depositary. Owners of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry

Issuance” under “Medium-Term Notes, Series B” above.

These Securities are part of a series of UBS AG debt securities entitled “Medium-Term Notes, Series B” that we may issue,

from time to time, under the indenture more particularly described under “Medium-Term Notes, Series B” above. This section

summarizes general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described under “Medium-Term Notes, Series B” above. The terms described here supplement those

described in “Medium-Term Notes, Series B” above and, if the terms described here are inconsistent with those described

there, the terms described here are controlling.

These Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015

between us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below. 

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or call, or upon early redemption. At maturity,

you will receive a cash payment the amount of which will vary depending on the performance of the Index and will be reduced

by the Accrued Tracking Fee as of the last Index Business Day in the Final Measurement Period, as described under “— Cash

Settlement Amount at Maturity.” We refer to this cash payment as the “Cash Settlement Amount.” If the amount so calculated

is equal to or less than zero, the Cash Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment on the Redemption Date equal to the Redemption Amount as described under “—

Early Redemption at the Option of the Holders.”

If the amount as calculated is equal to or less than zero, the Redemption Amount will be zero and you will not receive a cash

payment.

The Securities may pay a cash coupon during their term. 

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each quarterly Coupon Payment Date you will receive

an amount in cash equal to the difference between the Reference Distribution Amount, calculated as of the corresponding

Coupon Valuation Date, and the Accrued Tracking Fee, calculated as of the corresponding Coupon Valuation Date (the

“Coupon Amount”).

To the extent the Reference Distribution Amount on any Coupon Valuation Date is equal to or less than the Accrued Tracking

Fee on the corresponding Coupon Valuation Date, there will be no Coupon Amount payment made on that Coupon Payment

Date, and an amount equal to the difference between the Accrued Tracking Fee and the Reference Distribution Amount (the

“Tracking Fee Shortfall”) will be included in the Accrued Tracking Fee and will reduce the Coupon Amount for the next

Coupon Valuation Date. This process will be repeated to the extent necessary until the Reference Distribution Amount for a

Coupon Valuation Date is greater than the Accrued Tracking Fee for the corresponding Coupon Valuation Date. The final

Coupon Amount will be included in the Cash Settlement Amount.

The “

Coupon Payment Date

” means the 15th Index Business Day following each Coupon Valuation Date. The final Coupon

Payment Date will be the Maturity Date, subject to adjustment as described herein. 

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Exchange Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the second Exchange Business Day prior to the applicable Coupon Record Date.

The “

Coupon Valuation Date

” means the 30th of March, June, September and December of each calendar year during the

term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such date,

provided that the final Coupon Valuation Date will be the Calculation Date, subject to adjustment as described herein..

77

The “

Reference Distribution Amount

” means as of any Coupon Valuation Date, an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index constituents held by such

Reference Holder on the “record date” with respect to any Index constituent for those cash distributions whose “ex-dividend

date” occurs during the period from and excluding the immediately preceding Coupon Valuation Date to and including such

Coupon Valuation Date.

Notwithstanding the foregoing, with respect to cash distributions for an Index constituent which is scheduled to be paid prior to

the applicable Coupon Ex-Date, if, and only if, the issuer of such Index constituent fails to pay the distribution to holders of

such Index constituent by the scheduled payment date for such distribution, such distribution will be assumed to be zero for the

purposes of calculating the applicable Reference Distribution Amount.

The “

Reference

Holder

” is, as of any date of determination, a hypothetical holder of a number of units of each Index

constituent equal to (i) the published unit weighting of that Index constituent as of that date, as described under “MarketVector

US Business Development Companies Liquid Index — Float Adjustment,”

divided by

(ii) the product of (a) the Divisor as of

that date and (b) the Initial Index Level

divided by

25.

“

record date

” means, with respect to a distribution on an Index constituent, the date on which a holder of the Index constituent

must be registered as a unitholder of such Index constituent in order to be entitled to receive such distribution.

“

ex-dividend date

” means, with respect to a distribution on an Index constituent, the first Business Day on which transactions

in such Index constituent trade on the Primary Exchange without the right to receive such distribution.

“

Business Day

” means any day that is not a Saturday, a Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

The “

Annual Tracking Fee

” means, as of any date of determination, an amount per Security equal to the product of (i) 0.85%

per annum and (ii) the Current Indicative Value as of the immediately preceding Index Business Day.

The “

Current Indicative Value

,” as determined by the Security Calculation Agent, means, as of any date of determination, an

amount per Security equal to the product of (i) the Stated Principal Amount

times

(ii) the Index Performance Ratio (as defined

under “— Cash Settlement Amount at Maturity”) as of such date, using the Index Closing Level on such date as the Final

Index Level. As of July 30, 2021, the Current Indicative Value was $19.3744.

The “

Accrued Tracking Fee

” is:

(1) with respect to the first Coupon Valuation Date, an amount equal to the product of

(a) the Annual Tracking Fee calculated as of the first Coupon Valuation Date, and

(b) a fraction, the numerator of which is the total number of calendar days from and excluding September 30,

2015 to and including such Coupon Valuation Date, and the denominator of which is 365;

and

(2) with respect to any Coupon Valuation Date other than the first Coupon Valuation Date, an amount equal to

(a) the product of

(i) the Annual Tracking Fee as of such Coupon Valuation Date, and

(i) a fraction, the numerator of which is the total number of calendar days from and excluding the

immediately preceding Coupon Valuation Date to and including such Coupon Valuation Date, and

the denominator of which is 365,

plus

(b) the Tracking Fee Shortfall as of the immediately preceding Coupon Valuation Date. If there is a Tracking

Fee Shortfall on the last Coupon Valuation Date, it will be taken into account in determining the Cash

Settlement Amount, as described below.

The Accrued Tracking Fee also takes into account the performance of the Index, as measured by the Index Closing Level.

Cash Settlement Amount at Maturity

For each Security, unless earlier called or redeemed, you will receive at maturity a cash payment equal to

(a) the product of

78

(i) the Stated Principal Amount and

(ii) the Index Performance Ratio as of the last Index Business Day in the Final Measurement Period,

plus

(b) the final Coupon Amount,

minus

(c) the Accrued Tracking Fee as of the last Index Business Day in the Final Measurement Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Final Measurement Period, if any.

We refer to this cash payment as the “Cash Settlement Amount.” If the amount so calculated is equal to or less than zero, the

payment at maturity will be zero.

You may lose some or all of your investment at maturity. The negative effect of the Accrued Tracking Fee will reduce your

final payment. If the increase in the level of the Index (as measured by the Final Index Level, as compared to the Initial

Index Level) is insufficient to offset the negative effect of the Accrued Tracking Fee (

less

any Coupon Amounts, any Stub

Reference Distribution Amount and/or Adjusted Coupon Amount, as applicable, you may be entitled to receive) or if the

Final Index Level is less than the Initial Index Level, you may lose some or all of your investment at maturity.

The “Stated Principal Amount” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices, which may be significantly higher or lower than the Stated Principal Amount.

The Index Performance Ratio on any Index Business Day is calculated as follows:

Final Index Level

Initial Index Level

The “

Initial Index Level

” is adjusted on the Effective Date to be equal to (a) the Index Closing Level of the Index on the

Effective Date

multiplied by

(b) (i) 904.113 (the original Initial Index Level)

divided by

(ii) the Index Closing Level of the

Original Index on the Effective Date. The adjusted Initial index Level is 692.808593.

As determined by the Security Calculation Agent, the “Final Index Level” is the arithmetic mean of the Index Closing Levels

measured on each Index Business Day during the Final Measurement Period or the Call Measurement Period, or the Index

Closing Level on any Redemption Valuation Date; provided that if the Redemption Valuation Date falls in the Call

Measurement Period or the Final Measurement Period, for the purposes of calculating the Index Performance Ratio as of the

Redemption Valuation Date, the Final Index Level on any date of determination during the Call Measurement Period or the

Final Measurement Period shall equal (a) 1/10

times

(b) (i) the sum of the Index Closing Levels on each Index Business Day

from and including the Call Valuation Date or the Calculation Date, as applicable, to but excluding the date of determination

plus

(ii) the number of Index Business Days from and including the date of determination to and including the last Index

Business Day in the Call Measurement Period or the Final Measurement Period, as applicable,

times

the Index Closing Level

on the date of determination.

The “

Index Closing Level

” is the closing level of the Index as reported on Bloomberg.

The “

Accrued Tracking Fee

” as of the last Index Business Day in the Final Measurement Period is an amount equal to

(a) the product of

(i) the Annual Tracking Fee calculated as of the last Index Business Day in the Final Measurement 

(ii) Period and

(iii) a fraction, the numerator of which is the total number of calendar days from and excluding the Calculation

Date to and including the last Index Business Day in the Final Measurement Period, and the denominator of

which is 365,

plus

(b) the Tracking Fee Shortfall as of the last Coupon Valuation Date, if any.

The Accrued Tracking Fee also takes into account the performance of the Index, as measured by the Index Closing Level.

The “

Final Measurement Period

” means the ten Index Business Days from and including the Calculation Date, subject to

adjustment as described under “— Market Disruption Event.”

79

The “

Stub Reference Distribution Amount

” means, as of the last Index Business Day in the Final Measurement Period or

Call Measurement Period, as applicable, an amount equal to the gross cash distributions that a Reference Holder would have

been entitled to receive in respect of the Index constituents held by such Reference Holder on the “record date” with respect to

any Index constituent, for those cash distributions whose “ex-dividend date” occurs during the period from and excluding the

first Index Business Day in the Final Measurement Period or Call Measurement Period, as applicable, to and including the last

Index Business Day in the Final Measurement Period or Call Measurement Period, as applicable, provided, that for the purpose

of calculating the Stub Reference Distribution Amount, the Reference Holder will be deemed to hold nine-tenths, eight-tenths,

seven-tenths, six-tenths, five-tenths, four-tenths, three-tenths, two-tenths and one-tenth of the shares of each Index constituent

it would otherwise hold on the second, third, fourth, fifth, sixth, seventh, eighth, ninth and tenth Index Business Day,

respectively, in such Final Measurement Period or Call Measurement Period.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is Solactive AG as

of market close on July 30, 2021.

The “

Calculation Date

” means April 9, 2041, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

“

Index Business Day

” means any day on which the Primary Exchange and each Related Exchange are scheduled to be open

for trading.

“

Exchange Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled

to be open for trading and is also a valid settlement date.

“

Business Day

” means any day that is not a Saturday, a Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

“

Primary Exchange

” means, with respect to each Index constituent or each constituent underlying a successor index, the

primary exchange or market of trading such Index constituent or such constituent underlying a successor index.

“Related Exchange”

means, with respect to each Index constituent or each constituent underlying a successor index, each

exchange or quotation system where trading has a material effect (as determined by the Security Calculation Agent) on the

overall market for futures or options contracts relating to such Index constituent or such constituent underlying a successor

index.

Underlying Index 

The return on the Securities is linked to the performance of the MarketVector US Business Development Companies Liquid

Index, the successor index to the Wells Fargo® Business Development Company Index (the “

Original Index

”) effective after

market close on the July 30, 2021 (the “

Effective Date

”), which was renamed from MVIS US Business Development

Companies Index effective after market close on June 16, 2023. On April 26, 2021, the Security Calculation Agent announced

that, pursuant to the terms of the Securities, it has determined that the Index is comparable to the Original Index and approved

the Index as the successor index for the Securities following the discontinuation of publication of the Original Index. The

Index is intended to measure the performance of the largest and most liquid companies which are treated as business

development companies and are incorporated in the United States. The “

Index Sponsor

” is MarketVector Indexes GmbH.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request on any Business Day during the term of the Securities to have

us redeem your Securities (“

Redemption Notice

”) on any Business Day no later than 12:00 noon, New York City time, and a

confirmation of redemption (“

Redemption Confirmation

”) by no later than 5:00 p.m., New York City time, on any Business

Day, provided that you request that we redeem a minimum of 50,000 Securities. To satisfy the minimum redemption amount,

your broker or other financial intermediary may bundle your Securities for redemption with those of other investors to reach

this minimum amount of 50,000 Securities; however, there can be no assurance that they can or will do so. We may from time

to time in our sole discretion reduce, in part or in whole, the minimum redemption amount of 50,000 Securities. Any such

reduction will be applied on a consistent basis for all holders of the Securities at the time the reduction becomes effective.

The Securities will be redeemed and the holders will receive payment for their Securities on the third Business Day following

the applicable Redemption Valuation Date (the “Redemption Date”). The final Redemption Date will be April 18, 2041;

provided that if a call notice has been issued, the last Redemption Valuation Date is the fifth Index Business Day prior to the

Call Settlement Date in connection with the call notice. (See “Specific Terms of the Securities — UBS’s Call Right”). If a

Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to any

of the Index constituents, such Redemption Valuation Date may be postponed as described under “— Market Disruption

Event.”

80

For any applicable redemption request, the “Redemption Valuation Date” will be the first Index Business Day following the

date that the applicable Redemption Notice and Redemption Confirmation are delivered. You may request that UBS AG

accelerate the Redemption Valuation Date to the date on which you deliver the applicable Redemption Notice and Redemption

Confirmation instead of the Index Business Day following such date. If UBS AG approves such request, in its sole discretion

on a case-by-case basis, the Redemption Valuation Date for such redemption shall be the date on which you deliver the

applicable Redemption Notice and Redemption Confirmation instead of the Index Business Day following such date. You

should not assume that you will be entitled to any such acceleration. UBS AG will be under no obligation to approve any such

request, or to make any announcement regarding any decision by it to approve any such request.

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

(a) the product of

(i) the Stated Principal Amount and

(ii) the Index Performance Ratio as of the Redemption Valuation Date,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Redemption Valuation

Date if on the Redemption Valuation Date the Coupon Ex-Date with respect to such Coupon Amount has not yet

occurred,

plus

(c) the Adjusted Coupon Amount, if any,

minus

(d) the Adjusted Tracking Fee Shortfall, if any, as of the Redemption Valuation Date,

minus

(e) the Redemption Fee Amount.

We refer to this cash payment as the “

Redemption Amount

.”

For purposes of calculating the Redemption Amount, either the Adjusted Coupon Amount will be included or the Adjusted

Tracking Fee Shortfall will be subtracted, but not both.

If the amount calculated above is equal to or less than zero, the payment upon early redemption will be zero.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Valuation

Date.

You may lose some or all of your investment upon early redemption. The combined negative effect of the Accrued Tracking

Fee and the Redemption Fee Amount will reduce your final Redemption Amount. If the level of the Index (as measured by

the Final Index Level, as compared to the Initial Index Level) does not increase by an amount sufficient to offset the

combined negative effect of the Accrued Tracking Fee and the Redemption Fee Amount (

less

any Coupon Amounts, any

Stub Reference Distribution Amount, as applicable, and/or any Adjusted Coupon Amount you may be entitled to receive)

or if the Final Index Level is less than the Initial Index Level, you may lose some or all of your investment upon early

redemption.

The “Adjusted Coupon Amount,” with respect to any Redemption Valuation Date, is an amount in cash equal to the difference

between the Adjusted Reference Distribution Amount, calculated as of the applicable Redemption Valuation Date, and the

Adjusted Tracking Fee, calculated as of such Redemption Valuation Date, to the extent that the Adjusted Reference

Distribution Amount, calculated as of such Redemption Valuation Date, is greater than or equal to the Adjusted Tracking Fee,

calculated as of such Redemption Valuation Date.

The “Adjusted Reference Distribution Amount,” as of any Redemption Valuation Date, is an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index constituents held by such

Reference Holder on the “record date” with respect to an Index constituent, for those cash distributions whose “ex-dividend

date” occurs during the period from and excluding the immediately preceding Coupon Valuation Date to and including such

Redemption Valuation Date.

The “

Adjusted Tracking Fee

” is, as of the Call Valuation Date or any Redemption Valuation Date, as applicable, an amount

equal to:

(a) the Tracking Fee Shortfall as of the immediately preceding Coupon Valuation Date,

plus

(b) the product of

81

(i) the Annual Tracking Fee as of such Redemption Valuation Date or Call Valuation Date and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the

immediately preceding Coupon Valuation Date to and including such Redemption Valuation Date

or Call Valuation Date, and the denominator of which is 365.

The “

Adjusted Tracking Fee Shortfall,”

 as of any Redemption Valuation Date, is the difference between the Adjusted

Tracking Fee and the Adjusted Reference Distribution Amount, to the extent that the Adjusted Reference Distribution Amount,

calculated as of such Redemption Valuation Date, is less than the Adjusted Tracking Fee, calculated as of such Redemption

Valuation Date.

The “

Redemption Fee Amount

” means, as of any date of determination, an amount per Security equal to the product of

(i) 0.125% and (ii) the Current Indicative Value as of the immediately preceding Index Business Day.

Some of the defined terms used in this section have different applications when used in determining the Call Settlement

Amount. For the definitions of the terms relevant to a call, please refer to “— UBS’s Call Right”.

We discuss redemption in “Medium-Term Notes, Series B” above under “Description of Debt Securities We May Offer —

Redemption and Repayment.”

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption to UBS via email no later than 12:00 noon, New York City time, on the Business Day

immediately preceding the applicable Redemption Valuation Date. If we receive your notice by the time specified in

the preceding sentence, we will respond by sending you a form of confirmation of redemption;

Ø

deliver the signed confirmation of redemption to us via facsimile in the specified form by 5:00 p.m. (New York City

time) on the same day. We or our affiliate must acknowledge receipt in order for your confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 10:00 a.m., New York

City time, on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your notice of redemption after 12:00 noon, New York City time, or your confirmation of

redemption after 5:00 p.m., New York City time, on the Business Day prior to the applicable Redemption Valuation Date, your

notice will not be effective, you will not be able to redeem your Securities until the following Redemption Date and your

broker will need to complete all the required steps if you should wish to redeem your Securities on any subsequent Redemption

Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as it may deem necessary

in its sole discretion. All instructions given to participants from beneficial owners of Securities relating to the right to redeem

their Securities will be irrevocable.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than 18 calendar days’ prior notice to the

holders of the Securities, such redemption to occur on any Exchange Business Day (or if such day is not an Exchange Business

Day, the next Exchange Business Day) that we may specify through and including the Maturity Date (the “Call Settlement

Date”). Upon early redemption in the event we exercise this right, you will receive a cash payment equal to:

(a) the product of

(i) the Stated Principal Amount and (ii) the Index Performance Ratio as of the last Index Business

Day in the Call Measurement Period,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Call Valuation Date if on

the last Index Business Day in the Call Measurement Period the Coupon Ex-Date with respect to such Coupon

Amount has not yet occurred,

plus

(c) the Adjusted Coupon Amount, if any,

minus

(d) the Accrued Tracking Fee as of the last Index Business Day in the Call Measurement Period,

plus

82

(e) the Stub Reference Distribution Amount as of the last Index Business Day in the Call Measurement Period, if any.

We refer to this cash payment as the “Call Settlement Amount.”

If the amount calculated above is equal to or less than zero, the payment upon early redemption will be zero.

If UBS issues a call notice on any calendar day, the “Call Valuation Date” will be the fifth Business Day following the

calendar day on which the call notice is issued.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “Call Settlement Date”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index constituents, such Call Valuation Date may be postponed as described

under “— Market Disruption Event.”

The “Call Measurement Period” means the ten Index Business Days from and including the Call Valuation Date, subject to

adjustments as described under “— Market Disruption Event.”

You may lose some or all of your investment upon a call. The negative effect of the Accrued Tracking Fee will reduce your

final payment. If the level of the Index (as measured by the Final Index Level, as compared to the Initial Index Level) is

insufficient to offset the negative effect of the Accrued Tracking Fee (

less

any Coupon Amounts, any Stub Reference

Distribution Amount and/or any Adjusted Coupon Amount, you may be entitled to receive) or if the Final Index Level is less

than the Initial Index Level, you may lose some or all of your investment upon a call.

The “

Accrued Tracking Fee

” as of the last Index Business Day in the Call Measurement Period is an amount equal to: 

(a) the product of

(i) the Annual Tracking Fee calculated as of the last Index Business Day in the Call Measurement Period, and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the Call

Valuation Date to and including the last Index Business Day in the Call Measurement Period, and the

denominator of which is 365,

plus

(b) the Adjusted Tracking Fee Shortfall (as defined below), if any.

The Accrued Tracking Fee also takes into account the performance of the Index, as measured by the Index Closing Level.

The “Adjusted Coupon Amount,” with respect to the Call Valuation Date, is an amount in cash equal to the difference between

the Adjusted Reference Distribution Amount (as defined below), calculated as of the Call Valuation Date, and the Adjusted

Tracking Fee (as defined below), calculated as of the Call Valuation Date, to the extent that the Adjusted Reference

Distribution Amount, calculated as of the Call Valuation Date, is greater than or equal to the Adjusted Tracking Fee, calculated

as of the Call Valua tion Date.

The “Adjusted Reference Distribution Amount,” as of the Call Valuation Date, is an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index constituents held by such

Reference Holder on the “record date” with respect to an Index constituent, for those cash distributions whose “ex-dividend

date” occurs during the period from and excluding the immediately preceding Coupon Valuation Date to and including the Call

Valuation Date.

The “

Adjusted Tracking Fee

”, as of the Call Valuation Date, is an amount equal to

(a) the Tracking Fee Shortfall as of the immediately preceding Coupon Valuation Date

plus

(b) the product of

(i) the Annual Tracking Fee as of such Call Valuation Date and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the immediately

preceding Coupon Valuation Date to and including such Call Valuation Date, and the denominator of which

is 365.

83

The “

Adjusted Tracking Fee Shortfall

,” as of the Call Valuation Date, is the difference between the Adjusted Tracking Fee

and the Adjusted Reference Distribution Amount, to the extent that the Adjusted Reference Distribution Amount, calculated as

of the Call Valuation Date, is less than the Adjusted Tracking Fee, calculated as of the Call Valuation Date.

Some of the defined terms used in this section have different applications when used in determining the Redemption Amount.

For the definition of the terms relevant to early redemption, please refer to “— Early Redemption at the Option of the

Holders”.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will determine, among other

things, the Current Indicative Value, the Final Index Level, the Index Performance Ratio, the Coupon Amount, the Adjusted

Coupon Amount, if any, the Reference Distribution Amount, the Stub Reference Distribution Amount, if any, the Adjusted

Reference Distribution Amount, the Accrued Tracking Fee (including the Annual Tracking Fee, any Tracking Fee Shortfall

and any Adjusted Tracking Fee Shortfall), the Adjusted Tracking Fee, the Redemption Fee Amount, the Cash Settlement

Amount, if any, that we will pay you at maturity, the Final Measurement Period, the Coupon Payment Dates, the Coupon

Valuation Dates, the Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon

redemption, if applicable, the Call Settlement Date, the Call Valuation Date, the Call Measurement Period and the Call

Settlement Amount, if any, that we will pay you in the event that UBS calls the Securities, and whether any day is a Business

Day, Index Business Day or Exchange Business Day. The Security Calculation Agent will also be responsible for determining

whether a Market Disruption Event has occurred, whether the Index has been discontinued and whether there has been a

material change in the Index. All determinations made by the Security Calculation Agent will be at the sole discretion of the

Security Calculation Agent and will, in the absence of manifest error, be conclusive for all purposes and binding on you and on

us. We may appoint a different Security Calculation Agent from time to time without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or call, or upon early redemption, or on a Coupon Payment Date on

or prior to 12:00 noon, New York City time, on the Business Day immediately preceding the Maturity Date, any Redemption

Date, any Call Settlement Date or any Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Adjusted Coupon Amount, if any, the Reference

Distribution Amount, the Stub Reference Distribution Amount, if any, the Adjusted Reference Distribution Amount, the

Accrued Tracking Fee (including the Annual Tracking Fee, any Tracking Fee Shortfall and any Adjusted Tracking Fee

Shortfall), the Adjusted Tracking Fee, the Redemption Amount and Redemption Fee Amount, if any, per Security, the Call

Settlement Amount, if any, per Security, and the Cash Settlement Amount, if any, per Security, will be rounded to the nearest

ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded up to .7655); and all dollar

amounts paid on the aggregate stated principal amount of Securities per holder will be rounded to the nearest cent, with one-

half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on an Averaging Date (as

defined below) or on a Redemption Valuation Date, the Index Closing Level for such Averaging Date or Redemption

Valuation Date will be determined by the Security Calculation Agent or one of its affiliates on the first succeeding Index

Business Day on which a Market Disruption Event does not occur or is not continuing (the “Deferred Averaging Date”) with

respect to the Index irrespective of whether pursuant to such determination, the Deferred Averaging Date would fall on a date

originally scheduled to be an Averaging Date. If the postponement described in the preceding sentence results in the Index

Closing Level being calculated on a day originally scheduled to be an Averaging Date, for purposes of determining the Index

Closing Level on the Index Business Days during the Final Measurement Period or the Call Measurement Period, or on the

Redemption Valuation Date, as applicable, the Security Calculation Agent or one of its affiliates, as the case may be, will

apply the Index Closing Level for such Deferred Averaging Date (i) on the date(s) of the original Market Disruption Event and

(ii) such Averaging Date. For example, if the Final Measurement Period or Call Measurement Period, as applicable, for

purposes of calculating the Cash Settlement Amount or Call Settlement Amount, respectively, is based on the arithmetic mean

of the Index Closing Levels on October 3, October 4, October 5, October 6, October 7, October 10, October 11, October 12,

October 13 and October 14, and there is a Market Disruption Event with respect to the Index on October 3, but no other Market

Disruption Event during the Final Measurement Period or the Call Measurement Period, as applicable, then the Index Closing

Level on October 4 will be used twice to calculate the Cash Settlement Amount or Call Settlement Amount, respectively, and

such Cash Settlement Amount or Call Settlement Amount, as applicable, will be determined based on the arithmetic mean of

the Index Closing Levels on October 4, October 4, October, 5, October 6, October 7, October 10, October 11, October 12,

October 13 and October 14.

If the Redemption Valuation Date for purposes of calculating a Redemption Amount is based on the Index Closing Level on

October 3, 2016 and there is a Market Disruption Event with respect to the Index on October 3, 2016, then the Index Closing

Level on October 4, 2016 will be used to calculate the Redemption Amount.

84

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the final

Averaging Date or the Redemption Valuation Date, as applicable, occurring more than three Index Business Days following

the day originally scheduled to be such final Averaging Date or Redemption Valuation Date. If the third Index Business Day

following the date originally scheduled to be the final Averaging Date, or the Redemption Valuation Date, as applicable, is not

an Index Business Day or a Market Disruption Event has occurred or is continuing with respect to the Index on such third

Index Business Day, the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its

good faith estimate of the Index Closing Level that would have prevailed on such third Index Business Day but for such

Market Disruption Event.

An “Averaging Date” means each of the Index Business Days during the Final Measurement Period or the Call Measurement

Period, as applicable, subject to adjustment as described herein.

Notwithstanding the occurrence of one or more of the events below, which may, in the Security Calculation Agent’s discretion,

constitute a Market Disruption Event with respect to the Index, the Security Calculation Agent in its discretion may waive its

right to postpone the Index Closing Level if it determines that one or more of the below events has not and is not likely to

materially impair its ability to determine the Index Closing Level on such date.

Any of the following will be a Market Disruption Event with respect to the Index, in each case as determined by the Security

Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index constituents for more than two

hours or during the one-half hour before the close of trading in the applicable market or markets;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index constituent equity interests in the primary market or markets for those contracts for more

than two hours of trading or during the one-half hour before the close of trading in that market;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially interferes

with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with respect to the

Securities that we or our affiliates have effected or may effect as described in the section entitled “Use of Proceeds

and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

constituent equity interests.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index constituent equity interests are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in “Medium-Term Notes, Series B” above. If we exercise this right, the redemption price of the

Securities will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our

relative economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

In addition to the default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to

the final Coupon Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was

the last Index Business Day in the Final Measurement Period and the four Index Business Days immediately preceding the date

of acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the fourth

Index Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated

final Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant

final Coupon Valuation Date.

85

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium- Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars for the principal of the Securities, equal to

the cost of having a qualified financial institution, of the kind and selected as described below, expressly assume all our

payment and other obligations with respect to the Securities as of that day and as if no default or acceleration had occurred, or

to undertake other obligations providing substantially equivalent economic value to you with respect to the Securities. That

cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five Business Days after that first Business Day, however, the default quotation period will continue as described

in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuation of the Index; Alteration of Method of Calculation

If the Index Sponsor or the Index Calculation Agent discontinues publication of or otherwise fails to publish the Index, and the

Index Sponsor, the Index Calculation Agent or another entity publishes a successor or substitute index that the Security

Calculation Agent determines to be comparable to the discontinued Index (such index being referred to herein as a “

successor

index

”), then the Index Closing Level for such successor index will be determined by the Security Calculation Agent by

reference to the successor index on the dates and at the times as of which the Index Closing Levels for such successor index are

to be determined.

86

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor or the Index Calculation Agent discontinues publication of the Index prior to, and such discontinuation is

continuing on the Calculation Date or any Index Business Day during the Final Measurement Period or Call Measurement

Period, or on the Redemption Valuation Date, as applicable, or any other relevant date on which the Index Closing Level is to

be determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on, the Calculation Date or any Index Business Day during the Final Measurement

Period or Call Measurement Period, or on the Redemption Valuation Date, as applicable, or any other relevant date on which

the Index Closing Level is to be determined, then the Security Calculation Agent will determine the Index Closing Level using

the closing level and published share weighting of each Index constituent included in the Index or successor index, as

applicable, immediately prior to such discontinuation or unavailability, as adjusted for certain corporate actions as described

under “MarketVector US Business Development Liquid Companies Index — Corporate Events.”

In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the holders of

the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index or a successor index, or the value thereof, is changed in a material respect, or

if the Index or a successor index is in any other way modified so that the level of the Index or such successor index does not, in

the opinion of the Security Calculation Agent, fairly represent the level of the Index or such successor index had such changes

or modifications not been made, then the Security Calculation Agent will make such calculations and adjustments as, in the

good faith judgment of the Security Calculation Agent, may be necessary in order to arrive at a level of an index comparable to

the Index or such successor index, as the case may be, as if such changes or modifications had not been made, and the Security

Calculation Agent will calculate the levels for the Index or such successor index with reference to the Index or such successor

index, as adjusted. The Security Calculation Agent will accordingly calculate the Current Indicative Value, the Final Index

Level, the Index Performance Ratio, the Coupon Amount, the Adjusted Coupon Amount, if any, the Reference Distribution

Amount, the Stub Reference Distribution Amount, if any, the Adjusted Reference Distribution Amount, the Accrued Tracking

Fee (including the Annual Tracking Fee, any Tracking Fee Shortfall and any Adjusted Tracking Fee Shortfall), the Adjusted

Tracking Fee, the Redemption Fee Amount, if any, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Redemption Amount, if any, upon redemption, if applicable, or the Call Settlement Amount that we will pay you on the Call

Settlement Date, if applicable, based on the relevant index levels calculated by the Security Calculation Agent, as adjusted.

Accordingly, if the method of calculating the Index or a successor index is modified so that the level of the Index or such

successor index is a fraction of what it would have been if there had been no such modification (e.g., due to a split in the

Index), which, in turn, causes the level of the Index or such successor index to be a fraction of what it would have been if there

had been no such modification, then the Security Calculation Agent will make such calculations and adjustments in order to

arrive at a level for the Index or such successor index as if it had not been modified (e.g., as if such split had not occurred).

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or call, or upon early redemption will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Business Day

When we refer to a Business Day with respect to the Securities, we mean a day that is a Business Day of the kind described in

“Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in “Medium-Term Notes, Series

B”.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in “Medium-Term

Notes, Series B”, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead

be paid on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described

under “— Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of the

Holders” above.

Defeasance

Neither full defeasance nor covenant defeasance, as described in “Medium -Term Notes, Series B” under “Description of Debt

Securities We May Offer — Defeasance and Covenant Defeasance,” will apply to the Securities.

87

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate stated principal amount specified on the cover of this prospectus supplement. We may issue additional Securities in

amounts that exceed such amount at any time, without your consent and without notifying you. The Securities do not limit our

ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar restrictions by the

terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer — Amounts That

We May Issue” in “Medium-Term Notes, Series B”.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate stated principal amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch. 

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

88

5. ETRACS Alerian MLP Index ETN Series B due July 18, 2042

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintain for this purpose, and not those who own beneficial interests in the Securities registered in street name or

in the Securities issued in book-entry form through The Depository Trust Company (“DTC”) or another depositary. Owners of

beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium-Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B are

described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms described

here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are inconsistent with

those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015,

between us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or call, or upon early redemption. Instead, at

maturity, you will receive a cash payment the amount of which will vary depending on the performance of the VWAP Level

calculated in accordance with the formula set forth below and will be reduced by the Accrued Tracking Fee as of the last Index

Business Day in the Final Measurement Period. We refer to this cash payment as the “Cash Settlement Amount.” If the amount

so calculated is equal to or less than zero, the Cash Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment on the Redemption Date equal to the Redemption Amount as described below under

“— Early Redemption at the Option of the Holders.”

The Securities may pay a cash coupon during their term.

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the excess, if any, of the Reference Distribution Amount, calculated as of the corresponding Coupon Valuation

Date, over the Accrued Tracking Fee, calculated as of the corresponding Coupon Valuation Date (the “Coupon Amount”).

To the extent the Reference Distribution Amount on any Coupon Valuation Date is equal to or less than the Accrued Tracking

Fee on the corresponding Coupon Valuation Date, there will be no Coupon Amount payment made on the corresponding

Coupon Payment Date, and an amount equal to the difference between the Accrued Tracking Fee and the Reference

Distribution Amount (the “Tracking Fee Shortfall”) will be included in the Accrued Tracking Fee for the next Coupon

Valuation Date. This process will be repeated to the extent necessary until the Reference Distribution Amount for a Coupon

Valuation Date is greater than the Accrued Tracking Fee for the corresponding Coupon Valuation Date. The final Coupon

Amount will be included in the Cash Settlement Amount.

The “Coupon Payment Date” means the fifteenth (15th) Index Business Day following each Coupon Valuation Date, provided

that the final Coupon Payment Date will be the Maturity Date, subject to adjustment as described herein. The first Coupon

Payment Date will be December 8, 2015.

The “Coupon Record Date” means the ninth (9th) Index Business Day following each Coupon Valuation Date.

The “Coupon Ex-Date,” with respect to a Coupon Amount, means the first (1st) Exchange Business Day on which the

Securities trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date

will generally be the second (2nd) Exchange Business Day prior to the applicable Coupon Record Date.

The “Coupon Valuation Date” means the fifteenth (15th) of February, May, August and November of each calendar year

during the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such

date, provided that the final Coupon Valuation Date will be the Calculation Date, subject to adjustment as described herein.

The first Coupon Valuation Date will be November 16, 2015.

89

The “Reference Distribution Amount” means (i) as of the first Coupon Valuation Date, an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index constituents held by such

Reference Holder on the “record date” with respect to any Index constituent, for those cash distributions whose “ex-dividend

date” occurs during the period from and excluding August 17, 2015 to and including the first Coupon Valuation Date; and (ii)

as of any other Coupon Valuation Date, an amount equal to the gross cash distributions that a Reference Holder would have

been entitled to receive in respect of the Index constituents held by such Reference Holder on the “record date” with respect to

any Index constituent for those cash distributions whose “ex-dividend date” occurs during the period from and excluding the

immediately preceding Coupon Valuation Date to and including such Coupon Valuation Date.

Notwithstanding the foregoing, with respect to cash distributions for an Index constituent which are scheduled to be paid prior

to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index constituent fails to pay the distribution to holders of

such Index constituent by the scheduled payment date for such distribution, such distribution will be assumed to be zero for the

purposes of calculating the applicable Reference Distribution Amount.

The “Reference Holder” is, as of any date of determination, a hypothetical holder of a number of units of each Index

constituent equal to (i) the published unit weighting of that Index constituent as of that date,

divided by

(ii) the product of (a)

the Index Divisor as of that date, and (b) the Initial VWAP Level

divided by

25.

“record date” means, with respect to a distribution on an Index constituent, the date on which a holder of the Index constituent

must be registered as a unitholder of such Index constituent in order to be entitled to receive such distribution.

“ex-dividend date” means, with respect to a distribution on an Index constituent, the first Business Day on which transactions

in such Index constituent trade on the Primary Exchange without the right to receive such distribution.

The “Quarterly Tracking Fee” means, as of any date of determination, an amount per Security equal to the product of (i) 0.20%

(equivalent to 0.80% per annum) and (ii) the Current Indicative Value as of the immediately preceding Index Business Day.

The “Current Indicative Value,” as determined by the Security Calculation Agent, means, as of any date of determination, an

amount per Security equal to the product of (i) the Stated Principal Amount

multiplied by

(ii) a fraction, the numerator of

which is equal to the VWAP Level (as defined under “— Cash Settlement Amount at Maturity”) as of such date and the

denominator of which is equal to the Initial VWAP Level. As of October 7, 2015, the Current Indicative Valu e was 21.4587.

The “Accrued Tracking Fee” is:

(1) with respect to the first Coupon Valuation Date, an amount equal to

the Quarterly Tracking Fee calculated as of the first Coupon Valuation Date (for the avoidance of doubt, the

calculation of the Accrued Tracking Fee with respect to the first Coupon Valuation Date will be for a full quarter

beginning from and excluding August 17, 2015);

(2) with respect to any Coupon Valuation Date, other than the first and last Coupon Valuation Dates, an amount equal to

the Quarterly Tracking Fee as of such Coupon Valuation Date,

plus

the Tracking Fee Shortfall as of the immediately

preceding Coupon Valuation Date, if any; and

(3) with respect to the last Coupon Valuation Date, an amount equal to

(a) the product of

(i) the Quarterly Tracking Fee as of such Coupon Valuation Date and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the

immediately preceding Coupon Valuation Date to and including such Coupon Valuation Date, and

the denominator of which is 90,

plus

(b) the Tracking Fee Shortfall as of the immediately preceding Coupon Valuation Date. If there is a Tracking

Fee Shortfall on the last Coupon Valuation Date, it will be taken into account in determining the Cash

Settlement Amount, as described below.

The calculation of the Accrued Tracking Fee also takes into account the performance of the Index, as measured by the VWAP

Level.

Cash Settlement Amount at Maturity

The “Maturity Date” is July 18, 2042, which will be the third Business Day following the last Index Business Day in the

Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

90

For each Security, unless earlier called or redeemed, you will receive at maturity a cash payment equal to

(a) the product of

(i) the Stated Principal Amount and

(ii) the Index Performance Ratio as of the last Index Business Day in the Final Measurement Period,

plus

(b) the final Coupon Amount,

minus

(c) the Accrued Tracking Fee as of the last Index Business Day in the Final Measurement Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Final Measurement Period, if any.

We refer to this cash payment as the “Cash Settlement Amount.” If the amount calculated above is equal to or less than zero,

the payment at maturity will be zero.

You may lose some or all of your investment at maturity. The negative effect of the Accrued Tracking Fee will reduce your

final payment. If the level of the Index increases (as measured by the Final VWAP Level, as compared to the Initial VWAP

Level), such increase may be insufficient to offset the negative effect of the Accrued Tracking Fee (less any Coupon

Amounts, Stub Reference Distribution Amount and/ or Adjusted Coupon Amount, as applicable, you may be entitled to

receive), or if the Final VWAP Level is less than the Initial VWAP Level, you may lose some or all of your investment at

maturity.

The “Stated Principal Amount” of each Security is $25.00.

The “Index Performance Ratio” on any Index Business Day is calculated as follows:

Final VWAP Level

Initial VWAP Level

The “VWAP” with respect to each Index constituent, as of any date of determination, is the volume-weighted average price of

one unit of such Index constituent as determined by the VWAP Calculation Agent based on the Primary Exchange for each

Index constituent. For information about how the VWAP will be calculated to the extent a Disrupted Day exists with respect to

an Index constituent, please see “— Market Disruption Event.”

The “Initial VWAP Level” is 396.997, the VWAP Level on July 17, 2012, as determined by the VWAP Calculation Agent.

See “— VWAP Calculation Agent” below.

The “Final VWAP Level,” as determined by the VWAP Calculation Agent, will be the arithmetic mean of the VWAP Levels

measured on each Index Business Day during the Final Measurement Period or the Call Measurement Period or on any

applicable Redemption Measurement Date, as applicable.

The “VWAP Level,” as determined by the VWAP Calculation Agent as of any Index Business Day, is equal to (1) the sum of

the products of (i) the VWAP of each Index constituent as of such date and (ii) the published unit weighting of that Index

constituent as of such date

divided by

(2) the Index Divisor as of such date, or expressed as a formula, as follows:

where:

n

is the number of Index constituents;

VWAPi,t

is the VWAP of Index constituent

i

as of Index Business Day

t

;

Wi

,

t

is the published unit weighting of Index constituent

i

as of Index Business Day

t

; and

Index Divisor t

 is the Index Divisor as of Index Business Day t.

As of October 7, 2015, the VWAP Level was 340.761.

The “Index Divisor,” as of any date of determination, is the divisor used by the Index Calculation Agent to calculate the level

of the Index, as further described under “Alerian MLP Index — Index Equations”.

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The “Accrued Tracking Fee” as of the last Index Business Day in the Final Measurement Period is an amount equal to

(a) the product of

(i) the Quarterly Tracking Fee calculated as of the last Index Business Day in the Final Measurement Period and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the Calculation

Date to and including the last Index Business Day in the Final Measurement Period, and the denominator of

which is 90,

plus

(b) the Tracking Fee Shortfall as of the last Coupon Valuation Date, if any.

The Accrued Tracking Fee also takes into account the performance of the Index, as measured by the VWAP Level.

The “Final Measurement Period” means the five (5) Index Business Days from and including the Calculation Date, subject to

adjustment as described under “— Market Disruption Event.”

The “Stub Reference Distribution Amount” means, as of the last Index Business Day in the Final Measurement Period or the

Call Measurement Period, as applicable, an amount equal to the gross cash distributions that a Reference Holder would have

been entitled to receive in respect of the Index constituents held by such Reference Holder on the “record date” with respect to

any Index constituent, for those cash distributions whose “ex-dividend date” occurs during the period from and excluding the

first Index Business Day in the Final Measurement Period or the Call Measurement Period, as applicable, to and including the

last Index Business Day in the Final Measurement Period or the Call Measurement Period, as applicable, provided, that for the

purpose of calculating the Stub Reference Distribution Amount, the Reference Holder will be deemed to hold 4/5 ths, 3/5 ths,

2/5 ths and 1/5 th of the shares of each Index constituent it would otherwise hold on the second, third, fourth and fifth Index

Business Day, respectively, in such Final Measurement Period or the Call Measurement Period.

The “Index Calculation Agent” means the entity that calculates and publishes the level of the Index, which is currently S&P.

The “Calculation Date” means July 9, 2042, unless such day is not an Index Business Day, in which case the Calculation Date

will be the next Index Business Day, subject to adjustments.

“Index Business Day” means any day on which the Primary Exchange and each Related Exchange are scheduled to be open for

trading.

“Exchange Business Day” means any day on which the Primary Exchange or market for trading of the Securities is scheduled

to be open for trading.

“Primary Exchange” means, with respect to each Index constituent or each constituent underlying a successor index, the

primary exchange or market of trading such Index constituent or such constituent underlying a successor index.

“Related Exchange” means, with respect to each Index constituent or each constituent underlying a successor index, each

exchange or quotation system where trading has a material effect (as determined by the Security Calculation Agent) on the

overall market for futures or options contracts relating to such Index constituent or such constituent underlying a successor

index.

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Underlying Index

The Alerian MLP Index measures the composite performance of energy master limited partnerships (“MLPs”), and is

calculated by S&P Dow Jones Indices using a float-adjusted, capitalization-weighted methodology. We refer to the MLPs

included in the Index as the “Index constituents.” The Index constituents earn the majority of their cash flow from qualifying

activities involving energy commodities, which include pipeline transportation, gathering and processing, storage, production

and mining, marketing, marine transportation, services, catalytic conversion, mineral interest, refining, regasification and other

related activities.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Business Day no

later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City time,

on the applicable Redemption Notice Date, provided that you request that we redeem a minimum of 50,000 Securities. For any

applicable redemption request, the “Redemption Notice Date” will be the date that the applicable Redemption Notice and

Redemption Confirmation are delivered. If such Redemption Notice or Redemption Confirmation is delivered on a day that is

not an Index Business Day, then the Redemption Notice Date shall be the next Index Business Day. To satisfy the minimum

redemption amount, your broker or other financial intermediary may bundle your Securities for redemption with those of other

investors to reach this minimum amount of 50,000 Securities. We may from time to time in our sole discretion reduce, in part

or in whole, the minimum redemption amount of 50,000 Securities. Any such reduction will be applied on a consistent basis

for all holders of the Securities at the time the reduction becomes effecti ve.

The Securities will be redeemed and the holders will receive payment for their Securities on the third Business Day following

the applicable Redemption Measurement Date (the “Redemption Date”). The first Redemption Date will be October 15, 2015.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Measurement Date with respect

to any of the Index constituents, such Redemption Measurement Date may be postponed as described under “— Market

Disruption Event.”

The applicable “Redemption Measurement Date” means the Index Business Day following the applicable Redemption Notice

Date, subject to adjustments as described under “— Market Disruption Event.”

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to

(a) the product of

(i) the Stated Principal Amount and

(ii) the Index Performance Ratio as of the Redemption Measurement Date,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Redemption Measurement

Date if on the Redemption Measurement Date the Coupon Ex-Date with respect to such Coupon Amount has not yet

occurred,

plus

(c) the Adjusted Coupon Amount, if any,

minus

(d) the Adjusted Tracking Fee Shortfall, if any,

minus

(e) the Redemption Fee Amount.

We refer to this cash payment as the “Redemption Amount.” We have determined to offer all holders of the Securities the

option, upon early redemption and solely for purposes of determining the Redemption Amount, but not for any other

purpose, to elect that the Index Performance Ratio (which is used to calculate the Redemption Amount) be calculated using

the Index Closing Level on the Redemption Measurement Date instead of the Final VWAP Level. If the redeeming holder

so elects, the Index Performance Ratio will be calculated, for purposes of determining the Redemption Amount, as:

Index Closing Level on the Redemption Measurement Date

Initial VWAP Level

The “Index Closing Level” is the closing level of the Index as reported on the NYSE and Bloomberg; provided, however, that

if the closing level of the Index as reported on the NYSE (or any successor) differs from the closing level of the Index as

reported on Bloomberg (or any successor), then the Index Closing Level will be the closing level of the Index as calculated by

the Index Calculation Agent.

93

If the amount calculated above is equal to or less than zero, the payment upon early redemption will be zero.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Measurement

Date.

You may lose some or all of your investment upon early redemption. The combined negative effect of the Accrued

Tracking Fee and the Redemption Fee Amount will reduce your final Redemption Amount. If the level of the Index (as

measured by the Final VWAP Level) does not increase as compared to the Initial VWAP Level by an amount sufficient

to offset the combined negative effect of the Accrued Tracking Fee and the Redemption Fee Amount (less any Coupon

Amounts, any Stub Reference Distribution Amount, as applicable, and/or any Adjusted Coupon Amount you may be

entitled to receive), you may lose some or all of your investment upon early redemption.

The “Adjusted Coupon Amount,” with respect to any Redemption Measurement Date, is an amount in cash equal to the

difference between the Adjusted Reference Distribution Amount, calculated as of such Redemption Measurement Date, and

the Adjusted Tracking Fee, calculated as of such Redemption Measurement Date. To the extent the Adjusted Reference

Distribution Amount is less than the Adjusted Tracking Fee, the Redemption Amount will not include an Adjusted Coupon

Amount, and the Adjusted Tracking Fee Shortfall will be included in the calculation of Redemption Amount.

The “Adjusted Reference Distribution Amount,” as of any Redemption Measurement Date, is an amount equal to the gross

cash distributions that a Reference Holder would have been entitled to receive in respect of the Index constituents held by such

Reference Holder on the “record date” with respect to an Index constituent, for those cash distributions whose “ex-dividend

date” occurs during the period from and excluding the immediately preceding Coupon Valuation Date (or if the Redemption

Measurement Date occurs prior to the first Coupon Valuation Date, the period from and excluding August 17, 2015) to and

including such Redemption Measurement Date.

The “Adjusted Tracking Fee” is:

(1) as of any Redemption Measurement Date occurring prior to the first Coupon Valuation Date, an amount equal to the

product of

(i) the Quarterly Tracking Fee as of such Redemption Measurement Date and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding August 17, 2015

to and including such Redemption Measurement Date, and the denominator of which is 90; and

(2) as of any Redemption Measurement Date occurring on or after the first Coupon Valuation Date, an amount equal to

(a) the Tracking Fee Shortfall as of the immediately preceding Coupon Valuation Date

plus

(b) the product of

(i) the Quarterly Tracking Fee as of such Redemption Measurement Date and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the

immediately preceding Coupon Valuation Date to and including such Redemption Measurement

Date, and the denominator of which is 90.

The “Adjusted Tracking Fee Shortfall,” as of any Redemption Measurement Date, is the difference between the Adjusted

Tracking Fee and the Adjusted Reference Distribution Amount, to the extent that the Adjusted Reference Distribution Amount,

calculated as of such Redemption Measurement Date, is less than the Adjusted Tracking Fee, calculated as of such Redemption

Measurement Date.

The “Redemption Fee Amount” means an amount equal to 0.125% of the Current Indicative Value.

Some of the defined terms used in this section have different applications when used in determining the Call Settlement

Amount. For the definitions of the terms relevant to a call, please refer to “— UBS Call Right.”

We discuss redemption in “ Medium-Term Notes, Series B” under “Description of Debt Securities We May Offer —

Redemption and Repayment”.

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the repurchase feature in this manner.

94

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption to UBS via e-mail no later than 12:00 noon, New York City time, on the applicable

Redemption Notice Date. If we receive your Redemption Notice by the time specified in the preceding sentence, we

will respond by sending you a form of confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “Redemption Confirmation,” to us via facsimile

in the specified form by 5:00 p.m., New York City time on the same day. We or our affiliate must acknowledge receipt

in order for your Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Measurement Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 10:00 a.m., New York

City time, on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the

relevant deadline. If your broker delivers your notice of redemption after 12:00 noon, New York City time, or your

confirmation of redemption after 5:00 p.m., New York City time, on the applicable Redemption Notice Date, your notice

will not be effective, you will not be able to redeem your Securities until the following Redemption Date and your broker

will need to complete all the required steps if you should wish to redeem your Securities on any subsequent Redemption

Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as it may deem necessary

in its sole discretion. All instructions given to participants from beneficial owners of Securities relating to the right to redeem

their Securities will be irrevocable.

UBS Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen calendar days’ prior notice to

the holders of the Securities, such redemption to occur on any Business Day that we may specify on or after October 17, 2016

through and including the Maturity Date (the “Call Settlement Date”). Upon early redemption in the event we exercise this

right, you will receive a cash payment equal to

(a) the product of

(i) the Stated Principal Amount and

(ii) the Index Performance Ratio as of the last Index Business Day in the Call Measurement Period,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Call Valuation Date if on

the last Index Business Day in the Call Measurement Period the Coupon Ex-Date with respect to such Coupon

Amount has not yet occurred,

plus

(c) the Adjusted Coupon Amount, if any,

minus

(d) the Accrued Tracking Fee as of the last Index Business Day in the Call Measurement Period,

plus

(e) the Stub Reference Distribution Amount as of the last Index Business Day in the Call Measurement Period, if any.

We refer to this cash payment as the “Call Settlement Amount.”

If the amount calculated above is equal to or less than zero, the payment upon early redemption will be zero.

If UBS issues a call notice on any calendar day, the “Call Valuation Date” will be the last Business Day of the week in which

the call notice is issued, generally Friday, subject to a minimum five (5) calendar day period commencing on the date of the

issuance of the call notice and ending on the related Call Valuation Date. If UBS issues a call notice on a Friday, the related

Call Valuation Date will fall on the following Friday. The Call Settlement Date will be the third Business Day following the

last Index Business Day in the Call Measurement Period.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “Call Settlement Date”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index constituents, such Call Valuation Date may be postponed as described

under “— Market Disruption Event.”

95

The “Call Measurement Period” means the five (5) Index Business Days from and including the Call Valuation Date, subject

to adjustments as described under “— Market Disruption Event.”

You may lose some or all of your investment upon a call. The negative effect of the Accrued Tracking Fee will reduce your final

payment. If the increase in the Final VWAP Level, as compared to the Initial VWAP Level, is insufficient to offset the negative

effect of the Accrued Tracking Fee (less any Coupon Amounts, any Stub Reference Distribution Amount and/or any Adjusted

Coupon Amount), or if the Final VWAP Level is less than the Initial VWAP Level, you may lose some or all of your investment

upon a call.

The Accrued Tracking Fee as of the last Index Business Day in the Call Measurement Period is an amount equal to

(a) the product of

(i) the Quarterly Tracking Fee calculated as of the last Index Business Day in such Call Measurement Period,

and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the Call

Valuation Date to and including the last Index Business Day in such Call Measurement Period, and the

denominator of which is 90,

plus

(b) the Adjusted Tracking Fee Shortfall (as defined below), if any.

The Accrued Tracking Fee also takes into account the performance of the Index, as measured by the VWAP Level.

The “Adjusted Coupon Amount,” with respect to the Call Valuation Date, is an amount in cash equal to the difference between

the Adjusted Reference Distribution Amount (as defined below), calculated as of the Call Valuation Date, and the Adjusted

Tracking Fee (as defined in the preceding paragraph), calculated as of such Call Valuation Date. To the extent the Adjusted

Reference Distribution Amount is less than the Adjusted Tracking Fee, the Call Settlement Amount will not include an

Adjusted Coupon Amount, and the Adjusted Tracking Fee Shortfall (as defined below) will be included in the calculation of

the Accrued Tracking Fee as of the last Index Business Day in the Call Measurement Period.

The “Adjusted Reference Distribution Amount,” as of the Call Valuation Date, is an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index constituents held by such

Reference Holder on the “record date” with respect to an Index constituent, for those cash distributions whose “ex-dividend

date” occurs during the period from and excluding the immediately preceding Coupon Valuation Date to and including the Call

Valuation Date.

The “Adjusted Tracking Fee” is:

as of the Call Valuation Date, an amount equal to

(a) the Tracking Fee Shortfall as of the immediately preceding Coupon Valuation Date,

plus

(b) the product of

(i) the Quarterly Tracking Fee as of such Call Valuation Date and

(ii) a fraction, the numerator of which is the total number of calendar days from and excluding the immediately

preceding Coupon Valuation Date to and including such Call Valuation Date, and the denominator of which

is 90.

The “Adjusted Tracking Fee Shortfall,” as of the Call Valuation Date, is the difference between the Adjusted Tracking Fee and

the Adjusted Reference Distribution Amount, to the extent that the Adjusted Reference Distribution Amount, calculated as of

such Call Valuation Date, is less than the Adjusted Tracking Fee, calculated as of such Call Valuation Date.

Some of the defined terms used in this section have different applications when used in determining the Redemption Amount.

For the definition of the terms relevant to early redemption, please refer to “— Early Redemption at the Option of the

Holders”.

96

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will determine, among other

things, the Current Indicative Value, Index Performance Ratio, the Coupon Amount, the Adjusted Coupon Amount, if any, the

Reference Distribution Amount, the Stub Reference Distribution Amount, if any, the Adjusted Reference Distribution Amount,

the Accrued Tracking Fee (including the Quarterly Tracking Fee, any Tracking Fee Shortfall and any Adjusted Tracking Fee

Shortfall), the Adjusted Tracking Fee, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you

at maturity, the Final Measurement Period, the Coupon Payment Dates, the Coupon Valuation Dates, the Coupon Ex-Dates,

the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon redemption, if applicable, the Call

Settlement Date, the Call Valuation Date, the Call Measurement Period and the Call Settlement Amount, if any, that we will

pay you in the event that UBS calls the Securities, and whether any day is a Business Day, Exchange Business Day or Index

Business Day. The Security Calculation Agent will also be responsible for determining whether a Market Disruption Event has

occurred, whether the Index has been discontinued and whether there has been a material change in the Index. All

determinations made by the Security Calculation Agent will be at the sole discretion of the Security Calculation Agent and

will, in the absence of manifest error, be conclusive for all purposes and binding on you and on us. The holder of the Securities

shall not be entitled to any compensation from us for any loss suffered as a result of any determinations or calculations made

by the Security Calculation Agent. We may appoint a different Security Calculation Agent from time to time without your

consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or call, or upon early redemption, or on a Coupon Payment Date on

or prior to 12:00 p.m., New York City time, on the Business Day immediately preceding the Maturity Date, any Redemption

Date, any Call Settlement Date or any Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Adjusted Coupon Amount, if any, the Reference

Distribution Amount, the Stub Reference Distribution Amount, if any, the Adjusted Reference Distribution Amount, the

Accrued Tracking Fee (including the Quarterly Tracking Fee, any Tracking Fee Shortfall and any Adjusted Tracking Fee

Shortfall), the Adjusted Tracking Fee, the Redemption Amount and Redemption Fee Amount, if any, per security, the Call

Settlement Amount, if any, per security, and the Cash Settlement Amount, if any, per security, will be rounded to the nearest

ten-thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar

amounts paid on the aggregate principal amount of Securities per holder will be rounded to the nearest cent, with one-half cent

rounded upward.

VWAP Calculation Agent

The NYSE will on each day that is not a Disrupted Day (as defined below) act as the VWAP Calculation Agent. The VWAP

Calculation Agent will determine the VWAP of any Index constituent, the VWAP Level and the Final VWAP Level on any

Index Business Day on which such VWAP, VWAP Level and Final VWAP Level are to be determined during the term of the

Securities. The VWAP Calculation Agent determined the Initial VWAP Level of 396.997 as of July 17, 2012. All

determinations made by the VWAP Calculation Agent will be at the sole discretion of the VWAP Calculation Agent and will,

in the absence of manifest error, be conclusive for all purposes and binding on you and on us. We may appoint a different

VWAP Calculation Agent from time to time without your consent and without notifying you.

All calculations with respect to the VWAP of any Index constituent, any VWAP Level and the Final VWAP Level will be

rounded to the nearest thousandth, with five ten-thousandths rounded upward (

e.g.

, .8765 would be rounded to .877).

97

Market Disruption Event

To the extent a Disrupted Day (as defined below) exists with respect to an Index constituent on an Averaging Date (as defined

below) or on a Redemption Measurement Date, the VWAP and published unit weighting with respect to such Index constituent

(and only with respect to such Index constituent) for such Averaging Date or Redemption Measurement Date will be

determined by the Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day that is not a

Disrupted Day (the “Deferred Averaging Date”) with respect to such Index constituent irrespective of whether pursuant to such

determination, the Deferred Averaging Date would fall on a date originally scheduled to be an Averaging Date. If the

postponement described in the preceding sentence results in the VWAP of a particular Index constituent being calculated on a

day originally scheduled to be an Averaging Date, for purposes of determining the VWAP Levels on the Index Business Days

during the Final Measurement Period or the Call Measurement Period, or on the Redemption Measurement Date, as applicable,

the Security Calculation Agent or one of its affiliates, as the case may be, will apply the VWAP and the published unit

weighting with respect to such Index constituent for such Deferred Averaging Date to the calculation of the VWAP Level (i)

on the date(s) of the original disruption with respect to such Index constituent and (ii) such Averaging Date. For example, if the

Final Measurement Period or the Call Measurement Period, as applicable, for purposes of calculating the Cash Settlement

Amount or Call Settlement Amount, respectively, is based on the arithmetic mean of the VWAP Levels on June 6, 2016, June

7, 2016, June 8, 2016, June 9, 2016 and June 10, 2016 and there is a Market Disruption Event for an Index constituent on June

6, 2016, but no other Market Disruption Event during the Final Measurement Period or the Call Measurement Period, as

applicable, then the VWAP for such disrupted Index constituent on June 7, 2016 will be used more than once to calculate the

Cash Settlement Amount or Call Settlement Amount, respectively, and such Cash Settlement Amount or Call Settlement

Amount, as applicable, will be determined based on the arithmetic mean of the VWAP for such disrupted Index constituent on

June 7, 2016, June 7, 2016, June 8, 2016, June 9, 2016 and June 10, 2016.

If the Redemption Measurement Date for purposes of calculating a Redemption Amount is based on the VWAP Level on June

6, 2016 and there is a Market Disruption Event for an Index constituent on June 6, 2016, then the VWAP for such disrupted

Index constituent on June 7, 2016 will be used to calculate the Redemption Amount.

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the final

Averaging Date or the Redemption Measurement Date, as applicable, with respect to any Index constituent occurring more

than three (3) Index Business Days following the day originally scheduled to be such final Averaging Date or Redemption

Measurement Date. If the third Index Business Day following the date originally scheduled to be the final Averaging Date, or

the Redemption Measurement Date, as applicable, is not an Index Business Day or is a Disrupted Day with respect to such

Index constituent, the Security Calculation Agent or one of its affiliates will determine the VWAP and unit weighting with

respect to any Index constituent required to be determined for the purpose of calculating the applicable VWAP Level based

on its good faith estimate of the VWAP and unit weighting of each such Index constituent that would have prevailed on the

Primary Exchange on such third Index Business Day but for such suspension or limitation.

An “Averaging Date” means each of the Index Business Days during the Final Measurement Period or the Call Measurement

Period, as applicable, subject to adjustment as described herein.

A “Disrupted Day” with respect to any Index constituent is any Index Business Day on which the Primary Exchange or any

Related Exchange fails to open for trading during its regular trading session or on which a Market Disruption Event has

occurred and is continuing, and, in both cases, the occurrence of which is determined by the Security Calculation Agent to

have a material effect on the VWAP Level.

With respect to an Index constituent, a “Market Disruption Event” means:

(a) the occurrence or existence of a condition specified below:

(i) any suspension, absence or limitation of trading on the Primary Exchange for trading in the Index

constituent, whether by reason of movements in price exceeding limits permitted by the Primary Exchange or

otherwise;

(ii) any suspension, absence or limitation of trading on the Related Exchange for trading in futures or options

contracts related to the Index constituent, whether by reason of movements in price exceeding limits

permitted by such Related Exchange or otherwise, or

(iii) any event (other than an event described in (b) below) that disrupts or impairs (as determined by the Security

Calculation Agent) the ability of market participants in general (A) to effect transactions in, or obtain market

values for, the relevant Index constituent or (B) to effect transactions in, or obtain market values for, futures

or options contracts relating to the relevant Index constituent; or

98

(b) the closure on any Index Business Day of the Primary Exchange or any Related Exchange prior to its Scheduled

Closing Time unless such earlier closing time is announced by the Primary Exchange or such Related Exchange at

least one hour prior to the earlier of (i) the actual closing time for the regular trading session on the Primary Exchange

or such Related Exchange on such Index Business Day and (ii) the submission deadline for orders to be entered into

the Primary Exchange or such Related Exchange system for execution at the close of trading on such Index Business

Day;

in each case determined by the Security Calculation Agent in its sole discretion; and

(c) a determination by the Security Calculation Agent in its sole discretion that the event described above materially

interfered with our ability or the ability of any of our affiliates to adjust or unwind all or a material portion of any

hedge with respect to the Securities.

For purposes of the above definition:

(a) a limitation on the hours or number of days of trading will not constitute a Market Disruption Event if it results from

an announced change in the regular business hours of the Primary Exchange or Related Exchange, and

(b) for purposes of clause (a) above, limitations pursuant to the rules of any Primary Exchange or Related Exchange

similar to NYSE Rule 80B or Nasdaq Rule 4120 (or any applicable rule or regulation enacted or promulgated by any

other self-regulatory organization or any government agency of scope similar to NYSE Rule 80B or Nasdaq Rule

4120 as determined by the Security Calculation Agent) on trading during significant market fluctuations will

constitute a suspension, absence or material limitation of trading.

“Scheduled Closing Time” means, with respect to the Primary Exchange or the Related Exchange, on any Index Business Day,

the scheduled weekday closing time of the Primary Exchange or such Related Exchange on such Index Business Day, without

regard to after hours or any other trading outside of the regular trading session hours.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described in “ Medium-Term Notes, Series B” under

“Description of Debt Securities We May Offer — Optional Tax Redemption”. If we exercise this right, the redemption price of

the Securities will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our

relative economic position.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.” In addition to the

default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to the final Coupon

Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was the last Index

Business Day in the Final Measurement Period and the four (4) Index Business Days immediately preceding the date of

acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the fourth Index

Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated final

Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant final

Coupon Valuation Date.

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in Stated Principal Amount of all

Medium-Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action

affecting all the Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms

that apply to the Medium-Term Notes, Series B, accelerating the maturity of the “Medium-Term Notes, Series B” after a

default or waiving some of our obligations under the indenture. We discuss these matters in “ Medium-Term Notes, Series B”

above under “Description of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of

Debt Securities We May Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount in U.S. dollars for the principal of the Securities, as

determined by the Security Calculation Agent in its sole discretion, equal to the cost of having a qualified financial institution,

of the kind and selected as described below, expressly assume all our payment and other obligations with respect to the

Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations providing

substantially equivalent economic value to you with respect to the Securities. That cost will equal:

99

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two (2) Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

(3rd) Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third (3rd) Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two (2) Business Day objection period have not ended before

the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and is rated either:

Ø

A-1 or higher by S&P or any successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index; Alteration of Method of Calculation

If S&P discontinues publication of or otherwise fails to publish the Index, or S&P does not make the Index constituents, their

unit weighting and/or the Index Divisor available to the VWAP Calculation Agent, and the Index Sponsor, S&P or another

entity publishes a successor or substitute index that the Security Calculation Agent determines to be comparable to the

discontinued Index and for which the Index constituents, their unit weighting, and/or the Index Divisor are available to the

VWAP Calculation Agent (such index being referred to herein as a “successor index”), then the VWAP Level for such

successor index will be determined by the VWAP Calculation Agent by reference to the sum of the products of the VWAPs of

the components underlying such successor index on the Primary Exchanges and each such component’s respective weighting

within the successor index (which sum will be adjusted by any index divisor used by such successor index) on the dates and at

the times as of which the VWAP Levels for such successor index are to be determined.

Upon any selection by the Security Calculation Agent of a successor Index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If S&P discontinues publication of the Index or does not make the Index constituents, their unit weightings and/or Index

Divisor available to the VWAP Calculation Agent prior to, and such discontinuation or unavailability is continuing on the

Calculation Date or any Index Business Day during the Final Measurement Period or the Call Measurement Period, or on the

Redemption Measurement Date, as applicable, or any other relevant date on which the VWAP Level is to be determined and

the Security Calculation Agent determines that no successor index is available at such time, or the Security Calculation Agent

has previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during the Final Measurement Period or the

Call Measurement Period, or on the Redemption Measurement Date, as applicable, or any other relevant date on which the

VWAP Level is to be determined, then the Security Calculation Agent will determine the relevant VWAP Levels using the

VWAP and published unit weighting of each Index constituent included in the Index or successor index, as applicable,

immediately prior to such discontinuation or unavailability, as adjusted for certain corporate actions as described under

“Alerian MLP Index — Index Rebalancings.” In such event, the Security Calculation Agent will cause notice thereof to be

furnished to the trustee, to us and to the holders of the Securities.

100

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index or a successor index, or the value thereof, is changed in a material respect, or

if the Index or a successor index is in any other way modified so that the VWAP Level of the Index or such successor index

does not, in the opinion of the Security Calculation Agent, fairly represent the VWAP Level of the Index or such successor

index had such changes or modifications not been made, then the Security Calculation Agent will make such calculations and

adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in order to arrive at a VWAP

level of an index comparable to the Index or such successor index, as the case may be, as if such changes or modifications had

not been made, and the Security Calculation Agent will calculate the VWAP Levels for the Index or such successor index with

reference to the Index or such successor index, as adjusted. The Security Calculation Agent will accordingly calculate the Final

VWAP Level, the Current Indicative Value, the Index Performance Ratio, the Coupon Amount, the Adjusted Coupon Amount,

if any, the Reference Distribution Amount, the Stub Reference Distribution Amount, if any, the Adjusted Reference

Distribution Amount, the Accrued Tracking Fee (including the Quarterly Tracking Fee, any Tracking Fee Shortfall and any

Adjusted Tracking Fee Shortfall), the Adjusted Tracking Fee, the Redemption Fee Amount, if any, the Cash Settlement

Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, upon early redemption, if applicable, and the

Call Settlement Amount, if any, that we will pay you in the event UBS calls the Securities, based on the relevant VWAP

Levels calculated by the VWAP Calculation Agent, as adjusted. Accordingly, if the method of calculating the Index or a

successor index is modified so that the level of the Index or such successor index is a fraction of what it would have been if

there had been no such modification (

e.g.

, due to a split in the Index), which, in turn, causes the VWAP Level of the Index or

such successor index to be a fraction of what it would have been if there had been no such modification, then the Security

Calculation Agent will make such calculations and adjustments in order to arrive at a VWAP Level for the Index or such

successor index as if it had not been modified (

e.g.

, as if such split had not occurred).

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or call, or upon early redemption will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Business Day

When we refer to a Business Day with respect to the Securities, we mean a day that is a Business Day of the kind described in

“ Medium-Term Notes, Series B” under “Description of Debt Securities We May Offer — Payment Mechanics for Debt

Securities”.

Modified Business Day

As described in “ Medium-Term Notes, Series B” under “Description of Debt Securities We May Offer — Payment

Mechanics for Debt Securities”, any payment on the Securities that would otherwise be due on a day that is not a Business

Day may instead be paid on the next day that is a Business Day, with the same effect as if paid on the original due date,

except as described under “— Cash Settlement Amount at Maturity,” “— UBS Call Right” and “— Early Redemption at the

Option of the Holders” above.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate principal amount specified on the cover of the prospectus supplement. We may issue additional Securities in

amounts that exceed such amount at any time, without your consent and without notifying you. The Securities do not limit our

ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar restrictions by the

terms of the Securities. For more information, please refer to “ Medium -Term Notes, Series B” under “Description of Debt

Securities We May Offer — Amounts That We May Issue”.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate stated principal amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

101

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

102

6. ETRACS Monthly Pay 2xLeveraged US Small Cap High Dividend ETN Series B, due November 10, 2048

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity, call or acceleration, or upon early redemption.

Instead, at maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance

and path of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement

Period as described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero,

the Cash Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the Reference Distribution Amount, calculated as of the corresponding Coupon Valuation Date (the “

Coupon

Amount

”).

If the Reference Distribution Amount on such Coupon Valuation Date is zero, you will not receive any Coupon Amount on the

related Coupon Payment Date. The final Coupon Amount will be included in the

Cash Settlement Amount if on the last Index Business Day in the Final Measurement Period the Coupon Ex-Date with respect

to the final Coupon Amount has not yet occurred.

The “

Coupon Payment Date

” means the fifteenth (15th) Index Business Day following each Coupon Valuation Date. The

final Coupon Payment Date will be the Maturity Date, subject to adjustment as described herein. The first Coupon Payment

Date will be December 21, 2018, subject to adjustment as provided herein.

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Exchange Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the Exchange Business Day prior to the applicable Coupon Record Date.

The “

Coupon Valuation Date

” means the 30th day of each month, and the 28th day of February of each calendar year during

the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such date,

provided that the final Coupon Valuation Date will be the Calculation Date, subject to adjustment described herein. The first

Coupon Valuation Date will be November 30, 2018.

The “

Reference Distribution Amount

” means (i) as of the first Coupon Valuation Date, an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index Constituent Securities held by

such Reference Holder on the record date with respect to any Index Constituent Security, for those cash distributions whose

ex-dividend date occurs during the period from, but excluding, the Initial Trade Date to, and including, the first Coupon

Valuation Date; (ii) as of any other Coupon Valuation Date (other than the Calculation Date), an amount equal to the gross

cash distributions that a Reference Holder would have been entitled to receive in respect of the Index Constituent Securities

held by such Reference Holder on the record date with respect to any Index Constituent Security for those cash distributions

whose ex-dividend date occurs during the period from, but excluding, the immediately preceding Coupon Valuation Date to,

and including, such Coupon Valuation Date; and (iii) as of the Calculation Date, an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index Constituent Securities held by

such Reference Holder on the record date with respect to any Index Constituent Security for those cash distributions whose ex-

dividend date occurs during the period from, but excluding, the immediately preceding Coupon Valuation Date to, but

excluding, the Calculation Date.

103

Notwithstanding the foregoing, with respect to cash distributions for an Index Constituent Security which is scheduled to be

paid prior to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index Constituent Security fails to pay the

distribution to holders of such Index Constituent Security by the scheduled payment date for such distribution, such

distribution will be assumed to be zero for the purposes of calculating the applicable Reference Distribution Amount.

The “

Reference Holder

” is, as of any date of determination, a hypothetical holder of a number of units of each Index

Constituent Security equal to two

times

(a) the product of (i) the published unit weighting of that Index Constituent Security as

of that date and (ii) the Current Principal Amount,

divided

by (b) the Monthly Initial Closing Level or Loss Rebalancing

Closing Level, whichever is more recent.

“

record date

” means, (i) with respect to a distribution on an Index Constituent Security, the date on which a holder of the

Index Constituent Security must be registered as a stockholder/unitholder of such Index Constituent Security in order to be

entitled to receive such distribution and (ii) with respect to any split or reverse split, the tenth Business Day after the

announcement date.

“

ex-dividend date

” means, with respect to a distribution on an Index Constituent Security, the first Business Day on which

transactions in such Index Constituent Security trade on the Primary Exchange without the right to receive such distribution.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is November 10, 2048, which will be the second Business Day following the last Index Business Day in

the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated, you will receive at maturity a cash payment equal to:

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Index Business Day in the Final

Measurement Period,

plus

(b) the final Coupon Amount, if on the last Index Business Day in the Final Measurement Period the Coupon Ex-Date

with respect to the final Coupon Amount has not yet occurred,

minus

(c) the Accrued Fees as of the last Index Business Day in the Final Measurement Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Final Measurement Period, if any.

We refer to this cash payment as the “

Cash Settlement Amount

.”

If the amount so calculated is equal to or less than zero, the payment at maturity will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation.

Current Principal

Amount

×

Index Factor

+

Final Coupon

Amount

—

Accrued

Fees

+

Stub Reference

Distribution

Amount

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged monthly return of the Index is insufficient to offset

the negative effect of the Accrued Fees (less any Coupon Amounts and/or any Stub Reference Distribution Amount, as

applicable, you may be entitled to receive), or if the compounded leveraged monthly return of the Index is negative, you

may lose all or a substantial portion of your investment at maturity.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of an acceleration event, the Securities may be accelerated and redeemed by UBS, at its option.

See “Specific

Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Optional Acceleration Upon Minimum

Indicative Value”.

The Stated Principal Amount of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount.

The Current Principal Amount for the period from the Initial Settlement Date to November 30, 2018 (such period, the “

initial

calendar month

”) will equal $25.00 per Security (unless a Loss Rebalancing Event occurs during the initial calendar month).

For each subsequent calendar month, the Current Principal Amount for each Security will be reset as follows on the Monthly

Reset Date:

New

Current Principal Amount =

previous

Current Principal Amount × Index Factor on the applicable Monthly

Valuation Date – Accrued Fees on the applicable Monthly Valuation Date

In the event of a Loss Rebalancing Event, the Current Principal Amount will be reset on the applicable Loss Rebalancing Reset

Date as described below under “— Loss Rebalancing Events”.

104

If a day that would otherwise be a Monthly Reset Date falls within a Measurement Period, then the Current Principal Amount

will not be reset on such date and no further Monthly Reset Dates will occur during the term of the Securities.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

For each calendar month, the “

Monthly Reset Date

” is the first Exchange Business Day of that month beginning on December

1, 2018 and ending on November 1, 2048, subject to adjustment as described under “— Market Disruption Event.” If a day that

would otherwise be a Monthly Reset Date falls within a Measurement Period, as applicable, then the Current Principal Amount

will not be reset on such date and no further Monthly Reset Dates will occur during the term of the Securities.

For each Monthly Reset Date, the “

Monthly Valuation Date

” is the last Exchange Business Day of the previous calendar

month beginning on November 30, 2018 and ending on October 31, 2048, subject to adjustment as described under “— Market

Disruption Event.” If a day that would otherwise be a Monthly Reset Date falls within a Measurement Period, then the Current

Principal Amount will not be reset on such date and no further Monthly Reset Dates or Monthly Valuation Dates will occur

during the term of the Securities.

The “

Index Factor

” is: 1 + (2 × Index Performance Ratio).

The “

Index Performance Ratio

” may be calculated on multiple dates of determination during any applicable calendar month.

The formula used to calculate the Index Performance Ratio on any date of determination depends on the number of Loss

Rebalancing Events that have occurred in the applicable calendar month.

If no Loss Rebalancing Events have occurred in the applicable calendar month, then on any Index Business Day during a

Measurement Period, or on the Monthly Valuation Date, any Redemption Valuation Date, the first Loss Rebalancing Valuation

Date of the applicable calendar month or any other date of determination, as applicable, the Index Performance Ratio will be

equal to:

Index Valuation Level – Monthly Initial Closing Level 

Monthly Initial Closing Level

where the “Monthly Initial Closing Level” for the initial calendar month is 122.3841, the Index Closing Level on November 8,

2018. For each subsequent calendar month, the Monthly Initial Closing Level will equal the Index Closing Level on the

Monthly Valuation Date for the previous calendar month. For example, the Monthly Initial Closing Level for December 2018

will equal the Index Closing Level on November 30, 2018, subject to adjustment. If a day that would otherwise be a Monthly

Reset Date falls within a Measurement Period, then the Current Principal Amount will not be reset on such date and the

Monthly Initial Closing Level for the then-current calendar month will remain the same as it was for the immediately

preceding calendar month.

If one or more Loss Rebalancing Events have occurred during the applicable calendar month, then on any Index Business Day

during a Measurement Period, or on the Monthly Valuation Date, any Redemption Valuation Date, on each Loss Rebalancing

Valuation Date after the first Loss Rebalancing Valuation Date in the applicable calendar month or on any other date of

determination, as applicable, the Index Performance Ratio will be equal to:

Index Valuation Level – the most recent Loss Rebalancing Closing Level 

the most recent Loss Rebalancing Closing Level

The “

Index Closing Level

” will equal the closing level of the Index on any date of determination, as reported on the NYSE

and Bloomberg L.P.

The “

Index Valuation Level

”, as determined by the Security Calculation Agent will equal the arithmetic mean of the Index

Closing Levels measured on each Index Business Day during the applicable Measurement Period, or the Index Closing Level

on any Monthly Valuation Date, Loss Rebalancing Valuation Date or Redemption Valuation Date, provided that if the

Redemption Valuation Date falls in any Measurement Period, for the purposes of calculating the Index Performance Ratio as

of the Redemption Valuation Date, the Index Valuation Level on any date of determination during such Measurement Period

shall equal (a) 1/5

times

(b) (i) the sum of the Index Closing Levels on each Index Business Day from, and including, the first

Index Business Day of the applicable Measurement Period, to, and including, the date of determination,

plus

(ii) the number of

Index Business Days from, but excluding, the date of determination to, and including, the last Index Business Day in such

Measurement Period,

times

the Index Closing Level on such date of determination.

“

Measurement Period

” means the Final Measurement Period, Call Measurement Period or Acceleration Valuation Period, as

applicable.

The “

intraday indicative value”

, or “

Indicative Value

” is an amount per Security, as determined by the Security Calculation

Agent as of any date of determination equal to (Current Principal Amount on the previous calendar day × Index Factor,

calculated using the intraday indicative value of the Index) — Accrued Fees + Coupon Amount with respect to the Coupon

Valuation Date immediately preceding the date of determination if on the date of determination the Coupon Ex-Date with

respect to such Coupon Amount has not yet occurred + Reference Distribution Amount, calculated as if such time and date of

determination is a Coupon Valuation Date.

The “

Current Indicative Principal Amount

”, is an amount per Security, as determined by the Security Calculation Agent as

of any date of determination, equal to the product of (i) the Current Principal Amount and (ii) the Index Factor as of such date,

using the Index Closing Level as of such date as the Index Valuation Level.

105

The “

Accrued Fees

” as of any date of determination means the sum of (1) the Accrued Tracking Fee as of such date and (2)

the Accrued Financing Charges as of such date.

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to 0.

(b) On the initial Monthly Valuation Date (or if applicable, on a Loss Rebalancing Date that occurs prior to the initial

Monthly Valuation Date), the Accrued Tracking Fee is an amount equal to the product of: (a) the Annual Tracking

Fee as of the initial Monthly Valuation Date and (b) a fraction, the numerator of which is the total number of calendar

days from, but excluding, the Initial Trade Date to, and including, the initial Monthly Valuation Date (or Loss

Rebalancing Date, as applicable), and the denominator of which is 365.

(c) On any subsequent Monthly Valuation Date other than the Initial Monthly Valuation Date or on any Loss

Rebalancing Date, the Accrued Tracking Fee is an amount equal to the product of (a) the Annual Tracking Fee as of

such Monthly Valuation Date or Loss Rebalancing Date, as the case may be, and (b) a fraction, the numerator of

which is the total number of calendar days from, but excluding, the immediately preceding Monthly Valuation Date

(or Loss Rebalancing Date, whichever is more recent), to, and including, such Monthly Valuation Date or Loss

Rebalancing Date, as the case may be, and the denominator of which is 365.

(d) On the last Exchange Business Day of an applicable Measurement Period, or as of the Redemption Valuation Date, as

applicable, the Accrued Tracking Fee is an amount equal to the product of (a) the Annual Tracking Fee calculated as

of the last Exchange Business Day of the applicable Measurement Period, or as of the Redemption Valuation Date, as

applicable, and (b) a fraction, the numerator of which is the total number of calendar days from, but excluding, the

immediately preceding Monthly Valuation Date (or Loss Rebalancing Date, whichever is more recent), to, and

including, (i) such last Exchange Business Day of such Measurement Period, or (ii) such Redemption Valuation Date

(or, if the Optional Acceleration Date or Redemption Valuation Date occurs prior to the initial Monthly Valuation

Date, the period from, and excluding, the Initial Trade Date), as applicable, and the denominator of which is 365.

The “

Annual Tracking Fee

” is, as of any date of determination, an amount per Security equal to the product of (i) the Annual

Tracking Rate and (ii) the Current Indicative Principal Amount as of the immediately preceding Index Business Day.

The “

Annual Tracking Rate

” is 0.85%.

The Securities are subject to “

Accrued Financing Charges

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Charge for each Security is equal to $0.

(b) On the initial Monthly Valuation Date (or if applicable, on a Loss Rebalancing Date that occurs prior to the initial

Monthly Valuation Date), the Accrued Financing Charge for each Security will equal (a) the aggregate sum of (i) the

Financing Level as of each date starting from, but excluding, the Initial Trade Date, to and including the initial

Monthly Valuation Date (or Loss Rebalancing Date, whichever is more recent)

times

(ii) the Financing Rate as of

such date,

divided by

(b) 360.

(c) On any subsequent Monthly Valuation Date, the Accrued Financing Charge for each Security will equal (a) the

aggregate sum of (i) the Financing Level as of each date starting from, but excluding, the immediately preceding

Monthly Valuation Date (or Loss Rebalancing Valuation Date, whichever is more recent), to and including, the then

current Monthly Valuation Date

times

(ii) the Financing Rate as of such date,

divided by

(b) 360.

(d) On the last Index Business Day of an applicable Measurement Period, or as of the Redemption Valuation Date, as

applicable, the Accrued Financing Charge for each Security will equal (a) the aggregate sum of (i) the Financing

Level as of each date starting from, but excluding, the immediately preceding Monthly Valuation Date (or Loss

Rebalancing Valuation Date, or, if the Redemption Valuation Date falls in the Initial Calendar Month, the Initial

Trade Date, whichever is more recent), to, and including such last Index Business Day in such Measurement Period,

or such Redemption Valuation Date, as applicable,

times

(ii) the Financing Rate as of such date,

divided by

(b) 360.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Financing Level

” is, as of any date of determination, an amount that equals the Current Principal Amount.

The “

Financing Rate

” will equal the sum of (a) the “

Financing Spread

” of 0.80% and (b) the three-month CME Term SOFR

rate plus a 0.2616% adjustment, on the day that is two U.S. Government Securities Business Days prior to the immediately

preceding Monthly Valuation Date.

The Accrued Financing Charges seek to compensate UBS for providing investors with the potential to receive a leveraged

participation in movements in the Index Closing Level and are intended to approximate the monthly financing costs that

investors may have otherwise incurred had they sought to borrow funds at a similar rate from a third party to invest in the

Securities.

106

The “

Final Measurement Period

” means the five Index Business Days from, and including, the Calculation Date, subject to

adjustment as described under “— Market Disruption Event.”

The “

Stub Reference Distribution Amount

” means, as of the last Index Business Day in a Measurement Period, an amount

equal to the gross cash distributions that a Reference Holder would have been entitled to receive in respect of the Index

Constituent Securities held by such Reference Holder on the “record date” with respect to any Index Constituent Security, for

those cash distributions whose “ex-dividend date” occurs during the period from, but excluding, the immediately preceding

Coupon Valuation Date (or if such Redemption Valuation Date or the Optional Acceleration Date occurs prior to the first

Coupon Valuation Date, the period from but excluding the Initial Trade Date) to, and including, such last Index Business Day

of such Measurement Period, or such Redemption Valuation Date, as applicable; provided, that for the purpose of calculating

the Stub Reference Distribution Amount, the Reference Holder will be deemed to hold four-fifths, three-fifths, two-fifths and

one-fifth of the shares of each Index Constituent Security it would otherwise hold on the second, third, fourth and fifth Index

Business Day, respectively, in such Measurement Period.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently

Solactive.

The “

Calculation Date

” means November 2, 2048, unless such day is not an Index Business Day, in which case the

Calculation Date will be the next Index Business Day, subject to adjustments.

“

Index Business Day

” means any day on which the Primary Exchange and each Related Exchange are scheduled to be open

for trading.

“

Exchange Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled

to be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

Related Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor index,

each exchange or quotation system where trading has a material effect (as determined by the Security Calculation Agent) on

the overall market for futures or options contracts relating to such Index Constituent Security or such constituent underlying a

successor index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return on the Securities is linked to the performance of the price return version of the Solactive US Small Cap High

Dividend Index (“SOLSMHD”). The Index is designed to measure the performance of 100 relatively small capitalization,

dividend yielding Index Constituent Securities selected from a universe of qualifying U.S. listed equity securities.

The Index

Sponsor and Index Calculation Agent is Solactive AG (“

Solactive

” or the “

Index Sponsor

”).

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 4:00 p.m., New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on any applicable Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. We

reserve the right from time to time to waive this minimum redemption amount in our sole discretion on a case-by-case basis.

You should not assume you will be entitled to the benefit of any such waiver. For any applicable redemption request, the

“

Redemption Valuation Date

” will be the first Index Business Day following the date that the applicable redemption notice

and redemption confirmation are delivered, except that we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than the following Index Business Day. You should not assume you will be entitled to the benefit of any such

acceleration. To satisfy the minimum redemption amount, your broker or other financial intermediary may bundle your

Securities for redemption with those of other investors to reach this minimum amount of 50,000 Securities.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be November

15, 2018, and the final Redemption Date will be November 3, 2048. In addition, if a call notice has been issued or if

acceleration has been triggered, the last Redemption Valuation Date will be the fifth Index Business day prior to the Call

Settlement Date or Acceleration Settlement Date, as applicable. If a Market Disruption Event is continuing or occurs on the

applicable scheduled Redemption Valuation Date with respect to any of the Index Constituent Securities, such Redemption

Valuation Date may be postponed as described under “— Market Disruption Event.”

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

107

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Valuation

Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation.

Closing Indicative

Value

—

Redemption Fee

Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

monthly return of the Index is insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee

Amount, if applicable (less any Coupon Amounts and/or any Stub Reference Distribution Amount you may be entitled

to receive as of the Redemption Valuation Date), or if the compounded leveraged monthly return of the Index is

negative, you may lose all or a substantial portion of your investment upon early redemption.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of an acceleration event, the Securities may be accelerated and redeemed by UBS, at its option.

See “Specific

Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Optional Acceleration Upon Minimum

Indicative Value”.

We discuss these matters in the accompanying prospectus under “Description of Debt Securities We May Offer — Redemption

and Repayment.”

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 4:00 p.m.

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 4:00 p.m. (New York City time), or your Redemption

Confirmation after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your Redemption Notice will not be effective, you will not be able to redeem your Securities until the following Redemption

Date and your broker will need to complete all the required steps if you should wish to redeem your Securities on any

subsequent Redemption Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as

it may deem necessary in its sole discretion. All instructions given to participants from beneficial owners of Securities relating

to the right to redeem their Securities will be irrevocable.

108

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which the Redemption Notice is received by UBS rather than

the following Index Business Day. You should not assume you will be entitled to the benefit of any such waiver or election to

accelerate the Redemption Valuation Date.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen (18) calendar days’ prior

notice to the holders of the Securities (which may be provided via press release), such redemption to occur on any Business

Day that we may specify on or after November 15, 2019 through and including the Maturity Date. Upon early redemption in

the event we exercise this right, you will receive a cash payment equal to

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Index Business Day in the Call

Measurement Period,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Call Valuation Date if on

the last Index Business Day in the Call Measurement Period the Coupon Ex-Date with respect to such Coupon

Amount has not yet occurred,

minus

(c) the Accrued Fees as of the last Index Business Day in the Call Measurement Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Call Measurement Period, if any.

We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the second Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding as at the close of business on the Exchange Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is less than $75,000,000, the Call Valuation Date, subject to adjustments as described

under “— Market Disruption Event”;

(b) if the Market Value of Securities outstanding as at the close of business on the Exchange Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is equal to or greater than $75,000,000, the five (5) Index Business Days from and

including the Call Valuation Date, subject to adjustments as described under “— Market Disruption Event.”

The “

Market Value

” of the Securities outstanding as of the close of business on the Exchange Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its exercise of the

UBS Call Right will equal:

Intraday indicative value as of such Exchange Business Day × number of Securities outstanding as reported by SMHBIV

<Index> on Bloomberg.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation.

Current

Principal

Amount

×

Index Factor

+

Coupon

Amount

—

Accrued

Fees

+

Stub

Reference

Distribution

Amount

109

You may lose all or a substantial portion of your investment upon a call. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged monthly return of the Index is insufficient to offset

the negative effect of the Accrued Fees (less any Coupon Amounts and/or any Stub Reference Distribution Amount, as

applicable, you may be entitled to receive), or if the compounded leveraged monthly return of the Index is negative, you

may lose all or a substantial portion of your investment upon a call.

In addition, upon the occurrence of an acceleration event, the Securities may be accelerated and redeemed by UBS, at

its option.

See “Specific Terms of the Securities — Optional Acceleration Upon Minimum Indicative Value”.

Optional Acceleration Upon Minimum Indicative Value

If, at any time, the intraday indicative value of the Securities on any Index Business Day equals $2.00 or less (the “

Indicative

Value Optional Acceleration Trigger

”) (each such day, an “

Optional Acceleration Date

”), all issued and outstanding

Securities may be accelerated and redeemed by UBS, at its option (even if the intraday indicative value would later exceed

$2.00 on such Optional Acceleration Date or any subsequent Index Business Day) for a cash payment equal to the Acceleration

Amount (the “

Acceleration Option

”).

In the event that the Indicative Value Optional Acceleration Trigger threshold has been breached, UBS will issue a press

release before 9:00 a.m. on the Index Business Day following the Optional Acceleration Date announcing whether or not it has

elected to exercise its Acceleration Option. UBS is under no obligation to exercise its Acceleration Option and the Securities

may remain outstanding following an Indicative Value Optional Acceleration Trigger Event occurring, if UBS does not elect to

exercise such Acceleration Option.

The “

Acceleration Amount

” will equal

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Index Business Day in the Acceleration

Valuation Period,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Optional Acceleration

Date if on the last Index Business Day in the Acceleration Valuation Period the Coupon Ex-Date with respect to such

Coupon Amount has not yet occurred,

minus

(c) the Accrued Fees as of the last Index Business Day in the Acceleration Valuation Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Acceleration Valuation Period, if

any.

If the Acceleration Amount is equal to or less than zero, the payment upon acceleration will be zero.

If the Indicative Value Optional Acceleration Trigger threshold has been breached and UBS elects to exercise its Acceleration

Option, you will receive on the Acceleration Settlement Date only the Acceleration Amount in respect of your investment in

the Securities. The “

Acceleration Settlement Date

” will be the second Business Day following the last Index Business Day of

the Acceleration Valuation Period. The “

Acceleration Valuation Period

” will be the five Index Business Days from, but

excluding, the Optional Acceleration Date, subject to adjustment as described under “— Market Disruption Event.” Subject to

the prior verification by the Security Calculation Agent that the intraday indicative value of the Securities of $2.00 or less was

accurately calculated by the NYSE, UBS must provide notice (which may be provided via press release) to the holders of the

Securities that the minimum indicative value threshold has been breached not less than five calendar days prior to the

Acceleration Settlement Date.

For a detailed description of how the minimum indicative value of the Securities is calculated see “Valuation of the Index and

the Securities”.

If the Securities undergo a split or reverse split, the Indicative Value Optional Acceleration Trigger will be adjusted

accordingly.

The following graphic illustrates the formula to determine the Acceleration Amount, which has been simplified for ease of

presentation.

Current Principal

Amount

×

Index Factor

+

Coupon

Amount

—

Accrued

Fees

+

Stub Reference

Distribution

Amount

You may lose all or a substantial portion of your investment upon acceleration. The combined negative effect of the

Accrued Fees will reduce your final payment. If the compounded leveraged monthly return of the Index is insufficient

to offset the negative effect of the Accrued Fees (less any Coupon Amounts and/or any Stub Reference Distribution

Amount, as applicable, you may be entitled to receive), or if the compounded leveraged monthly return of the Index is

negative, you may lose all or a substantial portion of your investment upon acceleration.

110

In addition, the Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right.

See “Specific

Terms of the Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on any Index Business Day (other than an

Excluded Day, as defined herein) decreases 20% in value from the previous Monthly Initial Closing Level or Loss Rebalancing

Closing Level, whichever is more recent. If a Loss Rebalancing Event occurs, the Current Principal Amount of the Securities

will be reset as described below, which will have the effect of deleveraging your Securities with the aim of resetting the then-

current leverage to approximately 2.0. A Loss Rebalancing Event may occur irrespective of whether a Market Disruption

Event also occurs on such Index Business Day.

Upon the occurrence of a Loss Rebalancing Event, the Current Principal Amount will be reset on the applicable Loss

Rebalancing Reset Date as follows:

New

Current Principal Amount =

previous

Current Principal Amount × Index Factor on the applicable Loss Rebalancing

Valuation Date — Accrued Fees on the applicable Loss Rebalancing Valuation Date

In the event of a Loss Rebalancing Event, the Financing Rate will not be adjusted.

On the next Monthly Valuation Date following one or more Loss Rebalancing Events, the Monthly Initial Closing Level will

be replaced with the most recent Loss Rebalancing Closing Level in the calculation of the Index Performance Ratio.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar month. This means both that (i) the Current Principal Amount may be reset more frequently than monthly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

On any Loss Rebalancing Valuation Date, the Accrued Financing Charges for each Security will equal the product of (i) the

Financing Level on the immediately preceding Monthly Valuation Date or Loss Rebalancing Valuation Date, whichever is

more recent,

times

(ii) the Financing Rate times (iii) the number of calendar days from, but excluding, the immediately

preceding Monthly Valuation Date or Loss Rebalancing Valuation Date, whichever is more recent, to, and including, the then

current Loss Rebalancing Valuation Date

divided by

(iv) 360.

An “

Excluded Day

” means (i) the Index Business Day immediately preceding any Monthly Valuation Date, (ii) any Monthly

Valuation Date, (iii) any Loss Rebalancing Valuation Date (iv) the Index Business Day immediately preceding the first day of

the Final Measurement Period or any day after such Index Business Day, (v) the Index Business Day immediately preceding

the first day of the Call Measurement Period or any day after such Index Business Day, or (vi) the Optional Acceleration Date

or any day after the Optional Acceleration Date.

“

Loss Rebalancing Closing Level

” means the Index Closing Level on the Loss Rebalancing Valuation Date.

“

Loss Rebalancing Reset Date

” means the first Index Business Day immediately following a Loss Rebalancing Valuation

Date, subject to adjustment as described under “— Market Disruption Event.”

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”;

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

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Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Principal Amount, intraday

indicative value, Market Disruption Events, Business Days, Index Business Days, Exchange Business Days, the Index Factor,

the Index Performance Ratio, the Index Valuation Level, the Financing Level, the Accrued Fees (including determining any

successor to the LIBOR base rate), the Coupon Amount, the Reference Distribution Amount, the Stub Reference Distribution

Amount, if any, the Accrued Fees, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at

maturity, the Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon

redemption, if applicable, the Acceleration Amount that we will pay you upon acceleration, the Call Settlement Amount, if

any, that we will pay you in the event that UBS calls the Securities, whether a Loss Rebalancing Event has occurred and

whether any day is a Business Day, Index Business Day or an Exchange Business Day and all such other matters as may be

specified elsewhere herein as matters to be determined by the Security Calculation Agent. The Security Calculation Agent will

also be responsible for determining whether the Index has been discontinued and whether there has been a material change in

the Index. The Security Calculation Agent will make all such determinations and calculations in its sole discretion, and absent

manifest error, all determinations of the Security Calculation Agent will be conclusive for all purposes and binding on us, you,

and all other persons having an interest in the Security, without liability on the part of the Security Calculation Agent. You will

not be entitled to any compensation from us for any loss suffered as a result of any determinations or calculations made by the

Security Calculation Agent. We may appoint a different Security Calculation Agent from time to time after the date of the

prospectus supplement without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity, call or acceleration, or upon early redemption, or on a Coupon

Payment Date on or prior to 12:00 noon, New York City time, on the Business Day immediately preceding the Maturity Date,

any Redemption Date, any Call Settlement Date, Acceleration Settlement Date or any Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Reference Distribution Amount, the Stub Reference

Distribution Amount, if any, the Accrued Fees, the Redemption Amount and Redemption Fee Amount, if any, per Security, the

Call Settlement Amount, if any, per Security, the Current Principal Amount, the Acceleration Amount, the Financing Level,

and the Cash Settlement Amount, if any, per Security, will be rounded to the nearest ten-thousandth, with five one hundred-

thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar amounts paid on the Stated Principal

Amount of the Securities per holder will be rounded to the nearest cent, with one-half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on an Averaging Date (as

defined below), the Index Closing Level for such Averaging Date will be determined by the Security Calculation Agent or one

of its affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not

continuing (the “

Deferred Averaging Date

”) with respect to the Index irrespective of whether, pursuant to such

determination, the Deferred Averaging Date would fall on a date originally scheduled to be an Averaging Date. If the

postponement described in the preceding sentence results in the Index Closing Level being calculated on a day originally

scheduled to be an Averaging Date, for purposes of determining the Index Closing Level on any Averaging Date, the Security

Calculation Agent or one of its affiliates, as the case may be, will apply the Index Closing Level for such Deferred Averaging

Date (i) on the date(s) of the original Market Disruption Event and (ii) such Averaging Date. For example, if the applicable

Measurement Period for purposes of calculating the Call Settlement Amount is based on the arithmetic mean of the Index

Closing Levels on October 3, October 4, October 5, October 6 and October 7, and there is a Market Disruption Event with

respect to the Index on October 3, but no other Market Disruption Event during such Measurement Period, then the Index

Closing Level on October 4 will be used twice to calculate the Call Settlement Amount, and the Call Settlement Amount will

be determined based on the arithmetic mean of the Index Closing Levels on October 4, October 4, October 5, October 6 and

October 7. The same approach would be applied if there is a Market Disruption Event during any Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date or any Monthly Valuation Date or Loss Rebalancing Valuation Date, the Index Closing Level for such Redemption

Valuation Date, Monthly Valuation Date or Loss Rebalancing Valuation Date, as applicable, will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on October 3 and there is a Market

Disruption Event with respect to the Index on October 3, then the Index Closing Level on October 4 will be used to calculate

the Redemption Amount, assuming that no such Market Disruption Event has occurred or is continuing on October 4.

112

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the final

Averaging Date or any Monthly Valuation Date, Redemption Valuation Date or Loss Rebalancing Valuation Date, as

applicable, occurring more than three Index Business Days following the day originally scheduled to be such final Averaging

Date or such Monthly Valuation Date, Redemption Valuation Date or Loss Rebalancing Valuation Date. If a Market

Disruption Event has occurred or is continuing with respect to the Index on the third Index Business Day following the date

originally scheduled to be the final Averaging Date or any Monthly Valuation Date, Redemption Valuation Date or Loss

Rebalancing Valuation Date, as applicable, the Security Calculation Agent or one of its affiliates will determine the Index

Closing Level based on its good faith estimate of the Index Closing Level that would have prevailed on such third Index

Business Day but for such Market Disruption Event. If any Monthly Valuation Date or Loss Rebalancing Valuation Date is

postponed as described above, the succeeding Monthly Reset Date or Loss Rebalancing Reset Date will occur on the next

Index Business Day following the postponed Monthly Valuation Date or Loss Rebalancing Valuation Date, as applicable.

An “

Averaging Date

” means each of the Index Business Days during a Measurement Period, subject to adjustment as

described herein.

Any of the following will be a Market Disruption Event with respect to the Index, in each case as determined by the Security

Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities for trading

in the Index Constituent Security, whether by reason of movements in price exceeding limits permitted by the Primary

Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in the accompanying prospectus. If we exercise this right, the redemption price of the Securities

will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our relative

economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

In addition to the default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to

the final Coupon Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was

the last Index Business Day in the Final Measurement Period and the four Index Business Days immediately preceding the date

of acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the fourth

Index Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated

final Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant

final Coupon Valuation Date.

113

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in the attached prospectus under “Description of Debt

Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May Offer —

Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking, plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index or Termination of Our License Agreement with the Index Sponsor;

Alteration of Method of Calculation

If (i) the Index Sponsor discontinues publication of, or otherwise fails to publish, the Index, (ii) our license agreement with the

Index Sponsor terminates or (iii) the Index Sponsor does not make the Index Constituent Securities and/or their unit weighting

available to the Security Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS

that the Security Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities

and/or their unit weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor

index

”),and the Security Calculation Agent approves such index as a successor index, then the Security Calculation Agent will

determine the Index Closing Level on the applicable dates of determination, Coupon Amounts and the amount payable at

maturity, call, acceleration or upon early redemption and all other related payments terms by reference to such successor index.

114

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor discontinues publication of the Index, our license agreement with the Index Sponsor terminates or the

Index Sponsor does not make the Index Constituent Securities and/or their unit weighting available to the Security Calculation

Agent, prior to, and such discontinuation, termination or unavailability is continuing on the Calculation Date or any Index

Business Day during a Measurement Period, or on the Redemption Valuation Date or on any Monthly Valuation Date or Loss

Rebalancing Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be determined

and the Security Calculation Agent determines that no successor index is available at such time, or the Security Calculation

Agent has previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date or on any Monthly Valuation Date or Loss Rebalancing Valuation Date, as applicable, or any

other relevant date on which the Index Closing Level is to be determined, then the Security Calculation Agent will determine

the Index Closing Level using the Index Closing Level on the last Index Business Day immediately prior to such

discontinuation or unavailability, as adjusted for certain corporate actions. In such event, the Security Calculation Agent will

cause notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts

hereunder, including the Coupon Amounts, Current Principal Amount, Current Indicative Principal Amount, Index Factor,

intraday indicative value, Accrued Fees, Index Closing Levels on the applicable dates of determination, all other related

payment terms and the amount payable at maturity, call, or upon early redemption by reference to such Substitute Index. If the

Security Calculation Agent so elects to replace the original Index with a Substitute Index, the Security Calculation Agent will

cause written notice thereof to be furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange or Related

Exchange (each as defined herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or

dispose of units in the Index Constituent Securities included in the Index or options, futures, swaps or other

derivatives on the Index or the units in the Index Constituent Securities included in the Index (including but not

limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates, third parties with

whom we transact or similarly situated third parties in performing our or their obligations in connection with the

Securities, (iii) has a material adverse effect on any of these parties’ ability to perform their obligations in connection

with the Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after November 8,

2018 that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of units in the Index Constituent

Securities included in the Index or options, futures, swaps or other derivatives on the Index or the units in the Index

constituents included in the Index (including but not limited to exchange -imposed position limits), (ii) materially

increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties in

performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on the ability

of us, our affiliates, third parties with whom we transact or a similarly situated third party to perform our or their

obligations in connection with the Securities or (iv) materially affects our ability to issue or transact in exchange

traded notes similar to the Securities, each as determined by the Security Calculation Agent;

(c) any event that occurs on or after November 8, 2018 that makes it a violation of any law, regulation or rule of the

United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange or Related

Exchange (each as defined herein) is located, or of any official administrative decision, judicial decision,

administrative action, regulatory interpretation or other official pronouncement interpreting or applying those laws,

regulations or rules, (i) for UBS AG or its affiliates to hold, acquire or dispose of units in the Index Constituent

Securities included in the Index or options, futures, swaps or other derivatives on the Index or the units in the Index

constituents included in the Index (including but not limited to exchange-imposed position limits), (ii) for us, our

affiliates, third parties with whom we transact or similarly situated third parties to perform our or their obligations in

connection with the Securities or (iii) for us to issue or transact in exchange traded notes similar to the Securities, each

as determined by the Security Calculation Agent;

115

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable Notwithstanding these alternative arrangements, discontinuation of the publication of the Index

or successor index, as applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index or a successor index, or the value thereof, is changed in a material respect, or

if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index or such successor

index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of the Index or such

successor index had such changes or modifications not been made, then the Security Calculation Agent will make such

calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in order to

arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if such

changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level for the

Index or such successor index with reference to the Index or such successor index, as adjusted. The Security Calculation Agent

will accordingly calculate the Index Closing Level, the Index Valuation Level, the Index Performance Ratio, the Coupon

Amount, the Reference Distribution Amount, the Stub Reference Distribution Amount, if any, the Accrued Fees, the

Redemption Fee Amount, if any, the Cash Settlement Amount, if any, that we will pay you at maturity, the Redemption

Amount, if any, upon early redemption, if applicable, the Call Settlement Amount, if any, that we will pay you in the event

UBS calls the Securities, the Acceleration Amount that we will pay you in the event of an optional acceleration upon minimum

indicative value, if applicable, the Loss Rebalancing Closing Level, if any, the Monthly Initial Closing Level and all related

payment terms based on the Index Closing Level calculated by the Security Calculation Agent, as adjusted. Accordingly, if the

method of calculating the Index or a successor index is modified so that the level of the Index or such successor index is a

fraction of what it would have been if there had been no such modification (

e.g.

, due to a split in the Index), which, in turn,

causes the Index Closing Level of the Index or such successor index to be a fraction of what it would have been if there had

been no such modification, then the Security Calculation Agent will make such calculations and adjustments in order to arrive

at an Index Closing Level for the Index or such successor index as if it had not been modified (

e.g.

, as if such split had not

occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in the prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity, call or acceleration, or upon early redemption, will be made to

accounts designated by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when

the Securities are surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the

applicable procedures of the depositary.

Business Day

When we refer to a Business Day or a New York Business Day with respect to the Securities, we mean a day that is a Business

Day of the kind described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the

accompanying prospectus.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the attached

prospectus, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead be paid

on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described under “—

Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of the Holders” above.

116

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The Securities do

not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in the accompanying prospectus.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

117

7. ETRACS 2xMonthly Pay Leveraged Preferred Stock Index ETN due September 25, 2048

Specific Terms of the Securities

In this section, references to “holders” or “you” mean those who own the Securities registered in their own names, on the

books that we or the trustee maintain for this purpose, and not those who own beneficial interests in the Securities registered in

street name or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another

depositary. Owners of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry

Issuance” under “Medium-Term Notes, Series B” above.

These Securities are part of a series of UBS AG debt securities entitled “Medium-Term Notes, Series B” that we may issue,

from time to time, under the indenture more particularly described under “Medium-Term Notes, Series B” above. This section

summarizes general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described under “Medium-Term Notes, Series B” above. The terms described here supplement those

described under “Medium-Term Notes, Series B” above and, if the terms described here are inconsistent with those described

there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity, call or acceleration, or upon early redemption.

Instead, at maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance

and path of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement

Period as described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero,

the Cash Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the Reference Distribution Amount, calculated as of the corresponding Coupon Valuation Date (the “Coupon

Amount”).

If the Reference Distribution Amount on such Coupon Valuation Date is zero, you will not receive any Coupon Amount on the

related Coupon Payment Date. The final Coupon Amount will be included in the Cash Settlement Amount if on the last Index

Business Day in the Final Measurement Period the Coupon Ex-Date with respect to the final Coupon Amount has not yet

occurred.

The “

Coupon Payment Date

” means the fifteenth (15th) Index Business Day following each Coupon Valuation Date. The

final Coupon Payment Date will be the Maturity Date, subject to adjustment as described herein. The first Coupon Payment

Date will be October 22, 2018, subject to adjustment as provided herein.

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Exchange Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the Exchange Business Day prior to the applicable Coupon Record Date.

The “

Coupon Valuation Date

” means the 30th day of each month, and the 28th day of February, of each calendar year during

the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such date,

provided that the final Coupon Valuation Date will be the Calculation Date, subject to adjustment described herein. The first

Coupon Valuation Date was October 1, 2018.

The “

Reference Distribution Amount

” means (i) as of the first Coupon Valuation Date, an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index Constituent Securities held by

such Reference Holder on the record date with respect to any Index Constituent Security, for those cash distributions whose

ex-dividend date occurs during the period from, but excluding, the Initial Trade Date to, and including, the first Coupon

Valuation Date; (ii) as of any other Coupon Valuation Date (other than the Calculation Date), an amount equal to the gross

cash distributions that a Reference Holder would have been entitled to receive in respect of the Index Constituent Securities

held by such Reference Holder on the record date with respect to any Index Constituent Security for those cash distributions

whose ex-dividend date occurs during the period from, but excluding, the immediately preceding Coupon Valuation Date to,

and including, such Coupon Valuation Date; and (iii) as of the Calculation Date, an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index Constituent Securities held by

such Reference Holder on the record date with respect to any Index Constituent Security for those cash distributions whose ex-

dividend date occurs during the period from, but excluding, the immediately preceding Coupon Valuation Date to, but

excluding, the Calculation Date.

118

Notwithstanding the foregoing, with respect to cash distributions for an Index Constituent Security which is scheduled to be

paid prior to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index Constituent Security fails to pay the

distribution to holders of such Index Constituent Security by the scheduled payment date for such distribution, such

distribution will be assumed to be zero for the purposes of calculating the applicable Reference Distribution Amount.

The “

Reference Holder

” is, as of any date of determination, a hypothetical holder of a number of units of each Index

Constituent Security equal to two

times

(a) the product of (i) the published unit weighting of that Index Constituent Security as

of that date and (ii) the Current Principal Amount,

divided

by (b) the Monthly Initial Closing Level or Loss Rebalancing

Closing Level, whichever is more recent.

“

record date

” means, (i) with respect to a distribution on an Index Constituent Security, the date on which a holder of the

Index Constituent Security must be registered as a stockholder/unitholder of such Index Constituent Security in order to be

entitled to receive such distribution and (ii) with respect to any split or reverse split, the tenth Business Day after the

announcement date.

“

ex-dividend date

” means, with respect to a distribution on an Index Constituent Security, the first Business Day on which

transactions in such Index Constituent Security trade on the Primary Exchange without the right to receive such distribution.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is September 25, 2048, which will be the second Business Day following the last Index Business Day in

the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated, you will receive at maturity a cash payment equal to:

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Index Business Day in the Final

Measurement Period,

plus

(b) the final Coupon Amount, if on the last Index Business Day in the Final Measurement Period the Coupon Ex-Date

with respect to the final Coupon Amount has not yet occurred,

minus

(c) the Accrued Fees as of the last Index Business Day in the Final Measurement Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Final Measurement Period, if any.

We refer to this cash payment as the “

Cash Settlement Amount

.”

If the amount so calculated is equal to or less than zero, the payment at maturity will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation.

Current

Principal

Amount 

× 

Index Factor

+

Final

Coupon 

Amount

–

Accrued Fees

+

Stub

Reference

Distributio

n Amount

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged monthly return of the Index is insufficient to offset

the negative effect of the Accrued Fees (less any Coupon Amounts and/or any Stub Reference Distribution Amount, as

applicable, you may be entitled to receive), or if the compounded leveraged monthly return of the Index is negative, you

may lose all or a substantial portion of your investment at maturity.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of an acceleration event, the Securities may be accelerated and redeemed by UBS, at its option

. See “Specific

Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Optional Acceleration Upon Minimum

Indicative Value” below.

The Stated Principal Amount of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount.

The Current Principal Amount for the period from the Initial Settlement Date to September 30, 2018 (such period, the “

initial

calendar month

”) is equal to $25.00 per Security (unless a Loss Rebalancing Event occurs during the initial calendar month).

For each subsequent calendar month, the Current Principal Amount for each Security will be reset as follows on the Monthly

Reset Date:

New

Current Principal Amount =

previous

Current Principal Amount × Index Factor on the applicable Monthly

Valuation Date — Accrued Fees on the applicable Monthly Valuation Date

119

In the event of a Loss Rebalancing Event, the Current Principal Amount will be reset on the applicable Loss Rebalancing Reset

Date as described below under “— Loss Rebalancing Events”.

If a day that would otherwise be a Monthly Reset Date falls within a Measurement Period, then the Current Principal Amount

will not be reset on such date and no further Monthly Reset Dates will occur during the term of the Securities.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

For each calendar month, the “

Monthly Reset Date

” is the first Exchange Business Day of that month beginning on October

1, 2018 and ending on September 1, 2048, subject to adjustment as described under “— Market Disruption Event.” If a day

that would otherwise be a Monthly Reset Date falls within a Measurement Period, as applicable, then the Current Principal

Amount will not be reset on such date and no further Monthly Reset Dates will occur during the term of the Securities.

For each Monthly Reset Date, the “

Monthly Valuation Date

” is the last Exchange Business Day of the previous calendar

month beginning on September 30, 2018 and ending on August 31, 2048, subject to adjustment as described under “— Market

Disruption Event.” If a day that would otherwise be a Monthly Reset Date falls within a Measurement Period, then the Current

Principal Amount will not be reset on such date and no further Monthly Reset Dates or Monthly Valuation Dates will occur

during the term of the Securities.

The “

Index Factor

” is: 1 + (2 × Index Performance Ratio).

The “

Index Performance Ratio

” may be calculated on multiple dates of determination during any applicable calendar month.

The formula used to calculate the Index Performance Ratio on any date of determination depends on the number of Loss

Rebalancing Events that have occurred in the applicable calendar month.

If no Loss Rebalancing Events have occurred in the applicable calendar month, then on any Index Business Day during a

Measurement Period, or on the Monthly Valuation Date, any Redemption Valuation Date, the first Loss Rebalancing Valuation

Date of the applicable calendar month or any other date of determination, as applicable, the Index Performance Ratio will be

equal to:

Index Valuation Level – Monthly Initial Closing Level 

Monthly Initial Closing Level

where the “Monthly Initial Closing Level” for the initial calendar month is 97.6983, the Index Closing Level on September 25,

2018. For each subsequent calendar month, the Monthly Initial Closing Level will equal the Index Closing Level on the

Monthly Valuation Date for the previous calendar month. For example, the Monthly Initial Closing Level for October 2018 is

equal to the Index Closing Level on September 30, 2018, subject to adjustment. If a day that would otherwise be a Monthly

Reset Date falls within a Measurement Period, then the Current Principal Amount will not be reset on such date and the

Monthly Initial Closing Level for the then-current calendar month will remain the same as it was for the immediately

preceding calendar month.

If one or more Loss Rebalancing Events have occurred during the applicable calendar month, then on any Index Business Day

during a Measurement Period, or on the Monthly Valuation Date, any Redemption Valuation Date, on each Loss Rebalancing

Valuation Date after the first Loss Rebalancing Valuation Date in the applicable calendar month or on any other date of

determination, as applicable, the Index Performance Ratio will be equal to:

Index Valuation Level – the most recent Loss Rebalancing Closing Level 

the most recent Loss Rebalancing Closing Level

The “

Index Closing Level

” will equal the closing level of the Index on any date of determination, as reported on the NYSE

and Bloomberg L.P.

The “

Index Valuation Level

”, as determined by the Security Calculation Agent will equal the arithmetic mean of the Index

Closing Levels measured on each Index Business Day during the applicable Measurement Period, or the Index Closing Level

on any Monthly Valuation Date, Loss Rebalancing Valuation Date or Redemption Valuation Date, provided that if the

Redemption Valuation Date falls in any Measurement Period, for the purposes of calculating the Index Performance Ratio as

of the Redemption Valuation Date, the Index Valuation Level on any date of determination during such Measurement Period

shall equal (a) 1/5

times

(b) (i) the sum of the Index Closing Levels on each Index Business Day from, and including, the first

Index Business Day of the applicable Measurement Period, to, and including, the date of determination,

plus

(ii) the number of

Index Business Days from, but excluding, the date of determination to, and including, the last Index Business Day in such

Measurement Period,

times

the Index Closing Level on such date of determination.

“

Measurement Period

” means the Final Measurement Period, Call Measurement Period or Acceleration Valuation Period, as

applicable.

The “

intraday indicative value”

, or “

Indicative Value

” is an amount per Security, as determined by the Security Calculation

Agent as of any date of determination equal to (Current Principal Amount on the previous calendar day × Index Factor,

calculated using the intraday indicative value of the Index) — Accrued Fees + Coupon Amount with respect to the Coupon

Valuation Date immediately preceding the date of determination if on the date of determination the Coupon Ex-Date with

respect to such Coupon Amount has not yet occurred + Reference Distribution Amount, calculated as if such time and date of

determination is a Coupon Valuation Date.

120

The “

Current Indicative Principal Amount

”, is an amount per Security, as determined by the Security Calculation Agent as

of any date of determination, equal to the product of (i) the Current Principal Amount and (ii) the Index Factor as of such date,

using the Index Closing Level as of such date as the Index Valuation Level.

The “

Accrued Fees

” as of any date of determination means the sum of (1) the Accrued Tracking Fee as of such date and (2)

the Accrued Financing Charges as of such date.

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to 0.

(b) On the initial Monthly Valuation Date (or if applicable, on a Loss Rebalancing Date that occurs prior to the initial

Monthly Valuation Date), the Accrued Tracking Fee is an amount equal to the product of: (a) the Annual Tracking

Fee as of the initial Monthly Valuation Date and (b) a fraction, the numerator of which is the total number of calendar

days from, but excluding, the Initial Trade Date to, and including, the initial Monthly Valuation Date (or Loss

Rebalancing Date, as applicable), and the denominator of which is 365.

(c) On any subsequent Monthly Valuation Date other than the Initial Monthly Valuation Date or on any Loss

Rebalancing Date, the Accrued Tracking Fee is an amount equal to the product of (a) the Annual Tracking Fee as

of such Monthly Valuation Date or Loss Rebalancing Date, as the case may be, and (b) a fraction, the numerator

of which is the total number of calendar days from, but excluding, the immediately preceding Monthly Valuation

Date (or Loss Rebalancing Date, whichever is more recent), to, and including, such Monthly Valuation Date or

Loss Rebalancing Date, as the case may be, and the denominator of which is 365.

(d) On the last Exchange Business Day of an applicable Measurement Period, or as of the Redemption Valuation Date,

as applicable, the Accrued Tracking Fee is an amount equal to the product of (a) the Annual Tracking Fee

calculated as of the last Exchange Business Day of the applicable Measurement Period, or as of the Redemption

Valuation Date, as applicable, and (b) a fraction, the numerator of which is the total number of calendar days from,

but excluding, the immediately preceding Monthly Valuation Date (or Loss Rebalancing Date, whichever is more

recent), to, and including, (i) such last Exchange Business Day of such Measurement Period, or (ii) such

Redemption Valuation Date (or, if the Optional Acceleration Date or Redemption Valuation Date occurs prior to

the initial Monthly Valuation Date, the period from, and excluding, the Initial Trade Date), as applicable, and the

denominator of which is 365.

The “

Annual Tracking Fee

” is, as of any date of determination, an amount per Security equal to the product of (i) the Annual

Tracking Rate and (ii) the Current Indicative Principal Amount as of the immediately preceding Index Business Day.

The “

Annual Tracking Rate

” is 0.85%.The Securities are subject to “

Accrued Financing Charges

” per Security calculated

as follows:

(a) On the Initial Trade Date, the Accrued Financing Charge for each Security is equal to $0.

(b) On the initial Monthly Valuation Date (or if applicable, on a Loss Rebalancing Date that occurs prior to the initial

Monthly Valuation Date), the Accrued Financing Charge for each Security will equal (a) the aggregate sum of (i) the

Financing Level as of each date starting from, but excluding, the Initial Trade Date, to and including the initial

Monthly Valuation Date (or Loss Rebalancing Date, whichever is more recent)

times

(ii) the Financing Rate as of

such date,

divided by

(b) 360.

(c) On any subsequent Monthly Valuation Date, the Accrued Financing Charge for each Security will equal (a) the

aggregate sum of (i) the Financing Level as of each date starting from, but excluding, the immediately preceding

Monthly Valuation Date (or Loss Rebalancing Valuation Date, whichever is more recent), to and including, the then

current Monthly Valuation Date

times

(ii) the Financing Rate as of such date,

divided by

(b) 360.

(d) On the last Index Business Day of an applicable Measurement Period, or as of the Redemption Valuation Date, as

applicable, the Accrued Financing Charge for each Security will equal (a) the aggregate sum of (i) the Financing

Level as of each date starting from, but excluding, the immediately preceding Monthly Valuation Date (or Loss

Rebalancing Valuation Date, or, if the Redemption Valuation Date falls in the Initial Calendar Month, the Initial

Trade Date, whichever is more recent), to, and including such last Index Business Day in such Measurement Period,

or such Redemption Valuation Date, as applicable,

times

(ii) the Financing Rate as of such date,

divided by

(b) 360.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Financing Level

” is, as of any date of determination, an amount that equals the Current Principal Amount.

The “

Financing Rate

” will equal the sum of (a) the “

Financing Spread

” of 0.80% and (b) the three-month CME Term SOFR

rate plus a 0.2616% adjustment, on the day that is two U.S. Government Securities Business Days prior to the immediately

preceding Monthly Valuation Date.

121

The Accrued Financing Charges seek to compensate UBS for providing investors with the potential to receive a leveraged

participation in movements in the Index Closing Level and are intended to approximate the monthly financing costs that

investors may have otherwise incurred had they sought to borrow funds at a similar rate from a third party to invest in the

Securities.

The “

Final Measurement Period

” means the five Index Business Days from, and including, the Calculation Date, subject to

adjustment as described under “— Market Disruption Event.”

The “

Stub Reference Distribution Amount

” means, as of the last Index Business Day in a Measurement Period, an amount

equal to the gross cash distributions that a Reference Holder would have been entitled to receive in respect of the Index

Constituent Securities held by such Reference Holder on the “record date” with respect to any Index Constituent Security, for

those cash distributions whose “ex-dividend date” occurs during the period from, but excluding, the immediately preceding

Coupon Valuation Date (or if such Redemption Valuation Date or the Optional Acceleration Date occurs prior to the first

Coupon Valuation Date, the period from but excluding the Initial Trade Date) to, and including, such last Index Business Day

of such Measurement Period, or such Redemption Valuation Date, as applicable; provided, that for the purpose of calculating

the Stub Reference Distribution Amount, the Reference Holder will be deemed to hold four-fifths, three-fifths, two-fifths and

one-fifth of the shares of each Index Constituent Security it would otherwise hold on the second, third, fourth and fifth Index

Business Day, respectively, in such Measurement Period.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently

Solactive.

The “

Calculation Date

” means September, 17, 2048, unless such day is not an Index Business Day, in which case the

Calculation Date will be the next Index Business Day, subject to adjustments.

“

Index Business Day

” means any day on which the Primary Exchange and each Related Exchange are scheduled to be open

for trading.

“

Exchange Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled

to be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

Related Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor index,

each exchange or quotation system where trading has a material effect (as determined by the Security Calculation Agent) on

the overall market for futures or options contracts relating to such Index Constituent Security or such constituent underlying a

successor index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return on the Securities is linked to the performance of the Solactive Preferred Stock ETF Index (“

SOLPRF

”). The Index

is intended to track the price movements of an equally weighted portfolio of two ETFs that hold preferred securities of various

issuers. We refer to the ETFs included in the Index as the “

Index Constituent Securities

.” The Index Sponsor is Solactive AG 

(“

Solactive

” or the “

Index Sponsor

”).

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 4:00 p.m., New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on any applicable Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. We

reserve the right from time to time to waive this minimum redemption amount in our sole discretion on a case-by-case basis.

You should not assume you will be entitled to the benefit of any such waiver. For any applicable redemption request, the

“

Redemption Valuation Date

” will be the first Index Business Day following the date that the applicable redemption notice

and redemption confirmation are delivered, except that we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than the following Index Business Day. You should not assume you will be entitled to the benefit of any such

acceleration. To satisfy the minimum redemption amount, your broker or other financial intermediary may bundle your

Securities for redemption with those of other investors to reach this minimum amount of 50,000 Securities.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date was October 2,

2018, and the final Redemption Date will be September 18, 2048.

122

In addition, if a call notice has been issued or if acceleration has been triggered, the last Redemption Valuation Date will be the

fifth Index Business day prior to the Call Settlement Date or Acceleration Settlement Date, as applicable. If a Market

Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to any of the

Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market Disruption

Event.”

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date — Redemption Fee Amount.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Valuation

Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation.

Closing

Indicative Value

—

Redemption Fee

Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

monthly return of the Index is insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee

Amount, if applicable (less any Coupon Amounts and/or any Stub Reference Distribution Amount you may be entitled

to receive as of the Redemption Valuation Date), or if the compounded leveraged monthly return of the Index is

negative, you may lose all or a substantial portion of your investment upon early redemption.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of an acceleration event, the Securities may be accelerated and redeemed by UBS, at its option

. See “Specific

Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Optional Acceleration Upon Minimum

Indicative Value” below.

We discuss these matters in “Medium -Term Notes, Series B” under “Description of Debt Securities We May Offer —

Redemption and Payment.”

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice,

” to UBS via email no later than 4:00 p.m.

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

123

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 4:00 p.m. (New York City time), or your Redemption

Confirmation after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your Redemption Notice will not be effective, you will not be able to redeem your Securities until the following Redemption

Date and your broker will need to complete all the required steps if you should wish to redeem your Securities on any

subsequent Redemption Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as

it may deem necessary in its sole discretion. All instructions given to participants from beneficial owners of Securities relating

to the right to redeem their Securities will be irrevocable.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which the Redemption Notice is received by UBS rather than

the following Index Business Day. You should not assume you will be entitled to the benefit of any such waiver or election to

accelerate the Redemption Valuation Date.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen (18) calendar days’ prior

notice to the holders of the Securities (which may be provided via press release), such redemption to occur on any Business

Day that we may specify on or after September 30, 2019 through and including the Maturity Date. Upon early redemption in

the event we exercise this right, you will receive a cash payment equal to

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Index Business Day in the Call

Measurement Period,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Call Valuation Date if on

the last Index Business Day in the Call Measurement Period the Coupon Ex-Date with respect to such Coupon

Amount has not yet occurred,

minus

(c) the Accrued Fees as of the last Index Business Day in the Call Measurement Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Call Measurement Period, if any.

We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the second Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding as at the close of business on the Exchange Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is less than $50,000,000, the Call Valuation Date, subject to adjustments as described

under “— Market Disruption Event”;

(b) if the Market Value of Securities outstanding as at the close of business on the Exchange Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is equal to or greater than $50,000,000, the five (5) Index Business Days from and

including the Call Valuation Date, subject to adjustments as described under “— Market Disruption Event.”

The “

Market Value

” of the Securities outstanding as of the close of business on the Exchange Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its exercise of the

UBS Call Right will equal:

Intraday indicative value as of such Exchange Business Day × number of Securities outstanding as reported by PFFLSO

<Index> on Bloomberg.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

124

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation.

Current Principal

Amount

×

Index Factor

+

Coupon

Amount

—

Accrued Fees

+

Stub Reference

Distribution

Amount

You may lose all or a substantial portion of your investment upon a call. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged monthly return of the Index is insufficient to offset

the negative effect of the Accrued Fees (less any Coupon Amounts and/or any Stub Reference Distribution Amount, as

applicable, you may be entitled to receive), or if the compounded leveraged monthly return of the Index is negative, you

may lose all or a substantial portion of your investment upon a call.

In addition, upon the occurrence of an acceleration event, the Securities may be accelerated and redeemed by UBS, at

its option.

See “Specific Terms of the Securities — Optional Acceleration Upon Minimum Indicative Value” below.

Optional Acceleration Upon Minimum Indicative Value

If, at any time, the intraday indicative value of the Securities on any Index Business Day equals $2.00 or less (the “

Indicative

Value Optional Acceleration Trigger

”) (each such day, an “

Optional Acceleration Date

”), all issued and outstanding

Securities may be accelerated and redeemed by UBS, at its option (even if the intraday indicative value would later exceed

$2.00 on such Optional Acceleration Date or any subsequent Index Business Day) for a cash payment equal to the Acceleration

Amount (the “

Acceleration Option

”).

In the event that the Indicative Value Optional Acceleration Trigger threshold has been breached, UBS will issue a press

release before 9:00 a.m. on the Index Business Day following the Optional Acceleration Date announcing whether or not it has

elected to exercise its Acceleration Option. UBS is under no obligation to exercise its Acceleration Option and the Securities

may remain outstanding following an Indicative Value Optional Acceleration Trigger Event occurring, if UBS does not elect to

exercise such Acceleration Option.

The “

Acceleration Amount

” will equal

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Index Business Day in the Acceleration

Valuation Period,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Optional Acceleration

Date if on the last Index Business Day in the Acceleration Valuation Period the Coupon Ex-Date with respect to such

Coupon Amount has not yet occurred,

minus

(c) the Accrued Fees as of the last Index Business Day in the Acceleration Valuation Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Acceleration Valuation Period, if

any.

If the Acceleration Amount is equal to or less than zero, the payment upon acceleration will be zero.

If the Indicative Value Optional Acceleration Trigger threshold has been breached and UBS elects to exercise its Acceleration

Option, you will receive on the Acceleration Settlement Date only the Acceleration Amount in respect of your investment in

the Securities. The “

Acceleration Settlement Date

” will be the second Business Day following the last Index Business Day of

the Acceleration Valuation Period. The “

Acceleration Valuation Period

” will be the five Index Business Days from, but

excluding, the Optional Acceleration Date, subject to adjustment as described under “— Market Disruption Event.” Subject to

the prior verification by the Security Calculation Agent that the intraday indicative value of the Securities of $2.00 or less was

accurately calculated by the NYSE, UBS must provide notice (which may be provided via press release) to the holders of the

Securities that the minimum indicative value threshold has been breached not less than five calendar days prior to the

Acceleration Settlement Date. For a detailed description of how the minimum indicative value of the Securities is calculated

see “Valuation of the Index and the Securities” below.

If the Securities undergo a split or reverse split, the Indicative Value Optional Acceleration Trigger will be adjusted

accordingly.

The following graphic illustrates the formula to determine the Acceleration Amount, which has been simplified for ease of

presentation.

Current

Principal

Amount 

×

Index Factor

+

Coupon

Amount

—

Accrued Fees

+

Stub Reference

Distribution

Amount

125

You may lose all or a substantial portion of your investment upon acceleration. The combined negative effect of the

Accrued Fees will reduce your final payment. If the compounded leveraged monthly return of the Index is insufficient

to offset the negative effect of the Accrued Fees (less any Coupon Amounts and/or any Stub Reference Distribution

Amount, as applicable, you may be entitled to receive), or if the compounded leveraged monthly return of the Index is

negative, you may lose all or a substantial portion of your investment upon acceleration.

In addition, the Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right

. See “Specific

Terms of the Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on any Index Business Day (other than an

Excluded Day, as defined herein) decreases 20% in value from the previous Monthly Initial Closing Level or Loss Rebalancing

Closing Level, whichever is more recent. If a Loss Rebalancing Event occurs, the Current Principal Amount of the Securities

will be reset as described below, which will have the effect of deleveraging your Securities with the aim of resetting the then-

current leverage to approximately 2.0. A Loss Rebalancing Event may occur irrespective of whether a Market Disruption

Event also occurs on such Index Business Day.

Upon the occurrence of a Loss Rebalancing Event, the Current Principal Amount will be reset on the applicable Loss

Rebalancing Reset Date as follows:

New

Current Principal Amount =

previous

Current Principal Amount × Index Factor on the applicable Loss Rebalancing

Valuation Date — Accrued Fees on the applicable Loss Rebalancing Valuation Date

In the event of a Loss Rebalancing Event, the Financing Rate will not be adjusted.

On the next Monthly Valuation Date following one or more Loss Rebalancing Events, the Monthly Initial Closing Level will

be replaced with the most recent Loss Rebalancing Closing Level in the calculation of the Index Performance Ratio.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar month. This means both that (i) the Current Principal Amount may be reset more frequently than monthly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

On any Loss Rebalancing Valuation Date, the Accrued Financing Charges for each Security will equal the product of (i) the

Financing Level on the immediately preceding Monthly Valuation Date or Loss Rebalancing Valuation Date, whichever is

more recent,

times

(ii) the Financing Rate times (iii) the number of calendar days from, but excluding, the immediately

preceding Monthly Valuation Date or Loss Rebalancing Valuation Date, whichever is more recent, to, and including, the then

current Loss Rebalancing Valuation Date

divided by

(iv) 360.

An “

Excluded Day

” means (i) the Index Business Day immediately preceding any Monthly Valuation Date, (ii) any Monthly

Valuation Date, (iii) any Loss Rebalancing Valuation Date (iv) the Index Business Day immediately preceding the first day of

the Final Measurement Period or any day after such Index Business Day, (v) the Index Business Day immediately preceding

the first day of the Call Measurement Period or any day after such Index Business Day, or (vi) the Optional Acceleration Date

or any day after the Optional Acceleration Date.

“

Loss Rebalancing Closing Level

” means the Index Closing Level on the Loss Rebalancing Valuation Date.

“

Loss Rebalancing Reset Date

” means the first Index Business Day immediately following a Loss Rebalancing Valuation

Date, subject to adjustment as described under “— Market Disruption Event.”

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”;

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

126

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Principal Amount, intraday

indicative value, Market Disruption Events, Business Days, Index Business Days, Exchange Business Days, the Index Factor,

the Index Performance Ratio, the Index Valuation Level, the Financing Level, the Accrued Fees (including determining any

successor to the LIBOR base rate), the Coupon Amount, the Reference Distribution Amount, the Stub Reference Distribution

Amount, if any, the Accrued Fees, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at

maturity, the Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon

redemption, if applicable, the Acceleration Amount that we will pay you upon acceleration, the Call Settlement Amount, if

any, that we will pay you in the event that UBS calls the Securities, whether a Loss Rebalancing Event has occurred and

whether any day is a Business Day, Index Business Day or an Exchange Business Day and all such other matters as may be

specified elsewhere herein as matters to be determined by the Security Calculation Agent. The Security Calculation Agent will

also be responsible for determining whether the Index has been discontinued and whether there has been a material change in

the Index. The Security Calculation Agent will make all such determinations and calculations in its sole discretion, and absent

manifest error, all determinations of the Security Calculation Agent will be conclusive for all purposes and binding on us, you,

and all other persons having an interest in the Security, without liability on the part of the Security Calculation Agent. You will

not be entitled to any compensation from us for any loss suffered as a result of any determinations or calculations made by the

Security Calculation Agent. We may appoint a different Security Calculation Agent from time to time without your consent

and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity, call or acceleration, or upon early redemption, or on a Coupon

Payment Date on or prior to 12:00 noon, New York City time, on the Business Day immediately preceding the Maturity Date,

any Redemption Date, any Call Settlement Date, Acceleration Settlement Date or any Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Reference Distribution Amount, the Stub Reference

Distribution Amount, if any, the Accrued Fees, the Redemption Amount and Redemption Fee Amount, if any, per Security, the

Call Settlement Amount, if any, per Security, the Current Principal Amount, the Acceleration Amount, the Financing Level,

and the Cash Settlement Amount, if any, per Security, will be rounded to the nearest ten-thousandth, with five one hundred-

thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar amounts paid on the Stated Principal

Amount of the Securities per holder will be rounded to the nearest cent, with one-half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on an Averaging Date (as

defined below), the Index Closing Level for such Averaging Date will be determined by the Security Calculation Agent or one

of its affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not

continuing (the “

Deferred Averaging Date

”) with respect to the Index irrespective of whether, pursuant to such

determination, the Deferred Averaging Date would fall on a date originally scheduled to be an Averaging Date. If the

postponement described in the preceding sentence results in the Index Closing Level being calculated on a day originally

scheduled to be an Averaging Date, for purposes of determining the Index Closing Level on any Averaging Date, the Security

Calculation Agent or one of its affiliates, as the case may be, will apply the Index Closing Level for such Deferred Averaging

Date (i) on the date(s) of the original Market Disruption Event and (ii) such Averaging Date. For example, if the applicable

Measurement Period for purposes of calculating the Call Settlement Amount is based on the arithmetic mean of the Index

Closing Levels on October 3, October 4, October 5, October 6 and October 7, and there is a Market Disruption Event with

respect to the Index on October 3, but no other Market Disruption Event during such Measurement Period, then the Index

Closing Level on October 4 will be used twice to calculate the Call Settlement Amount, and the Call Settlement Amount will

be determined based on the arithmetic mean of the Index Closing Levels on October 4, October 4, October 5, October 6 and

October 7. The same approach would be applied if there is a Market Disruption Event during any Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date or any Monthly Valuation Date or Loss Rebalancing Valuation Date, the Index Closing Level for such Redemption

Valuation Date, Monthly Valuation Date or Loss Rebalancing Valuation Date, as applicable, will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on October 3 and there is a Market

Disruption Event with respect to the Index on October 3, then the Index Closing Level on October 4 will be used to calculate

the Redemption Amount, assuming that no such Market Disruption Event has occurred or is continuing on October 4.

127

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the final

Averaging Date or any Monthly Valuation Date, Redemption Valuation Date or Loss Rebalancing Valuation Date, as

applicable, occurring more than three Index Business Days following the day originally scheduled to be such final Averaging

Date or such Monthly Valuation Date, Redemption Valuation Date or Loss Rebalancing Valuation Date. If a Market

Disruption Event has occurred or is continuing with respect to the Index on the third Index Business Day following the date

originally scheduled to be the final Averaging Date or any Monthly Valuation Date, Redemption Valuation Date or Loss

Rebalancing Valuation Date, as applicable, the Security Calculation Agent or one of its affiliates will determine the Index

Closing Level based on its good faith estimate of the Index Closing Level that would have prevailed on such third Index

Business Day but for such Market Disruption Event. If any Monthly Valuation Date or Loss Rebalancing Valuation Date is

postponed as described above, the succeeding Monthly Reset Date or Loss Rebalancing Reset Date will occur on the next

Index Business Day following the postponed Monthly Valuation Date or Loss Rebalancing Valuation Date, as applicable.

An “

Averaging Date

” means each of the Index Business Days during a Measurement Period, subject to adjustment as

described herein.

Any of the following will be a Market Disruption Event with respect to the Index, in each case as determined by the Security

Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities for trading

in the Index Constituent Security, whether by reason of movements in price exceeding limits permitted by the Primary

Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging” of the applicable prospectus supplement.

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in “Medium-Term Notes, Series B” above. If we exercise this right, the redemption price of the

Securities will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our

relative economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

In addition to the default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to

the final Coupon Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was

the last Index Business Day in the Final Measurement Period and the four Index Business Days immediately preceding the date

of acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the fourth

Index Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated

final Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant

final Coupon Valuation Date.

128

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above, under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index or Termination of Our License Agreement with the Index Sponsor;

Alteration of Method of Calculation

If (i) the Index Sponsor discontinues publication of, or otherwise fails to publish, the Index, (ii) our license agreement with the

Index Sponsor terminates or (iii) the Index Sponsor does not make the Index Constituent Securities and/or their unit weighting

available to the Security Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS

that the Security Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities

and/or their unit weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor

index

”), and the Security Calculation Agent approves such index as a successor index, then the Security Calculation Agent

will determine the Index Closing Level on the applicable dates of determination, Coupon Amounts and the amount payable at

maturity, call, acceleration or upon early redemption and all other related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

129

If the Index Sponsor discontinues publication of the Index, our license agreement with the Index Sponsor terminates or the

Index Sponsor does not make the Index Constituent Securities and/or their unit weighting available to the Security Calculation

Agent, prior to, and such discontinuation, termination or unavailability is continuing on the Calculation Date or any Index

Business Day during a Measurement Period, or on the Redemption Valuation Date or on any Monthly Valuation Date or Loss

Rebalancing Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be determined

and the Security Calculation Agent determines that no successor index is available at such time, or the Security Calculation

Agent has previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date or on any Monthly Valuation Date or Loss Rebalancing Valuation Date, as applicable, or any

other relevant date on which the Index Closing Level is to be determined, then the Security Calculation Agent will determine

the Index Closing Level using the Index Closing Level on the last Index Business Day immediately prior to such

discontinuation or unavailability, as adjusted for certain corporate actions. In such event, the Security Calculation Agent will

cause notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described herein as applying to the Index will thereafter apply to

the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments, if any, to any level of

the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in the circumstances. If

the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the Security Calculation Agent

will determine all amounts hereunder, including the Coupon Amounts, Current Principal Amount, Current Indicative Principal

Amount, Index Factor, intraday indicative value, Accrued Fees, Index Closing Levels on the applicable dates of determination,

all other related payment terms and the amount payable at maturity, call, or upon early redemption by reference to such

Substitute Index. If the Security Calculation Agent so elects to replace the original Index with a Substitute Index, the Security

Calculation Agent will cause written notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange or Related

Exchange (each as defined herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or

dispose of units in the Index Constituent Securities included in the Index or options, futures, swaps or other

derivatives on the Index or the units in the Index Constituent Securities included in the Index (including but not

limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates, third parties with

whom we transact or similarly situated third parties in performing our or their obligations in connection with the

Securities, (iii) has a material adverse effect on any of these parties’ ability to perform their obligations in connection

with the Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other

official pronouncement interpreting or applying those laws, regulations or rules that is announced on or after

September 25, 2018 that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of units in the

Index Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or the

units in the Index constituents included in the Index (including but not limited to exchange-imposed position limits),

(ii) materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third

parties in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on

the ability of us, our affiliates, third parties with whom we transact or a similarly situated third party to perform our

or their obligations in connection with the Securities or (iv) materially affects our ability to issue or transact in

exchange traded notes similar to the Securities, each as determined by the Security Calculation Agent;

(c) any event that occurs on or after September 25, 2018 that makes it a violation of any law, regulation or rule of the

United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange or Related

Exchange (each as defined herein) is located, or of any official administrative decision, judicial decision,

administrative action, regulatory interpretation or other official pronouncement interpreting or applying those

laws, regulations or rules, (i) for UBS AG or its affiliates to hold, acquire or dispose of units in the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or the

units in the Index constituents included in the Index (including but not limited to exchange-imposed position

limits), (ii) for us, our affiliates, third parties with whom we transact or similarly situated third parties to perform

our or their obligations in connection with the Securities or (iii) for us to issue or transact in exchange traded

notes similar to the Securities, each as determined by the Security Calculation Agent;

130

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable Notwithstanding these alternative arrangements, discontinuation of the publication of the Index

or successor index, as applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index or a successor index, or the value thereof, is changed in a material respect, or

if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index or such successor

index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of the Index or such

successor index had such changes or modifications not been made, then the Security Calculation Agent will make such

calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in order to

arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if such

changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level for the

Index or such successor index with reference to the Index or such successor index, as adjusted. The Security Calculation Agent

will accordingly calculate the Index Closing Level, the Index Valuation Level, the Index Performance Ratio, the Coupon

Amount, the Reference Distribution Amount, the Stub Reference Distribution Amount, if any, the Accrued Fees , the

Redemption Fee Amount, if any, the Cash Settlement Amount, if any, that we will pay you at maturity, the Redemption

Amount, if any, upon early redemption, if applicable, the Call Settlement Amount, if any, that we will pay you in the event

UBS calls the Securities, the Acceleration Amount that we will pay you in the event of an optional acceleration upon minimum

indicative value, if applicable, the Loss Rebalancing Closing Level, if any, the Monthly Initial Closing Level and all related

payment terms based on the Index Closing Level calculated by the Security Calculation Agent, as adjusted. Accordingly, if the

method of calculating the Index or a successor index is modified so that the level of the Index or such successor index is a

fraction of what it would have been if there had been no such modification (

e.g.

, due to a split in the Index), which, in turn,

causes the Index Closing Level of the Index or such successor index to be a fraction of what it would have been if there had

been no such modification, then the Security Calculation Agent will make such calculations and adjustments in order to arrive

at an Index Closing Level for the Index or such successor index as if it had not been modified (

e.g.

, as if such split had not

occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in the prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity, call or acceleration, or upon early redemption, will be made to

accounts designated by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when

the Securities are surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the

applicable procedures of the depositary.

Business Day

When we refer to a Business Day or a New York Business Day with respect to the Securities, we mean a day that is a Business

Day of the kind described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in

“Medium-Term Notes, Series B” above.

Modified Business Day

As described in “Medium-Term Notes, Series B” under “Description of Debt Securities We May Offer — Payment Mechanics

for Debt Securities”, any payment on the Securities that would otherwise be due on a day that is not a Business Day may

instead be paid on the next day that is a Business Day, with the same effect as if paid on the original due date, except as

described under “— Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of

the Holders” above.

131

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover of the prospectus supplement at any time, without your consent and without

notifying you. The Securities do not limit our ability to incur other indebtedness or to issue other securities. Also, we are not

subject to financial or similar restrictions by the terms of the Securities. For more information, please refer to “Description of

Debt Securities We May Offer — Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participant.

132

133

8. ETRACS Monthly Pay 2xLeveraged US High Dividend Low Volatility ETN Series B due October 21, 2049

Specific Terms of the Securities

In this section, references to “holders” or “you” mean those who own the Securities registered in their own names, on the

books that we or the trustee maintain for this purpose, and not those who own beneficial interests in the Securities registered

in street name or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another

depositary. Owners of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-

Entry Issuance” under “Medium-Term Notes, Series B” above.

These Securities are part of a series of UBS AG debt securities entitled “Medium-Term Notes, Series B” that we may

issue, from time to time, under the indenture more particularly described under “Medium-Term Notes, Series B” above.

This section summarizes general financial and other terms that apply to the Securities. Terms that apply generally to all

Medium-Term Notes, Series B are described in “Description of Debt Securities We May Offer” under “Medium-Term

Notes, Series B” above. The terms described here supplement those described in “Medium-Term Notes, Series B” above

and, if the terms described here are inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity, call or acceleration, or upon early redemption.

Instead, at maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance

and path of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement

Period as described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero,

the Cash Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the Reference Distribution Amount, calculated as of the corresponding Coupon Valuation Date (the “

Coupon

Amount

”).

If the Reference Distribution Amount on such Coupon Valuation Date is zero, you will not receive any Coupon Amount on the

related Coupon Payment Date. The final Coupon Amount will be included in the Cash Settlement Amount if on the last Index

Business Day in the Final Measurement Period the Coupon Ex-Date with respect to the final Coupon Amount has not yet

occurred.

The “

Coupon Payment Date

” means the fifteenth (15th) Index Business Day following each Coupon Valuation Date. The

final Coupon Payment Date will be the Maturity Date, subject to adjustment as described herein. The first Coupon Payment

Date will be November 20, 2019, subject to adjustment as provided herein.

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Exchange Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the Exchange Business Day prior to the applicable Coupon Record Date.

The “

Coupon Valuation Date

” means the 30th day of each month, and the 28th day of February of each calendar year during

the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such date,

provided that the final Coupon Valuation Date will be the Calculation Date, subject to adjustment described herein. The first

Coupon Valuation Date will be October 30, 2019.

The “

Reference Distribution Amount

” means (i) as of the first Coupon Valuation Date, an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index Constituent Securities held by

such Reference Holder on the record date with respect to any Index Constituent Security, for those cash distributions whose

ex-dividend date occurs during the period from, but excluding, the Initial Trade Date to, and including, the first Coupon

Valuation Date; (ii) as of any other Coupon Valuation Date (other than the Calculation Date), an amount equal to the gross

cash distributions that a Reference Holder would have been entitled to receive in respect of the Index Constituent Securities

held by such Reference Holder on the record date with respect to any Index Constituent Security for those cash distributions

whose ex-dividend date occurs during the period from, but excluding, the immediately preceding Coupon Valuation Date to,

and including, such Coupon Valuation Date; and (iii) as of the Calculation Date, an amount equal to the gross cash

distributions that a Reference Holder would have been entitled to receive in respect of the Index Constituent Securities held by

such Reference Holder on the record date with respect to any Index Constituent Security for those cash distributions whose ex-

dividend date occurs during the period from, but excluding, the immediately preceding Coupon Valuation Date to, but

excluding, the Calculation Date.

134

Notwithstanding the foregoing, with respect to cash distributions for an Index Constituent Security which is scheduled to be

paid prior to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index Constituent Security fails to pay the

distribution to holders of such Index Constituent Security by the scheduled payment date for such distribution, such

distribution will be assumed to be zero for the purposes of calculating the applicable Reference Distribution Amount.

The “

Reference Holder

” is, as of any date of determination, a hypothetical holder of a number of units of each Index

Constituent Security equal to two

times

(a) the product of (i) the published unit weighting of that Index Constituent Security as

of that date and (ii) the Current Principal Amount,

divided

by (b) the Monthly Initial Closing Level or Loss Rebalancing

Closing Level, whichever is more recent.

“

record date

” means, (i) with respect to a distribution on an Index Constituent Security, the date on which a holder of the

Index Constituent Security must be registered as a stockholder/unitholder of such Index Constituent Security in order to be

entitled to receive such distribution and (ii) with respect to any split or reverse split, the tenth Business Day after the

announcement date.

“

ex-dividend date

” means, with respect to a distribution on an Index Constituent Security, the first Business Day on which

transactions in such Index Constituent Security trade on the Primary Exchange without the right to receive such distribution.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is October 21, 2049, which will be the second Business Day following the last Index Business Day in

the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated, you will receive at maturity a cash payment equal to:

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Index Business Day in the Final

Measurement Period,

plus

(b) the final Coupon Amount, if on the last Index Business Day in the Final Measurement Period the Coupon Ex-Date

with respect to the final Coupon Amount has not yet occurred,

minus

(c) the Accrued Fees as of the last Index Business Day in the Final Measurement Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Final Measurement Period, if any.

We refer to this cash payment as the “

Cash Settlement Amount

.”

If the amount so calculated is equal to or less than zero, the payment at maturity will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation.

Current

Principal

Amount

×

Index

Factor

+

Final

Coupon

Amount

—

Accrued Fees

+

Stub

Reference

Distributio

n Amount

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged monthly return of the Index is insufficient to offset

the negative effect of the Accrued Fees (less any Coupon Amounts and/or any Stub Reference Distribution Amount, as

applicable, you may be entitled to receive), or if the compounded leveraged monthly return of the Index is negative, you

may lose all or a substantial portion of your investment at maturity.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of an acceleration event, the Securities may be accelerated and redeemed by UBS, at its option

. See “—

UBS’s Call Right” and “— Optional Acceleration Upon Minimum Indicative Value” below.

The Stated Principal Amount of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount.

The Current Principal Amount for the period from the Initial Settlement Date to October 31, 2019 (such period, the “

initial

calendar month

”) will equal $25.00 per Security (unless a Loss Rebalancing Event occurs during the initial calendar month).

For each subsequent calendar month, the Current Principal Amount for each Security will be reset as follows on the Monthly

Reset Date:

New

Current Principal Amount =

previous

Current Principal Amount × Index Factor on the applicable Monthly

Valuation Date – Accrued Fees on the applicable Monthly Valuation Date

135

In the event of a Loss Rebalancing Event, the Current Principal Amount will be reset on the applicable Loss Rebalancing Reset

Date as described below under “— Loss Rebalancing Events”.

If a day that would otherwise be a Monthly Reset Date falls within a Measurement Period, then the Current Principal Amount

will not be reset on such date and no further Monthly Reset Dates will occur during the term of the Securities.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

For each calendar month, the “

Monthly Reset Date

” is the first Exchange Business Day of that month beginning on

November 1, 2019 and ending on October 1, 2049, subject to adjustment as described under “— Market Disruption Event.” If

a day that would otherwise be a Monthly Reset Date falls within a Measurement Period, as applicable, then the Current

Principal Amount will not be reset on such date and no further Monthly Reset Dates will occur during the term of the

Securities.

For each Monthly Reset Date, the “

Monthly Valuation Date

” is the last Exchange Business Day of the previous calendar

month beginning on October 31, 2019 and ending on September 30, 2049, subject to adjustment as described under “— Market

Disruption Event.” If a day that would otherwise be a Monthly Reset Date falls within a Measurement Period, then the Current

Principal Amount will not be reset on such date and no further Monthly Reset Dates or Monthly Valuation Dates will occur

during the term of the Securities.

The “

Index Factor

” is: 1 + (2 × Index Performance Ratio).

The “

Index Performance Ratio

” may be calculated on multiple dates of determination during any applicable calendar month.

The formula used to calculate the Index Performance Ratio on any date of determination depends on the number of Loss

Rebalancing Events that have occurred in the applicable calendar month.

If no Loss Rebalancing Events have occurred in the applicable calendar month, then on any Index Business Day during a

Measurement Period, or on the Monthly Valuation Date, any Redemption Valuation Date, the first Loss Rebalancing Valuation

Date of the applicable calendar month or any other date of determination, as applicable, the Index Performance Ratio will be

equal to:

Index Valuation Level – Monthly Initial Closing Level 

Monthly Initial Closing Level

where the “

Monthly Initial Closing Level

” for the initial calendar month is 230.9117, the Index Closing Level on October 24,

2019. For each subsequent calendar month, the Monthly Initial Closing Level will equal the Index Closing Level on the

Monthly Valuation Date for the previous calendar month. For example, the Monthly Initial Closing Level for November 2019

will equal the Index Closing Level on October 31, 2019, subject to adjustment. If a day that would otherwise be a Monthly

Reset Date falls within a Measurement Period, then the Current Principal Amount will not be reset on such date and the

Monthly Initial Closing Level for the then-current calendar month will remain the same as it was for the immediately

preceding calendar month.

If one or more Loss Rebalancing Events have occurred during the applicable calendar month, then on any Index Business Day

during a Measurement Period, or on the Monthly Valuation Date, any Redemption Valuation Date, on each Loss Rebalancing

Valuation Date after the first Loss Rebalancing Valuation Date in the applicable calendar month or on any other date of

determination, as applicable, the Index Performance Ratio will be equal to:

Index Valuation Level – the most recent Loss Rebalancing Closing Level 

the most recent Loss Rebalancing Closing Level

The “

Index Closing Level

” will equal the closing level of the Index on any date of determination, as reported on the NYSE

and Bloomberg L.P.

The “

Index Valuation Level

”, as determined by the Security Calculation Agent will equal the arithmetic mean of the Index

Closing Levels measured on each Index Business Day during the applicable Measurement Period, or the Index Closing Level

on any Monthly Valuation Date, Loss Rebalancing Valuation Date or Redemption Valuation Date, provided that if the

Redemption Valuation Date falls in any Measurement Period, for the purposes of calculating the Index Performance Ratio as

of the Redemption Valuation Date, the Index Valuation Level on any date of determination during such Measurement Period

shall equal (a) 1/5

times

(b) (i) the sum of the Index Closing Levels on each Index Business Day from, and including, the first

Index Business Day of the applicable Measurement Period, to, and including, the date of determination,

plus

(ii) the number of

Index Business Days from, but excluding, the date of determination to, and including, the last Index Business Day in such

Measurement Period,

times

the Index Closing Level on such date of determination.

“

Measurement Period

” means the Final Measurement Period, Call Measurement Period or Acceleration Valuation Period, as

applicable.

The “

intraday indicative value”

, or “

Indicative Value

” is an amount per Security, as determined by the Security Calculation

Agent as of any date of determination equal to (Current Principal Amount on the previous calendar day × Index Factor,

calculated using the intraday indicative value of the Index) — Accrued Fees + Coupon Amount with respect to the Coupon

Valuation Date immediately preceding the date of determination if on the date of determination the Coupon Ex-Date with

respect to such Coupon Amount has not yet occurred + Reference Distribution Amount, calculated as if such time and date of

determination is a Coupon Valuation Date.

136

The “

Current Indicative Principal Amount

”, is an amount per Security, as determined by the Security Calculation Agent as

of any date of determination, equal to the product of (i) the Current Principal Amount and (ii) the Index Factor as of such date,

using the Index Closing Level as of such date as the Index Valuation Level.

The “

Accrued Fees

” as of any date of determination means the sum of (1) the Accrued Tracking Fee as of such date and (2)

the Accrued Financing Charges as of such date.

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to 0.

(b) On the initial Monthly Valuation Date (or if applicable, on a Loss Rebalancing Date that occurs prior to the initial

Monthly Valuation Date), the Accrued Tracking Fee is an amount equal to the product of: (a) the Annual Tracking

Fee as of the initial Monthly Valuation Date and (b) a fraction, the numerator of which is the total number of calendar

days from, but excluding, the Initial Trade Date to, and including, the initial Monthly Valuation Date (or Loss

Rebalancing Date, as applicable), and the denominator of which is 365.

(c) On any subsequent Monthly Valuation Date other than the Initial Monthly Valuation Date or on any Loss

Rebalancing Date, the Accrued Tracking Fee is an amount equal to the product of (a) the Annual Tracking Fee as of

such Monthly Valuation Date or Loss Rebalancing Date, as the case may be, and (b) a fraction, the numerator of

which is the total number of calendar days from, but excluding, the immediately preceding Monthly Valuation Date

(or Loss Rebalancing Date, whichever is more recent), to, and including, such Monthly Valuation Date or Loss

Rebalancing Date, as the case may be, and the denominator of which is 365.

(d) On the last Exchange Business Day of an applicable Measurement Period, or as of the Redemption Valuation Date,

as applicable, the Accrued Tracking Fee is an amount equal to the product of (a) the Annual Tracking Fee

calculated as of the last Exchange Business Day of the applicable Measurement Period, or as of the Redemption

Valuation Date, as applicable, and (b) a fraction, the numerator of which is the total number of calendar days from,

but excluding, the immediately preceding Monthly Valuation Date (or Loss Rebalancing Date, whichever is more

recent), to, and including, (i) such last Exchange Business Day of such Measurement Period, or (ii) such

Redemption Valuation Date (or, if the Optional Acceleration Date or Redemption Valuation Date occurs prior to

the initial Monthly Valuation Date, the period from, and excluding, the Initial Trade Date), as applicable, and the

denominator of which is 365.

The “

Annual Tracking Fee

” is, as of any date of determination, an amount per Security equal to the product of (i) the Annual

Tracking Rate and (ii) the Current Indicative Principal Amount as of the immediately preceding Index Business Day.

The “

Annual Tracking Rate

” is 0.85%. The Securities are subject to “

Accrued Financing Charges

” per Security calculated

as follows:

(a) On the Initial Trade Date, the Accrued Financing Charge for each Security is equal to $0.

(b) On the initial Monthly Valuation Date (or if applicable, on a Loss Rebalancing Date that occurs prior to the initial

Monthly Valuation Date), the Accrued Financing Charge for each Security will equal (a) the aggregate sum of (i) the

Financing Level as of each date starting from, but excluding, the Initial Trade Date, to and including the initial

Monthly Valuation Date (or Loss Rebalancing Date, whichever is more recent)

times

(ii) the Financing Rate as of

such date,

divided by

(b) 360.

(c) On any subsequent Monthly Valuation Date, the Accrued Financing Charge for each Security will equal (a) the

aggregate sum of (i) the Financing Level as of each date starting from, but excluding, the immediately preceding

Monthly Valuation Date (or Loss Rebalancing Valuation Date, whichever is more recent), to and including, the then

current Monthly Valuation Date

times

(ii) the Financing Rate as of such date,

divided by

(b) 360.

(d) On the last Index Business Day of an applicable Measurement Period, or as of the Redemption Valuation Date, as

applicable, the Accrued Financing Charge for each Security will equal (a) the aggregate sum of (i) the Financing

Level as of each date starting from, but excluding, the immediately preceding Monthly Valuation Date (or Loss

Rebalancing Valuation Date, or, if the Redemption Valuation Date falls in the Initial Calendar Month, the Initial

Trade Date, whichever is more recent), to, and including such last Index Business Day in such Measurement Period,

or such Redemption Valuation Date, as applicable,

times

(ii) the Financing Rate as of such date,

divided by

(b) 360.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Financing Level

” is, as of any date of determination, an amount that equals the Current Principal Amount.

The “

Financing Rate

” will equal the sum of (a) the “

Financing Spread

” of 0.80% and (b) the three-month CME Term SOFR

rate plus a 0.2616% adjustment, on the day that is two U.S. Government Securities Business Days prior to the immediately

preceding Monthly Valuation Date.

137

The Accrued Financing Charges seek to compensate UBS for providing investors with the potential to receive a leveraged

participation in movements in the Index Closing Level and are intended to approximate the monthly financing costs that

investors may have otherwise incurred had they sought to borrow funds at a similar rate from a third party to invest in the

Securities.

The “

Final Measurement Period

” means the five Index Business Days from, and including, the Calculation Date, subject to

adjustment as described under “— Market Disruption Event.”

The “

Stub Reference Distribution Amount

” means, as of the last Index Business Day in a Measurement Period, an amount

equal to the gross cash distributions that a Reference Holder would have been entitled to receive in respect of the Index

Constituent Securities held by such Reference Holder on the “record date” with respect to any Index Constituent Security, for

those cash distributions whose “ex-dividend date” occurs during the period from, but excluding, the immediately preceding

Coupon Valuation Date (or if such Redemption Valuation Date or the Optional Acceleration Date occurs prior to the first

Coupon Valuation Date, the period from but excluding the Initial Trade Date) to, and including, such last Index Business Day

of such Measurement Period, or such Redemption Valuation Date, as applicable; provided, that for the purpose of calculating

the Stub Reference Distribution Amount, the Reference Holder will be deemed to hold four-fifths, three-fifths, two-fifths and

one-fifth of the shares of each Index Constituent Security it would otherwise hold on the second, third, fourth and fifth Index

Business Day, respectively, in such Measurement Period.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently

Solactive.

The “

Calculation Date

” means October 13, 2049, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

“

Index Business Day

” means any day on which the Primary Exchange and each Related Exchange are scheduled to be open

for trading.

“

Exchange Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled

to be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

Related Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor index,

each exchange or quotation system where trading has a material effect (as determined by the Security Calculation Agent) on

the overall market for futures or options contracts relating to such Index Constituent Security or such constituent underlying a

successor index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return on the Securities is linked to the performance of the price return version of the Solactive US High Dividend Low

Volatility Index (“SOLHDLV”). The Index is designed to measure the performance of 40 dividend yielding, relatively lower

volatility Index Constituent Securities from the universe of the largest 1,000 U.S. listed stocks by market capitalization.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on any applicable Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. We

reserve the right from time to time to waive this minimum redemption amount in our sole discretion on a case-by-case basis.

You should not assume you will be entitled to the benefit of any such waiver. For any applicable redemption request, the

“

Redemption Valuation Date

” will be the first Index Business Day following the date that the applicable redemption notice

and redemption confirmation are delivered, except that we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than the following Index Business Day. You should not assume you will be entitled to the benefit of any such

acceleration. To satisfy the minimum redemption amount, your broker or other financial intermediary may bundle your

Securities for redemption with those of other investors to reach this minimum amount of 50,000 Securities.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be October

30, 2019, and the final Redemption Date will be October 14, 2049. In addition, if a call notice has been issued or if

acceleration has been triggered, the last Redemption Valuation Date will be the fifth Index Business day prior to the Call

Settlement Date or Acceleration Settlement Date, as applicable. If a Market Disruption Event is continuing or occurs on the

applicable scheduled Redemption Valuation Date with respect to any of the Index Constituent Securities, such Redemption

Valuation Date may be postponed as described under “— Market Disruption Event.”

138

As of any Redemption Valuation Date, the “Redemption Fee Amount” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Valuation

Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation.

Closing Indicative 

Value

—

Redemption Fee

Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

monthly return of the Index is insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee

Amount, if applicable (less any Coupon Amounts and/or any Stub Reference Distribution Amount you may be entitled

to receive as of the Redemption Valuation Date), or if the compounded leveraged monthly return of the Index is

negative, you may lose all or a substantial portion of your investment upon early redemption.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of an acceleration event, the Securities may be accelerated and redeemed by UBS, at its option

. See “—

UBS’s Call Right” and “— Optional Acceleration Upon Minimum Indicative Value” below.

We discuss these matters in “Medium -Term Notes, Series B” above under “Description of Debt Securities We May Offer —

Redemption and Repayment.”

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon (New York City time), or your Redemption

Confirmation after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your Redemption Notice will not be effective, you will not be able to redeem your Securities until the following Redemption

Date and your broker will need to complete all the required steps if you should wish to redeem your Securities on any

subsequent Redemption Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as

it may deem necessary in its sole discretion. All instructions given to participants from beneficial owners of Securities relating

to the right to redeem their Securities will be irrevocable.

139

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which the Redemption Notice is received by UBS rather than

the following Index Business Day. You should not assume you will be entitled to the benefit of any such waiver or election to

accelerate the Redemption Valuation Date.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen (18) calendar days’ prior

notice to the holders of the Securities (which may be provided via press release), such redemption to occur on any Business

Day that we may specify on or after November 12, 2019 through and including the Maturity Date. Upon early redemption in

the event we exercise this right, you will receive a cash payment equal to

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Index Business Day in the Call

Measurement Period,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Call Valuation Date if on

the last Index Business Day in the Call Measurement Period the Coupon Ex-Date with respect to such Coupon

Amount has not yet occurred,

minus

(c) the Accrued Fees as of the last Index Business Day in the Call Measurement Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Call Measurement Period, if any.

We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the second Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding as at the close of business on the Exchange Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is less than $250,000,000, the Call Valuation Date, subject to adjustments as described

under “— Market Disruption Event”;

(b) if the Market Value of Securities outstanding as at the close of business on the Exchange Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is equal to or greater than $250,000,000, the five (5) Index Business Days from and

including the Call Valuation Date, subject to adjustments as described under “— Market Disruption Event.”

The “

Market Value

” of the Securities outstanding as of the close of business on the Exchange Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its exercise of the

UBS Call Right will equal:

Intraday indicative value as of such Exchange Business Day × number of Securities outstanding as reported by HDLBIV

<Index> on Bloomberg.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation.

Current

Principal

Amount

×

Index Factor

+

Coupon

Amount

—

Accrued

Fees

+

Stub

Reference

Distribution

Amount

140

You may lose all or a substantial portion of your investment upon a call. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged monthly return of the Index is insufficient to offset

the negative effect of the Accrued Fees (less any Coupon Amounts and/or any Stub Reference Distribution Amount, as

applicable, you may be entitled to receive), or if the compounded leveraged monthly return of the Index is negative, you

may lose all or a substantial portion of your investment upon a call.

In addition, upon the occurrence of an acceleration event, the Securities may be accelerated and redeemed by UBS, at

its option.

See “Specific Terms of the Securities — Optional Acceleration Upon Minimum Indicative Value” below.

Optional Acceleration Upon Minimum Indicative Value

If, at any time, the intraday indicative value of the Securities on any Index Business Day equals $2.00 or less (the

“

Indicative Value Optional Acceleration Trigger

”) (each such day, an “

Optional Acceleration Date

”), all issued and

outstanding Securities may be accelerated and redeemed by UBS, at its option (even if the intraday indicative value would

later exceed $2.00 on such Optional Acceleration Date or any subsequent Index Business Day) for a cash payment equal to

the Acceleration Amount (the “

Acceleration Option

”).

In the event that the Indicative Value Optional Acceleration Trigger threshold has been breached, UBS will issue a press

release before 9:00 a.m. on the Index Business Day following the Optional Acceleration Date announcing whether or not it has

elected to exercise its Acceleration Option. UBS is under no obligation to exercise its Acceleration Option and the Securities

may remain outstanding following an Indicative Value Optional Acceleration Trigger Event occurring, if UBS does not elect to

exercise such Acceleration Option.

The “

Acceleration Amount

” will equal

(a) the product of

(i) the Current Principal Amount and (ii) the Index Factor as of the last Index Business Day in the Acceleration

Valuation Period,

plus

(b) the Coupon Amount with respect to the Coupon Valuation Date immediately preceding the Optional Acceleration

Date if on the last Index Business Day in the Acceleration Valuation Period the Coupon Ex-Date with respect to such

Coupon Amount has not yet occurred,

minus

(c) the Accrued Fees as of the last Index Business Day in the Acceleration Valuation Period,

plus

(d) the Stub Reference Distribution Amount as of the last Index Business Day in the Acceleration Valuation Period, if

any.

If the Acceleration Amount is equal to or less than zero, the payment upon acceleration will be zero.

If the Indicative Value Optional Acceleration Trigger threshold has been breached and UBS elects to exercise its Acceleration

Option, you will receive on the Acceleration Settlement Date only the Acceleration Amount in respect of your investment in

the Securities. The “

Acceleration Settlement Date

” will be the second Business Day following the last Index Business Day of

the Acceleration Valuation Period. The “

Acceleration Valuation Period

” will be the five Index Business Days from, but

excluding, the Optional Acceleration Date, subject to adjustment as described under “— Market Disruption Event.” Subject to

the prior verification by the Security Calculation Agent that the intraday indicative value of the Securities of $2.00 or less was

accurately calculated by the NYSE, UBS must provide notice (which may be provided via press release) to the holders of the

Securities that the minimum indicative value threshold has been breached not less than five calendar days prior to the

Acceleration Settlement Date.

If the Securities undergo a split or reverse split, the Indicative Value Optional Acceleration Trigger will be adjusted

accordingly.

The following graphic illustrates the formula to determine the Acceleration Amount, which has been simplified for ease of

presentation.

Current

Principal

Amount 

× 

Index Factor

+

Coupon

Amount

—

Accrued Fees

+

Stub Reference

Distribution

Amount

You may lose all or a substantial portion of your investment upon acceleration. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged monthly return of the Index is insufficient to offset the

negative effect of the Accrued Fees (less any Coupon Amounts and/or any Stub Reference Distribution Amount, as

applicable, you may be entitled to receive), or if the compounded leveraged monthly return of the Index is negative, you may

lose all or a substantial portion of your investment upon acceleration.

In addition, the Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right

. See “—

UBS’s Call Right” above.

141

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on any Index Business Day (other than an

Excluded Day, as defined herein) decreases 20% in value from the previous Monthly Initial Closing Level or Loss

Rebalancing Closing Level, whichever is more recent. If a Loss Rebalancing Event occurs, the Current Principal Amount of

the Securities will be reset as described below, which will have the effect of deleveraging your Securities with the aim of

resetting the then-current leverage to approximately 2.0. A Loss Rebalancing Event may occur irrespective of whether a

Market Disruption Event also occurs on such Index Business Day.

Upon the occurrence of a Loss Rebalancing Event, the Current Principal Amount will be reset on the applicable Loss

Rebalancing Reset Date as follows:

New

Current Principal Amount =

previous

Current Principal Amount × Index Factor on the applicable Loss Rebalancing

Valuation Date — Accrued Fees on the applicable Loss Rebalancing Valuation Date

In the event of a Loss Rebalancing Event, the Financing Rate will not be adjusted.

On the next Monthly Valuation Date following one or more Loss Rebalancing Events, the Monthly Initial Closing Level will

be replaced with the most recent Loss Rebalancing Closing Level in the calculation of the Index Performance Ratio.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar month. This means both that (i) the Current Principal Amount may be reset more frequently than monthly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

On any Loss Rebalancing Valuation Date, the Accrued Financing Charges for each Security will equal the product of (i) the

Financing Level on the immediately preceding Monthly Valuation Date or Loss Rebalancing Valuation Date, whichever is

more recent,

times

(ii) the Financing Rate times (iii) the number of calendar days from, but excluding, the immediately

preceding Monthly Valuation Date or Loss Rebalancing Valuation Date, whichever is more recent, to, and including, the then

current Loss Rebalancing Valuation Date

divided by

(iv) 360.

An “

Excluded Day

” means (i) the Index Business Day immediately preceding any Monthly Valuation Date, (ii) any Monthly

Valuation Date, (iii) any Loss Rebalancing Valuation Date (iv) the Index Business Day immediately preceding the first day of

the Final Measurement Period or any day after such Index Business Day, (v) the Index Business Day immediately preceding

the first day of the Call Measurement Period or any day after such Index Business Day, or (vi) the Optional Acceleration Date

or any day after the Optional Acceleration Date.

“

Loss Rebalancing Closing Level

” means the Index Closing Level on the Loss Rebalancing Valuation Date.

“

Loss Rebalancing Reset Date

” means the first Index Business Day immediately following a Loss Rebalancing Valuation

Date, subject to adjustment as described under “— Market Disruption Event.”

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”;

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

142

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Principal Amount, intraday

indicative value, Market Disruption Events, Business Days, Index Business Days, Exchange Business Days, the Index Factor,

the Index Performance Ratio, the Index Valuation Level, the Financing Level, the Accrued Fees (including determining any

successor to the LIBOR base rate), the Coupon Amount, the Reference Distribution Amount, the Stub Reference Distribution

Amount, if any, the Accrued Fees, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at

maturity, the Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon

redemption, if applicable, the Acceleration Amount that we will pay you upon acceleration, the Call Settlement Amount, if

any, that we will pay you in the event that UBS calls the Securities, whether a Loss Rebalancing Event has occurred and

whether any day is a Business Day, Index Business Day or an Exchange Business Day and all such other matters as may be

specified elsewhere herein as matters to be determined by the Security Calculation Agent. The Security Calculation Agent will

also be responsible for determining whether the Index has been discontinued and whether there has been a material change in

the Index. The Security Calculation Agent will make all such determinations and calculations in its sole discretion, and absent

manifest error, all determinations of the Security Calculation Agent will be conclusive for all purposes and binding on us, you,

and all other persons having an interest in the Security, without liability on the part of the Security Calculation Agent. You will

not be entitled to any compensation from us for any loss suffered as a result of any determinations or calculations made by the

Security Calculation Agent. We may appoint a different Security Calculation Agent from time to time without your consent

and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity, call or acceleration, or upon early redemption, or on a Coupon

Payment Date on or prior to 12:00 noon, New York City time, on the Business Day immediately preceding the Maturity Date,

any Redemption Date, any Call Settlement Date, Acceleration Settlement Date or any Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Reference Distribution Amount, the Stub Reference

Distribution Amount, if any, the Accrued Fees, the Redemption Amount and Redemption Fee Amount, if any, per Security, the

Call Settlement Amount, if any, per Security, the Current Principal Amount, the Acceleration Amount, the Financing Level,

and the Cash Settlement Amount, if any, per Security, will be rounded to the nearest ten-thousandth, with five one hundred-

thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar amounts paid on the Stated Principal

Amount of the Securities per holder will be rounded to the nearest cent, with one-half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on an Averaging Date (as

defined below), the Index Closing Level for such Averaging Date will be determined by the Security Calculation Agent or one

of its affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not

continuing (the “

Deferred Averaging Date

”) with respect to the Index irrespective of whether, pursuant to such

determination, the Deferred Averaging Date would fall on a date originally scheduled to be an Averaging Date. If the

postponement described in the preceding sentence results in the Index Closing Level being calculated on a day originally

scheduled to be an Averaging Date, for purposes of determining the Index Closing Level on any Averaging Date, the Security

Calculation Agent or one of its affiliates, as the case may be, will apply the Index Closing Level for such Deferred

Averaging Date (i) on the date(s) of the original Market Disruption Event and (ii) such Averaging Date. For example, if

the applicable Measurement Period for purposes of calculating the Call Settlement Amount is based on the arithmetic

mean of the Index Closing Levels on November 3, November 4, November 5, November 6 and November 7, and there is a

Market Disruption Event with respect to the Index on November 3, but no other Market Disruption Event during such

Measurement Period, then the Index Closing Level on November 4 will be used twice to calculate the Call Settlement

Amount, and the Call Settlement Amount will be determined based on the arithmetic mean of the Index Closing Levels on

November 4, November 4, November 5, November 6 and November 7. The same approach would be applied if there is a

Market Disruption Event during any Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date or any Monthly Valuation Date or Loss Rebalancing Valuation Date, the Index Closing Level for such Redemption

Valuation Date, Monthly Valuation Date or Loss Rebalancing Valuation Date, as applicable, will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on November 3 and there is a Market

Disruption Event with respect to the Index on November 3, then the Index Closing Level on October 4 will be used to calculate

the Redemption Amount, assuming that no such Market Disruption Event has occurred or is continuing on November 4.

143

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the final

Averaging Date or any Monthly Valuation Date, Redemption Valuation Date or Loss Rebalancing Valuation Date, as

applicable, occurring more than three Index Business Days following the day originally scheduled to be such final Averaging

Date or such Monthly Valuation Date, Redemption Valuation Date or Loss Rebalancing Valuation Date. If a Market

Disruption Event has occurred or is continuing with respect to the Index on the third Index Business Day following the date

originally scheduled to be the final Averaging Date or any Monthly Valuation Date, Redemption Valuation Date or Loss

Rebalancing Valuation Date, as applicable, the Security Calculation Agent or one of its affiliates will determine the Index

Closing Level based on its good faith estimate of the Index Closing Level that would have prevailed on such third Index

Business Day but for such Market Disruption Event. If any Monthly Valuation Date or Loss Rebalancing Valuation Date is

postponed as described above, the succeeding Monthly Reset Date or Loss Rebalancing Reset Date will occur on the next

Index Business Day following the postponed Monthly Valuation Date or Loss Rebalancing Valuation Date, as applicable.

An “

Averaging Date

” means each of the Index Business Days during a Measurement Period, subject to adjustment as

described herein.

Any of the following will be a Market Disruption Event with respect to the Index, in each case as determined by the Security

Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities for trading

in the Index Constituent Security, whether by reason of movements in price exceeding limits permitted by the Primary

Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in “Medium-Term Notes, Series B” above. If we exercise this right, the redemption price of the

Securities will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our

relative economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

In addition to the default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to

the final Coupon Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was

the last Index Business Day in the Final Measurement Period and the four Index Business Days immediately preceding the date

of acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the fourth

Index Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated

final Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant

final Coupon Valuation Date.

144

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we

may request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption

or undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount

referred to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained,

and as to which notice is so given, during the default quotation period. With respect to any quotation, however, the party

not obtaining the quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the

qualified financial institution providing the quotation and notify the other party in writing of those grounds within two

Business Days after the last day of the default quotation period, in which case that quotation will be disregarded in

determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index or Termination of Our License Agreement with the Index Sponsor;

Alteration of Method of Calculation

If (i) the Index Sponsor discontinues publication of, or otherwise fails to publish, the Index, (ii) our license agreement with the

Index Sponsor terminates or (iii) the Index Sponsor does not make the Index Constituent Securities and/or their unit weighting

available to the Security Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS

that the Security Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities

and/or their unit weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor

index

”),and the Security Calculation Agent approves such index as a successor index, then the Security Calculation Agent will

determine the Index Closing Level on the applicable dates of determination, Coupon Amounts and the amount payable at

maturity, call, acceleration or upon early redemption and all other related payments terms by reference to such successor index.

145

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor discontinues publication of the Index, our license agreement with the Index Sponsor terminates or the

Index Sponsor does not make the Index Constituent Securities and/or their unit weighting available to the Security Calculation

Agent, prior to, and such discontinuation, termination or unavailability is continuing on the Calculation Date or any Index

Business Day during a Measurement Period, or on the Redemption Valuation Date or on any Monthly Valuation Date or Loss

Rebalancing Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be determined

and the Security Calculation Agent determines that no successor index is available at such time, or the Security Calculation

Agent has previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date or on any Monthly Valuation Date or Loss Rebalancing Valuation Date, as applicable, or any

other relevant date on which the Index Closing Level is to be determined, then the Security Calculation Agent will determine

the Index Closing Level using the Index Closing Level on the last Index Business Day immediately prior to such

discontinuation or unavailability, as adjusted for certain corporate actions. In such event, the Security Calculation Agent will

cause notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described herein as applying to the Index will thereafter apply to

the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments, if any, to any level of

the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in the circumstances. If

the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the Security Calculation Agent

will determine all amounts hereunder, including the Coupon Amounts, Current Principal Amount, Current Indicative Principal

Amount, Index Factor, intraday indicative value, Accrued Fees, Index Closing Levels on the applicable dates of determination,

all other related payment terms and the amount payable at maturity, call, or upon early redemption by reference to such

Substitute Index. If the Security Calculation Agent so elects to replace the original Index with a Substitute Index, the Security

Calculation Agent will cause written notice thereof to be furnished to the trustee, to us and to the holders of the Securities of

the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange or Related

Exchange (each as defined herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or

dispose of units in the Index Constituent Securities included in the Index or options, futures, swaps or other

derivatives on the Index or the units in the Index Constituent Securities included in the Index (including but not

limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates, third parties with

whom we transact or similarly situated third parties in performing our or their obligations in connection with the

Securities, (iii) has a material adverse effect on any of these parties’ ability to perform their obligations in connection

with the Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other

official pronouncement interpreting or applying those laws, regulations or rules that is announced on or after

October 24, 2019 that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of units in the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or the units

in the Index constituents included in the Index (including but not limited to exchange -imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third

parties in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on

the ability of us, our affiliates, third parties with whom we transact or a similarly situated third party to perform our

or their obligations in connection with the Securities or (iv) materially affects our ability to issue or transact in

exchange traded notes similar to the Securities, each as determined by the Security Calculation Agent;

(c) any event that occurs on or after October 24, 2019 that makes it a violation of any law, regulation or rule of the

United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange or Related

Exchange (each as defined herein) is located, or of any official administrative decision, judicial decision,

administrative action, regulatory interpretation or other official pronouncement interpreting or applying those

laws, regulations or rules, (i) for UBS AG or its affiliates to hold, acquire or dispose of units in the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or the

units in the Index constituents included in the Index (including but not limited to exchange-imposed position

limits), (ii) for us, our affiliates, third parties with whom we transact or similarly situated third parties to

perform our or their obligations in connection with the Securities or (iii) for us to issue or transact in exchange

traded notes similar to the Securities, each as determined by the Security Calculation Agent;

146

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index or a successor index, or the value thereof, is changed in a material respect, or

if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index or such successor

index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of the Index or such

successor index had such changes or modifications not been made, then the Security Calculation Agent will make such

calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in order to

arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if such

changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level for the

Index or such successor index with reference to the Index or such successor index, as adjusted. The Security Calculation Agent

will accordingly calculate the Index Closing Level, the Index Valuation Level, the Index Performance Ratio, the Coupon

Amount, the Reference Distribution Amount, the Stub Reference Distribution Amount, if any, the Accrued Fees, the

Redemption Fee Amount, if any, the Cash Settlement Amount, if any, that we will pay you at maturity, the Redemption

Amount, if any, upon early redemption, if applicable, the Call Settlement Amount, if any, that we will pay you in the event

UBS calls the Securities, the Acceleration Amount that we will pay you in the event of an optional acceleration upon minimum

indicative value, if applicable, the Loss Rebalancing Closing Level, if any, the Monthly Initial Closing Level and all related

payment terms based on the Index Closing Level calculated by the Security Calculation Agent, as adjusted. Accordingly, if the

method of calculating the Index or a successor index is modified so that the level of the Index or such successor index is a

fraction of what it would have been if there had been no such modification (

e.g.

, due to a split in the Index), which, in turn,

causes the Index Closing Level of the Index or such successor index to be a fraction of what it would have been if there had

been no such modification, then the Security Calculation Agent will make such calculations and adjustments in order to arrive

at an Index Closing Level for the Index or such successor index as if it had not been modified (

e.g.

, as if such split had not

occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in the prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity, call or acceleration, or upon early redemption, will be made to

accounts designated by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when

the Securities are surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the

applicable procedures of the depositary.

Business Day

When we refer to a Business Day or a New York Business Day with respect to the Securities, we mean a day that is a Business

Day of the kind described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in

“Medium-Term Notes, Series B” above.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in “Medium-

Term Notes, Series B” above, any payment on the Securities that would otherwise be due on a day that is not a Business

Day may instead be paid on the next day that is a Business Day, with the same effect as if paid on the original due date,

except as described under “— Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at

the Option of the Holders” above.

147

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The Securities do

not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

148

9. ETRACS Quarterly Pay 1.5x Leveraged Alerian MLP Index ETN due June 10, 2050

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“DTC”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

The Securities are part of a series of UBS AG debt securities entitled “Medium-Term Notes, Series B” that we may issue, from

time to time, under the indenture more particularly described in the accompanying prospectus. This prospectus supplement

summarizes specific financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described in “Description of Debt Securities We May Offer” in the accompanying prospectus. The terms

described here (i.e., in this prospectus supplement) supplement those described in the accompanying prospectus and, if the

terms described here are inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity, call or acceleration upon the occurrence of a

Zero Value Event, or upon early redemption. Instead, at maturity, you will receive a cash payment per Security the amount of

which will vary depending on the performance and path of the Index and will be reduced by the Accrued Fees as of the last

Index Business Day in the Final Measurement Period as described under “— Cash Settlement Amount at Maturity.” If the

amount as calculated is equal to or less than zero, the Cash Settlement Amount will be zero and you will not receive a cash

payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

If a Zero Value Event occurs, for each Security you will receive a cash payment per Security on the Zero Value Settlement

Date equal to the (i) the Measurement Period Cash Amount, on the immediately preceding calendar day, plus (ii) the Accrued

Dividend, on the date on which the Zero Value Event occurred, minus (iii) the Accrued Fees, on the date on which the Zero

Value Event occurred, as described under “— Automatic Acceleration Upon Zero Value Event.”

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an

amount in cash equal to the Coupon Amount. The Coupon Amount will equal the sum of the cash distributions that a

hypothetical holder of Index constituents would have been entitled to receive in respect of the Index constituents during the

relevant period. The Coupon Amount may be equal to zero.

The “

Coupon Amount

” means (i) on any calendar day that is not a Coupon Ex-Date, zero; and (ii) on any calendar day that

is a Coupon Ex-Date, an amount per Security equal to the Accrued Dividend on the Coupon Valuation Date immediately

preceding such Coupon Ex-Date. The minimum value of the Coupon Amount will be zero.

The following graphic illustrates the formula to determine the Coupon Amount on a Coupon Ex-Date, which has been

simplified for ease of presentation:

Coupon Amount

=

Accrued Dividend, on the immediately

preceding Coupon Valuation Date

If the Securities undergo a split or reverse split, the Coupon Amount will be adjusted accordingly.

The “

Accrued Dividend

” means (i) on the Initial Trade Date, zero; and (ii) on any subsequent calendar day, an

amount per Security equal to (a) the Accrued Dividend as of the immediately preceding calendar day,

plus

(b) the

Daily Dividend on such calendar day,

minus

the Coupon Amount on such calendar day.

If the Securities undergo a split or reverse split, the Accrued Dividend will be adjusted accordingly.

149

The “

Daily Dividend

” means, on any calendar day, an amount per Security equal to (a)(i) the Index Dividend

Point,

times

(ii) the Leverage Factor,

times

(iii) the Current Principal Amount on the immediately preceding

calendar day,

times

(iv) the Residual Factor on the immediately preceding calendar day,

divided by

(b) the

Last Reset Index Closing Level.

The “

Index Dividend Point

” means, on any calendar day, an amount per Security equal to the

sum of the products

of (i) the cash value of distributions that a hypothetical holder of one share of each Index Constituent Security on

such calendar day would have been entitled to receive in respect of that Index Constituent Security for those cash

distributions whose “ex-dividend date” occurs on such calendar day and (ii) the number of units of that Index

Constituent Security included in the Index as of such date.

The Index Dividend Point may not be publicly disseminated by the Index Calculation Agent. The data used to

calculate the Index Dividend Point is the property of the Index Sponsor and investors may be required to pay a

fee and meet any other requirements of the Index Sponsor, in order to access such information. See “Risk Factors

— The value of the Index Dividend Point may not be publicly disseminated or otherwise freely accessible to

investors”.

The Index Dividend Point, on any calendar day, represents the total cash value of distributions that a

hypothetical holder of the Index Constituent Securities, in proportion to the weights of the Index Constituent

Securities, would have been entitled to receive with respect to any Index Constituent Securities for those cash

distributions whose “ex-dividend date” occurs on such calendar day.

The “

Coupon Payment Date

” means the fifteenth (15th) Index Business Day following each Coupon Valuation

Date. The first Coupon Payment Date will be July 22, 2020, subject to adjustment as provided herein. If such day

is not a Coupon Business Day, the Coupon Payment Date shall be the following Coupon Business Day.

If the Final Coupon Ex-Date occurs prior to the Maturity Date, but the Final Coupon Payment Date otherwise occurs

after the Maturity Date, in such case, the Final Coupon Payment Date will be the Maturity Date, subject to adjustment

as provided herein.

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date. If such

day is not a Coupon Business Day, the Coupon Record Date shall be the immediately preceding Coupon Business

Day.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Coupon Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the Coupon Business Day immediately preceding the applicable Coupon Record Date.

If a Zero Value Event occurs on an Index Business Day that would otherwise be a Coupon Ex-Date, such day will not be a

valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the Coupon Amount corresponding to

such Coupon Ex-Date will be included in the Zero Value Settlement Amount payable on the Zero Value Settlement Date.

In addition, if a day that would otherwise by a Coupon Ex-Date occurs on or after the first day of an applicable Measurement

Period, such day will not be a valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the

Coupon Amount corresponding to such Coupon Ex-date will be included in the Cash Settlement Amount or Call Settlement

Amount payable at maturity or call, respectively.

The “

Coupon Valuation Date

” means the 30th day of each March, June, September and December, of each calendar year

during the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such

date, provided that the final Coupon Valuation Date will be the Calculation Date, subject to adjustment described herein. The

first Coupon Valuation Date will be

June 30, 2020.

Notwithstanding the foregoing, with respect to cash distributions or dividends on an Index Constituent Security which is

scheduled to be paid prior to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index Constituent Security fails

to pay the dividend or distribution to holders of such Index Constituent Security by the scheduled payment date for such

dividend or distribution, such dividend or distribution will be assumed to be zero for the purposes of calculating the applicable

Coupon Amount. Any such delayed dividend or distribution payment from the issuer of an Index Constituent Security will be

attributed back to the Accrued Dividend and included in the next Coupon Amount.

“

Coupon Business Day

” means any Index Business Day other than an Index Business Day on which banking institutions in

New York are generally not authorized or obligated by law, regulation or executive order to open.

150

“

record date

” means, (i) with respect to a distribution on an Index Constituent Security, the date on which a holder of the

Index Constituent Security must be registered as a stockholder/unitholder of such Index Constituent Security in order to be

entitled to receive such distribution and (ii) with respect to any split or reverse split, the tenth Business Day after the

announcement date.

“

ex-dividend date

” means, with respect to a distribution on an Index Constituent Security, the first Business Day on which

transactions in such Index Constituent Security trade on the Primary Exchange without the right to receive such distribution.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is June 10, 2050, which will be the third Business Day following the last Index Business Day in the

Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated, you will receive at maturity a cash payment equal to the

Closing Indicative Value on the last Index Business Day in the applicable Measurement Period.

We

refer to this cash

payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment will be

zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease

of presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees (less any Coupon Amounts you may be entitled to receive), or if the compounded leveraged quarterly

return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is negative, you

may lose all or a substantial portion of your investment at maturity. The occurrence of Loss Rebalancing Events will

result in more frequent than quarterly compounding.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

If the Securities are called by UBS or accelerated upon the occurrence of a Zero Value Event, the Call Settlement

Amount or Zero Value Settlement Amount, as applicable, may be zero and you may lose all or a substantial portion of

your investment.

 See “Specific Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities —

Automatic Acceleration Upon Zero Value Event”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split

or reverse split, the Stated Principal Amount will be adjusted accordingly.

The “

Closing Indicative Value

” per Security, will be calculated as follows:

a)

On the Initial Trade Date, $25.00 per Security;

b)

On any other calendar day, prior to the first day of an applicable Measurement Period, an amountper Security

equal to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) -

Accrued Fees + Accrued Dividend

c)

From and including the first day of an applicable Measurement Period, an amount per Securityequal to:

(Current Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) - Accrued Fees + Accrued Dividend +Measurement Period Cash Amount

d)

The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs on any Index Business Day then the Closing Indicative Value will be equal to the Zero

Value Settlement Amount on the date on which the Zero Value Event occurred, and on all future calendar days. Upon

the occurrence of a Zero Value Event, investors will likely lose all or substantially all of their investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event. See “— Automatic

Acceleration Upon Zero Value Event”.

151

The actual trading price of the Securities in the secondary market may vary significantly from their Closing

Indicative Value.

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order

to generate the leveraged returns would be approximately half of the Current Principal Amount at the close of

trading on any Reset Valuation Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities

will be permanently reset to 1.0 and the notional financing amount will be equal to zero. If a Zero Value Event

occurs prior to your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging

Valuation Date, then your Securities will be fully redeemed and you will receive the Zero Value Settlement Amount

(which amount may be zero).

The Current Principal Amount per Security, will be calculated as follows:

(1)

From and including the Initial Trade Date to and excluding the subsequent Reset Valuation Date, $25.00 per

Security;

(2)

At the close of trading on each Reset Valuation Date after the Initial Trade Date, the CurrentPrincipal Amount of

the Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index

Factor) – Accrued Fees

The Current Principal Amount will not change until the subsequent Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of an applicable

Measurement Period, such day will not be a valid Reset Valuation Date.

If a Zero Value Event occurs on any Index Business Day then the Current Principal Amount will be equal to

zero on the date on which the Zero Value Event occurred, and on all future calendar days. Upon the

occurrence of a Zero Value Event, investors will likely lose all or substantially all of their investment.

You will not benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

 See

“Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted

accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset.

The “

Reset Valuation Date

” means:

(1) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valu ation Date, or (v) the Second Permanent Deleveraging Valuation Date; and

(2) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The definition of each valuation date is set forth below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of an applicable Measurement Period,

such day will not be a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the last Index Business Day of January, April, July and October of each calendar

year beginning on July 31, 2020 and ending on April 29, 2050 (other than an Excluded Day), subject to adjustment as

described under “— Market Disruption Event.”

For purposes of the “Quarterly Reset Valuation Date” definition, an “

Excluded Day

” means (i) the Index Business Day

immediately preceding the first day of an applicable Measurement Period, and any calendar day thereafter, and (ii) any

calendar day after the Second Permanent Deleveraging Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

152

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

If a Zero Value Event occurs at any time during any Index Business Day then the Index Factor will be equal to zero

subsequent to the event on the date on which the Zero Value Event occurred, and on all future calendar days. Upon the

occurrence of a Zero Value Event, investors will likely lose all or substantially all of their investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “Specific Terms of the

Securities — Automatic Acceleration Upon Zero Value Event”.

The “

Residual Factor

” will be calculated as follows:

a) on any calendar day, to but excluding the first day of an applicable Measurement Period.

b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period,

divided by

(b) four. For example, on the first Index Business Day in an applicable four-day

Measurement Period, the Residual Factor will equal (3/4), on the second Index Business Day in an applicable four-

day Measurement Period, the Residual Factor will equal (2/4), on the third Index Business Day in an applicable four-

day Measurement Period, the Residual Factor will equal (1/4) and on the last Index Business Day in an applicable

four-day Measurement Period, the Residual Factor will equal zero.

c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 1.5. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is 147.1048, the Index Closing Level on the Initial Trade Date, as reported by

Bloomberg L.P. and Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg L.P. and

Reuters; provided, however, that if the closing level of the Index as reported on Bloomberg L.P. (or any successor) differs from

the closing level of the Index as reported on Reuters (or any successor), then the Index Closing Level will be the closing level

of the Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset

Index Closing Level) is 147.1048, the Index Closing Level measured on the Initial Trade Date, as determined by the Security

Calculation Agent.

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or Call Measurement Period, as applicable.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

a) On the Initial Trade Date, $25.00.

153

b) On any other calendar day prior to the first day of an applicable Measurement Period: (Current Principal Amount on

the immediately preceding calendar day × Index Factor, calculated using the Intraday Index Value) - Accrued Fees +

Accrued Dividend.

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value × Residual Factor,

from the immediately preceding calendar

day) - Accrued Fees + Accrued Dividend + Measurement Period Cash Amount, from the immediately preceding

calendar day

d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(or intraday indicative value).

If a Zero Value Event occurs during any Index Business Day then the Current Indicative

Value (or “intraday indicative value”) will be equal to the Zero Value Settlement Amount, subsequent to the event on

the date on which the Zero Value Event occurred, and on all future calendar days. Upon the occurrence of a Zero

Value Event, investors will likely lose all or substantially all of their investment. You will not benefit from any future

exposure to the Index after the occurrence of a Zero Value Event.

See “Specific Terms of the Securities — Automatic

Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (or intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly.

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

a) On the Initial Trade Date, the Daily Tracking Fee is zero.

b) On any subsequent calendar day, the Daily Tracking Fee is equal to: (a) (i) 0.95%,

times

(ii) the Current Principal

Amount on the immediately preceding calendar day,

times

(iii) the Index Factor, on such calendar day,

times

(iv) the

Residual Factor, on the immediately preceding calendar day,

divided by

(b) 365.

c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity, early redemption, call or acceleration upon the occurrence of a Zero Value

Event.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly.

The Securities are subject to an “

Accrued Financing Fee

” per Security calculated as follows:

a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

b)

On any subsequent calendar day, the Accrued Financing Fee is equal to: (a) the Accrued Financing Fee as of the

immediately preceding calendar day,

plus

(b) the Daily Financing Fee on such calendar day.

c)

On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

d)

If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

154

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

b) On any subsequent calendar day, the Daily Financing Fee is equal to: (a) (i) 0.5,

times

(ii) the Financing Rate, on such

calendar day,

times

(iii) the Current Principal Amount, on the immediately preceding calendar day,

times

(iv) the

Residual Factor, on the immediately preceding calendar day,

divided by

(b) 360.

c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Securities. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity, early redemption, call or acceleration upon

the occurrence of a Zero Value Event.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%. 

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

a) $0.00 on any calendar day, to but excluding the first day of an applicable Measurement Period.

b) On the first day of an applicable one-day Measurement Period:

c) At the close of trading on such Index Business Day, (the Current Principal Amount on the immediately preceding

calendar day × Index Factor on such Index Business Day)

d) From and including the first day of an applicable four-day Measurement Period:

i. At the close of trading on each Index Business Day during the applicable four-day Measurement Period, the

Measurement Period Cash Amount on the immediately preceding calendar day + (Current Principal Amount,

on the calendar day immediately preceding the first day of such Measurement Period × 0.25 × Index Factor,

on such Index Business Day).

ii. On any calendar day during an applicable four-day Measurement Period that is not an Index Business Day,

the Measurement Period Cash Amount on the immediately preceding Index Business Day.

e) On any calendar day after the last Index Business Day of an applicable Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

155

At the close of trading of each Index Business day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable amount of financing will separately be deemed converted to cash as well. After the close

of trading on the final Index Business Day of an applicable four-day Measurement Period, the Measurement Period Cash

Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the four-

days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current Principal

Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed converted to cash,

at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is less than $100,000,000, the Calculation Date, subject to adjustments as described

under “— Market Disruption Event”;

b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is equal to or greater than $100,000,000, the four (4) Index Business Days from and

including the Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by MLPRSO <Index> on Bloomberg L.P.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently S&P

Dow Jones Indices.

The “

Calculation Date

” means June 2, 2050, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return of the Securities is based upon the performance of the Alerian MLP Index (Bloomberg: “AMZ”). The Index

measures the composite performance of energy master limited partnerships (“MLPs”), and is calculated by S&P Dow Jones

Indices using a capped, float-adjusted, capitalization weighted methodology. We refer to the MLPs included in the Index as the

“Index Constituent Securities.” The Index Constituent Securities earn the majority of their cash flow from qualifying activities

involving energy commodities, which include pipeline transportation, gathering and processing, storage, production and

mining, marketing, marine transportation, services, catalytic conversion, mineral interest, refining, regasification and other

related activities.

156

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on the same Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. We reserve

the right from time to time to waive this minimum redemption amount in our sole discretion on a case-by-case basis. You

should not assume you will be entitled to the benefit of any such waiver. For any applicable redemption request, the

“

Redemption Valuation Date

” will be the first Index Business Day following the date that the applicable redemption notice

and redemption confirmation are delivered, except that we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than the following Index Business Day. You should not assume you will be entitled to any such acceleration. To

satisfy the minimum redemption amount, your broker or other financial intermediary may bundle your Securities for

redemption with those of other investors to reach this minimum amount of 50,000 Securities.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity date, subject to adjustments. In addition, if a call notice has been issued, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event.”

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Valuation

Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption

Amount

=

Closing Indicative

Value

-

Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable (less any

Coupon Amounts you may be entitled to receive as of the Redemption Valuation Date), or if the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

negative, you may lose all or a substantial portion of your investment upon early redemption. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

157

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

See “Specific Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic Acceleration

Upon Zero Value Event”.

We discuss these matters in the accompanying prospectus under “Description of Debt Securities We May Offer — Redemption

and Repayment.”

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon (New York City time), or your Redemption

Confirmation after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your Redemption Notice will not be effective, you will not be able to redeem your Securities until the following Redemption

Date and your broker will need to complete all the required steps if you should wish to redeem your Securities on any

subsequent Redemption Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as

it may deem necessary in its sole discretion. All instructions given to participants from beneficial owners of Securities relating

to the right to redeem their Securities will be irrevocable. If your DTC custodian or your brokerage firm is not a current UBS

customer, UBS will be required to on-board such DTC custodian or brokerage firm, in compliance with its internal policies and

procedures, before it can accept your Redemption Notice, your Redemption Confirmation or otherwise process your

redemption request. This on-boarding process may delay your Redemption Valuation Date and Redemption Date. Furthermore,

in certain circumstances, UBS may be unable to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which the Redemption Notice is received by UBS rather than

the following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen (18) calendar days’ prior

notice to the holders of the Securities (which may be provided via press release), such redemption to occur on any Business

Day that we may specify through and including the Maturity Date. Upon early redemption in the event we exercise this call

right, you will receive a cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call

Measurement Period. We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

158

a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is less than $100,000,000, the Call Valuation Date, subject to adjustments as described

under “— Market Disruption Event”;

b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is equal to or greater than $100,000,000, the four (4) Index Business Days from and

including the Call Valuation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of the UBS Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by MLPRSO <Index> on Bloomberg L.P.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Call Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment upon a call. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees (less any Coupon Amounts you may be entitled to receive), or if the compounded leveraged quarterly

return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is negative, you

may lose all or a substantial portion of your investment upon a call. The occurrence of Loss Rebalancing Events will

result in more frequent than quarterly compounding.

In addition, upon the occurrence of a Zero Value Event, the Securities may be automatically accelerated and

mandatorily redeemed by UBS.

See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”

below.

Automatic Acceleration Upon Zero Value Event

A “

Zero Value Event

” occurs if, on any Index Business Day (other than an Excluded Day), the Intraday Index Value

decreases by 66.66667% or more in value from the Last Reset Index Closing Level. From immediately after the Zero Value

Event and on all future calendar days, the Index Factor and the Current Principal Amount will be set equal to zero. The

Accrued Dividend and Accrued Fees will be fixed at their respective values on the Zero Value Event date and will stay

unchanged on all future calendar days.

When the Intraday Index Value decreases 66.66667% in value from the Last Reset Index Closing Level, the Index Factor will

equal zero. A Zero Value Event represents the first instance when the effective unleveraged notional amount that is deemed

invested in the Index per Security equals zero. It will have the effect of permanently resetting the value of your Securities to a

fixed value (which may be zero) and accelerating the Securities. You will not benefit from any future exposure to the Index

after the occurrence of a Zero Value Event. A Zero Value Event is expected to occur only in the narrow window of time

between the occurrence of a Permanent Deleveraging Event and completion of the leverage reset to 1.0 at the end of the

Second Permanent Deleveraging Valuation Date.

For the purposes of the “Zero Value Event” definition, an “

Excluded Day

” means (i) any calendar day after the Second

Permanent Deleveraging Valuation Date (ii) any calendar day on which a Zero Value Event has already occurred, (iii) any

calendar day after the occurrence of a Zero Value Event, and (iv) any calendar day after the last day of an applicable

Measurement Period.

If a Zero Value Event occurs, all issued and outstanding Securities will be automatically terminated and mandatorily redeemed

by UBS and you will receive the Zero Value Settlement Amount on the Zero Value Settlement Date. You will not benefit from

any future exposure to the Index after the occurrence of a Zero Value Event.

159

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event and specify the

relevant Zero Value Settlement Date and Zero Value Settlement Amount in respect of your investment in the Securities. The

Securities will be suspended from trading intra-day shortly after the event occurs and will likely not be open for trading again

on NYSE Arca before the Zero Value Settlement Date.

If a Zero Value Event occurs on an Index Business Day that would otherwise be a Coupon Ex-Date, such day will not be a

valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended.

The “

Zero Value Settlement Amount

” per Security will be calculated as follows:

a) On any calendar day, to but excluding the first day of an applicable Measurement Period:

(i) the Accrued Dividend, minus (ii) the Accrued Fees, on the date on which the Zero Value Event occurred.

b) From and including the first day of an applicable Measurement Period:

(i) the Measurement Period Cash Amount on the immediately preceding calendar day,

plus

(ii) the Accrued Dividend,

minus

(iii) the Accrued Fees, on the date on which the Zero Value Event occurred.

c) The minimum value of the Zero Value Settlement Amount will be zero.

For example:

a) If the Accrued Dividend was $0.04, the Accrued Fees was $0.01, and the Measurement Period Cash Amount was $0,

then the Zero Value Settlement Amount would be $0.03.

b) If the Accrued Dividend was $0.01, the Accrued Fees was $0.05, and the Measurement Period Cash Amount was $0,

then the Zero Value Settlement Amount would be $0.

c) If the Zero Value Event occurred during a four-day Measurement Period, and the Accrued Dividend was $0.01, the

Accrued Fees was $0.03, and the Measurement Period Cash Amount on the immediately preceding calendar day was

$6.59, then the Zero Value Settlement Amount would be $6.57.

The following graphics illustrate the formula to determine the Zero Value Settlement Amount, which has been simplified for

ease of presentation:

On any calendar day, to but excluding the first day of an applicable four-day Measurement Period:

Zero Value Settlement

Amount

=

Accrued Dividend

-

Accrued Fees on date Zero

Value Event occurred

From and including the first day of an applicable Measurement Period:

Zero Value Settlement

Amount

=

Measurement Period Cash

Amount on immediately

preceding

calendar day

+

Accrued

Dividend

-

Accrued Fees on

date Zero Value

Event occurred

The “

Zero Value Settlement Date

” will be the third Index Business Day following the date on which the Zero Value Event

occurred. For a detailed description of how the Current Indicative Value (or intraday indicative value) of the Securities is

calculated see “Valuation of the Index and the Securities”.

You may lose all or a substantial portion of your investment upon the occurrence of a Zero Value Event. Upon the

occurrence of a Zero Value Event you will receive on the Zero Value Settlement Date only the Zero Value Settlement

Amount per Security.

In addition, the Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right.

See “Specific

Terms of the Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 1.5. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day) decreases by 15% or more in value from the previously Last Reset Index Closing Level.

160

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

For purposes of the “Loss Rebalancing Event” definition, an “

Excluded Day

” means (i) the Index Business Day immediately

preceding any Quarterly Reset Valuation Date, if a Loss Rebalancing Event occurs after 3:15pm on such day, (ii) any

Quarterly Reset Valuation Date, (iii) any Loss Rebalancing Valuation Date, (iv) the Index Business Day immediately

preceding the first day of an applicable Measurement Period, if a Loss Rebalancing Event occurs after 3:15pm on such day (v)

any calendar day from and including the first day of an applicable Measurement Period, (vi) the First or Second Permanent

Deleveraging Valuation Dates, (vii) any calendar day after the Second Permanent Deleveraging Valuation Date, (viii) a Zero

Value Event date, and (ix) any calendar day after the Zero Value Event date.

“

Loss Rebalancing Valuation Date

” means:

a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”;

b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0, over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 1.5 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Permanent

Deleveraging Event. A Permanent Deleveraging Event is expected to occur only in the narrow window of time between the

occurrence of a Loss Rebalancing Event and completion of the leverage reset to 1.5 at the end of the Loss Rebalancing

Valuation Date.

A “

Permanent Deleveraging Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than

an Excluded Day) decreases by 50% or more in value from the Last Reset Index Closing Level.

For purposes of the “Permanent Deleveraging Event” definition, an “

Excluded Day

” means (i) the First or Second Permanent

Deleveraging Valuation Dates, (ii) any calendar day after the Second Permanent Deleveraging Valuation Date, (iii) a day upon

which a Zero Value Event occurs, (iv) any calendar day after the occurrence of a Zero Value Event, (v) the day which is two

Index Business Days prior to the first day of an applicable Measurement Period, if a Permanent Deleveraging Event occurs

after 3:15pm on such day and (vi) any calendar day from and including the Index Business Day immediately preceding the first

day of an applicable Measurement Period.

In the event that a Permanent Deleveraging Event has occurred, UBS will issue a press release before 9:00

a.m. on the Index Business Day immediately following the date on which the Permanent Deleveraging Event occurred,

announcing the Permanent Deleveraging Event and notifying you of the Permanent Deleveraging Valuation Dates.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

a) The “

First Permanent Deleveraging Valuation Date

” means:

i.

Any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but on

which a Permanent Deleveraging Event has occurred, subject to adjustment as described under “- Market

Disruption Event”;

ii.

If a Permanent Deleveraging Event occurs after 3:15pm on any Index Business Day which would not

otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day following the

occurrence of such Permanent Deleveraging Event, subject to adjustment as described under “— Market

Disruption Event”.

The leverage of your Securities will be reset to approximately 1.5 at the close of trading on the First Permanent

Deleveraging Valuation Date.

161

b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event”.

The leverage of your Securities will be reset to approximately 1.0 at the close of trading on the Second Permanent

Deleveraging Valuation Date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (or the “intraday indicative

value”), Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the Leverage Factor, the

Index Factor, the Index Performance Ratio, the Residual Factor, the Index Closing Level, the Financing Rate, the Accrued Fees

(including determining any successor to the LIBOR base rate), the Coupon Amount, the Accrued Dividend, the Daily

Dividend, if any, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon redemption, if

applicable, the Zero Value Settlement Amount, if any, that we will pay you upon acceleration following the occurrence of a

Zero Value Event, the Call Settlement Amount, if any, that we will pay you in the event that UBS calls the Securities, whether

a Loss Rebalancing Event has occurred, whether a Permanent Deleveraging Event has occurred and whether any day is a

Business Day or an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. The Security Calculation Agent will also be responsible for determining

whether the Index has been discontinued and whether there has been a material change in the Index. The Security Calculation

Agent will make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of

the Security Calculation Agent will be conclusive for all purposes and binding on us, you, and all other persons having an

interest in the Security, without liability on the part of the Security Calculation Agent. You will not be entitled to any

compensation from us for any loss suffered as a result of any determinations or calculations made by the Security Calculation

Agent. We may appoint a different Security Calculation Agent from time to time after the date of this prospectus supplement

without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity, call or acceleration upon the occurrence of a Zero Value Event, or

upon early redemption, or on a Coupon Payment Date on or prior to 12:00 noon, New York City time, on the Business Day

immediately preceding the Maturity Date, any Redemption Date, any Call Settlement Date, Zero Value Settlement Date or any

Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Accrued Dividend, the Daily Dividend, if any, the

Accrued Fees, the Redemption Amount and Redemption Fee Amount, if any, per Security, the Call Settlement Amount, if any,

per Security, the Current Principal Amount, the Zero Value Settlement Amount, and the Cash Settlement Amount, if any, per

Security, will be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545

would be rounded up to .7655); and all dollar amounts paid on the Stated Principal Amount of the Securities per holder will be

rounded to the nearest cent, with one-half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

162

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the affected

Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event that the

Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period is the

Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a Market Disruption Event with respect to the Index, in each case as determined by the Security

Calculation Agent in its sole discretion:

a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

c) the Index is not published; or

d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in the accompanying prospectus. If we exercise this right, the redemption price of the Securities

will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our relative

economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

In addition to the default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to

the final Coupon Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was

the last Index Business Day in the Final Measurement Period and the three Index Business Days immediately preceding the

date of acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the third

Index Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated

final Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant

final Coupon Valuation Date.

163

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in the attached prospectus under “Description of Debt

Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May Offer —

Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

164

Discontinuance of or Adjustments to the Index or Termination of Our License Agreement with the Index Sponsor;

Alteration of Method of Calculation

If (i) the Index Sponsor or Index Calculation Agent discontinue publication of, or otherwise fails to publish, the Index, (ii) our

license agreement with the Index Sponsor terminates or (iii) the Index Sponsor or Index Calculation Agent does not make the

Index Constituent Securities and/or their unit weighting available to the Security Calculation Agent, and, in each case, any

other person or entity publishes an index licensed to UBS that the Security Calculation Agent determines is comparable to the

Index and for which the Index Constituent Securities and/or their unit weighting are available to the Security Calculation

Agent (such index being referred to herein as a “

successor index

”), and the Security Calculation Agent approves such index as

a successor index, then the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination, Coupon Amounts and the amount payable at maturity, call, acceleration upon the occurrence of a Zero Value

Event or upon early redemption and all other related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor or Index Calculation Agent discontinue publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in this prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, including the Coupon Amounts, Current Principal Amount,

Current Indicative Value or intraday indicative value, Closing Indicative Value, Index Factor, Index Performance Ratio,

Residual Factor, Accrued Fees, Index Closing Levels on the applicable dates of determination, all other related payment terms

and the amount payable at maturity, call, upon early redemption or upon acceleration upon the occurrence of a Zero Value

Event by reference to such Substitute Index. If the Security Calculation Agent so elects to replace the original Index with a

Substitute Index, the Security Calculation Agent will cause written notice thereof to be furnished to the trustee, to us and to the

holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

165

b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after June 2, 2020 that

(i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities included

in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent Securities

(including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates,

third parties with whom we transact or similarly situated third parties in performing our or their obligations in

connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

c) any event that occurs on or after June 2, 2020 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a substitute index, or the value thereof, is changed in a

material respect, or if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index

or such successor index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of

the Index or such successor index had such changes or modifications not been made, then the Security Calculation Agent will

make such calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in

order to arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if

such changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level

for the Index or such successor index with reference to the Index or such successor index, as adjusted. The Security

Calculation Agent will accordingly calculate the Index Closing Level, the Index Performance Ratio, the Coupon Amount, the

Accrued Dividend, the Daily Dividend, if any, the Accrued Fees, the Redemption Fee Amount, if any, the Cash Settlement

Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, upon early redemption, if applicable, the

Call Settlement Amount, if any, that we will pay you in the event UBS calls the Securities, the Zero Value Settlement Amount,

if any, that we will pay you in the event of acceleration upon the occurrence of a Zero Value Event, if applicable, the Last

Reset Index Closing Level and all related payment terms based on the Index Closing Level calculated by the Security

Calculation Agent, as adjusted. Accordingly, if the method of calculating the Index or a successor index is modified so that the

level of the Index or such successor index is a fraction of what it would have been if there had been no such modification (

e.g.

,

due to a split in the Index), which, in turn, causes the Index Closing Level of the Index or such successor index to be a fraction

of what it would have been if there had been no such modification, then the Security Calculation Agent will make such

calculations and adjustments in order to arrive at an Index Closing Level for the Index or such successor index as if it had not

been modified (

e.g.

, as if such split had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in this prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

166

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity, call or acceleration upon the occurrence of a Zero Value Event, or

upon early redemption, will be made to accounts designated by you and approved by us, or at the corporate trust office of the

trustee in New York City, but only when the Securities are surrendered to the trustee at that office. We also may make any

payment or delivery in accordance with the applicable procedures of the depositary.

Business Day

When we refer to a Business Day or a New York Business Day with respect to the Securities, we mean a day that is a Business

Day of the kind described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the

accompanying prospectus.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the attached

prospectus, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead be paid

on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described under “—

Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of the Holders” above.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of this prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The Securities do

not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in the accompanying prospectus.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

167

10. ETRACS Quarterly Pay 1.5X Leveraged MarketVector BDC Liquid Index ETN due June 10, 2050

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

The Securities are part of a series of UBS AG debt securities entitled “Medium-Term Notes, Series B” that we may issue, from

time to time, under the indenture more particularly described in the accompanying prospectus. This prospectus supplement

summarizes specific financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described in “Description of Debt Securities We May Offer” in the accompanying prospectus. The terms

described here (

i.e.

, in this prospectus supplement) supplement those described in the accompanying prospectus and, if the

terms described here are inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity, call or acceleration upon the occurrence of a

Zero Value Event, or upon early redemption. Instead, at maturity, you will receive a cash payment per Security the amount of

which will vary depending on the performance and path of the Index and will be reduced by the Accrued Fees as of the last

Index Business Day in the Final Measurement Period as described under “— Cash Settlement Amount at Maturity.” If the

amount as calculated is equal to or less than zero, the Cash Settlement Amount will be zero and you will not receive a cash

payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

If a Zero Value Event occurs, for each Security you will receive a cash payment per Security on the Zero Value Settlement

Date equal to the (i) the Measurement Period Cash Amount, on the immediately preceding calendar day,

plus

(ii) the Accrued

Dividend, on the date on which the Zero Value Event occurred,

minus

(iii) the Accrued Fees, on the date on which the Zero

Value Event occurred, as described under “— Automatic Acceleration Upon Zero Value Event.”

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the Coupon Amount. The Coupon Amount will equal the sum of the cash distributions that a hypothetical

holder of Index constituents would have been entitled to receive in respect of the Index constituents during the relevant period.

The Coupon Amount may be equal to zero.

The “

Coupon Amount

” means (i) on any calendar day that is not a Coupon Ex-Date, zero; and (ii) on any calendar day that is

a Coupon Ex-Date, an amount per Security equal to the Accrued Dividend on the Coupon Valuation Date immediately

preceding such Coupon Ex-Date. The minimum value of the Coupon Amount will be zero.

The following graphic illustrates the formula to determine the Coupon Amount on a Coupon Ex-Date, which has been

simplified for ease of presentation:

Coupon Amount

=

Accrued Dividend, on the immediately

preceding Coupon Valuation Date

If the Securities undergo a split or reverse split, the Coupon Amount will be adjusted accordingly.

The “

Accrued Dividend

” means (i) on the Initial Trade Date, zero; and (ii) on any subsequent calendar day, an amount per

Security equal to (a) the Accrued Dividend as of the immediately preceding calendar day,

plus

(b) the Daily Dividend on such

calendar day,

minus

the Coupon Amount on such calendar day.

If the Securities undergo a split or reverse split, the Accrued Dividend will be adjusted accordingly.

168

The “

Daily Dividend

” means, on any calendar day, an amount per Security equal to (a)(i) the Index Dividend Point,

times

(ii)

the Leverage Factor,

times

(iii) the Current Principal Amount on the immediately preceding calendar day,

times

(iv) the

Residual Factor on the immediately preceding calendar day,

divided by

(b) the Last Reset Index Closing Level.

The “

Index Dividend Point

” means, on any calendar day, an amount per Security equal to the

sum of the products

of (i) the

cash value of distributions that a hypothetical holder of one share of each Index Constituent Security on such calendar day

would have been entitled to receive in respect of that Index Constituent Security for those cash distributions whose “ex-

dividend date” occurs on such calendar day and (ii) the number of units of that Index Constituent Security included in the

Index as of such date.

The Index Dividend Point may not be publicly disseminated by the Index Calculation Agent. The data used to calculate the

Index Dividend Point is the property of the Index Calculation Agent and investors may be required to pay a fee and meet any

other requirements of the Index Calculation Agent, in order to access such information. See “Risk Factors — The value of the

Index Dividend Point may not be publicly disseminated or otherwise freely accessible to investors”.

The Index Dividend Point, on any calendar day, represents the total cash value of distributions that a hypothetical holder of the

Index Constituent Securities, in proportion to the weights of the Index Constituent Securities, would have been entitled to

receive with respect to any Index Constituent Securities for those cash distributions whose “ex-dividend date” occurs on such

calendar day.

The “

Coupon Payment Date

” means the fifteenth (15th) Index Business Day following each Coupon Valuation Date. If such

day is not a Coupon Business Day, the Coupon Payment Date shall be the following Coupon Business Day

If the final Coupon Ex-Date occurs prior to the Maturity Date, but the final Coupon Payment Date otherwise occurs after the

Maturity Date, in such case, the final Coupon Payment Date will be the Maturity Date, subject to adjustment as provided

herein.

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date. If such day is not a

Coupon Business Day, the Coupon Record Date shall be the immediately preceding Coupon Business Day.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Coupon Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the Coupon Business Day immediately preceding the applicable Coupon Record Date.

If a Zero Value Event occurs on an Index Business Day that would otherwise be a Coupon Ex-Date, such day will not be a

valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the Coupon Amount corresponding to

such Coupon Ex-Date will be included in the Zero Value Settlement Amount payable on the Zero Value Settlement Date.

In addition, if a day that would otherwise by a Coupon Ex-Date occurs on or after the first day of an applicable Measurement

Period, such day will not be a valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the

Coupon Amount corresponding to such Coupon Ex-date will be included in the Cash Settlement Amount or Call Settlement

Amount payable at maturity or call, respectively.

The “

Coupon Valuation Date

” means the 30th day of each March, June, September and December, of each calendar year

during the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such

date, provided that the final Coupon Va luation Date will be the Calculation Date, subject to adjustment described herein.

Notwithstanding the foregoing, with respect to cash distributions or dividends on an Index Constituent Security which is

scheduled to be paid prior to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index Constituent Security fails

to pay the dividend or distribution to holders of such Index Constituent Security by the scheduled payment date for such

dividend or distribution, such dividend or distribution will be assumed to be zero for the purposes of calculating the applicable

Coupon Amount. Any such delayed dividend or distribution payment from the issuer of an Index Constituent Security will be

attributed back to the Accrued Dividend and included in the next Coupon Amount.

“

Coupon Business Day

” means any Index Business day other than an Index Business Day on which banking institutions in

New York are generally not authorized or obligated by law, regulation or executive order to open.

“

record date

” means, (i) with respect to a distribution on an Index Constituent Security, the date on which a holder of the

Index Constituent Security must be registered as a stockholder/unitholder of such Index Constituent Security in order to be

entitled to receive such distribution and (ii) with respect to any split or reverse split, the tenth Business Day after the

announcement date.

“

ex-dividend date

” means, with respect to a distribution on an Index Constituent Security, the first Business Day on which

transactions in such Index Constituent Security trade on the Primary Exchange without the right to receive such distribution.

169

Cash Settlement Amount at Maturity

The “

Maturity Date

” is June 10, 2050, which will be the third Business Day following the last Index Business Day in the

Final Measurement Period, subject to adjustment as described below under

“— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated, you will receive at maturity a cash payment equal to the

Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer to this cash payment

as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees (less any Coupon Amounts you may be entitled to receive), or if the compounded leveraged quarterly

return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is negative, you

may lose all or a substantial portion of your investment at maturity. The occurrence of Loss Rebalancing Events will

result in more frequent than quarterly compounding.

The Securities may be called by UBS prior to the Maturity Date pursuant to the UBS Call Right and, upon the

occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

If the Securities are called by UBS or accelerated upon the occurrence of a Zero Value Event, the Call Settlement

Amount or Zero Value Settlement Amount, as applicable, may be zero and you may lose all or a substantial portion of

your investment.

See “Specific Terms of the Securities — UBS Call Right” and “Specific Terms of the Securities —

Automatic Acceleration Upon Zero Value Event”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The “

Closing Indicative Value

” per Security, will be calculated as follows:

a) On the Initial Trade Date, $25.00 per Security;

b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) — Accrued Fees + Accrued

Dividend

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) — Accrued Fees + Accrued Dividend + Measurement Period Cash Amount

d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs on any Index Business Day then the Closing Indicative Value will be equal to the Zero

Value Settlement Amount on the date on which the Zero Value Event occurred, and on all future calendar days. Upon

the occurrence of a Zero Value Event, investors will likely lose all or substantially all of their investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “– Automatic Acceleration

Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

170

The “

Current Principal Amount

” represents the unleveraged investment in the Index Constituent Securities per Security at

the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate the

leveraged returns would be approximately half of the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero. If a Zero Value Event occurs prior to your Securities permanently resetting to

1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your Securities will be fully redeemed and you will

receive the Zero Value Settlement Amount (which amount may be zero).

The Current Principal Amount per Security, will be calculated as follows:

e) From and including the Initial Trade Date to and excluding the subsequent Reset Valuation Date, $25.00 per Security;

f) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index Factor)

– Accrued Fees

The Current Principal Amount will not change until the subsequent Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of an applicable Measurement Period,

such day will not be a valid Reset Valuation Date.

If a Zero Value Event occurs on any Index Business Day then the Current Principal Amount will be equal to zero on

the date on which the Zero Value Event occurred, and on all future calendar days. Upon the occurrence of a Zero

Value Event, investors will likely lose all or substantially all of their investment. You will not benefit from any future

exposure to the Index after the occurrence of a Zero Value Event.

See “Specific Terms of the Securities — Automatic

Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset.

The “

Reset Valuation Date

” means:

1. Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valua tion Date, or (v) the Second Permanent Deleveraging Valuation Date; and

2. Any calendar day following the Second Permanent Deleveraging Valuation Date.

The definition of each valuation date is set forth below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of an applicable Measurement Period,

such day will not be a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the last Index Business Day of January, April, July and October of each calendar

year beginning on July 31, 2020 and ending on April 29, 2050 (other than an Excluded Day), subject to adjustment as

described under “— Market Disruption Event.”

For purposes of the “Quarterly Reset Valuation Date” definition, an “

Excluded Day

” means (i) the Index Business Day

immediately preceding the first day of an applicable Measurement Period, and any calendar day thereafter, and (ii) any

calendar day after the Second Permanent Deleveraging Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

If a Zero Value Event occurs at any time during any Index Business Day then the Index Factor will be equal to zero

subsequent to the event on the date on which the Zero Value Event occurred, and on all future calendar days. Upon the

occurrence of a Zero Value Event, investors will likely lose all or substantially all of their investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “Specific Terms of the

Securities — Automatic Acceleration Upon Zero Value Event”.

171

The “

Residual Factor

” will be calculated as follows:

a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period,

divided by

(b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal (3/4), on the second Index Business Day in an applicable four-day Measurement Period, the Residual Factor

will equal (2/4), on the third Index Business Day in an applicable four-day Measurement Period, the Residual Factor

will equal (1/4) and on the last Index Business Day in an applicable four-day Measurement Period, the Residual

Factor will equal zero

c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 1.5. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

Immediately after market close on the Effective Date, the Last Reset Index Closing Level is adjusted to be 536.663, the Index

Closing Level of the successor index on the Effective Date, as reported by Bloomberg L.P.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg L.P.

536.663 is the Index Closing Level of the successor index on the Effective Date, as determined by the Security Calculation

Agent.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or Call Measurement Period, as applicable.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

a) On the Initial Trade Date, $25.00.

b) On any other calendar day prior to the first day of an applicable Measurement Period:

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) — Accrued Fees + Accrued Dividend.

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value× Residual Factor, from the immediately preceding calendar

day) — Accrued Fees + Accrued Dividend + Measurement Period Cash Amount, from the immediately preceding

calendar day

d) The minimum value of the Current Indicative Value on any calendar day will be zero.

172

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(or intraday indicative value).

If a Zero Value Event occurs during any Index Business Day then the Current Indicative

Value (or “intraday indicative value”) will be equal to the Zero Value Settlement Amount, subsequent to the event on

the date on which the Zero Value Event occurred, and on all future calendar days. Upon the occurrence of a Zero

Value Event, investors will likely lose all or substantially all of their investment. You will not benefit from any future

exposure to the Index after the occurrence of a Zero Value Event.

See “Specific Terms of the Securities — Automatic

Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (or intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly.

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

a) On the Initial Trade Date, the Daily Tracking Fee is zero.

b) On any subsequent calendar day, the Daily Tracking Fee is equal to: (a) (i) 0.95%,

times

(ii) the Current Principal

Amount on the immediately preceding calendar day,

times

(iii) the Index Factor, on such calendar day,

times

(iv) the

Residual Factor, on the immediately preceding calendar day,

divided by

(b) 365.

c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity, early redemption, call or acceleration upon the occurrence of a Zero Value

Event.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly.

The Securities are subject to an “

Accrued Financing Fee

” per Security calculated as follows:

a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

b) On any subsequent calendar day, the Accrued Financing Fee is equal to: (a) the Accrued Financing Fee as of the

immediately preceding calendar day,

plus

(b) the Daily Financing Fee on such calendar day.

c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

b) On any subsequent calendar day, the Daily Financing Fee is equal to: (a) (i) 0.5,

times

(ii) the Financing Rate, on such

calendar day,

times

(iii) the Current Principal Amount, on the immediately preceding calendar day,

times

(iv) the

Residual Factor, on the immediately preceding calendar day,

divided by

(b) 360.

173

c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Securities. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity, early redemption, call or acceleration upon

the occurrence of a Zero Value Event.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

(the “

SOFR-Based Benchmark Replacement

”) which is displayed on Chicago Mercantile Exchange’s website and will be

published on U.S. Government Securities Business Day. The minimum value of the SOFR-Based Benchmark Replacement(or

any successor base rate, as described below) used on any calendar day will be zero. The minimum Financing Rate at any time

will be 0.95%

For example, 5.24938% was the three-month CME Term SOFR rate on June 12, 2023. The Financing Rate on June 13, 2023

would therefore have been equal to: 0.95% + 5.24938% + 0.2616%, or 6.46098%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

a) $0.00 on any calendar day, to but excluding the first day of an applicable Measurement Period.

b) On the first day of an applicable one-day Measurement Period:

At the close of trading on such Index Business Day, (the Current Principal Amount on the immediately preceding

calendar day × Index Factor on such Index Business Day)

c) From and including the first day of an applicable four-day Measurement Period:

i.

At the close of trading on each Index Business Day during the applicable four-day Measurement Period, the

Measurement Period Cash Amount on the immediately preceding calendar day + (Current Principal Amount,

on the calendar day immediately preceding the first day of such Measurement Period × 0.25 × Index Factor,

on such Index Business Day).

ii.

On any calendar day during an applicable four-day Measurement Period that is not an Index Business Day,

the Measurement Period Cash Amount on the immediately preceding Index Business Day.

d) On any calendar day after the last Index Business Day of an applicable Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable amount of financing will separately be deemed converted to cash as well. After the close

of trading on the final Index Business Day of an applicable four-day Measurement Period, the Measurement Period Cash

Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the four-

days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current Principal

Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed converted to cash,

at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is less than $25,000,000, the Calculation Date, subject to adjustments as described

under “— Market Disruption Event”;

174

b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is equal to or greater than $25,000,000, the four (4) Index Business Days from and

including the Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by BDCXSO <Index> on Bloomberg L.P.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is Solactive AG as

of market close on July 30, 2021.

The “

Calculation Date

” means June 2, 2050, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return on the Securities is linked to the performance of the MarketVector US Business Development Companies Liquid

Index, the successor index to the Wells Fargo Business Development Company Index (the “

Original Index

”) effective after

market close on the July 30, 2021 (the “

Effective Date

”) (Bloomberg: “MVBIZD”), which was renamed from MVIS US

Business Development Companies Index effective after market close on June 16, 2023. On April 26, 2021, the Security

Calculation Agent announced that, pursuant to the terms of the Securities, it has determined that the Index is comparable to the

Original Index and approved the Index as the successor index for the Securities following the discontinuation of publication of

the Original Index. The Index is intended to measure the performance of the largest and most liquid companies which are

treated as business development companies and are incorporated in the United States. The “Index Sponsor” is MarketVector

Indexes GmbH.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on the same Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. We reserve

the right from time to time to waive this minimum redemption amount in our sole discretion on a case-by-case basis. You

should not assume you will be entitled to the benefit of any such waiver. For any applicable redemption request, the

“

Redemption Valuation Date

” will be the first Index Business Day following the date that the applicable redemption notice

and redemption confirmation are delivered, except that we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than the following Index Business Day. You should not assume you will be entitled to any such acceleration. To

satisfy the minimum redemption amount, your broker or other financial intermediary may bundle your Securities for

redemption with those of other investors to reach this minimum amount of 50,000 Securities.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if a call notice has been issued, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a market disruption event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event.”

175

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Valuation

Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption

Amount

=

Closing Indicative

Value

-

Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable (less any

Coupon Amounts you may be entitled to receive as of the Redemption Valuation Date), or if the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

negative, you may lose all or a substantial portion of your investment upon early redemption. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

The Securities may be called by UBS prior to the Maturity Date pursuant to the UBS Call Right and, upon the

occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

See “Specific Terms of the Securities — UBS Call Right” and “Specific Terms of the Securities — Automatic Acceleration

Upon Zero Value Event”.

We discuss these matters in the accompanying prospectus under “Description of Debt Securities We May Offer — Redemption

and Repayment.”

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

176

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon (New York City time), or your Redemption

Confirmation after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your Redemption Notice will not be effective, you will not be able to redeem your Securities until the following Redemption

Date and your broker will need to complete all the required steps if you should wish to redeem your Securities on any

subsequent Redemption Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as

it may deem necessary in its sole discretion. All instructions given to participants from beneficial owners of Securities relating

to the right to redeem their Securities will be irrevocable. If your DTC custodian or your brokerage firm is not a current UBS

customer, UBS will be required to on-board such DTC custodian or brokerage firm, in compliance with its internal policies and

procedures, before it can accept your Redemption Notice, your Redemption Confirmation or otherwise process your

redemption request. This on-boarding process may delay your Redemption Valuation Date and Redemption Date. Furthermore,

in certain circumstances, UBS may be unable to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which the Redemption Notice is received by UBS rather than

the following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen

(18) calendar days’ prior notice to the holders of the Securities (which may be provided via press release), such redemption to

occur on any Business Day that we may specify through and including the Maturity Date. Upon early redemption in the event

we exercise this call right, you will receive a cash payment equal to the Closing Indicative Value on the last Index Business

Day in the Call Measurement Period. We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its call right will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a market disruption event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is less than $25,000,000, the Call Valuation Date, subject to adjustments as described

under “— Market Disruption Event”;

b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is equal to or greater than $25,000,000, the four (4) Index Business Days from and

including the Call Valuation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of the UBS Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by BDCXSO <Index> on Bloomberg L.P.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

177

Call Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment upon a call. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees (less any Coupon Amounts you may be entitled to receive), or if the compounded leveraged quarterly

return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is negative, you

may lose all or a substantial portion of your investment upon a call. The occurrence of Loss Rebalancing Events will

result in more frequent than quarterly compounding.

In addition, upon the occurrence of a Zero Value Event, the Securities may be automatically accelerated and

mandatorily redeemed by UBS.

See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”

below.

Automatic Acceleration Upon Zero Value Event

A “

Zero Value Event

” occurs if, on any Index Business Day (other than an Excluded Day), the Intraday Index Value

decreases by 66.66667% or more in value from the Last Reset Index Closing Level. From immediately after the Zero Value

Event and on all future calendar days, the Index Factor and the Current Principal Amount will be set equal to zero. The

Accrued Dividend and Accrued Fees will be fixed at their respective values on the Zero Value Event date and will stay

unchanged on all future calendar days.

When the Intraday Index Value decreases 66.66667% in value from the Last Reset Index Closing Level, the Index Factor will

equal zero. A Zero Value Event represents the first instance when the effective unleveraged notional amount that is deemed

invested in the Index per Security equals zero. It will have the effect of permanently resetting the value of your Securities to a

fixed value (which may be zero) and accelerating the Securities. You will not benefit from any future exposure to the Index

after the occurrence of a Zero Value Event. A Zero Value Event is expected to occur only in the narrow window of time

between the occurrence of a Permanent Deleveraging Event and completion of the leverage reset to 1.0 at the end of the

Second Permanent Deleveraging Valuation Date.

For the purposes of the “Zero Value Event” definition, an “

Excluded Day

” means (i) any calendar day after the Second

Permanent Deleveraging Valuation Date (ii) any calendar day on which a Zero Value Event has already occurred, (iii) any

calendar day after the occurrence of a Zero Value Event, and (iv) any calendar day after the last day of an applicable

Measurement Period.

If a Zero Value Event occurs, all issued and outstanding Securities will be automatically terminated and mandatorily redeemed

by UBS and you will receive the Zero Value Settlement Amount on the Zero Value Settlement Date. You will not benefit from

any future exposure to the Index after the occurrence of a Zero Value Event.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event and specify the

relevant Zero Value Settlement Date and Zero Value Settlement Amount in respect of your investment in the Securities. The

Securities will be suspended from trading intra-day shortly after the event occurs and will likely not be open for trading again

on NYSE Arca before the Zero Value Settlement Date.

If a Zero Value Event occurs on an Index Business Day that would otherwise be a Coupon Ex-Date, such day will not be a

valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended.

The “

Zero Value Settlement Amount

” per Security will be calculated as follows:

a) On any calendar day, to but excluding the first day of an applicable Measurement Period:

(i) the Accrued Dividend,

minus

(ii) the Accrued Fees, on the date on which the Zero Value Event occurred.

b) From and including the first day of an applicable Measurement Period:

(i) the Measurement Period Cash Amount on the immediately preceding calendar day,

plus

(ii) the Accrued Dividend,

minus

(iii) the Accrued Fees, on the date on which the Zero Value Event occurred.

c) The minimum value of the Zero Value Settlement Amount will be zero.

For example:

a) If the Accrued Dividend was $0.04, the Accrued Fees was $0.01, and the Measurement Period Cash Amount was $0,

then the Zero Value Settlement Amount would be $0.03.

178

b) If the Accrued Dividend was $0.01, the Accrued Fees was $0.05, and the Measurement Period Cash Amount was $0,

then the Zero Value Settlement Amount would be $0.

c) If the Zero Value Event occurred during a four-day Measurement Period, and the Accrued Dividend was $0.01, the

Accrued Fees was $0.03, and the Measurement Period Cash Amount on the immediately preceding calendar day was

$6.59, then the Zero Value Settlement Amount would be $6.57.

The following graphics illustrate the formula to determine the Zero Value Settlement Amount, which has been simplified for

ease of presentation:

On any calendar day, to but excluding the first day of an applicable four-day Measurement Period:

Zero Value Settlement

Amount

=

Accrued Dividend

-

Accrued Fees on date

Zero Value Event

occurred

From and including the first day of an applicable Measurement Period:

Zero Value

Settlement

Amount

=

Measurement Period Cash

Amount on immediately

preceding calendar day

+

Accrued Dividend

-

Accrued Fees on date

Zero Value Event

occurred

The “

Zero Value Settlement Date

” will be the third Index Business Day following the date on which the Zero Value Event

occurred. For a detailed description of how the Current Indicative Value (or intraday indicative value) of the Securities is

calculated see “Valuation of the Index and the Securities”.

You may lose all or a substantial portion of your investment upon the occurrence of a Zero Value Event. Upon the

occurrence of a Zero Value Event you will receive on the Zero Value Settlement Date only the Zero Value Settlement

Amount per Security.

In addition, the Securities may be called by UBS prior to the Maturity Date pursuant to the UBS Call Right.

See

“Specific Terms of the Securities — UBS Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 1.5. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day) decreases by 15% or more in value from the previously Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

For purposes of the “Loss Rebalancing Event” definition, an “

Excluded Day

” means (i) the Index Business Day immediately

preceding any Quarterly Reset Valuation Date, if a Loss Rebalancing Event occurs after 3:15pm on such day, (ii) any

Quarterly Reset Valuation Date, (iii) any Loss Rebalancing Valuation Date, (iv) the Index Business Day immediately

preceding the first day of an applicable Measurement Period, if a Loss Rebalancing Event occurs after 3:15pm on such day (v)

any calendar day from and including the first day of an applicable Measurement Period, (vi) the First or Second Permanent

Deleveraging Valuation Dates, (vii) any calendar day after the Second Permanent Deleveraging Valuation Date, (viii) a Zero

Value Event date, and (ix) any calendar day after the Zero Value Event date.

“

Loss Rebalancing Valuation Date

” means:

a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”;

b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

179

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0, over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 1.5 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Permanent

Deleveraging Event. A Permanent Deleveraging Event is expected to occur only in the narrow window of time between the

occurrence of a Loss Rebalancing Event and completion of the leverage reset to 1.5 at the end of the Loss Rebalancing

Valuation Date.

A “

Permanent Deleveraging Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than

an Excluded Day) decreases by 50% or more in value from the Last Reset Index Closing Level.

For purposes of the “Permanent Deleveraging Event” definition, an “

Excluded Day

” means (i) the First or Second Permanent

Deleveraging Valuation Dates, (ii) any calendar day after the Second Permanent Deleveraging Valuation Date, (iii) a day upon

which a Zero Value Event occurs, (iv) any calendar day after the occurrence of a Zero Value Event, (v) the day which is two

Index Business Days prior to the first day of an applicable Measurement Period, if a Permanent Deleveraging Event occurs

after 3:15pm on such day and (vi) any calendar day from and including the Index Business Day immediately preceding the first

day of an applicable Measurement Period.

In the event that a Permanent Deleveraging Event has occurred, UBS will issue a press release before 9:00

a.m. on the Index Business Day immediately following the date on which the Permanent Deleveraging Event occurred,

announcing the Permanent Deleveraging Event and notifying you of the Permanent Deleveraging Valuation Dates.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

a) The “

First Permanent Deleveraging Valuation Date

” means:

i.

Any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but on

which a Permanent Deleveraging Event has occurred, subject to adjustment as described under “- Market

Disruption Event”;

ii.

If a Permanent Deleveraging Event occurs after 3:15pm on any Index Business Day which would not

otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day following the

occurrence of such Permanent Deleveraging Event, subject to adjustment as described under “— Market

Disruption Event”.

The leverage of your Securities will be reset to approximately 1.5 at the close of trading on the First Permanent

Deleveraging Valuation Date.

b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event”.

The leverage of your Securities will be reset to approximately 1.0 at the close of trading on the Second Permanent

Deleveraging Valuation Date.

180

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (or the “intraday indicative

value”), Closing Indicative Value, market disruption events, Business Days, Index Business Days, the Leverage Factor, the

Index Factor, the Index Performance Ratio, the Residual Factor, the Index Closing Level, the Financing Rate, the Accrued Fees

(including determining any successor to the LIBOR base rate), the Coupon Amount, the Accrued Dividend, the Daily

Dividend, if any, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon redemption, if

applicable, the Zero Value Settlement Amount, if any, that we will pay you upon acceleration following the occurrence of a

Zero Value Event, the Call Settlement Amount, if any, that we will pay you in the event that UBS calls the Securities, whether

a Loss Rebalancing Event has occurred, whether a Permanent Deleveraging Event has occurred and whether any day is a

Business Day or an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. The Security Calculation Agent will also be responsible for determining

whether the Index has been discontinued and whether there has been a material change in the Index. The Security Calculation

Agent will make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of

the Security Calculation Agent will be conclusive for all purposes and binding on us, you, and all other persons having an

interest in the Security, without liability on the part of the Security Calculation Agent. You will not be entitled to any

compensation from us for any loss suffered as a result of any determinations or calculations made by the Security Calculation

Agent. We may appoint a different Security Calculation Agent from time to time after the date of this prospectus supplement

without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity, call or acceleration upon the occurrence of a Zero Value Event, or

upon early redemption, or on a Coupon Payment Date on or prior to 12:00 noon, New York City time, on the Business Day

immediately preceding the Maturity Date, any Redemption Date, any Call Settlement Date, Zero Value Settlement Date or any

Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Accrued Dividend, the Daily Dividend, if any, the

Accrued Fees, the Redemption Amount and Redemption Fee Amount, if any, per Security, the Call Settlement Amount, if any,

per Security, the Current Principal Amount, the Zero Value Settlement Amount, and the Cash Settlement Amount, if any, per

Security, will be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545

would be rounded up to .7655); and all dollar amounts paid on the Stated Principal Amount of the Securities per holder will be

rounded to the nearest cent, with one-half cent rounded upward.

Market Disruption Event

To the extent a market disruption event with respect to the Index has occurred or is continuing during a four-day Measurement

Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its affiliates on

the first succeeding Index Business Day on which a market disruption event does not occur or is not continuing with respect to

the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and the remaining

Index Business Days in the Measurement Period will resume again following the suspension of the market disruption event.

For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is scheduled for

June 2, June 3, June 4 and June 5, and there is a market disruption event with respect to the Index on June 2, but no other

market disruption event during such Call Measurement Period, then June 3 will become the first Index Business Day of the

Measurement Period, June 4

th

 the second Index Business Day, June 5

th

 the third Index Business Day and the next Index

Business Day after June 5

th

 would be the final day of the Measurement Period. The same approach would be applied if there is

a market disruption event during a four-day Final Measurement Period.

To the extent a market disruption event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a market disruption

event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a market disruption

event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such market disruption event has occurred or is continuing on June 3.

181

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the affected

Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event that the

Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period is the

Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a market disruption event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such market disruption event.

Any of the following will be a market disruption event with respect to the Index, in each case as determined by the Security

Calculation Agent in its sole discretion:

a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

c) the Index is not published; or

d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be market disruption events with respect to the Index:

a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in the accompanying prospectus. If we exercise this right, the redemption price of the Securities

will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our relative

economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

In addition to the default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to

the final Coupon Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was

the last Index Business Day in the Final Measurement Period and the three Index Business Days immediately preceding the

date of acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the third

Index Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated

final Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant

final Coupon Valuation Date.

182

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in the attached prospectus under “Description of Debt

Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May Offer —

Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

183

Discontinuance of or Adjustments to the Index or Termination of Our License Agreement with the Index Sponsor;

Alteration of Method of Calculation

If (i) the Index Sponsor or Index Calculation Agent discontinues publication of, or otherwise fails to publish, the Index, (ii) our

license agreement with the Index Sponsor terminates or (iii) the Index Sponsor or Index Calculation Agent does not make the

Index Constituent Securities and/or their unit weighting available to the Security Calculation Agent, and, in each case, any

other person or entity publishes an index licensed to UBS that the Security Calculation Agent determines is comparable to the

Index and for which the Index Constituent Securities and/or their unit weighting are available to the Security Calculation

Agent (such index being referred to herein as a “

successor index

”), and the Security Calculation Agent approves such index as

a successor index, then the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination, Coupon Amounts and the amount payable at maturity, call, acceleration upon the occurrence of a Zero Value

Event or upon early redemption and all other related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in this prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, including the Coupon Amounts, Current Principal Amount,

Current Indicative Value or intraday indicative value, Closing Indicative Value, Index Factor, Index Performance Ratio,

Residual Factor, Accrued Fees, Index Closing Levels on the applicable dates of determination, all other related payment terms

and the amount payable at maturity, call, upon early redemption or upon acceleration upon the occurrence of a Zero Value

Event by reference to such Substitute Index. If the Security Calculation Agent so elects to replace the original Index with a

Substitute Index, the Security Calculation Agent will cause written notice thereof to be furnished to the trustee, to us and to the

holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

184

b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after June 2, 2020 that

(i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities included

in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent Securities

(including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates,

third parties with whom we transact or similarly situated third parties in performing our or their obligations in

connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

c) any event that occurs on or after June 2, 2020 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a substitute index, or the value thereof, is changed in a

material respect, or if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index

or such successor index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of

the Index or such successor index had such changes or modifications not been made, then the Security Calculation Agent will

make such calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in

order to arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if

such changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level

for the Index or such successor index with reference to the Index or such successor index, as adjusted. The Security

Calculation Agent will accordingly calculate the Index Closing Level, the Index Performance Ratio, the Coupon Amount, the

Accrued Dividend, the Daily Dividend, if any, the Accrued Fees, the Redemption Fee Amount, if any, the Cash Settlement

Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, upon early redemption, if applicable, the

Call Settlement Amount, if any, that we will pay you in the event UBS calls the Securities, the Zero Value Settlement Amount,

if any, that we will pay you in the event of acceleration upon the occurrence of a Zero Value Event, if applicable, the Last

Reset Index Closing Level and all related payment terms based on the Index Closing Level calculated by the Security

Calculation Agent, as adjusted. Accordingly, if the method of calculating the Index or a successor index is modified so that the

level of the Index or such successor index is a fraction of what it would have been if there had been no such modification (

e.g.

,

due to a split in the Index), which, in turn, causes the Index Closing Level of the Index or such successor index to be a fraction

of what it would have been if there had been no such modification, then the Security Calculation Agent will make such

calculations and adjustments in order to arrive at an Index Closing Level for the Index or such successor index as if it had not

been modified (

e.g.

, as if such split had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in this prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

185

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity, call or acceleration upon the occurrence of a Zero Value Event, or

upon early redemption, will be made to accounts designated by you and approved by us, or at the corporate trust office of the

trustee in New York City, but only when the Securities are surrendered to the trustee at that office. We also may make any

payment or delivery in accordance with the applicable procedures of the depositary.

Business Day

When we refer to a Business Day or a New York Business Day with respect to the Securities, we mean a day that is a Business

Day of the kind described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the

accompanying prospectus.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the attached

prospectus, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead be paid

on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described under “—

Cash Settlement Amount at Maturity,” “— UBS Call Right” and “— Early Redemption at the Option of the Holders” above.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of this prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The Securities do

not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in the accompanying prospectus.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

186

11. ETRACS Monthly Pay 1.5x Leveraged Mortgage REIT ETN due June 10, 2050

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

The Securities are part of a series of UBS AG debt securities entitled “Medium-Term Notes, Series B” that we may issue, from

time to time, under the indenture more particularly described in the accompanying prospectus. This prospectus supplement

summarizes specific financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described in “Description of Debt Securities We May Offer” in the accompanying prospectus. The terms

described here (

i.e.

, in this prospectus supplement) supplement those described in the accompanying prospectus and, if the

terms described here are inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity, call or acceleration upon the occurrence of a

Zero Value Event, or upon early redemption. Instead, at maturity, you will receive a cash payment per Security the amount of

which will vary depending on the performance and path of the Index and will be reduced by the Accrued Fees as of the last

Index Business Day in the Final Measurement Period as described under “— Cash Settlement Amount at Maturity.” If the

amount as calculated is equal to or less than zero, the Cash Settlement Amount will be zero and you will not receive a cash

payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

If a Zero Value Event occurs, for each Security you will receive a cash payment per Security on the Zero Value Settlement

Date equal to the (i) the Measurement Period Cash Amount, on the immediately preceding calendar day,

plus

(ii) the Accrued

Dividend, on the date on which the Zero Value Event occurred,

minus

(iii) the Accrued Fees, on the date on which the Zero

Value Event occurred, as described under “— Automatic Acceleration Upon Zero Value Event.”

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the Coupon Amount. The Coupon Amount will equal the sum of the cash distributions that a hypothetical

holder of Index constituents would have been entitled to receive in respect of the Index constituents during the relevant period.

The Coupon Amount may be equal to zero.

The “

Coupon Amount

” means (i) on any calendar day that is not a Coupon Ex-Date, zero; and (ii) on any calendar day that is

a Coupon Ex-Date, an amount per Security equal to the Accrued Dividend on the Coupon Valuation Date immediately

preceding such Coupon Ex-Date. The minimum value of the Coupon Amount will be zero.

The following graphic illustrates the formula to determine the Coupon Amount on a Coupon Ex-Date, which has been

simplified for ease of presentation:

Coupon Amount

=

Accrued Dividend, on the immediately

preceding Coupon Valuation Date

If the Securities undergo a split or reverse split, the Coupon Amount will be adjusted accordingly.

The “

Accrued Dividend

” means (i) on the Initial Trade Date, zero; and (ii) on any subsequent calendar day, an amount per

Security equal to (a) the Accrued Dividend as of the immediately preceding calendar day,

plus

(b) the Daily Dividend on such

calendar day,

minus

the Coupon Amount on such calendar day.

If the Securities undergo a split or reverse split, the Accrued Dividend will be adjusted accordingly.

187

The “

Daily Dividend

” means, on any calendar day, an amount per Security equal to (a)(i) the Index Dividend Point,

times

(ii)

the Leverage Factor,

times

(iii) the Current Principal Amount on the immediately preceding calendar day,

times

(iv) the

Residual Factor on the immediately preceding calendar day,

divided by

(b) the Last Reset Index Closing Level.

The “

Index Dividend Point

” means, on any calendar day, an amount per Security equal to the

sum of the products

of (i) the

cash value of distributions that a hypothetical holder of one share of each Index Constituent Security on such calendar day

would have been entitled to receive in respect of that Index Constituent Security for those cash distributions whose “ex-

dividend date” occurs on such calendar day and (ii) the number of units of that Index Constituent Security included in the

Index as of such date.

The Index Dividend Point may not be publicly disseminated by the Index Calculation Agent. The data used to calculate the

Index Dividend Point is the property of the Index Calculation Agent and investors may be required to pay a fee and meet any

other requirements of the Index Calculation Agent, in order to access such information. See “Risk Factors — The value of the

Index Dividend Point may not be publicly disseminated or otherwise freely accessible to investors”.

The Index Dividend Point, on any calendar day, represents the total cash value of distributions that a hypothetical holder of the

Index Constituent Securities, in proportion to the weights of the Index Constituent Securities, would have been entitled to

receive with respect to any Index Constituent Securities for those cash distributions whose “ex-dividend date” occurs on such

calendar day.

The “

Coupon Payment Date

” means the fifteenth (15th) Index Business Day following each Coupon Valuation Date. The

first Coupon Payment Date will be July 22, 2020, subject to adjustment as provided herein. If such day is not a Coupon

Business Day, the Coupon Payment Date shall be the following Coupon Business Day.

If the Final Coupon Ex-Date occurs prior to the Maturity Date, but the Final Coupon Payment Date otherwise occurs after the

Maturity Date, in such case, the Final Coupon Payment Date will be the Maturity Date, subject to adjustment as provided

herein.

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date. If such day is not a

Coupon Business Day, the Coupon Record Date shall be the immediately preceding Coupon Business Day.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Coupon Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the Coupon Business Day immediately preceding the applicable Coupon Record Date.

If a Zero Value Event occurs on an Index Business Day that would otherwise be a Coupon Ex-Date, such day will not be a

valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the Coupon Amount corresponding to

such Coupon Ex-Date will be included in the Zero Value Settlement Amount payable on the Zero Value Settlement Date.

In addition, if a day that would otherwise by a Coupon Ex-Date occurs on or after the first day of an applicable Measurement

Period, such day will not be a valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the

Coupon Amount corresponding to such Coupon Ex-date will be included in the Cash Settlement Amount or Call Settlement

Amount payable at maturity or call, respectively.

The “

Coupon Valuation Date

” means the 30th day of each month and the 28th day of February, of each calendar year during

the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such date,

provided that the final Coupon Valuation Date will be the Calculation Date, subject to adjustment described herein. The first

Coupon Valuation Date will be June 30, 2020.

Notwithstanding the foregoing, with respect to cash distributions or dividends on an Index Constituent Security which is

scheduled to be paid prior to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index Constituent Security fails

to pay the dividend or distribution to holders of such Index Constituent Security by the scheduled payment date for such

dividend or distribution, such dividend or distribution will be assumed to be zero for the purposes of calculating the applicable

Coupon Amount. Any such delayed dividend or distribution payment from the issuer of an Index Constituent Security will be

attributed back to the Accrued Dividend and included in the next Coupon Amount.

“

Coupon Business Day

” means any Index Business Day other than an Index Business Day on which banking institutions in

New York are generally not authorized or obligated by law, regulation or executive order to open.

“

record date

” means, (i) with respect to a distribution on an Index Constituent Security, the date on which a holder of the

Index Constituent Security must be registered as a stockholder/unitholder of such Index Constituent Security in order to be

entitled to receive such distribution and (ii) with respect to any split or reverse split, the tenth Business Day after the

announcement date.

“

ex-dividend date

” means, with respect to a distribution on an Index Constituent Security, the first Business Day on which

transactions in such Index Constituent Security trade on the Primary Exchange without the right to receive such distribution.

188

Cash Settlement Amount at Maturity

The “

Maturity Date

” is June 10, 2050, which will be the third Business Day following the last Index Business Day in the

Final Measurement Period, subject to adjustment as described below under

“— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated, you will receive at maturity a cash payment equal to the

Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer to this cash payment

as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees (less any Coupon Amounts you may be entitled to receive), or if the compounded leveraged quarterly

return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is negative, you

may lose all or a substantial portion of your investment at maturity. The occurrence of Loss Rebalancing Events will

result in more frequent than quarterly compounding.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

If the Securities are called by UBS or accelerated upon the occurrence of a Zero Value Event, the Call Settlement

Amount or Zero Value Settlement Amount, as applicable, may be zero and you may lose all or a substantial portion of

your investment.

See “Specific Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities —

Automatic Acceleration Upon Zero Value Event”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The “

Closing Indicative Value

” per Security, will be calculated as follows:

a) On the Initial Trade Date, $25.00 per Security;

b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) - Accrued Fees + Accrued

Dividend

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) - Accrued Fees + Accrued Dividend + Measurement Period Cash Amount

d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs on any Index Business Day then the Closing Indicative Value will be equal to the Zero

Value Settlement Amount on the date on which the Zero Value Event occurred, and on all future calendar days. Upon

the occurrence of a Zero Value Event, investors will likely lose all or substantially all of their investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “— Automatic

Acceleration Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

189

The “

Current Principal Amount

” represents the unleveraged investment in the Index Constituent Securities per Security at

the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate the

leveraged returns would be approximately half of the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero. If a Zero Value Event occurs prior to your Securities permanently resetting to

1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your Securities will be fully redeemed and you will

receive the Zero Value Settlement Amount (which amount may be zero).

The Current Principal Amount per Security, will be calculated as follows:

1) From and including the Initial Trade Date to and excluding the subsequent Reset Valuation Date,

$25.00 per Security;

2) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day

× Index Factor) – Accrued Fees

The Current Principal Amount will not change until the subsequent Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of an applicable Measurement Period,

such day will not be a valid Reset Valuation Date.

If a Zero Value Event occurs on any Index Business Day then the Current Principal Amount will be equal to zero on

the date on which the Zero Value Event occurred, and on all future calendar days. Upon the occurrence of a Zero

Value Event, investors will likely lose all or substantially all of their investment.

You will not benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “Specific

Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset.

The “

Reset Valuation Date

” means:

1) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valua tion Date, or (v) the Second Permanent Deleveraging Valuation Date; and.

2) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The definition of each valuation date is set forth below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of an applicable Measurement Period,

such day will not be a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the last Index Business Day of January, April, July and October of each calendar

year beginning on July 31, 2020 and ending on April 29, 2050 (other than an Excluded Day), subject to adjustment as

described under “— Market Disruption Event.”

For purposes of the “Quarterly Reset Valuation Date” definition, an “

Excluded Day

” means (i) the Index Business Day

immediately preceding the first day of an applicable Measurement Period, and any calendar day thereafter, and (ii) any

calendar day after the Second Permanent Deleveraging Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

190

If a Zero Value Event occurs at any time during any Index Business Day then the Index Factor will be equal to zero

subsequent to the event on the date on which the Zero Value Event occurred, and on all future calendar days. Upon the

occurrence of a Zero Value Event, investors will likely lose all or substantially all of their investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “Specific Terms of the

Securities — Automatic Acceleration Upon Zero Value Event”.

The “

Residual Factor

” will be calculated as follows:

a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period,

divided by

(b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal (3/4), on the second Index Business Day in an applicable four-day Measurement Period, the Residual Factor

will equal (2/4), on the third Index Business Day in an applicable four-day Measurement Period, the Residual Factor

will equal (1/4) and on the last Index Business Day in an applicable four-day Measurement Period, the Residual

Factor will equal zero.

c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 1.5. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is 156.926, the Index Closing Level on the Initial Trade Date, as reported by

Bloomberg L.P. and Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg L.P. and

Reuters; provided, however, that if the closing level of the Index as reported on Bloomberg L.P. (or any successor) differs from

the closing level of the Index as reported on Reuters (or any successor), then the Index Closing Level will be the closing level

of the Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset

Index Closing Level) is 156.926, the Index Closing Level measured on the Initial Trade Date, as determined by the Security

Calculation Agent.

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or Call Measurement Period, as applicable.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

a) On the Initial Trade Date, $25.00.

b) On any other calendar day prior to the first day of an applicable Measurement Period:

191

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) - Accrued Fees + Accrued Dividend.

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value × Residual Factor, from the immediately preceding calendar

day) - Accrued Fees + Accrued Dividend + Measurement Period Cash Amount, from the immediately preceding

calendar day

d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(or intraday indicative value).

If a Zero Value Event occurs during any Index Business Day then the Current Indicative

Value (or “intraday indicative value”) will be equal to the Zero Value Settlement Amount, subsequent to the event on

the date on which the Zero Value Event occurred, and on all future calendar days. Upon the occurrence of a Zero

Value Event, investors will likely lose all or substantially all of their investment. You will not benefit from any future

exposure to the Index after the occurrence of a Zero Value Event.

See “Specific Terms of the Securities — Automatic

Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (or intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly.

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

a) On the Initial Trade Date, the Daily Tracking Fee is zero.

b) On any subsequent calendar day, the Daily Tracking Fee is equal to: (a) (i) 0.95%,

times

(ii) the Current Principal

Amount on the immediately preceding calendar day,

times

(iii) the Index Factor, on such calendar day,

times

(iv) the

Residual Factor, on the immediately preceding calendar day,

divided by

(b) 365.

c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity, early redemption, call or acceleration upon the occurrence of a Zero Value

Event.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly.

The Securities are subject to an “

Accrued Financing Fee

” per Security calculated as follows:

a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

b) On any subsequent calendar day, the Accrued Financing Fee is equal to: (a) the Accrued Financing Fee as of the

immediately preceding calendar day,

plus

(b) the Daily Financing Fee on such calendar day.

c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

192

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

b) On any subsequent calendar day, the Daily Financing Fee is equal to: (a) (i) 0.5,

times

(ii) the Financing Rate, on such

calendar day,

times

(iii) the Current Principal Amount, on the immediately preceding calendar day,

times

(iv) the

Residual Factor, on the immediately preceding calendar day,

divided by

(b) 360.

c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Securities. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity, early redemption, call or acceleration upon

the occurrence of a Zero Value Event.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

a) $0.00 on any calendar day, to but excluding the first day of an applicable Measurement Period.

b) On the first day of an applicable one-day Measurement Period:

At the close of trading on such Index Business Day, (the Current Principal Amount on the immediately preceding

calendar day × Index Factor on such Index Business Day)

c) From and including the first day of an applicable four-day Measurement Period:

i. At the close of trading on each Index Business Day during the applicable four-day Measurement Period, the

Measurement Period Cash Amount on the immediately preceding calendar day + (Current Principal Amount,

on the calendar day immediately preceding the first day of such Measurement Period × 0.25 × Index Factor,

on such Index Business Day).

ii. On any calendar day during an applicable four-day Measurement Period that is not an Index Business Day,

the Measurement Period Cash Amount on the immediately preceding Index Business Day.

d) On any calendar day after the last Index Business Day of an applicable Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable amount of financing will separately be deemed converted to cash as well. After the close

of trading on the final Index Business Day of an applicable four-day Measurement Period, the Measurement Period Cash

Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the four-

days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current Principal

Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed converted to cash,

at the close of trading of the first day of such Measurement Period.

193

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is less than $100,000,000, the Calculation Date, subject to adjustments as described

under “— Market Disruption Event”;

b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is equal to or greater than $100,000,000, the four (4) Index Business Days from and

including the Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by MVRLSO <Index> on Bloomberg L.P.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently

Solactive AG.

The “

Calculation Date

” means June 2, 2050, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return on the Securities is based upon the performance of the MVIS US Mortgage REITs Index (Bloomberg:

“MVMORT”; Reuters: “.MVMORT”). The Index tracks the overall performance of publicly-traded mortgage REITs that are

listed and incorporated in the United States and derive at least 50% of their revenues from mortgage-related activity.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on the same Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. We reserve

the right from time to time to waive this minimum redemption amount in our sole discretion on a case-by-case basis. You

should not assume you will be entitled to the benefit of any such waiver. For any applicable redemption request, the

“

Redemption Valuation Date

” will be the first Index Business Day following the date that the applicable redemption notice

and redemption confirmation are delivered, except that we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than

the following Index Business Day. You should not assume you will be entitled to any such acceleration. To

satisfy the minimum redemption amount, your broker or other financial intermediary may bundle your Securities for

redemption with those of other investors to reach this minimum amount of 50,000 Securities.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity date, subject to adjustments. In addition, if a call notice has been issued, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event.”

194

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Valuation

Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption

Amount

=

Closing Indicative

Value

-

Redemption Fee

Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable (less any

Coupon Amounts you may be entitled to receive as of the Redemption Valuation Date), or if the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

negative, you may lose all or a substantial portion of your investment upon early redemption. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

See “Specific Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic

Acceleration Upon Zero Value Event”.

We discuss these matters in the accompanying prospectus under “Description of Debt Securities We May Offer — Redemption

and Repayment.”

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

195

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon (New York City time), or your Redemption

Confirmation after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your Redemption Notice will not be effective, you will not be able to redeem your Securities until the following Redemption

Date and your broker will need to complete all the required steps if you should wish to redeem your Securities on any

subsequent Redemption Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as

it may deem necessary in its sole discretion. All instructions given to participants from beneficial owners of Securities relating

to the right to redeem their Securities will be irrevocable. If your DTC custodian or your brokerage firm is not a current UBS

customer, UBS will be required to on-board such DTC custodian or brokerage firm, in compliance with its internal policies and

procedures, before it can accept your Redemption Notice, your Redemption Confirmation or otherwise process your

redemption request. This on-boarding process may delay your Redemption Valuation Date and Redemption Date. Furthermore,

in certain circumstances, UBS may be unable to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which the Redemption Notice is received by UBS rather than

the following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen (18) calendar days’ prior

notice to the holders of the Securities (which may be provided via press release), such redemption to occur on any Business

Day that we may specify through and including the Maturity Date. Upon early redemption in the event we exercise this call

right, you will receive a cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call

Measurement Period. We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “Call Measurement Period” means:

a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is less than $100,000,000, the Call Valuation Date, subject to adjustments as described

under “— Market Disruption Event”;

b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is equal to or greater than $100,000,000, the four (4) Index Business Days from and

including the Call Valuation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of the UBS Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by MVRLSO <Index> on Bloomberg L.P.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Call Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

196

You may lose all or a substantial portion of your investment upon a call. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees (less any Coupon Amounts you may be entitled to receive), or if the compounded leveraged quarterly

return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is negative, you

may lose all or a substantial portion of your investment upon a call. The occurrence of Loss Rebalancing Events will

result in more frequent than quarterly compounding.

In addition, upon the occurrence of a Zero Value Event, the Securities may be automatically accelerated and mandatorily

redeemed by UBS. See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event” below.

Automatic Acceleration Upon Zero Value Event

A “

Zero Value Event

” occurs if, on any Index Business Day (other than an Excluded Day), the Intraday Index Value

decreases by 66.66667% or more in value from the Last Reset Index Closing Level. From immediately after the Zero Value

Event and on all future calendar days, the Index Factor and the Current Principal Amount will be set equal to zero. The

Accrued Dividend and Accrued Fees will be fixed at their respective values on the Zero Value Event date and will stay

unchanged on all future calendar days.

When the Intraday Index Value decreases 66.66667% in value from the Last Reset Index Closing Level, the Index Factor will

equal zero. A Zero Value Event represents the first instance when the effective unleveraged notional amount that is deemed

invested in the Index per Security equals zero. It will have the effect of permanently resetting the value of your Securities to a

fixed value (which may be zero) and accelerating the Securities. You will not benefit from any future exposure to the Index

after the occurrence of a Zero Value Event. A Zero Value Event is expected to occur only in the narrow window of time

between the occurrence of a Permanent Deleveraging Event and completion of the leverage reset to 1.0 at the end of the

Second Permanent Deleveraging Valuation Date.

For the purposes of the “Zero Value Event” definition, an “

Excluded Day

” means (i) any calendar day after the Second

Permanent Deleveraging Valuation Date (ii) any calendar day on which a Zero Value Event has already occurred, (iii) any

calendar day after the occurrence of a Zero Value Event, and (iv) any calendar day after the last day of an applicable

Measurement Period.

If a Zero Value Event occurs, all issued and outstanding Securities will be automatically terminated and mandatorily redeemed

by UBS and you will receive the Zero Value Settlement Amount on the Zero Value Settlement Date. You will not benefit from

any future exposure to the Index after the occurrence of a Zero Value Event.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event and specify the

relevant Zero Value Settlement Date and Zero Value Settlement Amount in respect of your investment in the Securities. The

Securities will be suspended from trading intra-day shortly after the event occurs and will likely not be open for trading again

on NYSE Arca before the Zero Value Settlement Date.

If a Zero Value Event occurs on an Index Business Day that would otherwise be a Coupon Ex-Date, such day will not be a

valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended.

The “

Zero Value Settlement Amount

” per Security will be calculated as follows:

a) On any calendar day, to but excluding the first day of an applicable Measurement Period:

(i) the Accrued Dividend,

minus

(ii) the Accrued Fees, on the date on which the Zero Value Event occurred.

b) From and including the first day of an applicable Measurement Period:

(i) the Measurement Period Cash Amount on the immediately preceding calendar day,

plus

(ii) the Accrued Dividend,

minus

(iii) the Accrued Fees, on the date on which the Zero Value Event occurred.

c) The minimum value of the Zero Value Settlement Amount will be zero.

For example:

a) If the Accrued Dividend was $0.04, the Accrued Fees was $0.01, and the Measurement Period Cash Amount was $0,

then the Zero Value Settlement Amount would be $0.03.

b) If the Accrued Dividend was $0.01, the Accrued Fees was $0.05, and the Measurement Period Cash Amount was $0,

then the Zero Value Settlement Amount would be $0.

c) If the Zero Value Event occurred during a four-day Measurement Period, and the Accrued Dividend was $0.01, the

Accrued Fees was $0.03, and the Measurement Period Cash Amount on the immediately preceding calendar day was

$6.59, then the Zero Value Settlement Amount would be $6.57.

The following graphics illustrate the formula to determine the Zero Value Settlement Amount, which has been simplified for

ease of presentation:

On any calendar day, to but excluding the first day of an applicable four-day Measurement Period:

197

Zero Value Settlement

Amount

=

Accrued Dividend

-

Accrued Fees on date Zero

Value Event occurred

From and including the first day of an applicable Measurement Period:

Zero Value Settlement

Amount

=

Measurement Period Cash Amount

on immediately preceding

calendar day

+

Accrued

Dividend

-

Accrued Fees on date

Zero Value Event

occurred

The “

Zero Value Settlement Date

” will be the third Index Business Day following the date on which the Zero Value Event

occurred. For a detailed description of how the Current Indicative Value (or intraday indicative value) of the Securities is

calculated see “Valuation of the Index and the Securities”.

You may lose all or a substantial portion of your investment upon the occurrence of a Zero Value Event. Upon the

occurrence of a Zero Value Event you will receive on the Zero Value Settlement Date only the Zero Value Settlement

Amount per Security.

In addition, the Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right.

See “Specific

Terms of the Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 1.5. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day) decreases by 15% or more in value from the previously Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

For purposes of the “Loss Rebalancing Event” definition, an “

Excluded Day

” means (i) the Index Business Day immediately

preceding any Quarterly Reset Valuation Date, if a Loss Rebalancing Event occurs after 3:15pm on such day, (ii) any

Quarterly Reset Valuation Date, (iii) any Loss Rebalancing Valuation Date, (iv) the Index Business Day immediately

preceding the first day of an applicable Measurement Period, if a Loss Rebalancing Event occurs after 3:15pm on such day (v)

any calendar day from and including the first day of an applicable Measurement Period, (vi) the First or Second Permanent

Deleveraging Valuation Dates, (vii) any calendar day after the Second Permanent Deleveraging Valuation Date, (viii) a Zero

Value Event date, and (ix) any calendar day after the Zero Value Event date.

“

Loss Rebalancing Valuation Date

” means:

a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”;

b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0, over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 1.5 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Permanent

Deleveraging Event. A Permanent Deleveraging Event is expected to occur only in the narrow window of time between the

occurrence of a Loss Rebalancing Event and completion of the leverage reset to 1.5 at the end of the Loss Rebalancing

Valuation Date.

A “

Permanent Deleveraging Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than

an Excluded Day) decreases by 50% or more in value from the Last Reset Index Closing Level.

198

For purposes of the “Permanent Deleveraging Event” definition, an “

Excluded Day

” means (i) the First or Second Permanent

Deleveraging Valuation Dates, (ii) any calendar day after the Second Permanent Deleveraging Valuation Date, (iii) a day upon

which a Zero Value Event occurs, (iv) any calendar day after the occurrence of a Zero Value Event, (v) the day which is two

Index Business Days prior to the first day of an applicable Measurement Period, if a Permanent Deleveraging Event occurs

after 3:15pm on such day and (vi) any calendar day from and including the Index Business Day immediately preceding the first

day of an applicable Measurement Period.

In the event that a Permanent Deleveraging Event has occurred, UBS will issue a press release before 9:00

a.m. on the Index Business Day immediately following the date on which the Permanent Deleveraging Event occurred,

announcing the Permanent Deleveraging Event and notifying you of the Permanent Deleveraging Valuation Dates.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

a) The “

First Permanent Deleveraging Valuation Date

” means:

i. Any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but on

which a Permanent Deleveraging Event has occurred, subject to adjustment as described under “- Market

Disruption Event”;

ii. If a Permanent Deleveraging Event occurs after 3:15pm on any Index Business Day which would not

otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day following the

occurrence of such Permanent Deleveraging Event, subject to adjustment as described under “— Market

Disruption Event”.

The leverage of your Securities will be reset to approximately 1.5 at the close of trading on the First Permanent

Deleveraging Valuation Date.

b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event”.

The leverage of your Securities will be reset to approximately 1.0 at the close of trading on the Second Permanent

Deleveraging Valuation Date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (or the “intraday indicative

value”), Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the Leverage Factor, the

Index Factor, the Index Performance Ratio, the Residual Factor, the Index Closing Level, the Financing Rate, the Accrued Fees

(including determining any successor to the LIBOR base rate), the Coupon Amount, the Accrued Dividend, the Daily

Dividend, if any, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon redemption, if

applicable, the Zero Value Settlement Amount, if any, that we will pay you upon acceleration following the occurrence of a

Zero Value Event, the Call Settlement Amount, if any, that we will pay you in the event that UBS calls the Securities, whether

a Loss Rebalancing Event has occurred, whether a Permanent Deleveraging Event has occurred and whether any day is a

Business Day or an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. The Security Calculation Agent will also be responsible for determining

whether the Index has been discontinued and whether there has been a material change in the Index. The Security Calculation

Agent will make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of

the Security Calculation Agent will be conclusive for all purposes and binding on us, you, and all other persons having an

interest in the Security, without liability on the part of the Security Calculation Agent. You will not be entitled to any

compensation from us for any loss suffered as a result of any determinations or calculations made by the Security Calculation

Agent. We may appoint a different Security Calculation Agent from time to time after the date of this prospectus supplement

without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity, call or acceleration upon the occurrence of a Zero Value Event, or

upon early redemption, or on a Coupon Payment Date on or prior to 12:00 noon, New York City time, on the Business Day

immediately preceding the Maturity Date, any Redemption Date, any Call Settlement Date, Zero Value Settlement Date or any

Coupon Payment Date, as applicable.

199

All dollar amounts related to determination of the Coupon Amount, the Accrued Dividend, the Daily Dividend, if any, the

Accrued Fees, the Redemption Amount and Redemption Fee Amount, if any, per Security, the Call Settlement Amount, if any,

per Security, the Current Principal Amount, the Zero Value Settlement Amount, and the Cash Settlement Amount, if any, per

Security, will be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545

would be rounded up to .7655); and all dollar amounts paid on the Stated Principal Amount of the Securities per holder will be

rounded to the nearest cent, with one-half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the affected

Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event that the

Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period is the

Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a Market Disruption Event with respect to the Index, in each case as determined by the Security

Calculation Agent in its sole discretion:

a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

c) the Index is not published; or

d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

200

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in the accompanying prospectus. If we exercise this right, the redemption price of the Securities

will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our relative

economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

In addition to the default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to

the final Coupon Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was

the last Index Business Day in the Final Measurement Period and the three Index Business Days immediately preceding the

date of acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the third

Index Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated

final Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant

final Coupon Valuation Date.

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in the attached prospectus under “Description of Debt

Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May Offer —

Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

201

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index or Termination of Our License Agreement with the Index Sponsor;

Alteration of Method of Calculation

If (i) the Index Sponsor or Index Calculation Agent discontinue publication of, or otherwise fails to publish, the Index, (ii) our

license agreement with the Index Sponsor terminates or (iii) the Index Sponsor or Index Calculation Agent does not make the

Index Constituent Securities and/or their unit weighting available to the Security Calculation Agent, and, in each case, any

other person or entity publishes an index licensed to UBS that the Security Calculation Agent determines is comparable to the

Index and for which the Index Constituent Securities and/or their unit weighting are available to the Security Calculation

Agent (such index being referred to herein as a “

successor index

”), and the Security Calculation Agent approves such index as

a successor index, then the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination, Coupon Amounts and the amount payable at maturity, call, acceleration upon the occurrence of a Zero Value

Event or upon early redemption and all other related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor or Index Calculation Agent discontinue publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in this prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, including the Coupon Amounts, Current Principal Amount,

Current Indicative Value or intraday indicative value, Closing Indicative Value, Index Factor, Index Performance Ratio,

Residual Factor, Accrued Fees, Index Closing Levels on the applicable dates of determination, all other related payment terms

and the amount payable at maturity, call, upon early redemption or upon acceleration upon the occurrence of a Zero Value

Event by reference to such Substitute Index. If the Security Calculation Agent so elects to replace the original Index with a

Substitute Index, the Security Calculation Agent will cause written notice thereof to be furnished to the trustee, to us and to the

holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

202

b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after June 2, 2020 that

(i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities included

in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent Securities

(including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates,

third parties with whom we transact or similarly situated third parties in performing our or their obligations in

connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

c) any event that occurs on or after June 2, 2020 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a substitute index, or the value thereof, is changed in a

material respect, or if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index

or such successor index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of

the Index or such successor index had such changes or modifications not been made, then the Security Calculation Agent will

make such calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in

order to arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if

such changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level

for the Index or such successor index with reference to the Index or such successor index, as adjusted. The Security

Calculation Agent will accordingly calculate the Index Closing Level, the Index Performance Ratio, the Coupon Amount, the

Accrued Dividend, the Daily Dividend, if any, the Accrued Fees, the Redemption Fee Amount, if any, the Cash Settlement

Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, upon early redemption, if applicable, the

Call Settlement Amount, if any, that we will pay you in the event UBS calls the Securities, the Zero Value Settlement Amount,

if any, that we will pay you in the event of acceleration upon the occurrence of a Zero Value Event, if applicable, the Last

Reset Index Closing Level and all related payment terms based on the Index Closing Level calculated by the Security

Calculation Agent, as adjusted. Accordingly, if the method of calculating the Index or a successor index is modified so that the

level of the Index or such successor index is a fraction of what it would have been if there had been no such modification (

e.g.

,

due to a split in the Index), which, in turn, causes the Index Closing Level of the Index or such successor index to be a fraction

of what it would have been if there had been no such modification, then the Security Calculation Agent will make such

calculations and adjustments in order to arrive at an Index Closing Level for the Index or such successor index as if it had not

been modified (

e.g.

, as if such split had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in this prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

203

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity, call or acceleration upon the occurrence of a Zero Value Event, or

upon early redemption, will be made to accounts designated by you and approved by us, or at the corporate trust office of the

trustee in New York City, but only when the Securities are surrendered to the trustee at that office. We also may make any

payment or delivery in accordance with the applicable procedures of the depositary.

Business Day

When we refer to a Business Day or a New York Business Day with respect to the Securities, we mean a day that is a Business

Day of the kind described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the

accompanying prospectus.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the attached

prospectus, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead be paid

on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described under “—

Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of the Holders” above.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of this prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The Securities do

not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in the accompanying prospectus.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

204

12. ETRACS Monthly Pay 1.5x Leveraged Closed-End Fund Index ETN due June 10, 2050

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“DTC”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

The Securities are part of a series of UBS AG debt securities entitled “Medium-Term Notes, Series B” that we may issue, from

time to time, under the indenture more particularly described in the accompanying prospectus. This prospectus supplement

summarizes specific financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described in “Description of Debt Securities We May Offer” in the accompanying prospectus. The terms

described here (

i.e.

, in this prospectus supplement) supplement those described in the accompanying prospectus and, if the

terms described here are inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity, call or acceleration upon the occurrence of a

Zero Value Event, or upon early redemption. Instead, at maturity, you will receive a cash payment per Security the amount of

which will vary depending on the performance and path of the Index and will be reduced by the Accrued Fees as of the last

Index Business Day in the Final Measurement Period as described under “— Cash Settlement Amount at Maturity.” If the

amount as calculated is equal to or less than zero, the Cash Settlement Amount will be zero and you will not receive a cash

payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

If a Zero Value Event occurs, for each Security you will receive a cash payment per Security on the Zero Value Settlement

Date equal to the (i) the Measurement Period Cash Amount, on the immediately preceding calendar day,

plus

(ii) the Accrued

Dividend, on the date on which the Zero Value Event occurred,

minus

(iii) the Accrued Fees, on the date on which the Zero

Value Event occurred, as described under “— Automatic Acceleration Upon Zero Value Event.”

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the Coupon Amount. The Coupon Amount will equal the sum of the cash distributions that a hypothetical

holder of Index constituents would have been entitled to receive in respect of the Index constituents during the relevant period.

The Coupon Amount may be equal to zero.

The “

Coupon Amount

” means (i) on any calendar day that is not a Coupon Ex-Date, zero; and (ii) on any calendar day that is

a Coupon Ex-Date, an amount per Security equal to the Accrued Dividend on the Coupon Valuation Date immediately

preceding such Coupon Ex-Date. The minimum value of the Coupon Amount will be zero.

The following graphic illustrates the formula to determine the Coupon Amount on a Coupon Ex-Date, which has been

simplified for ease of presentation:

Coupon Amount

=

Accrued Dividend, on the immediately

preceding Coupon Valuation Date

If the Securities undergo a split or reverse split, the Coupon Amount will be adjusted accordingly.

The “

Accrued Dividend

” means (i) on the Initial Trade Date, zero; and (ii) on any subsequent calendar day, an amount per

Security equal to (a) the Accrued Dividend as of the immediately preceding calendar day,

plus

(b) the Daily Dividend on such

calendar day,

minus

the Coupon Amount on such calendar day.

If the Securities undergo a split or reverse split, the Accrued Dividend will be adjusted accordingly.

The “

Daily Dividend

” means, on any calendar day, an amount per Security equal to (a)(i) the Index Dividend Point,

times

(ii)

the Leverage Factor,

times

(iii) the Current Principal Amount on the immediately preceding calendar day,

times

(iv) the

Residual Factor on the immediately preceding calendar day,

divided by

(b) the Last Reset Index Closing Level.

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The “

Index Dividend Point

” means, on any calendar day, an amount per Security equal to the

sum of the products

of (i) the

cash value of distributions that a hypothetical holder of one share of each Index Constituent Security on such calendar day

would have been entitled to receive in respect of that Index Constituent Security for those cash distributions whose “ex-

dividend date” occurs on such calendar day and (ii) the number of units of that Index Constituent Security included in the

Index as of such date.

The Index Dividend Point may not be publicly disseminated by the Index Calculation Agent. The data used to calculate the

Index Dividend Point is the property of the Index Calculation Agent and investors may be required to pay a fee and meet any

other requirements of the Index Calculation Agent, in order to access such information. See “Risk Factors — The value of the

Index Dividend Point may not be publicly disseminated or otherwise freely accessible to investors”.

The Index Dividend Point, on any calendar day, represents the total cash value of distributions that a hypothetical holder of the

Index Constituent Securities, in proportion to the weights of the Index Constituent Securities, would have been entitled to

receive with respect to any Index Constituent Securities for those cash distributions whose “ex-dividend date” occurs on such

calendar day.

The “

Coupon Payment Date

” means the fifteenth (15th) Index Business Day following each Coupon Valuation Date. The

first Coupon Payment Date will be July 22, 2020, subject to adjustment as provided herein. If such day is not a Coupon

Business Day, the Coupon Payment Date shall be the following Coupon Business Day.

If the Final Coupon Ex-Date occurs prior to the Maturity Date, but the Final Coupon Payment Date otherwise occurs after the

Maturity Date, in such case, the Final Coupon Payment Date will be the Maturity Date, subject to adjustment as provided

herein.

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date. If such day is not a

Coupon Business Day, the Coupon Record Date shall be the immediately preceding Coupon Business Day.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Coupon Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the Coupon Business Day immediately preceding the applicable Coupon Record Date.

If a Zero Value Event occurs on an Index Business Day that would otherwise be a Coupon Ex-Date, such day will not be a

valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the Coupon Amount corresponding to

such Coupon Ex-Date will be included in the Zero Value Settlement Amount payable on the Zero Value Settlement Date.

In addition, if a day that would otherwise by a Coupon Ex-Date occurs on or after the first day of an applicable Measurement

Period, such day will not be a valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the

Coupon Amount corresponding to such Coupon Ex-date will be included in the Cash Settlement Amount or Call Settlement

Amount payable at maturity or call, respectively.

The “

Coupon Valuation Date

” means the 30th day of each month and the 28th day of February, of each calendar year during

the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such date,

provided that the final Coupon Valuation Date will be the Calculation Date, subject to adjustment described herein. The first

Coupon Valuation Date will be June 30, 2020.

Notwithstanding the foregoing, with respect to cash distributions or dividends on an Index Constituent Security which is

scheduled to be paid prior to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index Constituent Security fails

to pay the dividend or distribution to holders of such Index Constituent Security by the scheduled payment date for such

dividend or distribution, such dividend or distribution will be assumed to be zero for the purposes of calculating the applicable

Coupon Amount. Any such delayed dividend or distribution payment from the issuer of an Index Constituent Security will be

attributed back to the Accrued Dividend and included in the next Coupon Amount.

“

Coupon Business Day

” means any Index Business Day other than an Index Business Day other than an Index Business Day

on which banking institutions in New York are generally not authorized or obligated by law, regulation or executive order to

open.

“

record date

” means, (i) with respect to a distribution on an Index Constituent Security, the date on which a holder of the

Index Constituent Security must be registered as a stockholder/unitholder of such Index Constituent Security in order to be

entitled to receive such distribution and (ii) with respect to any split or reverse split, the tenth Business Day after the

announcement date.

“

ex-dividend date

” means, with respect to a distribution on an Index Constituent Security, the first Business Day on which

transactions in such Index Constituent Security trade on the Primary Exchange without the right to receive such distribution.

206

Cash Settlement Amount at Maturity

The “

Maturity Date

” is June 10, 2050, which will be the third Business Day following the last Index Business Day in the

Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated, you will receive at maturity a cash payment equal to the

Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer to this cash payment

as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees (less any Coupon Amounts you may be entitled to receive), or if the compounded leveraged quarterly

return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is negative, you

may lose all or a substantial portion of your investment at maturity. The occurrence of Loss Rebalancing Events will

result in more frequent than quarterly compounding.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

If the Securities are called by UBS or accelerated upon the occurrence of a Zero Value Event, the Call Settlement

Amount or Zero Value Settlement Amount, as applicable, may be zero and you may lose all or a substantial portion of

your investment.

See “Specific Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities —

Automatic Acceleration Upon Zero Value Event”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The “

Closing Indicative Value

” per Security, will be calculated as follows:

a) On the Initial Trade Date, $25.00 per Security;

b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor)—Accrued Fees + Accrued

Dividend

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) — Accrued Fees + Accrued Dividend + Measurement Period Cash Amount

d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs on any Index Business Day then the Closing Indicative Value will be equal to the Zero

Value Settlement Amount on the date on which the Zero Value Event occurred, and on all future calendar days. Upon

the occurrence of a Zero Value Event, investors will likely lose all or substantially all of their investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “— Automatic

Acceleration Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged investment in the Index Constituent Securities per Security at

the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate the

leveraged returns would be approximately half of the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero. If a Zero Value Event occurs prior to your Securities permanently resetting to

1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your Securities will be fully redeemed and you will

receive the Zero Value Settlement Amount (which amount may be zero).

207

The Current Principal Amount per Security, will be calculated as follows:

1) From and including the Initial Trade Date to and excluding the subsequent Reset Valuation Date, $25.00 per Security;

2) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index Factor)

– Accrued Fees

The Current Principal Amount will not change until the subsequent Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of an applicable Measurement Period,

such day will not be a valid Reset Valuation Date.

If a Zero Value Event occurs on any Index Business Day then the Current Principal Amount will be equal to zero on

the date on which the Zero Value Event occurred, and on all future calendar days. Upon the occurrence of a Zero

Value Event, investors will likely lose all or substantially all of their investment.

You will not benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “Specific

Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset.

The “

Reset Valuation Date

” means:

1) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valua tion Date, or (v) the Second Permanent Deleveraging Valuation Date; and.

2) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The definition of each valuation date is set forth below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of an applicable Measurement Period,

such day will not be a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the last Index Business Day of January, April, July and October of each calendar

year beginning on July 31, 2020 and ending on April 29, 2050 (other than an Excluded Day), subject to adjustment as

described under “— Market Disruption Event.”

For purposes of the “Quarterly Reset Valuation Date” definition, an “

Excluded Day

” means (i) the Index Business Day

immediately preceding the first day of an applicable Measurement Period, and any calendar day thereafter, and (ii) any

calendar day after the Second Permanent Deleveraging Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

If a Zero Value Event occurs at any time during any Index Business Day then the Index Factor will be equal to zero

subsequent to the event on the date on which the Zero Value Event occurred, and on all future calendar days. Upon the

occurrence of a Zero Value Event, investors will likely lose all or substantially all of their investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “Specific Terms of the

Securities — Automatic Acceleration Upon Zero Value Event”.

The “

Residual Factor

” will be calculated as follows:

a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

208

b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period,

divided by

(b) four. For example, on the first Index Business Day in an applicable four-day

Measurement Period, the Residual Factor will equal (3/4), on the second Index Business Day in an applicable four-

day Measurement Period, the Residual Factor will equal (2/4), on the third Index Business Day in an applicable four-

day Measurement Period, the Residual Factor will equal (1/4) and on the last Index Business Day in an applicable

four-day Measurement Period, the Residual Factor will equal zero.

c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 1.5. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is 622.5081, the Index Closing Level on the Initial Trade Date, as reported by

Bloomberg L.P. and Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg L.P. and

Reuters; provided, however, that if the closing level of the Index as reported on Bloomberg L.P. (or any successor) differs from

the closing level of the Index as reported on Reuters (or any successor), then the Index Closing Level will be the closing level

of the Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset

Index Closing Level) is 622.5081, the Index Closing Level measured on the Initial Trade Date, as determined by the Security

Calculation Agent.

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or Call Measurement Period, as applicable.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

a) On the Initial Trade Date, $25.00.

b) On any other calendar day prior to the first day of an applicable Measurement Period:

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) — Accrued Fees + Accrued Dividend.

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to: (Current

Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period × Index Factor,

calculated using the Intraday Index Value × Residual Factor, from the immediately preceding calendar day) —

Accrued Fees + Accrued Dividend + Measurement Period Cash Amount, from the immediately preceding calendar

day

d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(or intraday indicative value).

If a Zero Value Event occurs during any Index Business Day then the Current Indicative

Value (or “intraday indicative value”) will be equal to the Zero Value Settlement Amount, subsequent to the event on

the date on which the Zero Value Event occurred, and on all future calendar days. Upon the occurrence of a Zero

Value Event, investors will likely lose all or substantially all of their investment. You will not benefit from any future

exposure to the Index after the occurrence of a Zero Value Event.

See “Specific Terms of the Securities — Automatic

Acceleration Upon Zero Value Event”.

209

If the Securities undergo a split or reverse split, the Current Indicative Value (or intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly.

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

a) On the Initial Trade Date, the Daily Tracking Fee is zero.

b) On any subsequent calendar day, the Daily Tracking Fee is equal to: (a) (i) 0.95%,

times

(ii) the Current Principal

Amount on the immediately preceding calendar day,

times

(iii) the Index Factor, on such calendar day,

times

(iv) the

Residual Factor, on the immediately preceding calendar day,

divided by

(b) 365.

c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity, early redemption, call or acceleration upon the occurrence of a Zero Value

Event.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly.

The Securities are subject to an “

Accrued Financing Fee

” per Security calculated as follows:

a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

b) On any subsequent calendar day, the Accrued Financing Fee is equal to: (a) the Accrued Financing Fee as of the

immediately preceding calendar day,

plus

(b) the Daily Financing Fee on such calendar day.

c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

b) On any subsequent calendar day, the Daily Financing Fee is equal to: (a) (i) 0.5,

times

(ii) the Financing Rate, on such

calendar day,

times

(iii) the Current Principal Amount, on the immediately preceding calendar day,

times

(iv) the

Residual Factor, on the immediately preceding calendar day,

divided by

(b) 360.

c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

210

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Securities. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity, early redemption, call or acceleration upon

the occurrence of a Zero Value Event.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

a) $0.00 on any calendar day, to but excluding the first day of an applicable Measurement Period.

b) On the first day of an applicable one-day Measurement Period:

At the close of trading on such Index Business Day, (the Current Principal Amount on the immediately preceding

calendar day × Index Factor on such Index Business Day)

c) From and including the first day of an applicable four-day Measurement Period:

i. At the close of trading on each Index Business Day during the applicable four-day Measurement Period, the

Measurement Period Cash Amount on the immediately preceding calendar day + (Current Principal Amount,

on the calendar day immediately preceding the first day of such Measurement Period × 0.25 × Index Factor,

on such Index Business Day).

ii. On any calendar day during an applicable four-day Measurement Period that is not an Index Business Day,

the Measurement Period Cash Amount on the immediately preceding Index Business Day.

d) On any calendar day after the last Index Business Day of an applicable Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable amount of financing will separately be deemed converted to cash as well. After the close

of trading on the final Index Business Day of an applicable four-day Measurement Period, the Measurement Period Cash

Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the four-

days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current Principal

Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed converted to cash,

at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is less than $50,000,000, the Calculation Date, subject to adjustments as described

under “— Market Disruption Event”;

b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is equal to or greater than $50,000,000, the four (4) Index Business Days from and

including the Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by CEFDSO <Index> on Bloomberg L.P.

211

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently ICE

Data Services.

The “

Calculation Date

” means June 2, 2050, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return on the Securities is based upon the performance of the S-Network Composite Closed-End Fund Index (Bloomberg:

“CEFX”). The Index is a mutual fund index designed to serve as a benchmark for closed-end funds listed in the U.S. that are

principally engaged in asset management processes designed to produce taxable annual yield.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on the same Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. We reserve

the right from time to time to waive this minimum redemption amount in our sole discretion on a case-by-case basis. You

should not assume you will be entitled to the benefit of any such waiver. For any applicable redemption request, the

“

Redemption Valuation Date

” will be the first Index Business Day following the date that the applicable redemption notice

and redemption confirmation are delivered, except that we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than the following Index Business Day. You should not assume you will be entitled to any such acceleration. To

satisfy the minimum redemption amount, your broker or other financial intermediary may bundle your Securities for

redemption with those of other investors to reach this minimum amount of 50,000 Securities.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity date, subject to adjustments. In addition, if a call notice has been issued, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event.”

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Business Day following the applicable Redemption Valuation

Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

212

Redemption

Amount

=

Closing Indicative

Value

-

Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable (less any

Coupon Amounts you may be entitled to receive as of the Redemption Valuation Date), or if the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

negative, you may lose all or a substantial portion of your investment upon early redemption. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right and, upon the

occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

See “Specific Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic Acceleration

Upon Zero Value Event”.

We discuss these matters in the accompanying prospectus under “Description of Debt Securities We May Offer — Redemption

and Repayment.”

The Redemption Amount is meant to induce arbitrageurs to counteract any trading of the Securities at a premium or discount

to their indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon (New York City time), or your Redemption

Confirmation after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your Redemption Notice will not be effective, you will not be able to redeem your Securities until the following Redemption

Date and your broker will need to complete all the required steps if you should wish to redeem your Securities on any

subsequent Redemption Date. In addition, UBS may request a medallion signature guarantee or such assurances of delivery as

it may deem necessary in its sole discretion. All instructions given to participants from beneficial owners of Securities relating

to the right to redeem their Securities will be irrevocable. If your DTC custodian or your brokerage firm is not a current UBS

customer, UBS will be required to on-board such DTC custodian or brokerage firm, in compliance with its internal policies and

procedures, before it can accept your Redemption Notice, your Redemption Confirmation or otherwise process your

redemption request. This on-boarding process may delay your Redemption Valuation Date and Redemption Date. Furthermore,

in certain circumstances, UBS may be unable to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which the Redemption Notice is received by UBS rather than

the following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen (18) calendar days’ prior

notice to the holders of the Securities (which may be provided via press release), such redemption to occur on any Business

Day that we may specify through and including the Maturity Date. Upon early redemption in the event we exercise this call

right, you will receive a cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call

Measurement Period. We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

213

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is less than $50,000,000, the Call Valuation Date, subject to adjustments as described

under “— Market Disruption Event”;

b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date of delivery by UBS of its notice to holders (which may be provided via press release) of its

exercise of the UBS Call Right is equal to or greater than $50,000,000, the four (4) Index Business Days from and

including the Call Valuation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of the UBS Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by CEFDSO <Index> on Bloomberg L.P.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Call Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment upon a call. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees (less any Coupon Amounts you may be entitled to receive), or if the compounded leveraged quarterly

return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is negative, you

may lose all or a substantial portion of your investment upon a call. The occurrence of Loss Rebalancing Events will

result in more frequent than quarterly compounding.

In addition, upon the occurrence of a Zero Value Event, the Securities may be automatically accelerated and

mandatorily redeemed by UBS.

See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”

below.

Automatic Acceleration Upon Zero Value Event

A “

Zero Value Event

” occurs if, on any Index Business Day (other than an Excluded Day), the Intraday Index Value

decreases by 66.66667% or more in value from the Last Reset Index Closing Level. From immediately after the Zero Value

Event and on all future calendar days, the Index Factor and the Current Principal Amount will be set equal to zero. The

Accrued Dividend and Accrued Fees will be fixed at their respective values on the Zero Value Event date and will stay

unchanged on all future calendar days.

When the Intraday Index Value decreases 66.66667% in value from the Last Reset Index Closing Level, the Index Factor will

equal zero. A Zero Value Event represents the first instance when the effective unleveraged notional amount that is deemed

invested in the Index per Security equals zero. It will have the effect of permanently resetting the value of your Securities to a

fixed value (which may be zero) and accelerating the Securities. You will not benefit from any future exposure to the Index

after the occurrence of a Zero Value Event. A Zero Value Event is expected to occur only in the narrow window of time

between the occurrence of a Permanent Deleveraging Event and completion of the leverage reset to 1.0 at the end of the

Second Permanent Deleveraging Valuation Date.

For the purposes of the “Zero Value Event” definition, an “

Excluded Day

” means (i) any calendar day after the Second

Permanent Deleveraging Valuation Date (ii) any calendar day on which a Zero Value Event has already occurred, (iii) any

calendar day after the occurrence of a Zero Value Event, and (iv) any calendar day after the last day of an applicable

Measurement Period.

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If a Zero Value Event occurs, all issued and outstanding Securities will be automatically terminated and mandatorily redeemed

by UBS and you will receive the Zero Value Settlement Amount on the Zero Value Settlement Date. You will not benefit from

any future exposure to the Index after the occurrence of a Zero Value Event.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event and specify the

relevant Zero Value Settlement Date and Zero Value Settlement Amount in respect of your investment in the Securities. The

Securities will be suspended from trading intra-day shortly after the event occurs and will likely not be open for trading again

on NYSE Arca before the Zero Value Settlement Date.

If a Zero Value Event occurs on an Index Business Day that would otherwise be a Coupon Ex-Date, such day will not be a

valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended.

The “

Zero Value Settlement Amount

” per Security will be calculated as follows:

a) On any calendar day, to but excluding the first day of an applicable Measurement Period:

(i) the Accrued Dividend,

minus

(ii) the Accrued Fees, on the date on which the Zero Value Event occurred.

b) From and including the first day of an applicable Measurement Period:

(i) the Measurement Period Cash Amount on the immediately preceding calendar day,

plus

(ii) the Accrued Dividend,

minus

(iii) the Accrued Fees, on the date on which the Zero Value Event occurred.

c) The minimum value of the Zero Value Settlement Amount will be zero.

For example:

a) If the Accrued Dividend was $0.04, the Accrued Fees was $0.01, and the Measurement Period Cash Amount was $0,

then the Zero Value Settlement Amount would be $0.03.

b) If the Accrued Dividend was $0.01, the Accrued Fees was $0.05, and the Measurement Period Cash Amount was $0,

then the Zero Value Settlement Amount would be $0.

c) If the Zero Value Event occurred during a four-day Measurement Period, and the Accrued Dividend was $0.01, the

Accrued Fees was $0.03, and the Measurement Period Cash Amount on the immediately preceding calendar day was

$6.59, then the Zero Value Settlement Amount would be $6.57.

The following graphics illustrate the formula to determine the Zero Value Settlement Amount, which has been simplified for

ease of presentation:

On any calendar day, to but excluding the first day of an applicable four-day Measurement Period:

Zero Value Settlement

Amount

=

Accrued Dividend

-

Accrued Fees on date

Zero Value Event

occurred

From and including the first day of an applicable Measurement Period:

Zero Value Settlement

Amount

=

Measurement Period

Cash Amount on immediately

preceding calendar day

+

Accrued

Dividend

-

Accrued Fees on date

Zero Value Event

occurred

The “

Zero Value Settlement Date

” will be the third Index Business Day following the date on which the Zero Value Event

occurred. For a detailed description of how the Current Indicative Value (or intraday indicative value) of the Securities is

calculated see “Valuation of the Index and the Securities”.

You may lose all or a substantial portion of your investment upon the occurrence of a Zero Value Event. Upon the

occurrence of a Zero Value Event you will receive on the Zero Value Settlement Date only the Zero Value Settlement

Amount per Security.

In addition, the Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right.

See “Specific

Terms of the Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 1.5. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day) decreases by 15% or more in value from the previously Last Reset Index Closing Level.

215

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

For purposes of the “Loss Rebalancing Event” definition, an “

Excluded Day

” means (i) the Index Business Day immediately

preceding any Quarterly Reset Valuation Date, if a Loss Rebalancing Event occurs after 3:15pm on such day, (ii) any

Quarterly Reset Valuation Date, (iii) any Loss Rebalancing Valuation Date, (iv) the Index Business Day immediately

preceding the first day of an applicable Measurement Period, if a Loss Rebalancing Event occurs after 3:15pm on such day (v)

any calendar day from and including the first day of an applicable Measurement Period, (vi) the First or Second Permanent

Deleveraging Valuation Dates, (vii) any calendar day after the Second Permanent Deleveraging Valuation Date, (viii) a Zero

Value Event date, and (ix) any calendar day after the Zero Value Event date.

“

Loss Rebalancing Valuation Date

” means:

a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”;

b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0, over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 1.5 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Permanent

Deleveraging Event. A Permanent Deleveraging Event is expected to occur only in the narrow window of time between the

occurrence of a Loss Rebalancing Event and completion of the leverage reset to 1.5 at the end of the Loss Rebalancing

Valuation Date.

A “

Permanent Deleveraging Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than

an Excluded Day) decreases by 50% or more in value from the Last Reset Index Closing Level.

For purposes of the “Permanent Deleveraging Event” definition, an “

Excluded Day

” means (i) the First or Second Permanent

Deleveraging Valuation Dates, (ii) any calendar day after the Second Permanent Deleveraging Valuation Date, (iii) a day upon

which a Zero Value Event occurs, (iv) any calendar day after the occurrence of a Zero Value Event, (v) the day which is two

Index Business Days prior to the first day of an applicable Measurement Period, if a Permanent Deleveraging Event occurs

after 3:15pm on such day and (vi) any calendar day from and including the Index Business Day immediately preceding the first

day of an applicable Measurement Period.

In the event that a Permanent Deleveraging Event has occurred, UBS will issue a press release before 9:00 a.m. on the Index

Business Day immediately following the date on which the Permanent Deleveraging Event occurred, announcing the

Permanent Deleveraging Event and notifying you of the Permanent Deleveraging Valuation Dates.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

a) The “

First Permanent Deleveraging Valuation Date

” means:

i.

Any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but on

which a Permanent Deleveraging Event has occurred, subject to adjustment as described under “- Market

Disruption Event”;

ii.

If a Permanent Deleveraging Event occurs after 3:15pm on any Index Business Day which would not

otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day following the

occurrence of such Permanent Deleveraging Event, subject to adjustment as described under “— Market

Disruption Event”.

The leverage of your Securities will be reset to approximately 1.5 at the close of trading on the First Permanent

Deleveraging Valuation Date.

b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event”.

216

The leverage of your Securities will be reset to approximately 1.0 at the close of trading on the Second Permanent

Deleveraging Valuation Date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (or the “intraday indicative

value”), Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the Leverage Factor, the

Index Factor, the Index Performance Ratio, the Residual Factor, the Index Closing Level, the Financing Rate, the Accrued Fees

(including determining any successor to the LIBOR base rate), the Coupon Amount, the Accrued Dividend, the Daily

Dividend, if any, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon redemption, if

applicable, the Zero Value Settlement Amount,

if any, that we will pay you upon acceleration following the occurrence of a

Zero Value Event, the Call Settlement Amount, if any, that we will pay you in the event that UBS calls the Securities, whether

a Loss Rebalancing Event has occurred, whether a Permanent Deleveraging Event has occurred and whether any day is a

Business Day or an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. The Security Calculation Agent will also be responsible for determining

whether the Index has been discontinued and whether there has been a material change in the Index. The Security Calculation

Agent will make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of

the Security Calculation Agent will be conclusive for all purposes and binding on us, you, and all other persons having an

interest in the Security, without liability on the part of the Security Calculation Agent. You will not be entitled to any

compensation from us for any loss suffered as a result of any determinations or calculations made by the Security Calculation

Agent. We may appoint a different Security Calculation Agent from time to time after the date of this prospectus supplement

without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity, call or acceleration upon the occurrence of a Zero Value Event, or

upon early redemption, or on a Coupon Payment Date on or prior to 12:00 noon, New York City time, on the Business Day

immediately preceding the Maturity Date, any Redemption Date, any Call Settlement Date, Zero Value Settlement Date or any

Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Accrued Dividend, the Daily Dividend, if any, the

Accrued Fees, the Redemption Amount and Redemption Fee Amount, if any, per Security, the Call Settlement Amount, if any,

per Security, the Current Principal Amount, the Zero Value Settlement Amount, and the Cash Settlement Amount, if any, per

Security, will be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545

would be rounded up to .7655); and all dollar amounts paid on the Stated Principal Amount of the Securities per holder will be

rounded to the nearest cent, with one-half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

217

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the affected

Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event that the

Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period is the

Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a Market Disruption Event with respect to the Index, in each case as determined by the Security

Calculation Agent in its sole discretion:

a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

c) the Index is not published; or

d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in the accompanying prospectus. If we exercise this right, the redemption price of the Securities

will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our relative

economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

In addition to the default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to

the final Coupon Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was

the last Index Business Day in the Final Measurement Period and the three Index Business Days immediately preceding the

date of acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the third

Index Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated

final Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant

final Coupon Valuation Date.

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in the attached prospectus under “Description of Debt

Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May Offer —

Modification and Waiver of Covenants.”

218

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify

the other party in writing of the quotation. The amount referred to in the first bullet point above will equal the lowest — or, if

there is only one, the only — quotation obtained, and as to which notice is so given, during the default quotation period. With

respect to any quotation, however, the party not obtaining the quotation may object, on reasonable and significant grounds, to

the assumption or undertaking by the qualified financial institution providing the quotation and notify the other party in writing

of those grounds within two Business Days after the last day of the default quotation period, in which case that quotation will

be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index or Termination of Our License Agreement with the Index Sponsor;

Alteration of Method of Calculation

If (i) the Index Sponsor or Index Calculation Agent discontinue publication of, or otherwise fails to publish, the Index, (ii) our

license agreement with the Index Sponsor terminates or (iii) the Index Sponsor or Index Calculation Agent does not make the

Index Constituent Securities and/or their unit weighting available to the Security Calculation Agent, and, in each case, any

other person or entity publishes an index licensed to UBS that the Security Calculation Agent determines is comparable to the

Index and for which the Index Constituent Securities and/or their unit weighting are available to the Security Calculation

Agent (such index being referred to herein as a “

successor index

”), and the Security Calculation Agent approves such index as

a successor index, then the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination, Coupon Amounts and the amount payable at maturity, call, acceleration upon the occurrence of a Zero Value

Event or upon early redemption and all other related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

219

If the Index Sponsor or Index Calculation Agent discontinue publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in this prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, including the Coupon Amounts, Current Principal Amount,

Current Indicative Value or intraday indicative value, Closing Indicative Value, Index Factor, Index Performance Ratio,

Residual Factor, Accrued Fees, Index Closing Levels on the applicable dates of determination, all other related payment terms

and the amount payable at maturity, call, upon early redemption or upon acceleration upon the occurrence of a Zero Value

Event by reference to such Substitute Index. If the Security Calculation Agent so elects to replace the original Index with a

Substitute Index, the Security Calculation Agent will cause written notice thereof to be furnished to the trustee, to us and to the

holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after June 2, 2020 that

(i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities included

in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent Securities

(including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates,

third parties with whom we transact or similarly situated third parties in performing our or their obligations in

connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

c) any event that occurs on or after June 2, 2020 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

220

d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a substitute index, or the value thereof, is changed in a

material respect, or if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index

or such successor index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of

the Index or such successor index had such changes or modifications not been made, then the Security Calculation Agent will

make such calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in

order to arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if

such changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level

for the Index or such successor index with reference to the Index or such successor index, as adjusted. The Security

Calculation Agent will accordingly calculate the Index Closing Level, the Index Performance Ratio, the Coupon Amount, the

Accrued Dividend, the Daily Dividend, if any, the Accrued Fees, the Redemption Fee Amount, if any, the Cash Settlement

Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, upon early redemption, if applicable, the

Call Settlement Amount, if any, that we will pay you in the event UBS calls the Securities, the Zero Value Settlement Amount,

if any, that we will pay you in the event of acceleration upon the occurrence of a Zero Value Event, if applicable, the Last

Reset Index Closing Level and all related payment terms based on the Index Closing Level calculated by the Security

Calculation Agent, as adjusted. Accordingly, if the method of calculating the Index or a successor index is modified so that the

level of the Index or such successor index is a fraction of what it would have been if there had been no such modification (

e.g.

,

due to a split in the Index), which, in turn, causes the Index Closing Level of the Index or such successor index to be a fraction

of what it would have been if there had been no such modification, then the Security Calculation Agent will make such

calculations and adjustments in order to arrive at an Index Closing Level for the Index or such successor index as if it had not

been modified (

e.g.

, as if such split had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in this prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity, call or acceleration upon the occurrence of a Zero Value Event, or

upon early redemption, will be made to accounts designated by you and approved by us, or at the corporate trust office of the

trustee in New York City, but only when the Securities are surrendered to the trustee at that office. We also may make any

payment or delivery in accordance with the applicable procedures of the depositary.

Business Day

When we refer to a Business Day or a New York Business Day with respect to the Securities, we mean a day that is a Business

Day of the kind described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the

accompanying prospectus.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the attached

prospectus, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead be paid

on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described under “—

Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of the Holders” above.

221

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of this prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The Securities do

not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in the accompanying prospectus.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

222

13. ETRACS Alerian Midstream Energy Index due June 21, 2050

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

The Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described in the accompanying prospectus. This prospectus supplement

summarizes specific financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described in “Description of Debt Securities We May Offer” in the accompanying prospectus. The terms

described here (i.e., in this prospectus supplement) supplement those described in the accompanying prospectus and, if the

terms described here are inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or call, or upon early redemption. Instead, at

maturity, you will receive a cash payment the amount of which will vary depending on the performance and path of the Index

calculated in accordance with the formula set forth below and will be reduced by the Daily Tracking Fee as of the last Index

Business Day in the applicable Measurement Period or Redemption Valuation Date.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment on the Redemption Date equal to the Redemption Amount as described below under

“— Early Redemption at the Option of the Holders.” If the amount so calculated is equal to or less than zero, the Redemption

Amount will be zero and you will not receive a cash payment.

If we elect to exercise our call right to redeem all of the Securities, subject to compliance with the procedures set forth below,

for each Security you will receive a cash payment on the Call Settlement Date equal to the Call Settlement Amount, as

described below under “— UBS’s Call Right.” If the amount so calculated is equal to or less than zero, the Call Settlement

Amount will be zero and you will not receive a cash payment.

The Securities may pay a cash coupon during their term.

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the Coupon Amount, if any. The Coupon Amount will equal the

sum of the cash distributions that a

hypothetical holder of Index Constituent Securities would have been entitled to receive in respect of the Index Constituent

Securities during the relevant period. The Coupon Amount may be equal to zero.

The “

Coupon Amount

” means (i) on any calendar day that is not a Coupon Ex-Date, an amount per Security equal to zero;

and (ii) on any calendar day that is a Coupon Ex-Date, an amount per Security equal to the Accrued Dividend on the Coupon

Valuation Date immediately preceding such Coupon Ex-Date. The minimum value of the Coupon Amount will be zero.

The following graphic illustrates the formula to determine the Coupon Amount on a Coupon Ex-Date, which has been

simplified for ease of presentation:

Coupon Amount

=

Accrued Dividend, on the immediately

preceding Coupon Valuation Date

If the Securities undergo a split or reverse split, the Coupon Amount will be adjusted accordingly.

Notwithstanding the foregoing, with respect to cash distributions or dividends on an Index Constituent Security which is

scheduled to be paid prior to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index Constituent Security fails

to pay the dividend or cash distribution to holders of such Index Constituent Security by the scheduled payment date for such

dividend or cash distribution, such dividend or distribution will be assumed to be zero for the purposes of calculating the

applicable Coupon Amount. Any such delayed dividend or cash distribution payments from the issuer of an Index Constituent

Security will be attributed back to the Accrued Dividend and included in the next Coupon Amount.

The “

Accrued Dividend

” means, as of any date of determination, an amount per Security equal to: (i) on the Initial Trade

Date, $0.00 per Security; and (ii) on any subsequent calendar day (a) the Accrued Dividend as of the immediately preceding

calendar day,

plus

(b) the Daily Dividend on such calendar day,

minus

(c) the Coupon Amount on such calendar day.

If the Securities undergo a split or reverse split, the Accrued Dividend will be adjusted accordingly.

The “

Daily Dividend

” means on any calendar day, an amount per Security equal to:

223

(a)(i) the Index Dividend Point,

times

(ii) the Current Principal Amount on the immediately preceding calendar day,

divided by

(b) the Index Closing Level on the immediately preceding calendar day.

The Daily Dividend will be rounded to four decimal places.

The Daily Dividend is intended to approximate the amount of distributions in US Dollars that a holder of the Securities would

receive if such holder held an unleveraged investment in the Index Constituent Securities directly.

The “

Index Dividend Point

” on any calendar day, means an amount per Security equal to (a) (the

sum of the products of

(i)

the cash value of distributions, that a hypothetical holder of one share of an Index Constituent Security, whose “ex-dividend

date” occurs on such calendar day, would have been entitled to receive (adjustments relating to foreign exchange rate fixings

or dividend withholding taxes, described below), and (ii) the number of index shares of that Index Constituent Security

included in the Index as of such date),

divided by

(b) the Divisor as of such date.

In respect of distributions on any Canadian Index Constituent Securities, on their respective “ex-dividend date”, the cash value

of distributions will be deemed to be converted from Canadian Dollars to U.S. Dollars at the WM / Reuters USD/CAD foreign

exchange rate as of 4:00 p.m. Eastern Time on such ex-dividend date (the “

WM / Reuters FX Rate

”). These mid-market

fixings are calculated by the WM Company based on Reuters data and appear on the Reuters pages WMRA.

Notwithstanding the foregoing, if the Security Calculation Agent determines on the relevant determination date that:

(a) the WM/ Reuters FX Rate has been discontinued (or otherwise ceases to be published), materially disrupted

or is no longer representative of the underlying market or economic reality; or

(b) 4:00 p.m. Eastern Time is no longer the appropriate time for fixing the WM/Reuters FX Rate for any of the

reasons set forth in (a) above,

then the Security Calculation Agent will, in the case of (a) use a substitute or successor provider of foreign exchange rates that

it has determined in its sole discretion is most comparable to the WM / Reuters FX Rate, provided that if the Security

Calculation Agent determines that there is an industry- accepted successor provider of foreign exchange rates, then the

Security Calculation Agent shall use such successor provider of foreign exchange rates; or in the case of (b) use such other

time for fixing of the foreign exchange rate as it has determined in its sole discretion is appropriate based on the WM / Reuters

FX Rate, or such substitute or successor provider of foreign exchange rates, as it has determined in its sole discretion is most

comparable to the WM / Reuters FX Rate, as set forth above.

As of the date of this prospectus supplement, the applicable dividend withholding tax would reduce the cash value of

distributions in respect of any Canadian Index Constituent Security by 15% for purposes of calculating the Index Dividend

Point. The 15% rate is subject to adjustment if there is a change under Canadian law or the tax treaty between the United States

and Canada or to the Canadian dividend withholding tax rate applicable to a U.S. holder of a Canadian Index Constituent

Security that is eligible for the benefits of the tax treaty between the United States and Canada.

In the event that an adjustment relating to foreign exchange rate fixings or dividend withholding taxes is made, we will issue a

press release announcing such adjustment and the effective date for such adjustment.

The Index Dividend Point, on any calendar day, represents the total cash value of distributions that a hypothetical holder of the

Index Constituent Securities, in proportion to the weights of the Index Constituent Securities, would have been entitled to

receive with respect to any Index Constituent Security for those cash distributions whose “ex-dividend date” occurs on such

calendar day.

The Index Dividend Point may not be publicly disseminated by the Index Calculation Agent. The data used to calculate the

Index Dividend Point is the property of the Index Calculation Agent and investors may be required to pay a fee and meet any

other requirements of the Index Calculation Agent in order to access such information. See “Risk Factors — The value of the

Index Dividend Point may not be publicly disseminated or otherwise freely accessible to investors”.

The “

Divisor

” means, as of any date of determination, the divisor used by the Index Calculation Agent to calculate the Index

Closing Level.

The “

Coupon Payment Date

” means the 15th Index Business Day following each Coupon Valuation Date. The first Coupon

Payment Date will be October 21, 2020, subject to adjustment. If such day is not a Coupon Business Day, the Coupon Payment

Date shall be the following Coupon Business Day.

If the final Coupon Ex-Date occurs prior to the Maturity Date, but the final Coupon Payment Date otherwise occurs after the

Maturity Date, in such case, the final Coupon Payment Date will be the Maturity Date, subject to adjustment.

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date. If such day is not a

Coupon Business day, the Coupon Record Date shall be the immediately preceding Coupon Business Day.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Coupon Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the Coupon Business Day immediately preceding the applicable Coupon Record Date.

224

If a day that would otherwise be a Coupon Ex-Date occurs on or after the first day of an applicable Measurement Period, such

day will not be a valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the Coupon Amount

corresponding to such Coupon Ex-Date will be included in the Cash Settlement Amount or Call Settlement Amount payable at

maturity or call, respectively.

The “

Coupon Valuation Date

” means the 30th day of each March, June, September and December, of each calendar year

during the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such

date, provided that the final Coupon Valuation Date will be the Calculation Date. The first Coupon Valuation Date will be

September 30, 2020.

“

Coupon Business Day

” means any Index Business Day other than an Index Business Day on which banking institutions in

New York are not authorized or obligated by law, regulation or executive order to be open.

“

record date

” means, (i) with respect to a distribution on an Index Constituent Security, the date on which a holder of the

Index Constituent Security must be registered as a stockholder/unitholder of such Index Constituent Security in order to be

entitled to receive such distribution, and (ii) with respect to any split or reverse split, the tenth Business Day after the

announcement date.

“

ex-dividend date

” means, with respect to a distribution on an Index Constituent Security, the first Business Day on which

transactions in such Index Constituent Security trade on the Primary Exchange without the right to receive such distribution.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is June 21, 2050, which will be the third Business Day following the last Index Business Day in the

Final Measurement Period, subject to adjustment as described below under

“— Market Disruption Event.”

For each Security, unless earlier called or redeemed, you will receive at maturity a cash payment equal to the Closing

Indicative Value on the last day of the Final Measurement Period. We refer to this payment as the “

Cash Settlement

Amount

”. If the amount so calculated is equal to or less than zero, the payment at maturity will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The Securities are fully exposed to any decline

in the level of the Index. The negative effect of the Daily Tracking Fee will reduce your final payment. If the level of the

Index (as measured by the Index Closing Level at the end of the Final Measurement Period, as compared to the initial

Index Closing Level or the Index level at the time you purchase the Securities, as applicable) does not increase by an

amount sufficient to offset the negative effect of the Daily Tracking Fee (less any Coupon Amounts you may be entitled

to receive), or if the final Index level is less than the initial Index Closing Level (or the Index level at the time you

purchase the Securities, as applicable), you may lose all or a substantial portion of your investment at maturity. The

Daily Tracking Fee also takes into account the performance of the Index, as measured by the Current Principal

Amount.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right. If the Securities are

called by UBS, the Call Settlement Amount may be zero and you may lose all or a substantial portion of your

investment.

See “— UBS’s Call Right”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The “

Closing Indicative Value

” represents the dollar value per Security that an investor would receive on any day if it

redeemed the Security on such day (excluding any Redemption Fee Amount). The Closing Indicative Value per Security will

be calculated as follows:

a) On the Initial Trade Date, $25.00 per Security

b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period, an amount

per Security equal to:

Current Principal Amount + Accrued Dividend

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

Current Principal Amount + Accrued Dividend + Measurement Period Cash Amount

The minimum value of the Closing Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

225

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The Current Principal Amount represents the notional investment in the Index Constituent Securities per Security at the close

of trading on any calendar day.

The “

Current Principal Amount

” per Security, will be calculated as follows:

a) On the Initial Trade Date, $25.00 per Security;

b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period

(Current Principal Amount on the previous calendar day × Index Factor) —Daily Tracking Fee

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor)

On any calendar day during the Measurement Period that is not an Index Business Day, the Current Principal Amount will be

equal to the Current Principal Amount on the previous calendar day.

The minimum value of the Current Principal Amount on any calendar day will be zero.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

The “

Index Factor

” on any Index Business Day prior to but excluding the first day of an applicable Measurement Period, will

equal:

(i) the Index Closing Level, on such Index Business Day,

divided by,

(ii) the Index Closing Level, on the immediately

preceding Index Business Day.

From and including the first day of an applicable Measurement Period, the Index Factor will equal:

(i) the Index Closing Level, on such calendar day,

divided by,

(ii) the Index Closing Level on the calendar day

immediately preceding the first day of such Measurement Period.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the immediately preceding Index Business Day. The Index Factor will therefore equal one (1) on any calendar day that is not

an Index Business Day and is prior to the first Index Business Day of a five-day Measurement Period.

The “

Residual Factor

” will be calculated as follows:

a) 1.0 on any calendar day, prior to but excluding the first day of an applicable Measurement Period

b) From and including the first day of an applicable five-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such five-day

Measurement Period,

divided by

(b) five.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas.

For example, on the first Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal

(4/5), on the second Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (3/5),

on the third Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (2/5), on the

fourth Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (1/5) and on the last

Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal zero.

On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the Residual Factor

will be equal to zero.

The “

Index Closing Level

” on any date of determination is the closing level of the Index as reported on the NYSE and

Bloomberg; provided, however, that if the closing level of the Index as reported on the NYSE (or any successor) differs from

the closing level of the Index as reported on Bloomberg (or any successor), then the Index Closing Level will be the closing

level of the Index as calculated by the Index Calculation Agent. 335.0383 is the initial Index Closing Level measured on June

19, 2020 (the Initial Trade Date), as determined by the Security Calculation Agent.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level from

the last Index Business Day prior to such calendar day.

“

Measurement Period

” means the Final Measurement Period or Call Measurement Period, as applicable.

The

“Current Indicative Value”

or “

intraday indicative value

”, as determined by the Security Calculation Agent, means the

Closing Indicative Value per Security calculated on an intraday basis on any Index Business Day.

For the purposes of calculating the Current Indicative Value, the Index Factor (which is a component of the Current Principal

Amount definition) will be determined using the Intraday Index Value.

226

Additionally, from and including the first day of an applicable Measurement Period, the Current Indicative Value will be

calculated using (i) the Measurement Period Cash Amount from the immediately preceding calendar day, and (ii) the Residual

Factor from the immediately preceding calendar day.

The minimum value of the Current Indicative Value (or intraday indicative value) on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(or intraday indicative value).

If the Securities undergo a split or reverse split, the Current Indicative Value (or intraday indicative value) will be adjusted

accordingly.

The “

Daily Tracking Fee

” means, as of any date of determination, an amount per Security equal to 0.75% per annum,

calculated as follows:

a) On the Initial Trade Date, $0.00 per Security;

b) On any subsequent calendar day:

(0.75% / 365) × Current Principal Amount on the immediately preceding calendar day × Index Factor

The minimum value of the Daily Tracking Fee on any calendar day will be zero.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

a) $0.00, on any calendar day prior to but excluding the first day of an applicable Measurement Period.

b) On the first day of an applicable one-day Measurement Period:

a. At the close of trading on such Index Business Day, the (Current Principal Amount, on the immediately

preceding calendar day,

times

Index Factor, on such Index Business Day),

minus

Daily Tracking Fee.

c) From and including the first day of an applicable five-day Measurement Period:

a. At the close of trading on each Index Business Day, will equal:

(a) Measurement Period Cash Amount on the immediately preceding calendar day,

plus

(b) ( (i) Current

Principal Amount, on the calendar day immediately preceding the first day of such Measurement Period,

times

(ii) Index Factor,

divided by

(iii) five),

minus

(c) Daily Tracking Fee

b. On any calendar day that is not an Index Business Day, will equal the Measurement Period Cash Amount on

the immediately preceding Index Business Day,

minus

Daily Tracking Fee

d) On any calendar day after the last Index Business Day of an applicable Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

The minimum value of the Measurement Period Cash Amount on any calendar day will be zero.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business day during a five-day Measurement Period, approximately 20% of the Current

Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash. After the close of trading on the final Index Business Day of an applicable five-day Measurement Period,

the Measurement Period Cash Amount will represent the averaged value of the Current Principal Amount that was deemed

converted to cash across the five-days of such Measurement Period. In case of a one-day Measurement Period, approximately

100% of the Current Principal Amount will be deemed converted to cash, at the close of trading of the first day of such

Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is less than $250,000,000, the Calculation Date, subject to adjustments as described under

“Specific Terms of the Securities — Market Disruption Event”;

b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is equal to or greater than $250,000,000, the five (5) Index Business Days from, and including,

the Calculation Date, subject to adjustment as described under “Specific Terms of the Securities — Market Disruption

Event.”

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For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities as of the close of trading

on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by AMNASO <Index> on Bloomberg L.P.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently S&P

Dow Jones Indices.

The “

Calculation Date

” means June 10, 2050 unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Business Day

” means any day that is not a Saturday, a Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

Underlying Index

The Alerian Midstream Energy Index (Bloomberg: “AMNA Index”) is a broad-based composite of North American energy

infrastructure companies who earn the majority of their cash flow from midstream activities involving energy commodities,

such as gathering & processing, liquefaction, pipeline transportation, rail terminating, and storage of energy commodities. The

Index is calculated by S&P Dow Jones Indices using a capped, float-adjusted, capitalization weighted methodology.

We refer

to the companies included in the Index as the “

Index Constituent Securities

”).

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on the same Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. To satisfy

the minimum redemption amount, your broker or other financial intermediary may bundle your Securities for redemption with

those of other investors to reach this minimum amount of 50,000 Securities. We reserve the right from time-to-time to waive

this minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume that you will be

entitled to the benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be

the first Index Business Day following the date that the applicable redemption notice and redemption confirmation are

delivered, except that we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the

Redemption Valuation Date to the date on which the notice of redemption is received by UBS rather than the following Index

Business Day. You should not assume that you will be entitled to any such acceleration.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The First Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if a call notice has been issued, the

last Redemption Valu ation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event.”

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date —Redemption Fee Amount.

We refer to this cash payment as the “

Redemption Amount

.”

If the amount calculated above is less than or equal to zero, the payment upon early redemption will be zero.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of such Redemption Valuation Date).

We reserve the right from time to time to reduce or waive the Redemption Fee Amount in our sole discretion on a case-by-case

basis. You should not assume you will be entitled to the benefit of any such waiver.

228

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount =

Closing Indicative Value —

Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Daily Tracking Fee and the Redemption Fee Amount will reduce your Redemption Amount. If the level of the Index

does not increase by an amount sufficient to offset the combined negative effect of the Daily Tracking Fee and the

Redemption Fee Amount (less any Coupon Amounts you may be entitled to receive), or if the final Index level is less

than the initial Index Closing Level (or the Index level at the time you purchase the Securities, as applicable), you may

lose some or all of your investment upon early redemption.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right.

See — UBS’s Call

Right”.

We discuss these matters in the accompanying prospectus under “Description of Debt Securities We May Offer — Redemption

and Repayment.”

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

,” to us via e-mail

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your notice of redemption after 12:00 noon (New York City time), or your confirmation of

redemption after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your notice will not be effective, you will not be able to redeem your Securities until another date and your broker will need to

complete all the required steps if you should wish to redeem your Securities on any subsequent date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request.. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to reduce or waive the minimum redemption amount or the Redemption Fee Amount in

our sole discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than the following Index Business Day. You should not assume you will be entitled to any such waiver or election

to accelerate the Redemption Valuation Date.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen (18) calendar days’ prior

notice to the holders of the Securities (which notice may be provided via press release), such redemption to occur on any

Business Day that we may specify through and including the Maturity Date. Upon early redemption in the event we exercise

this right, you will receive a cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call

Measurement Period. We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount so calculated is equal to or less than zero, the payment upon exercise of the UBS Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

229

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date of delivery by UBS of its notice to holders of its exercise of the UBS Call Right is less than $250,000,000,

the Call Valuatio n Date, subject to adjustments as described under “— Market Disruption Event.”; or

b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date of delivery by UBS of its notice to holders of its exercise of the UBS Call Right is equal to or greater than

$250,000,000, the five (5) Index Business Days from and including the Call Valuation Date, subject to adjustments as

described under “ Specific Terms of the Securities — Market Disruption Event.”

For the purpose of determining the Call Measurement Period, the “

Market Value

” of the Securities as of the close of trading

on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which may be provided

via press release) of its exercise of the UBS Call Right, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by AMNASO <Index> on Bloomberg L.P.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Call Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment upon a call. The negative effect of the Daily Tracking Fee

will reduce your final payment. If the level of the Index does not increase by an amount sufficient to offset the negative

effect of the Daily Tracking Fee (less any Coupon Amounts you may be entitled to receive), or if the final Index level is

less than the initial Index Closing Level (or the Index level at the time you purchase the Securities, as applicable), you

may lose some or all of your investment upon UBS’s exercise of its call right.

Security Calculation Agent

UBS Securities LLC will act as the “Security Calculation Agent.” The Security Calculation Agent will be solely responsible

for all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (or “intraday indicative

value”), Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the Index Factor, the

Residual Factor, the Index Closing Level, the Daily Tracking Fee, the Coupon Amount, the Accrued Dividend, the Daily

Dividend, if any, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon redemption, if

applicable and the Call Settlement Amount, if any, that we will pay you in the event that UBS calls the Securities, and whether

any day is a Business Day or Index Business Day and all such other matters as may be specified herein as matters to be

determined by the Security Calculation Agent. The Security Calculation Agent will also be responsible for determining

whether the Index has been discontinued and whether there has been a material change in the Index. The Security Calculation

Agent will make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of

the Security Calculation Agent will be conclusive for all purposes and binding on us, you and all other persons having an

interest in the Security, without liability on the part of the Security Calculation Agent. You will not be entitled to any

compensation from us for any loss suffered as a result of any determinations or calculations made by Security Calculation

Agent. We may appoint a different Security Calculation Agent from time to time after the date of this prospectus supplement

without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or call, or upon early redemption, or on a Coupon Payment Date on

or prior to 12:00 noon (New York City time) on the Business Day immediately preceding the Maturity Date, any Redemption

Date, any Call Settlement Date or any Coupon Payment Date, as applicable.

230

All dollar amounts related to determination of the Coupon Amount, the Accrued Dividend, the Daily Dividend, if any, the

Daily Tracking Fee, the Redemption Amount and Redemption Fee Amount, if any, per security, the Call Settlement Amount, if

any, per security, the Current Principal Amount and the Cash Settlement Amount, if any, per security, will be rounded to the

nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded up to .7655); and

all dollar amounts paid on the Stated Principal Amount of Securities per holder will be rounded to the nearest cent, with one-

half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a five-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the five-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4, June 5 and June 6, and there is a Market Disruption Event with respect to the Index on

June 2, but no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index

Business Day of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day,

June 6th the fourth Index Business Day and the next Index Business Day after June 6th would be the final day of the

Measurement Period. The same approach would be applied if there is a Market Disruption Event during a five-day Final

Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date) or the Calculation Date

(in the event that the Final Measurement Period is the Calculation Date), the Index Closing Level for such Redemption

Valuation Date, Call Valuation Date or Calculation Date will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. For example, if the Redemption Valuation Date, for purposes of calculating a Redemption Amount,

is based on the Index Closing Level on June 2 and there is a Market Disruption Event with respect to the Index on June 2, then

the Index Closing Level on June 3 will be used to calculate the Redemption Amount, assuming that no such Market Disruption

Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the affected

Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event that the

Call Measurement Period is the Call Valuation Date) or Calculation Date (in the event that the Final Measurement Period is the

Calculation Date) occurring more than five Index Business Days following the day originally scheduled to be such Index

Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation Date or Calculation Date. If a

Market Disruption Event has occurred or is continuing with respect to the Index on the fifth Index Business Day following the

date originally scheduled to be such Index Business Day of the Measurement Period or any Redemption Valuation Date, Call

Valuation Date or Calculation Date, the Security Calculation Agent or one of its affiliates will determine the Index Closing

Level based on its good faith estimate of the Index Closing Level that would have prevailed on such fifth Index Business Day

but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

c) the Index is not published; or

d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

231

For this purpose, an “

absence of trading

” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in the accompanying prospectus. If we exercise this right, the redemption price of the Securities

will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our relative

economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.” In addition to the

default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to the final Coupon

Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was the last Index

Business Day in the Final Measurement Period and the three Index Business Days immediately preceding the date of

acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the third Index

Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated final

Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant final

Coupon Valuation Date.

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in the attached prospectus under “Description of Debt

Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May Offer —

Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent, in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking, plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

232

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. ,or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index or Termination of Our License Agreement with the Index Sponsor;

Alteration of Method of Calculation

If (i) the Index Sponsor or Index Calculation Agent discontinue publication of, or otherwise fails to publish, the Index, (ii) our

license agreement with the Index Sponsor terminates or (iii) the Index Sponsor or Index Calculation Agent does not make the

Index Constituent Securities and/or their unit weighting available to the Security Calculation Agent, and, in each case, any

other person or entity publishes an index licensed to UBS that the Security Calculation Agent determines is comparable to the

Index and for which the Index Constituent Securities and/or their unit weighting are available to the Security Calculation

Agent (such index being referred to herein as a “

successor index

”), and the Security Calculation Agent approves such index as

a successor index, then the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination, Coupon Amounts and the amount payable at maturity, call or upon early redemption and all other related

payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor or Index Calculation Agent discontinue publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date, as applicable, or on any other relevant date on which the Index Closing Level is to be determined and the Security

Calculation Agent determines that no successor index is available at such time, or the Security Calculation Agent has

previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date or any other relevant date on which the Index Closing Level is to be determined, then the Security

Calculation Agent will determine the Index Closing Level using the Index Closing Level on the last Index Business Day

immediately prior to such discontinuation or unavailability, as adjusted for certain corporate actions. In such event, the

Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in this prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, including the Coupon Amounts, Current Principal Amount,

Current Indicative Value (or “intraday indicative value”), Closing Indicative Value, Index Factor, Residual Factor, Daily

Tracking Fee, Accrued Dividend, Daily Dividend, Index Closing Levels on the applicable dates of determination, all other

related payment terms and the amount payable at maturity, call, upon early redemption by reference to such Substitute Index.

If the Security Calculation Agent so elects to replace the original Index with a Substitute Index, the Security Calculation Agent

will cause written notice thereof to be furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

233

b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after June 19, 2020

that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities

included in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent

Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our

affiliates, third parties with whom we transact or similarly situated third parties in performing our or their obligations

in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

c) any event that occurs on or after June 19, 2020 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a substitute index, or the value thereof, is changed in a

material respect, or if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index

or such successor index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of

the Index or such successor index had such changes or modifications not been made, then the Security Calculation Agent will

make such calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in

order to arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if

such changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level

for the Index or such successor index with reference to the Index or such successor index, as adjusted. The Security

Calculation Agent will accordingly calculate the Index Closing Level, the Coupon Amount, the Accrued Dividend, the Daily

Dividend, if any, the Daily Tracking Fee, the Redemption Fee Amount, if any, the Cash Settlement Amount, if any, that we

will pay you at maturity, the Redemption Amount, if any, upon early redemption, if applicable, the Call Settlement Amount, if

any, that we will pay you in the event UBS calls the Securities, and all related payment terms based on the Index Closing Level

calculated by the Security Calculation Agent, as adjusted. Accordingly, if the method of calculating the Index or a successor

index is modified so that the level of the Index or such successor index is a fraction of what it would have been if there had

been no such modification (

e.g.

, due to a split in the Index), which, in turn, causes the Index Closing Level of the Index or such

successor index to be a fraction of what it would have been if there had been no such modification, then the Security

Calculation Agent will make such calculations and adjustments in order to arrive at an Index Closing Level for the Index or

such successor index as if it had not been modified (

e.g.

, as if such split had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in this prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

234

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or call, or upon early redemption will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Business Day

When we refer to a Business Day with respect to the Securities, we mean a day that is a Business Day of the kind described in

“Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the accompanying prospectus.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the attached

prospectus, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead be paid

on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described under “—

Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of the Holders” above.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of this prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover any time, without your consent and without notifying you. The Securities do not

limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in the accompanying prospectus.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

235

14. ETRACS Alerian Midstream Energy High Dividend Index ETN due July 19, 2050

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“DTC”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

The Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described in the accompanying prospectus. This prospectus supplement

summarizes specific financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described in “Description of Debt Securities We May Offer” in the accompanying prospectus. The terms

described here (i.e., in this prospectus supplement) supplement those described in the accompanying prospectus and, if the

terms described here are inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or call, or upon early redemption. Instead, at

maturity, you will receive a cash payment the amount of which will vary depending on the performance and path of the Index

calculated in accordance with the formula set forth below and will be reduced by the Daily Tracking Fee as of the last Index

Business Day in the applicable Measurement Period or Redemption Valuation Date.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment on the Redemption Date equal to the Redemption Amount as described below under

“— Early Redemption at the Option of the Holders.” If the amount so calculated is equal to or less than zero, the Redemption

Amount will be zero and you will not receive a cash payment.

If we elect to exercise our call right to redeem all of the Securities, subject to compliance with the procedures set forth below,

for each Security you will receive a cash payment on the Call Settlement Date equal to the Call Settlement Amount, as

described below under “— UBS’s Call Right.” If the amount so calculated is equal to or less than zero, the Call Settlement

Amount will be zero and you will not receive a cash payment.

The Securities may pay a cash coupon during their term.

Coupon Payment

For each Security you hold on the applicable Coupon Record Date, on each Coupon Payment Date you will receive an amount

in cash equal to the Coupon Amount, if any. The Coupon Amount will equal the sum of the cash distributions that a

hypothetical holder of Index Constituent Securities would have been entitled to receive in respect of the Index Constituent

Securities during the relevant period. The Coupon Amount may be equal to zero.

The “

Coupon Amount

” means (i) on any calendar day that is not a Coupon Ex-Date, an amount per Security equal to zero;

and (ii) on any calendar day that is a Coupon Ex-Date, an amount per Security equal to the Accrued Dividend on the Coupon

Valuation Date immediately preceding such Coupon Ex-Date. The minimum value of the Coupon Amount will be zero.

The following graphic illustrates the formula to determine the Coupon Amount on a Coupon Ex-Date, which has been

simplified for ease of presentation:

Coupon Amount

=

Accrued Dividend, on the immediately

preceding Coupon Valuation Date

If the Securities undergo a split or reverse split, the Coupon Amount will be adjusted accordingly.

Notwithstanding the foregoing, with respect to cash distributions or dividends on an Index Constituent Security which is

scheduled to be paid prior to the applicable Coupon Ex-Date, if, and only if, the issuer of such Index Constituent Security fails

to pay the dividend or cash distribution to holders of such Index Constituent Security by the scheduled payment date for such

dividend or cash distribution, such dividend or distribution will be assumed to be zero for the purposes of calculating the

applicable Coupon Amount. Any such delayed dividend or cash distribution payments from the issuer of an Index Constituent

Security will be attributed back to the Accrued Dividend and included in the next Coupon Amount.

The “

Accrued Dividend

” means, as of any date of determination, an amount per Security equal to: (i) on the Initial Trade

Date, $0.00 per Security; and (ii) on any subsequent calendar day (a) the Accrued Dividend as of the immediately preceding

calendar day,

plus

(b) the Daily Dividend on such calendar day,

minus

(c) the Coupon Amount on such calendar day.

If the Securities undergo a split or reverse split, the Accrued Dividend will be adjusted accordingly.

The “

Daily Dividend

” means on any calendar day, an amount per Security equal to:

236

(a)(i) the Index Dividend Point,

times

(ii) the Current Principal Amount on the immediately preceding calendar day,

divided by

(b) the Index Closing Level on the immediately preceding calendar day.

The Daily Dividend will be rounded to four decimal places.

The Daily Dividend is intended to approximate the amount of distributions in US Dollars that a holder of the Securities would

receive if such holder held an unleveraged investment in the Index Constituent Securities directly.

The “

Index Dividend Point

” on any calendar day, means an amount per Security equal to (a) (the

sum of the products of

(i)

the cash value of distributions, that a hypothetical holder of one share of an Index Constituent Security, whose “ex-dividend

date” occurs on such calendar day, would have been entitled to receive (adjustments relating to foreign exchange rate fixings

or dividend withholding taxes, described below), and (ii) the number of index shares of that Index Constituent Security

included in the Index as of such date),

divided by

(b) the Divisor as of such date.

In respect of distributions on any Canadian Index Constituent Securities, on their respective “ex-dividend date”, the cash value

of distributions will be deemed to be converted from Canadian Dollars to U.S. Dollars (i) prior to August 3, 2020, at the WM /

Reuters USD/CAD foreign exchange rate as of 4:00 p.m. London Time on such ex-dividend date, and (ii) on and after August

3, 2020, at the WM / Reuters USD/CAD foreign exchange rate as of 4:00 p.m. Eastern Time on such ex-dividend date (the

“

WM / Reuters FX Rate

”), provided, however, that if, for purpose of determining the Index Closing Level, the Index Sponsor

converts the values of the Canadian Index Constituent Securities from Canadian Dollars to U.S. Dollars using a different

USD/CAD foreign exchange rate or using the WM/Reuters USD/CAD exchange rate as of a different time, then such foreign

exchange rate selected by the Index Sponsor for purposes of determining the Index Closing Level (and the time selected by the

Index Sponsor for such exchange) shall also apply for purposes of determining the cash value of distributions on the Canadian

Index Constituent Securities.

The WM/Reuters FX Rate mid-market fixings are calculated by the WM Company based on Reuters data and appear on the

Reuters pages WMRA.

Notwithstanding the foregoing, if the Security Calculation Agent determines on the relevant determination date that:

(a) the WM/ Reuters FX Rate, or the applicable replacement foreign exchange rate determined by the Index

Sponsor, has been discontinued (or otherwise ceases to be published), materially disrupted or is no longer

representative of the underlying market or economic reality; or

(b) 4:00 p.m. London Time (or, on and after August 3, 2020, 4:00 p.m. Eastern Time) (or such other time

selected by the Index Sponsor for purposes of converting the values of the Canadian Index Constituent

Securities to determine the Index Closing Level) is no longer the appropriate time for fixing the applicable

exchange rate for any of the reasons set forth in (a) above,

then the Security Calculation Agent will, in the case of (a) use a substitute or successor provider of foreign exchange rates that

it has determined in its sole discretion is most comparable to the prior exchange rate, provided that if the Security Calculation

Agent determines that there is an industry- accepted successor provider of foreign exchange rates, then the Security

Calculation Agent shall use such successor provider of foreign exchange rates; or in the case of (b) use such other time for

fixing of the foreign exchange rate as it has determined in its sole discretion is appropriate based on the WM / Reuters FX

Rate, or such substitute or successor provider of foreign exchange rates, as it has determined in its sole discretion is most

comparable to the prior exchange rate, as set forth above.

As of the date of this prospectus supplement, the applicable dividend withholding tax would reduce the cash value of

distributions in respect of any Canadian Index Constituent Security by 15% for purposes of calculating the Index Dividend

Point. The 15% rate is subject to adjustment if there is a change under Canadian law or the tax treaty between the United States

and Canada or to the Canadian dividend withholding tax rate applicable to a U.S. holder of a Canadian Index Constituent

Security that is eligible for the benefits of the tax treaty between the United States and Canada.

In the event that an adjustment relating to foreign exchange rate fixings (other than the change specified above, effective as of

August 3, 2020) or dividend withholding taxes is made, we will issue a press release announcing such adjustment and the

effective date for such adjustment.

The Index Dividend Point, on any calendar day, represents the total cash value of distributions that a hypothetical holder of the

Index Constituent Securities, in proportion to the weights of the Index Constituent Securities, would have been entitled to

receive with respect to any Index Constituent Security for those cash distributions whose “ex-dividend date” occurs on such

calendar day.

The Index Dividend Point may not be publicly disseminated by the Index Calculation Agent. The data used to calculate the

Index Dividend Point is the property of the Index Calculation Agent and investors may be required to pay a fee and meet any

other requirements of the Index Calculation Agent in order to access such information. See “Risk Factors – The value of the

Index Dividend Point may not be publicly disseminated or otherwise freely accessible to investors”.

The “

Divisor

” means, as of any date of determination, the divisor used by the Index Calculation Agent to calculate the Index

Closing Level.

The “

Coupon Payment Date

” means the 15th Index Business Day following each Coupon Valuation Date. The first Coupon

Payment Date will be October 21, 2020, subject to adjustment. If such day is not a Coupon Business Day, the Coupon Payment

Date shall be the following Coupon Business Day.

237

If the final Coupon Ex-Date occurs prior to the Maturity Date, but the final Coupon Payment Date otherwise occurs after the

Maturity Date, in such case, the final Coupon Payment Date will be the Maturity Date, subject to adjustment.

The “

Coupon Record Date

” means the ninth Index Business Day following each Coupon Valuation Date. If such day is not a

Coupon Business day, the Coupon Record Date shall be the immediately preceding Coupon Business Day.

The “

Coupon Ex-Date

,” with respect to a Coupon Amount, means the first Coupon Business Day on which the Securities

trade without the right to receive such Coupon Amount. Under current NYSE Arca practice, the Coupon Ex-Date will

generally be the Coupon Business Day immediately preceding the applicable Coupon Record Date.

If a day that would otherwise be a Coupon Ex-Date occurs on or after the first day of an applicable Measurement Period, such

day will not be a valid Coupon Ex-Date and all further Coupon Ex-Dates will be suspended. In this case, the Coupon Amount

corresponding to such Coupon Ex-Date will be included in the Cash Settlement Amount or Call Settlement Amount payable at

maturity or call, respectively.

The “

Coupon Valuation Date

” means the 30th day of each March, June, September and December, of each calendar year

during the term of the Securities or if such date is not an Index Business Day, then the first Index Business Day following such

date, provided that the final Coupon Valuation Date will be the Calculation Date. The first Coupon Valuation Date will be

September 30, 2020.

“

Coupon Business Day

” means any Index Business Day other than an Index Business Day on which banking institutions in

New York are not authorized or obligated by law, regulation or executive order to be open.

“

record date

” means, (i) with respect to a distribution on an Index Constituent Security, the date on which a holder of the

Index Constituent Security must be registered as a stockholder/unitholder of such Index Constituent Security in order to be

entitled to receive such distribution, and (ii) with respect to any split or reverse split, the tenth Business Day after the

announcement date.

“

ex-dividend date

” means, with respect to a distribution on an Index Constituent Security, the first Business Day on which

transactions in such Index Constituent Security trade on the Primary Exchange without the right to receive such distribution.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is July 19, 2050, which will be the third Business Day following the last Index Business Day in the Final

Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called or redeemed, you will receive at maturity a cash payment equal to the Closing

Indicative Value on the last day of the Final Measurement Period. We refer to this payment as the “

Cash Settlement

Amount

”. If the amount so calculated is equal to or less than zero, the payment at maturity will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The Securities are fully exposed to any decline

in the level of the Index. The negative effect of the Daily Tracking Fee will reduce your final payment. If the level of the

Index (as measured by the Index Closing Level at the end of the Final Measurement Period, as compared to the initial

Index Closing Level or the Index level at the time you purchase the Securities, as applicable) does not increase by an

amount sufficient to offset the negative effect of the Daily Tracking Fee (less any Coupon Amounts you may be entitled

to receive), or if the final Index level is less than the initial Index Closing Level (or the Index level at the time you

purchase the Securities, as applicable), you may lose all or a substantial portion of your investment at maturity. The

Daily Tracking Fee also takes into account the performance of the Index, as measured by the Current Principal

Amount.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right. If the Securities are

called by UBS, the Call Settlement Amount may be zero and you may lose all or a substantial portion of your

investment.

See “—UBS’s Call Right”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The “

Closing Indicative Value

” represents the dollar value per Security that an investor would receive on any day if it

redeemed the Security on such day (excluding any Redemption Fee Amount). The Closing Indicative Value per Security will

be calculated as follows:

a) On the Initial Trade Date, $25.00 per Security

b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period, an amount

per Security equal to:

Current Principal Amount + Accrued Dividend

238

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

Current Principal Amount + Accrued Dividend + Measurement Period Cash Amount

The minimum value of the Closing Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The Current Principal Amount represents the notional investment in the Index Constituent Securities per Security at the close

of trading on any calendar day.

The “

Current Principal Amount

” per Security, will be calculated as follows:

a) On the Initial Trade Date, $25.00 per Security;

b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period

(Current Principal Amount on the previous calendar day × Index Factor) —Daily Tracking Fee

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor)

On any calendar day during the Measurement Period that is not an Index Business Day, the Current Principal Amount will be

equal to the Current Principal Amount on the previous calendar day.

The minimum value of the Current Principal Amount on any calendar day will be zero.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

The “

Index Factor

” on any Index Business Day prior to but excluding the first day of an applicable Measurement Period, will

equal:

(i) the Index Closing Level, on such Index Business Day,

divided by,

(ii) the Index Closing Level, on the immediately

preceding Index Business Day.

From and including the first day of an applicable Measurement Period, the Index Factor will equal:

(i) the Index Closing Level, on such calendar day,

divided by,

(ii) the Index Closing Level on the calendar day

immediately preceding the first day of such Measurement Period.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the immediately preceding Index Business Day. The Index Factor will therefore equal one (1) on any calendar day that is not

an Index Business Day and is prior to the first Index Business Day of a five-day Measurement Period.

The “

Residual Factor

” will be calculated as follows:

a) 1.0 on any calendar day, prior to but excluding the first day of an applicable Measurement Period

b) From and including the first day of an applicable five-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such five-day

Measurement Period,

divided by

(b) five.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas.

For example, on the first Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal

(4/5), on the second Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (3/5),

on the third Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (2/5), on the

fourth Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (1/5) and on the last

Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal zero.

On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the Residual Factor

will be equal to zero.

The “

Index Closing Level

” on any date of determination is the closing level of the Index as reported on the NYSE and

Bloomberg; provided, however, that if the closing level of the Index as reported on the NYSE (or any successor) differs from

the closing level of the Index as reported on Bloomberg (or any successor), then the Index Closing Level will be the closing

level of the Index as calculated by the Index Calculation Agent. 41.8766 is the initial Index Closing Level measured on July

15, 2020 (the Initial Trade Date), as determined by the Security Calculation Agent.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level from

the last Index Business Day prior to such calendar day.

239

“

Measurement Period

” means the Final Measurement Period or Call Measurement Period, as applicable.

The

“Current Indicative Value”

or “

intraday indicative value

”, as determined by the Security Calculation Agent, means the

Closing Indicative Value per Security calculated on an intraday basis on any Index Business Day.

For the purposes of calculating the Current Indicative Value, the Index Factor (which is a component of the Current Principal

Amount definition) will be determined using the Intraday Index Value.

Additionally, from and including the first day of an applicable Measurement Period, the Current Indicative Value will be

calculated using (i) the Measurement Period Cash Amount from the immediately preceding calendar day, and (ii) the Residual

Factor from the immediately preceding calendar day.

The minimum value of the Current Indicative Value (or intraday indicative value) on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(or intraday indicative value).

If the Securities undergo a split or reverse split, the Current Indicative Value (or intraday indicative value) will be adjusted

accordingly.

The “

Daily Tracking Fee

” means, as of any date of determination, an amount per Security equal to 0.75% per annum,

calculated as follows:

a) On the Initial Trade Date, $0.00 per Security;

b) On any subsequent calendar day:

(0.75% / 365) × Current Principal Amount on the immediately preceding calendar day × Index Factor

The minimum value of the Daily Tracking Fee on any calendar day will be zero.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly. The “

Measurement

Period Cash Amount

” is an amount per Security equal to:

a) $0.00, on any calendar day prior to but excluding the first day of an applicable Measurement Period

b) On the first day of an applicable one-day Measurement Period:

a. At the close of trading on such Index Business Day, the (Current Principal Amount, on the immediately

preceding calendar day,

times

Index Factor, on such Index Business Day),

minus

Daily Tracking Fee.

c) From and including the first day of an applicable five-day Measurement Period:

a. At the close of trading on each Index Business Day, will equal:

i. Measurement Period Cash Amount on the immediately preceding calendar day,

plus

(b) ((i) Current

Principal Amount, on the calendar day immediately preceding the first day of such Measurement

Period,

times

(ii) Index Factor,

divided by

(iii) five),

minus

(c) Daily Tracking Fee

ii. On any calendar day that is not an Index Business Day, will equal the Measurement Period Cash

Amount on the immediately preceding Index Business Day,

minus

Daily Tracking Fee

d) On any calendar day after the last Index Business Day of an applicable Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

The minimum value of the Measurement Period Cash Amount on any calendar day will be zero.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business day during a five-day Measurement Period, approximately 20% of the Current

Principal Amount, on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash. After the close of trading on the final Index Business Day of an applicable five-day Measurement Period,

the Measurement Period Cash Amount will represent the averaged value of the Current Principal Amount that was deemed

converted to cash across the five-days of such Measurement Period. In case of a one-day Measurement Period, approximately

100% of the Current Principal Amount will be deemed converted to cash, at the close of trading of the first day of such

Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

240

a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is less than $150,000,000, the Calculation Date, subject to adjustments as described under “—

Market Disruption Event”;

b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is equal to or greater than $150,000,000, the five (5) Index Business Days from, and including,

the Calculation Date, subject to adjustment as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities as of the close of trading

on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by AMNDSO <Index> on Bloomberg L.P.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently S&P

DJI Netherlands B.V.

The “

Calculation Date

” means July 8, 2050 unless such day is not an Index Business Day, in which case the Calculation Date

will be the next Index Business Day, subject to adjustments.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Business Day

” means any day that is not a Saturday, a Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

Underlying Index

The Alerian Midstream Energy Dividend Index (Bloomberg: “AEDW”) is a fundamentally-weighted index based on the

liquid, dividend-paying portion of the North American energy infrastructure market. The Index measures the performance of

companies domiciled in the U.S. or Canada, listed on major U.S. or Canadian stock exchanges, that pay regular cash dividends

and meet specific liquidity requirements, as described elsewhere in the prospectus supplement. The Index is calculated by S&P

DJI Netherlands B.V. using a modified market capitalization weighted methodology.

We refer to the companies included in the

Index as the “

Index Constituent Securities

”).

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on the same Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. To satisfy

the minimum redemption amount, your broker or other financial intermediary may bundle your Securities for redemption with

those of other investors to reach this minimum amount of 50,000 Securities. We reserve the right from time-to-time to waive

this minimum redemption amount in our sole discretion on a case- by-case basis. You should not assume that you will be

entitled to the benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be

the first Index Business Day following the date that the applicable redemption notice and redemption confirmation are

delivered, except that we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the

Redemption Valuation Date to the date on which the notice of redemption is received by UBS rather than the following Index

Business Day. Yo u should not assume that you will be entitled to any such acceleration.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The First Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if a call notice has been issued, the

last Redemption Valu ation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event.”

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount.

We refer to this cash payment as the “

Redemption Amount

.

”

241

If the amount calculated above is less than or equal to zero, the payment upon early redemption will be zero.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of such Redemption Valuation Date).

We reserve the right from time to time to reduce or waive the Redemption Fee Amount in our sole discretion on a case-by-case

basis. You should not assume you will be entitled to the benefit of any such waiver.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount =

Closing Indicative Value —

Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Daily Tracking Fee and the Redemption Fee Amount will reduce your Redemption Amount. If the level of the Index

does not increase by an amount sufficient to offset the combined negative effect of the Daily Tracking Fee and the

Redemption Fee Amount (less any Coupon Amounts you may be entitled to receive), or if the final Index level is less

than the initial Index Closing Level (or the Index level at the time you purchase the Securities, as applicable), you may

lose some or all of your investment upon early redemption.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right.

See “— UBS’s Call

Right”.

We discuss these matters in the accompanying prospectus under “Description of Debt Securities We May Offer — Redemption

and Repayment.”

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation,

” to us via e-mail

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your notice of redemption after 12:00 noon (New York City time), or your confirmation of

redemption after 5:00 p.m. (New York City time), on the Business Day prior to the applicable Redemption Valuation Date,

your notice will not be effective, you will not be able to redeem your Securities until another date and your broker will need to

complete all the required steps if you should wish to redeem your Securities on any subsequent date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to reduce or waive the minimum redemption amount or the Redemption Fee Amount in

our sole discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than the following Index Business Day. You should not assume you will be entitled to any such waiver or election

to accelerate the Redemption Valuation Date.

242

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen (18) calendar days’ prior

notice to the holders of the Securities (which notice may be provided via press release), such redemption to occur on any

Business Day that we may specify through and including the Maturity Date. Upon early redemption in the event we exercise

this right, you will receive a cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call

Measurement Period. We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount so calculated is equal to or less than zero, the payment upon exercise of the UBS Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date of delivery by UBS of its notice to holders of its exercise of the UBS Call Right is less than $150,000,000,

the Call Valuation Date, subject to adjustments as described under “— Market Disruption Event.”; or

b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date of delivery by UBS of its notice to holders of its exercise of the UBS Call Right is equal to or greater than

$150,000,000, the five (5) Index Business Days from and including the Call Valuation Date, subject to adjustments as

described under “— Market Disruption Event.”

For the purpose of determining the Call Measurement Period, the “

Market Value

” of the Securities as of the close of trading

on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which may be provided

via press release) of its exercise of the UBS Call Right, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by AMNDSO <Index> on Bloomberg L.P.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Call Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment upon a call. The negative effect of the Daily Tracking Fee

will reduce your final payment. If the level of the Index does not increase by an amount sufficient to offset the negative

effect of the Daily Tracking Fee (less any Coupon Amounts you may be entitled to receive), or if the final Index level is

less than the initial Index Closing Level (or the Index level at the time you purchase the Securities, as applicable), you

may lose some or all of your investment upon UBS’s exercise of its call right.

243

Security Calculation Agent

UBS Securities LLC will act as the “Security Calculation Agent.” The Security Calculation Agent will be solely responsible

for all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (or “intraday indicative

value”), Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the Index Factor, the

Residual Factor, the Index Closing Level, the Daily Tracking Fee, the Coupon Amount, the Accrued Dividend, the Daily

Dividend, if any, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Coupon Ex-Dates, the Coupon Record Dates, the Redemption Amount, if any, that we will pay you upon redemption, if

applicable and the Call Settlement Amount, if any, that we will pay you in the event that UBS calls the Securities, and whether

any day is a Business Day or Index Business Day and all such other matters as may be specified herein as matters to be

determined by the Security Calculation

Agent. The Security Calculation Agent will also be responsible for determining

whether the Index has been discontinued and whether there has been a material change in the Index. The Security Calculation

Agent will make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of

the Security Calculation Agent will be conclusive for all purposes and binding on us, you and all other persons having an

interest in the Security, without liability on the part of the Security Calculation Agent. You will not be entitled to any

compensation from us for any loss suffered as a result of any determinations or calculations made by Security Calculation

Agent. We may appoint a different Security Calculation Agent from time to time after the date of this prospectus supplement

without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or call, or upon early redemption, or on a Coupon Payment Date on

or prior to 12:00 noon (New York City time) on the Business Day immediately preceding the Maturity Date, any Redemption

Date, any Call Settlement Date or any Coupon Payment Date, as applicable.

All dollar amounts related to determination of the Coupon Amount, the Accrued Dividend, the Daily Dividend, if any, the

Daily Tracking Fee, the Redemption Amount and Redemption Fee Amount, if any, per security, the Call Settlement Amount, if

any, per security, the Current Principal Amount and the Cash Settlement Amount, if any, per security, will be rounded to the

nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded up to .7655); and

all dollar amounts paid on the Stated Principal Amount of Securities per holder will be rounded to the nearest cent, with one-

half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a five-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the five-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4, June 5 and June 6, and there is a Market Disruption Event with respect to the Index on

June 2, but no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index

Business Day of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day,

June 6th the fourth Index Business Day and the next Index Business Day after June 6th would be the final day of the

Measurement Period. The same approach would be applied if there is a Market Disruption Event during a five-day Final

Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date) or the Calculation Date

(in the event that the Final Measurement Period is the Calculation Date), the Index Closing Level for such Redemption

Valuation Date, Call Valuation Date or Calculation Date will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. For example, if the Redemption Valuation Date, for purposes of calculating a Redemption Amount,

is based on the Index Closing Level on June 2 and there is a Market Disruption Event with respect to the Index on June 2, then

the Index Closing Level on June 3 will be used to calculate the Redemption Amount, assuming that no such Market Disruption

Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the affected

Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event that the

Call Measurement Period is the Call Valuation Date) or Calculation Date (in the event that the Final Measurement Period is the

Calculation Date) occurring more than five Index Business Days following the day originally scheduled to be such Index

Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation Date or Calculation Date. If a

Market Disruption Event has occurred or is continuing with respect to the Index on the fifth Index Business Day following the

date originally scheduled to be such Index Business Day of the Measurement Period or any Redemption Valuation Date, Call

Valuation Date or Calculation Date, the Security Calculation Agent or one of its affiliates will determine the Index Closing

Level based on its good faith estimate of the Index Closing Level that would have prevailed on such fifth Index Business Day

but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

244

a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

c) the Index is not published; or

d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “

absence of trading

” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in the accompanying prospectus. If we exercise this right, the redemption price of the Securities

will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our relative

economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.” In addition to the

default amount described below, we will also pay the Coupon Amount per Security, if any, with respect to the final Coupon

Payment Date, as described above under “— Coupon Payment,” calculated as if the date of acceleration was the last Index

Business Day in the Final Measurement Period and the three Index Business Days immediately preceding the date of

acceleration were the corresponding Index Business Days in the accelerated Final Measurement Period, with the third Index

Business Day immediately preceding the date of acceleration being the accelerated Calculation Date and the accelerated final

Coupon Valuation Date, and the Index Business Day immediately preceding the date of acceleration being the relevant final

Coupon Valuation Date.

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in the attached prospectus under “Description of Debt

Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May Offer —

Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent, in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking, plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

245

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. ,or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of, Adjustments to or Benchmark Event Affecting the Index or Termination of Our License Agreement

with the Index Sponsor; Alteration of Method of Calculation

If (i) the Index Sponsor or Index Calculation Agent discontinue publication of, or otherwise fails to publish, the Index, (ii) a

Benchmark Event (as described below) under the EU Benchmarks Regulation (as described under “Risk Factors – The

Securities are linked to the Index and are subject to certain regulatory risks”) occurs with respect to the Index or the Index

Sponsor, (iii) our license agreement with the Index Sponsor terminates or (iv) the Index Sponsor or Index Calculation Agent

does not make the Index Constituent Securities and/or their unit weighting available to the Security Calculation Agent, and, in

each case, any other person or entity publishes an EU Benchmarks Regulation-compliant index licensed to UBS that the

Security Calculation Agent both approves of and determines is comparable to the Index and for which the Index Constituent

Securities and/or their unit weighting are available to the Security Calculation Agent (such index being referred to herein as a

“

successor index

”), then the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination, Coupon Amounts and the amount payable, if any, at maturity, call or upon early redemption and all other

related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If the Security Calculation Agent determines that the conditions described above are met on the Calculation Date or any Index

Business Day during a Measurement Period, or on the Redemption Valuation Date, as applicable, or on any other relevant date

on which the Index Closing Level is to be determined and the Security Calculation Agent determines that no successor index is

available at such time, or the Security Calculation Agent has previously selected a successor index and publication of such

successor index is discontinued prior to, and such discontinuation is continuing on the Calculation Date or any Index Business

Day during a Measurement Period, or on the Redemption Valuation Date or any other relevant date on which the Index

Closing Level is to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index

Closing Level on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for

certain corporate actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee,

to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

For purposes of the above, a “

Benchmark Event

” will occur if the applicable registration for the Index or Index Sponsor is not

effective or has been suspended or withdrawn by the relevant authority with the effect that the use of the Index or the Index

Sponsor is not permitted under the EU Benchmarks Regulation.

246

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in this prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, including the Coupon Amounts, Current Principal Amount,

Current Indicative Value (or “intraday indicative value”), Closing Indicative Value, Index Factor, Residual Factor, Daily

Tracking Fee, Accrued Dividend, Daily Dividend, Index Closing Levels on the applicable dates of determination, all other

related payment terms and the amount payable at maturity, call, upon early redemption by reference to such Substitute Index.

If the Security Calculation Agent so elects to replace the original Index with a Substitute Index, the Security Calculation Agent

will cause written notice thereof to be furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after July 15, 2020

that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities

included in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent

Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our

affiliates, third parties with whom we transact or similarly situated third parties in performing our or their obligations

in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

c) any event that occurs on or after July 15, 2020 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

247

If at any time the method of calculating the Index, a successor index or a substitute index, or the value thereof, is changed in a

material respect, or if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index

or such successor index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of

the Index or such successor index had such changes or modifications not been made, then the Security Calculation Agent will

make such calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in

order to arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if

such changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level

for the Index or such successor index with reference to the Index or such successor index, as adjusted. The Security

Calculation Agent will accordingly calculate the Index Closing Level, the Coupon Amount, the Accrued Dividend, the Daily

Dividend, if any, the Daily Tracking Fee, the Redemption Fee Amount, if any, the Cash Settlement Amount, if any, that we

will pay you at maturity, the Redemption Amount, if any, upon early redemption, if applicable, the Call Settlement Amount, if

any, that we will pay you in the event UBS calls the Securities, and all related payment terms based on the Index Closing Level

calculated by the Security Calculation Agent, as adjusted. Accordingly, if the method of calculating the Index or a successor

index is modified so that the level of the Index or such successor index is a fraction of what it would have been if there had

been no such modification (

e.g.

, due to a split in the Index), which, in turn, causes the Index Closing Level of the Index or such

successor index to be a fraction of what it would have been if there had been no such modification, then the Security

Calculation Agent will make such calculations and adjustments in order to arrive at an Index Closing Level for the Index or

such successor index as if it had not been modified (

e.g.

, as if such split had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in this prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or call, or upon early redemption will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Business Day

When we refer to a Business Day with respect to the Securities, we mean a day that is a Business Day of the kind described in

“Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the accompanying prospectus.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the attached

prospectus, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead be paid

on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described under “—

Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of the Holders” above.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of this prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover any time, without your consent and without notifying you. The Securities do not

limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in the accompanying prospectus.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

248

15. ETRACS Alerian Midstream Energy Total Return Index ETN due October 20, 2050

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

The Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described in the accompanying prospectus. This prospectus supplement

summarizes specific financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term

Notes, Series B are described in “Description of Debt Securities We May Offer” in the accompanying prospectus. The terms

described here (i.e., in this prospectus supplement) supplement those described in the accompanying prospectus and, if the

terms described here are inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or call, or upon early redemption. Instead, at

maturity, you will receive a cash payment the amount of which will vary depending on the performance and path of the Index

calculated in accordance with the formula set forth below and will be reduced by the Daily Tracking Fee as of the last Index

Business Day in the applicable Measurement Period or Redemption Valuation Date.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment on the Redemption Date equal to the Redemption Amount as described below under

“— Early Redemption at the Option of the Holders.” If the amount so calculated is equal to or less than zero, the Redemption

Amount will be zero and you will not receive a cash payment.

If we elect to exercise our call right to redeem all of the Securities, subject to compliance with the procedures set forth below,

for each Security you will receive a cash payment on the Call Settlement Date equal to the Call Settlement Amount, as

described below under “— UBS’s Call Right.” If the amount so calculated is equal to or less than zero, the Call Settlement

Amount will be zero and you will not receive a cash payment.

The Securities will not pay any cash coupon during their term.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is October 20, 2050, which will be the third Business Day following the last Index Business Day in the

Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called or redeemed, you will receive at maturity a cash payment equal to the Closing

Indicative Value on the last day of the Final Measurement Period. We refer to this payment as the “

Cash Settlement

Amount

”. If the amount so calculated is equal to or less than zero, the payment at maturity will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The Securities are fully exposed to any decline

in the level of the Index. The negative effect of the Daily Tracking Fee will reduce your final payment. If the level of the

Index (as measured by the Index Closing Level at the end of the Final Measurement Period, as compared to the initial

Index Closing Level or the Index level at the time you purchase the Securities, as applicable) does not increase by an

amount sufficient to offset the negative effect of the Daily Tracking Fee, or if the final Index level is less than the initial

Index Closing Level (or the Index level at the time you purchase the Securities, as applicable), you may lose all or a

substantial portion of your investment at maturity. The Daily Tracking Fee also takes into account the performance of

the Index, as measured by the Closing Indicative Value.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right. If the Securities are

called by UBS, the Call Settlement Amount may be zero and you may lose all or a substantial portion of your

investment.

See “—UBS’s Call Right”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

249

The “

Closing Indicative Value

” represents the dollar value per Security that an investor would receive on any day if it

redeemed the Security on such day (excluding any Redemption Fee Amount). The Closing Indicative Value per Security will

be calculated as follows:

a) On the Initial Trade Date, $25.00 per Security

b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period, an amount

per Security equal to:

(Closing Indicative Value on the previous calendar day * Index Factor)—Daily Tracking Fee

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Closing Indicative Value on the calendar day immediately preceding the first day of the Measurement Period × Index

Factor × Residual Factor) + Measurement Period Cash Amount

The minimum value of the Closing Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Index Factor

” on any Index Business Day prior to but excluding the first day of an applicable Measurement Period, will

equal:

(i) the Index Closing Level, on such Index Business Day,

divided by,

(ii) the Index Closing Level, on the immediately

preceding Index Business Day.

From and including the first day of an applicable Measurement Period, the Index Factor will equal:

(i) the Index Closing Level, on such calendar day,

divided by,

(ii) the Index Closing Level on the calendar day

immediately preceding the first day of such Measurement Period.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the immediately preceding Index Business Day. The Index Factor will therefore equal one (1) on any calendar day that is not

an Index Business Day and is prior to the first Index Business Day of a five-day Measurement Period.

The “

Residual Factor

” will be calculated as follows:

a) 1.0 on any calendar day, prior to but excluding the first day of an applicable Measurement Period

b) From and including the first day of an applicable five-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such five-day

Measurement Period,

divided by

(b) five.

The Residual Factor is intended to approximate the percentage of the Closing Indicative Value that is tracking the Index on any

given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a component of

the Closing Indicative Value or Current Indicative Value formulas.

For example, on the first Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal

(4/5), on the second Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (3/5),

on the third Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (2/5), on the

fourth Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (1/5) and on the last

Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal zero.

On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the Residual Factor

will be equal to zero.

The “

Index Closing Level

” on any date of determination is the closing level of the Index as reported on the NYSE and

Bloomberg; provided, however, that if the closing level of the Index as reported on the NYSE (or any successor) differs from

the closing level of the Index as reported on Bloomberg (or any successor), then the Index Closing Level will be the closing

level of the Index as calculated by the Index Calculation Agent. 358.2653 is the initial Index Closing Level measured on

October 20, 2020 (the Initial Trade Date), as determined by the Security Calculation Agent.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level from

the last Index Business Day prior to such calendar day.

“

Measurement Period

” means the Final Measurement Period or Call Measurement Period, as applicable.

The

“Current Indicative Value”

or “

intraday indicative value

”, as determined by the Security Calculation Agent, means the

Closing Indicative Value per Security calculated on an intraday basis on any Index Business Day.

For the purposes of calculating the Current Indicative Value, the Index Factor will be determined using the Intraday Index

Value. Additionally, from and including the first day of an applicable Measurement Period, the Current Indicative Value will

be calculated using (i) the Measurement Period Cash Amount from the immediately preceding calendar day, and (ii) the

Residual Factor from the immediately preceding calendar day.

250

The minimum value of the Current Indicative Value (or intraday indicative value) on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(or intraday indicative value).

If the Securities undergo a split or reverse split, the Current Indicative Value (or intraday indicative value) will be adjusted

accordingly.

The “

Daily Tracking Fee

” means, as of any date of determination, an amount per Security equal to 0.75% per annum,

calculated as follows:

a) On the Initial Trade Date, $0.00 per Security;

b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period, an amount

per Security equal to:

(0.75% / 365) × Closing Indicative Value on the immediately preceding calendar day × Index Factor

c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(0.75% / 365) × Closing Indicative Value on the calendar day immediately preceding the first day of the Measurement

Period × Index Factor × Residual Factor on the immediately preceding calendar day

The minimum value of the Daily Tracking Fee on any calendar day will be zero.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly. The “

Measurement

Period Cash Amount

” is an amount per Security equal to:

a) $0.00, on any calendar day prior to but excluding the first day of an applicable Measurement Period

b) On the first day of an applicable one-day Measurement Period:

a. At the close of trading on such Index Business Day, the (Closing Indicative Value, on the immediately

preceding calendar day,

times

Index Factor, on such Index Business Day),

minus

Daily Tracking Fee.

c) From and including the first day of an applicable five-day Measurement Period:

a. At the close of trading on each Index Business Day, will equal:

i. Measurement Period Cash Amount on the immediately preceding calendar day,

plus

(b) ( (i)

Closing Indicative Value, on the calendar day immediately preceding the first day of such

Measurement Period,

times

(ii) Index Factor,

divided by

(iii) five),

minus

(c) Daily Tracking Fee

ii. On any calendar day that is not an Index Business Day, will equal the Measurement Period Cash

Amount on the immediately preceding Index Business Day,

minus

Daily Tracking Fee

d) On any calendar day after the last Index Business Day of an applicable Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

The minimum value of the Measurement Period Cash Amount on any calendar day will be zero.

The Measurement Period Cash Amount represents the portion of the Closing Indicative Value that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business day during a five-day Measurement Period, approximately 20% of the Closing

Indicative Value, on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash. After the close of trading on the final Index Business Day of an applicable five-day Measurement Period,

the Measurement Period Cash Amount will represent the averaged value of the Closing Indicative Value that was deemed

converted to cash across the five-days of such Measurement Period. In case of a one-day Measurement Period, approximately

100% of the Closing Indicative Value will be deemed converted to cash, at the close of trading of the first day of such

Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is less than $250,000,000, the Calculation Date, subject to adjustments as described under

“Specific Terms of the Securities—Market Disruption Event”;

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b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is equal to or greater than $250,000,000, the five (5) Index Business Days from, and including,

the Calculation Date, subject to adjustment as described under “Specific Terms of the Securities— Market Disruption

Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities as of the close of trading

on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by AMTRSO <Index> on Bloomberg L.P.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently S&P

Dow Jones Indices.

The “

Calculation Date

” means October 11, 2050 unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Business Day

” means any day that is not a Saturday, a Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

Underlying Index

The Alerian Midstream Energy Adjusted Net Total Return Index (Bloomberg: “AMNTR Index”) is the adjusted net total return

version of the Alerian Midstream Energy Index (Bloomberg: “AMNA Index”). The Index is a broad-based composite of North

American energy infrastructure companies who earn the majority of their cash flow from midstream activities involving energy

commodities, such as gathering & processing, liquefaction, pipeline transportation, rail terminaling, and storage of energy

commodities. The Index is calculated by S&P Dow Jones Indices using a capped, float adjusted, capitalization weighted

methodology. We refer to the companies included in the Index as the “Index Constituent Securities”.

The Index is an

adjusted net total return index and the Index level reflects the notional reinvestment of the cash distributions from its

constituent securities, subject to dividend withholding taxes on distributions made by applicable Canadian Index

Constituent Securities. No dividend withholding taxes are applied to distributions made by applicable U.S. Index

Constituent Securities.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, New York City time, and a confirmation of redemption by no later than 5:00 p.m., New York City

time, on the same Index Business Day, provided that you request that we redeem a minimum of 50,000 Securities. To satisfy

the minimum redemption amount, your broker or other financial intermediary may bundle your Securities for redemption with

those of other investors to reach this minimum amount of 50,000 Securities. We reserve the right from time-to-time to waive

this minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume that you will be

entitled to the benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be

the first Index Business Day following the date that the applicable redemption notice and redemption confirmation are

delivered, except that we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the

Redemption Valuation Date to the date on which the notice of redemption is received by UBS rather than the following Index

Business Day. You should not assume that you will be entitled to any such acceleration.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The First Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if a call notice has been issued, the

last Redemption Valu ation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event.”

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

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Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount.

We refer to this cash payment as the “

Redemption Amount

.”

If the amount calculated above is less than or equal to zero, the payment upon early redemption will be zero.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of such Redemption Valuation Date).

We reserve the right from time to time to reduce or waive the Redemption Fee Amount in our sole discretion on a case-by-case

basis. You should not assume you will be entitled to the benefit of any such waiver.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount =

Closing Indicative Value —

Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Daily Tracking Fee and the Redemption Fee Amount will reduce your Redemption Amount. If the level of the Index

does not increase by an amount sufficient to offset the combined negative effect of the Daily Tracking Fee and the

Redemption Fee Amount, or if the final Index level is less than the initial Index Closing Level (or the Index level at the

time you purchase the Securities, as applicable), you may lose some or all of your investment upon early redemption.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right.

See – UBS’s Call Right”.

We discuss these matters in the accompanying prospectus under “Description of Debt Securities We May Offer — Redemption

and Repayment.”

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

(New York City time) on the Index Business Day on which you elect to exercise your redemption right. If we receive

your Redemption Notice by the time specified in the preceding sentence, we will respond by sending you a form of

confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

,” to us via e-mail

in the specified form by 5:00 p.m. (New York City time) on the same day. We or our affiliate must acknowledge

receipt in order for your confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Valuation Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon (New York

City time) on the applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your notice of redemption after 12:00 noon (New York City time), or your confirmation of

redemption after 5:00 p.m. (New York

City time), on the Business Day prior to the applicable Redemption Valuation Date,

your notice will not be effective, you will not be able to redeem your Securities until another date and your broker will need to

complete all the required steps if you should wish to redeem your Securities on any subsequent date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to reduce or waive the minimum redemption amount or the Redemption Fee Amount in

our sole discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which the notice of redemption is received by

UBS rather than the following Index Business Day. You should not assume you will be entitled to any such waiver or election

to accelerate the Redemption Valuation Date.

UBS’s Call Right

We have the right to redeem all, but not less than all, of the Securities upon not less than eighteen

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(18) calendar days’ prior notice to the holders of the Securities (which notice may be provided via press release), such

redemption to occur on any Business Day that we may specify through and including the Maturity Date. Upon early

redemption in the event we exercise this right, you will receive a cash payment equal to the Closing Indicative Value on the

last Index Business Day in the Call Measurement Period. We refer to this cash payment as the “

Call Settlement Amount

.”

If the amount so calculated is equal to or less than zero, the payment upon exercise of the UBS Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Business Day following the last Index Business Day in the

Call Measurement Period.

The holders will receive payment for their Securities on the third Business Day following the last Index Business Day in the

Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the scheduled

Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be postponed as

described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date of delivery by UBS of its notice to holders of its exercise of the UBS Call Right is less than $250,000,000,

the Call Valuation Date, subject to adjustments as described under “— Market Disruption Event.”; or

b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date of delivery by UBS of its notice to holders of its exercise of the UBS Call Right is equal to or greater than

$250,000,000, the five (5) Index Business Days from and including the Call Valuation Date, subject to adjustments as

described under “ Specific Terms of the Securities—Market Disruption Event.”

For the purpose of determining the Call Measurement Period, the “

Market Value

” of the Securities as of the close of trading

on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which may be provided

via press release) of its exercise of the UBS Call Right, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

(ii) the number of Securities outstanding as

reported by AMTRSO <Index> on Bloomberg L.P.

The “

Call Valuation Date

” means the date disclosed as such by UBS in its notice to holders (which may be provided via press

release) of its exercise of the UBS Call Right.

In any notice to holders exercising the UBS Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Call Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment upon a call. The negative effect of the Daily Tracking Fee

will reduce your final payment. If the level of the Index does not increase by an amount sufficient to offset the negative

effect of the Daily Tracking Fee, or if the final Index level is less than the initial Index Closing Level (or the Index level

at the time you purchase the Securities, as applicable), you may lose some or all of your investment upon UBS’s exercise

of its call right.

Security Calculation Agent

UBS Securities LLC will act as the “Security Calculation Agent.” The Security Calculation Agent will be solely responsible

for all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, Current Indicative Value (or “intraday indicative value”), Closing Indicative Value,

Market Disruption Events, Business Days, Index Business Days, the Index Factor, the Residual Factor, the Index Closing

Level, the Daily Tracking Fee, the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at

maturity, the Redemption Amount, if any, that we will pay you upon redemption, if applicable and the Call Settlement

Amount, if any, that we will pay you in the event that UBS calls the Securities, and whether any day is a Business Day or

Index Business Day and all such other matters as may be specified herein as matters to be determined by the Security

Calculation Agent. The Security Calculation Agent will also be responsible for determining whether the Index has been

discontinued and whether there has been a material change in the Index. The Security Calculation Agent will make all such

determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Security Calculation

Agent will be conclusive for all purposes and binding on us, you and all other persons having an interest in the Security,

without liability on the part of the Security Calculation Agent. You will not be entitled to any compensation from us for any

loss suffered as a result of any determinations or calculations made by Security Calculation Agent. We may appoint a different

Security Calculation Agent from time to time after the date of the prospectus supplement without your consent and without

notifying you.

254

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or call, or upon early redemption, on or prior to 12:00 noon (New

York City time) on the Business Day immediately preceding the Maturity Date, any Redemption Date, or any Call Settlement

Date, as applicable.

All dollar amounts related to determination of the Daily Tracking Fee, the Redemption Amount and Redemption Fee Amount,

if any, per security, the Call Settlement Amount, if any, per security, and the Cash Settlement Amount, if any, per security, will

be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded

up to .7655); and all dollar amounts paid on the Stated Principal Amount of Securities per holder will be rounded to the nearest

cent, with one-half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a five-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the five-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4, June 5 and June 6, and there is a Market Disruption Event with respect to the Index on

June 2, but no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index

Business Day of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day,

June 6th the fourth Index Business Day and the next Index Business Day after June 6th would be the final day of the

Measurement Period. The same approach would be applied if there is a Market Disruption Event during a five-day Final

Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date) or the Calculation Date

(in the event that the Final Measurement Period is the Calculation Date), the Index Closing Level for such Redemption

Valuation Date, Call Valuation Date or Calculation Date will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. For example, if the Redemption Valuation Date, for purposes of calculating a Redemption Amount,

is based on the Index Closing Level on June 2 and there is a Market Disruption Event with respect to the Index on June 2, then

the Index Closing Level on June 3 will be used to calculate the Redemption Amount, assuming that no such Market Disruption

Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to the two immediately preceding paragraphs result in the affected

Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event that the

Call Measurement Period is the Call Valuation Date) or Calculation Date (in the event that the Final Measurement Period is the

Calculation Date) occurring more than five Index Business Days following the day originally scheduled to be such Index

Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation Date or Calculation Date. If a

Market Disruption Event has occurred or is continuing with respect to the Index on the fifth Index Business Day following the

date originally scheduled to be such Index Business Day of the Measurement Period or any Redemption Valuation Date, Call

Valuation Date or Calculation Date, the Security Calculation Agent or one of its affiliates will determine the Index Closing

Level based on its good faith estimate of the Index Closing Level that would have prevailed on such fifth Index Business Day

but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

c) the Index is not published; or

d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

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For this purpose, an “

absence of trading

” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Redemption Price Upon Optional Tax Redemption

We have the right to redeem the Securities in the circumstances described under “Description of Debt Securities We May Offer

— Optional Tax Redemption” in the accompanying prospectus. If we exercise this right, the redemption price of the Securities

will be determined by the Security Calculation Agent in a manner reasonably calculated to preserve your and our relative

economic positions.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in the attached prospectus under “Description of Debt

Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May Offer —

Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent, in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking, plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five (5) Business Days after the due date as described above.

If either of these two events occurs, the default quotation period will continue until the third Business Day after the first

Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as described

above within five (5) Business Days after that first Business Day, however, the default quotation period will continue as

described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Business Day objection period have not ended before the

Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

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Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of, Adjustments to or Benchmark Event Affecting the Index or Termination of Our License Agreement

with the Index Sponsor; Alteration of Method of Calculation

If (i) the Index Sponsor or Index Calculation Agent discontinue publication of, or otherwise fails to publish, the Index, (ii) a

Benchmark Event (as described below) under the EU Benchmarks Regulation (as described under “Risk Factors – The

Securities are linked to the Index and are subject to certain regulatory risks”) occurs with respect to the Index or the Index

Sponsor, (iii) our license agreement with the Index Sponsor terminates or (iv) the Index Sponsor or Index Calculation Agent

does not make the Index Constituent Securities and/or their unit weighting available to the Security Calculation Agent, and, in

each case, any other person or entity publishes an EU Benchmarks Regulation-compliant index licensed to UBS that the

Security Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities and/or their

unit weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor index

”),

and the Security Calculation Agent approves such index as a successor index, then the Security Calculation Agent will

determine the Index Closing Level on the applicable dates of determination, and the amount payable at maturity, call or upon

early redemption and all other related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor or Index Calculation Agent discontinue publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date, as applicable, or on any other relevant date on which the Index Closing Level is to be determined and the Security

Calculation Agent determines that no successor index is available at such time, or the Security Calculation Agent has

previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date or any other relevant date on which the Index Closing Level is to be determined, then the Security

Calculation Agent will determine the Index Closing Level using the Index Closing Level on the last Index Business Day

immediately prior to such discontinuation or unavailability, as adjusted for certain corporate actions. In such event, the

Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

For purposes of the above, a “

Benchmark Event

” will occur if the applicable registration for the Index or Index Sponsor is not

effective or has been suspended or withdrawn by the relevant authority with the effect that the use of the Index or the Index

Sponsor is not permitted under the EU Benchmarks Regulation.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, including the Current Indicative Value (or “intraday

indicative value”), Closing Indicative Value, Index Factor, Residual Factor, Daily Tracking Fee, Index Closing Levels on the

applicable dates of determination, all other related payment terms and the amount payable at maturity, call, upon early

redemption by reference to such Substitute Index. If the Security Calculation Agent so elects to replace the original Index with

a Substitute Index, the Security Calculation Agent will cause written notice thereof to be furnished to the trustee, to us and to

the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange- imposed position limits),

(ii) materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third

parties in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on

any of these parties’ ability to perform their obligations in connection with the Securities or (iv) materially affects our

ability to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security

Calculation Agent;

257

b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after October 20,

2020 that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent

Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the Index

Constituent Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the

cost to us, our affiliates, third parties with whom we transact or similarly situated third parties in performing our or

their obligations in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates,

third parties with whom we transact or a similarly situated third party to perform our or their obligations in connection

with the Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

c) any event that occurs on or after October 20, 2020 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a substitute index, or the value thereof, is changed in a

material respect, or if the Index or a successor index is in any other way modified so that the Index Closing Level of the Index

or such successor index does not, in the opinion of the Security Calculation Agent, fairly represent the Index Closing Level of

the Index or such successor index had such changes or modifications not been made, then the Security Calculation Agent will

make such calculations and adjustments as, in the good faith judgment of the Security Calculation Agent, may be necessary in

order to arrive at an Index Closing Level of an index comparable to the Index or such successor index, as the case may be, as if

such changes or modifications had not been made, and the Security Calculation Agent will calculate the Index Closing Level

for the Index or such successor index with reference to the Index or such successor index, as adjusted. The Security

Calculation Agent will accordingly calculate the Index Closing Level, the Daily Tracking Fee, the Redemption Fee Amount, if

any, the Cash Settlement Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, upon early

redemption, if applicable, the Call Settlement Amount, if any, that we will pay you in the event UBS calls the Securities, and

all related payment terms based on the Index Closing Level calculated by the Security Calculation Agent, as adjusted.

Accordingly, if the method of calculating the Index or a successor index is modified so that the level of the Index or such

successor index is a fraction of what it would have been if there had been no such modification (

e.g.

, due to a split in the

Index), which, in turn, causes the Index Closing Level of the Index or such successor index to be a fraction of what it would

have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor index as if it had not been modified

(

e.g.

, as if such split had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — There are potential conflicts of interest between you and the Security Calculation

Agent” in the prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the

Security Calculation Agent.

258

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or call, or upon early redemption will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Business Day

When we refer to a Business Day with respect to the Securities, we mean a day that is a Business Day of the kind described in

“Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the accompanying prospectus.

Modified Business Day

As described in “Description of Debt Securities We May Offer — Payment Mechanics for Debt Securities” in the attached

prospectus, any payment on the Securities that would otherwise be due on a day that is not a Business Day may instead be paid

on the next day that is a Business Day, with the same effect as if paid on the original due date, except as described under “—

Cash Settlement Amount at Maturity,” “— UBS’s Call Right” and “— Early Redemption at the Option of the Holders” above.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover any time, without your consent and without notifying you. The Securities do not

limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in the accompanying prospectus.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

259

16. ETRACS 2x Leveraged MSCI USA ESG Focus TR ETN due September 15, 2061

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or upon early redemption or call. Instead, at

maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance and path

of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement Period as

described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero, the Cash

Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is September 15, 2061, which will be the third Index Business Day following the last Index Business

Day in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated upon Zero Value Event, you will receive at maturity a cash

payment equal to its Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer

to this cash payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment

will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last

Index Business Day in Final

Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees, you may lose all or a substantial portion of your investment at maturity. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

UBS may call the Securities prior to the Maturity Date pursuant to its Call Right. If the Securities are called by UBS,

the Call Settlement Amount may be zero and you may lose all or a substantial portion of your investment.

See “— UBS

Call Right.”

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

260

The Closing Indicative Value represents the dollar value per Security that an investor would receive on any day if it redeemed

the Security that day (without giving effect to any Redemption Fee Amount).

The “

Closing Indicative Value

” per Security, will be calculated as follows:

(a)

an the Initial Trade Date, $25.00 per Security.

(b)

On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) – Accrued Fees

(c)

From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) – Accrued Fees + Measurement Period Cash Amount

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Closing Indicative Value for that day and all subsequent days will be fixed to be equal to the Measurement Period

Cash Amount from the immediately preceding calendar day.

(d)

The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs, the Closing Indicative Value will be equal to zero on the day it occurs and on all future calendar

days. Upon the occurrence of a Zero Value Event, investors will lose their entire investment. You will not benefit from any

future exposure to the Index after the occurrence of a Zero Value Event. See “— Automatic Acceleration Upon Zero Value

Event.”

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged notional investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate

the leveraged returns would approximately equal the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero for the remaining term of the Securities. If a Zero Value Event occurs prior to

your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your

Securities will be automatically accelerated and mandatorily redeemed and you will lose your entire investment.

The Current Principal Amount per Security, will be calculated as follows:

(a)

From and including the Initial Trade Date to and excluding the first Reset Valuation Date, $25.00 per Security.

(b)

At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

 Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index Factor)

– Accrued Fees

The Current Principal Amount will not change until the first Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, such day will

not be a valid Reset Valuation Date.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset.

The “

Reset Valuation Date

” means:

(a)

Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valuatio n Date, or (v) the Second Permanent Deleveraging Valuation Date; and

(b)

Any calendar day following the Second Permanent Deleveraging Valuation Date.

The valuation dates are defined below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, it will not be

a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

261

The “

Quarterly Reset Valuation D

ate” is the second Wednesday of January, April, July and October of each calendar year

during the term of the Securities (other than an Excluded Day, as defined below), subject to adjustment as described under “—

Market Disruption Event.”

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding the first day of an applicable

Measurement Period, and any calendar day thereafter, and (ii) any calendar day after the Second Permanent Deleveraging

Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor times the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

The “

Residual Factor

” will be calculated as follows:

(a)

1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

(b)

From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period, divided by (b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 3/4, on the second Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 2/4, on the third Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 1/4 and on the last Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal zero.

(c)

On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 2.0. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level 

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such

day. The initial Last Reset Index Closing Level is the Index Closing Level on the Initial Trade Date, as reported by

Bloomberg and Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset Index

Closing Level) was determined on September 14, 2021 by the Security Calculation Agent. If the closing level of the Index, as

reported on Bloomberg and Reuters for any Index Business Day, is manifestly incorrect, the “

Index Closing Level

” for such

Index Business Day shall be the closing level of the Index as determined by the Security Calculation Agent. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

262

“

Measurement Period

” means the Final Measurement Period or, if UBS exercises its Call Right, the Call

Measurement Period.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation

Agent, is an amount per Security, on an intraday basis on any Index Business Day, equal to:

(a)

On the Initial Trade Date, $25.00.

(b)

On any other calendar day prior to the first day of a Measurement Period:

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) – Accrued Fees

(c)

From and including the first day of a Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value × Residual Factor on the immediately preceding calendar

day) – Accrued Fees + Measurement Period Cash Amount, from the immediately preceding calendar day

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Current Indicative Value for the remainder of that day and all subsequent days will be fixed to be equal to the

Measurement Period Cash Amount from the immediately preceding calendar day.

(d)

The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(intraday indicative value).

If a Zero Value Event occurs, the Current Indicative Value (intraday indicative value) will be equal to zero for the

remainder of the day it occurs and on all future calendar days. Upon the occurrence of a Zero Value Event, investors

will lose their entire investment. You will not benefit from any future exposure to the Index after the occurrence of a

Zero Value Event.

See “— Automatic Acceleration Upon Zero Value Event.”

If the Securities undergo a split or reverse split, the Current Indicative Value (intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly.

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

(a)

On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

(b)

On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

(b) the Daily Tracking Fee on such calendar day.

(c)

On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Tracking Fee is zero.

(b) On any subsequent calendar day, the Daily Tracking Fee is equal to:

(1) (i) 0.95% times (ii) the Current Principal Amount on the immediately preceding calendar day times (iii) the Index

Factor on such calendar day times (iv) the Residual Factor on the immediately preceding calendar day, divided by (2)

365.

(c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly.

263

The Securities are subject to an “

Accrued Financing Fee

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Financing Fee is equal to:

(1) the Accrued Financing Fee as of the immediately preceding calendar day, plus (2) the Daily Financing Fee on

such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

(d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Daily Financing Fee is equal to:

(1) (i) the Financing Rate on such calendar day times (ii) the Current Principal Amount on the immediately preceding

calendar day times (iii) the Residual Factor on the immediately preceding calendar day, divided by (2) 360.

(c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

(d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Index. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 1.55% and (b) SOFR on the immediately preceding U.S. Government

Securities Business Day. The minimum value of SOFR (or any successor base rate, as described below) used on any calendar

day will be zero. The minimum Financing Rate at any time will be 1.55%.

For example, 0.05% was the SOFR rate on September 10, 2021, which was a U.S. Government Securities

Business Day. The Financing Rate on September 13, 2021 would therefore have been equal to 1.55% + 0.05%, or 1.60%.

“

SOFR

” means, with respect to any U.S. Government Securities Business Day, the daily secured overnight financing rate for

such U.S. Government Securities Business Day as provided by the SOFR Administrator on the SOFR Administrator’s

Website. If for any U.S. Government Securities Business Day, the SOFR in respect of that day has not been published on the

SOFR Administrator’s Website by the time the Security Calculation Agent determines the Financing Rate for the immediately

succeeding day and the Security Calculation Agent has not determined that SOFR has been discontinued, then the SOFR for

such day will be the secured overnight financing rate as published in respect of the first preceding U.S. Government Securities

Business Day for which the secured overnight financing rate was published on the SOFR Administrator’s Website.

“

SOFR Administrator

” means the Federal Reserve Bank of New York (or a successor administrator of SOFR).

“

SOFR Administrator’s Website

” means the website of the SOFR Administrator, currently at http://www.newyorkfed.org, or

any successor source.

“U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Information About the Secured Overnight Financing Rate

264

All disclosures contained herein regarding the secured overnight financing rate, including, without limitation, its make-up and

method of calculation, have been derived from publicly available sources. The information reflects the policies of, and is

subject to change by the Federal Reserve Bank of New York. The secured overnight financing rate is published by the Federal

Reserve Bank of New York, but the Federal Reserve Bank of New York has no obligation to continue to publish, and may

discontinue publication of, the secured overnight financing rate. Neither UBS nor any of its affiliates accepts any responsibility

for the calculation, maintenance or publication of the secured overnight financing rate or any successor or replacement rate.

Information from outside sources including, but not limited to any website referenced in this section, is not incorporated by

reference in, and should not be considered part of, this document or any document incorporated herein by reference. UBS has

not conducted any independent review or due diligence of any publicly available information with respect to the secured

overnight financing rate.

The secured overnight financing rate is published by the Federal Reserve Bank of New York and is intended to be a broad

measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities. The Federal Reserve Bank of New

York reports that secured overnight financing rate includes all trades in the “Broad General Collateral Rate” (as defined on the

Federal Reserve Bank of New York's Website), plus bilateral Treasury repurchase agreement transactions cleared through the

delivery-versus-payment service offered by the Fixed Income Clearing Corporation (the “

FICC

”), a subsidiary of the

Depository Trust and Clearing Corporation (“

DTCC

”). The secured overnight financing rate is filtered by the Federal Reserve

Bank of New York to remove a portion of the foregoing transactions considered to be "Specials", which are repurchases for

specific-issue collateral, which take place at cash-lending rates below those for general collateral repurchases because cash

providers are willing to accept a lesser return on their cash in order to obtain a particular security.

The Federal Reserve Bank of New York reports that the secured overnight financing rate is calculated as a volume-weighted

median of transaction-level tri-party repo data collected from The Bank of New York Mellon (“

BNYM

”) as well as General

Collateral Finance repurchase agreement transaction data and data on bilateral Treasury repurchase transactions cleared

through the FICC's delivery-versus-payment service. The Federal Reserve Bank of New York notes that it obtains information

from DTCC Solutions LLC, an affiliate of DTCC. The Federal Reserve Bank of New York notes on its publication page for

the secured overnight financing rate that use of the secured overnight financing rate is subject to important limitations and

disclaimers, including that the Federal Reserve Bank of New York may alter the methods of calculation, publication schedule,

rate revision practices or availability of the secured overnight financing rate at any time without notice. The secured overnight

financing rate is published at approximately 8:00 a.m. (New York time) on each U.S. Government Securities Business Day for

trades made on the immediately preceding U.S. Government Securities Business Day. If the Federal Reserve Bank of New

York discovers errors in the transaction data provided by either BNYM or DTCC, or in the calculation process, subsequent to

the rate publication but on that same day, the secured overnight financing rate and accompanying summary statistics may be

republished at approximately 2:30 p.m. (New York time). Similarly, if transaction data from BNYM or DTCC had previously

not been available in time for publication, but became available later in the day, the secured overnight financing rate may be

republished at approximately 2:30 p.m. (New York time). Rate revisions will only be effected on the same day as initial

publication and will only be republished if the change in the rate exceeds one basis point (0.01%), though the Federal Reserve

Bank of New York will review this revision threshold periodically and could modify it after any such review. The description

of the secured overnight financing rate herein does not purport to be exhaustive.

Because the secured overnight financing rate is published by the Federal Reserve Bank of New York based on data received

from other sources, neither UBS nor any of our affiliates has any control over its determination, calculation or publication.

There can be no guarantee that the secured overnight financing rate will not be discontinued or fundamentally altered in a

manner that is materially adverse to the interests of investors in the Securities. If the manner in which the secured overnight

financing rate is calculated is changed, that change may result in an increase in the Financing Rate on the Securities.

The Federal Reserve Bank of New York began publishing the secured overnight financing rate in April 2018. The Federal

Reserve Bank of New York has also published historical indicative secured overnight financing rates going back to August

2014. Investors should not rely on any historical changes or trends in the secured overnight financing rate as an indicator of

future changes in the secured overnight financing rate. Also, since the secured overnight financing rate is relatively new, the

Securities are not expected to have established trading market when issued, and an established trading market may never

develop or may not be very liquid. In addition, if the secured overnight financing rate does not become widely used as a

benchmark in securities that are similar or comparable to the Securities, the trading price of the Securities may be lower than

those of other securities that are linked to rates that are more widely used. Similarly, market terms for exchange traded notes

with financing rates linked to the secured overnight financing rate may evolve over time, and trading prices of the Securities

may be lower than those of later-issued secured overnight financing rate-linked exchange traded notes as a result. Investors in

the Securities may not be able to sell the Securities at all or may not be able to sell the Securities at prices comparable to

similar investments that have a developed secondary market, and may consequently suffer from increased pricing volatility and

market risk.

The secured overnight financing rate data is subject to the terms of use posted at newyorkfed.org. The Federal Reserve Bank of

New York is not responsible for publication of the secured overnight financing rate rates by UBS, does not sanction or endorse

any particular republication, and has no liability for your use. For a more complete discussion of the secured overnight

financing rate , see the website of SOFR Administrator’s Website.

Notwithstanding the foregoing:

265

Ø

If the Security Calculation Agent determines on the relevant determination date that SOFR (or any successor base rate)

has been discontinued, then the Security Calculation Agent will use a substitute or successor base rate that it has

determined in its sole discretion is most comparable to the SOFR base rate (or such successor base rate), provided that

if the Security Calculation Agent determines there is an industry-accepted successor base rate for exchange traded notes

similar to the Securities, then the Security Calculation Agent shall use such successor base rate; and;

Ø

If the Security Calculation Agent has determined a substitute or successor base rate in accordance with the foregoing,

the Security Calculation Agent in its sole discretion may determine the business day convention, definition of business

day and any other relevant methodology for calculating such substitute or successor base rate, including any adjustment

factor needed to make such substitute or successor base rate comparable to the SOFR base rate (or such successor base

rate), in a manner that is consistent with industry-accepted practices for such substitute or successor base rate.

The establishment of SOFR (or such successor base rate, as applicable) for each period by the Security Calculation Agent shall

(in the absence of manifest error) be final and binding.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00 on any calendar day, to but excluding the first day of a Measurement Period.

(b) On the first day of a one-day Measurement Period:

At the close of trading on such Index Business Day, (Current Principal Amount on the immediately preceding

calendar day × Index Factor, on such Index Business Day).

(c) From and including the first day of a four-day Measurement Period:

(i) At the close of trading on each Index Business Day during the four-day Measurement Period, the Measurement

Period Cash Amount on the immediately preceding calendar day + (Current Principal Amount on the calendar day

immediately preceding the first day of such Measurement Period × 0.25 × Index Factor, on such Index Business Day);

and

(ii) On any calendar day during the Measurement Period that is not an Index Business Day, the Measurement Period

Cash Amount on the immediately preceding Index Business Day.

(d) On any calendar day after the last Index Business Day of a Measurement Period, the Measurement Period Cash

Amount on the last Index Business Day of such Measurement Period.

Notwithstanding the foregoing, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is less than or equal to the Measurement Period Cash Amount from the immediately preceding calendar day,

then the Measurement Period Cash Amount for that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash Amount from the immediately preceding calendar day.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable portion of the notional financing amount will separately be deemed converted to cash as

well. After the close of trading on the final Index Business Day of a four-day Measurement Period, the Measurement Period

Cash Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the

four-days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current

Principal Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed

converted to cash, at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period”

 means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is less than $500,000,000, the Calculation Date, subject to adjustments as described under “—

Market Disruption Event”;

(b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is equal to or greater than $500,000,000, the four Index Business Days from and including the

Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

266

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day times (ii) the number of Securities outstanding as

reported by ESUSSO <Index> on Bloomberg.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently MSCI.

The “

Calculation Date

” means September 7, 2061, unless such day is not an Index Business Day, in which case the

Calculation Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Business Day

” means any day that is not a Saturday, Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

Underlying Index

The return on the securities is linked to the performance of the MSCI USA ESG Focus Index Gross Total Return USD

(Bloomberg: “M2USESG”). The Index is designed to maximize exposure to positive ESG factors while exhibiting risk and

return characteristics similar to those of the MSCI USA Index. We refer to the companies included in the Index as the “Index

Constituent Securities”. The Index is developed and calculated by MSCI.

The Index is a total return index and the Index

level reflects the notional reinvestment of the cash distributions from its constituent securities.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event”, you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon and a confirmation of redemption by no later than 5:00 p.m. on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The First Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to: (0.125% ×

Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures”, for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount.

267

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to reduce or waive the Redemption Fee

Amount in our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and

you should not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount = Closing Indicative Value – Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable, or if the

compounded leveraged quarterly return of the Index (or the unleveraged return of the Index, following a Permanent

Deleveraging Event) is negative, you may lose all or a substantial portion of your investment upon early redemption.

Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

The Securities may be called by UBS prior to the Maturity Date pursuant to its Call Right and, upon the occurrence of

a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

 See “— UBS

Call Right” and “— Automatic Acceleration Upon Zero Value Event.”

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to reduce or waive the minimum redemption amount or the Redemption Fee Amount in

our sole discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice

rather than the following Index Business Day. You should not assume you will be entitled to any such waiver or election to

accelerate the Redemption Valuation Date.

268

UBS Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities. To exercise its Call Right,

UBS must provide notice to the holders of such Securities (which may be provided via press release) not less than 18 calendar

days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a cash

payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer to this

cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event”.

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date we issue a notice of exercise of our Call Right is less than $500,000,000, the Call Valuation Date, subject to

adjustments as described under “— Market Disruption Event”; and

(b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date we issue a notice of exercise of our Call Right is equal to or greater than $500,000,000, the four Index

Business Days from and including the Call Valuation Date, subject to adjustment as described under “— Market

Disruption Event.”

For the purpose of determining the Final Measurement Period, the “Market Value” of the Securities outstanding as of the close

of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which may

be provided via press release) of its exercise of its Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day times (ii) the number of Securities outstanding as

reported by ESUSSO <Index> on Bloomberg.

The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Closing Indicative Value, on last Index

Cash Settlement Amount = Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment if we exercise our Call Right. The combined negative effect

of the Accrued Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the

unleveraged return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect

of the Accrued Fees, or if the compounded leveraged quarterly return of the Index (or the unleveraged return of the

Index, following a Permanent Deleveraging Event) is negative, you may lose all or a substantial portion of your

investment upon a call. Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

In addition, upon the occurrence of a Zero Value Event, the Securities will be automatically accelerated and

mandatorily redeemed by UBS

. See “— Automatic Acceleration Upon Zero Value Event” below.

Automatic Acceleration Upon Zero Value Event

A Zero Value Event represents the first instance when the Current Indicative Value (intraday indicative value) or the Closing

Indicative Value is less than or equal to zero (other than on an Excluded Day, as defined below). It will have the effect of

permanently resetting the value of your Securities to zero and accelerating the Securities. You will not benefit from any future

exposure to the Index after the occurrence of a Zero Value Event.

269

A Zero Value Event can occur only if a Permanent Deleveraging Event occurs and the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value declines to zero before the leverage of your Securities is reset to 1.0 at the

close of trading on the Index Business Day following such event (or if such event occurs after 3:15 p.m. on any Index Business

Day which would not otherwise have been a Loss Rebalancing Valuation Date, the second Index Business Day following such

event), as described under “Permanent Deleveraging Valuation Dates” above.

A “

Zero Value Event

” occurs if the Current Indicative Value (intraday indicative value) or the Closing Indicative Value on

any Index Business Day (other than an Excluded Day, as defined below) is less than or equal to zero. From immediately after

the Zero Value Event and on all future calendar days, the Current Indicative Value (intraday indicative value) and the Closing

Indicative Value will be set equal to zero.

As used above, an “

Excluded Day

” means (i) any calendar day after the Second Permanent Deleveraging Valuation Date (ii)

any calendar day on or after which a Zero Value Event has already occurred, and (iii) any calendar day after the last day of an

applicable Measurement Period.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event; provided that the

failure to do so shall not affect the automatic acceleration and redemption of the Securities. The Securities will be suspended

from trading intraday shortly after the event occurs and will likely not be open for trading again on NYSE Arca.

You will lose your entire investment upon the occurrence of a Zero Value Event.

In addition, we may call the Securities prior to the Maturity Date pursuant to our Call Right. See “— UBS Call Right.”

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day, as used below) decreases by 20% or more from the previous Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding any Quarterly Reset Valuation

Date, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day, (ii) any Quarterly Reset Valuation Date, (iii) any Loss

Rebalancing Valuation Date, (iv) the Index Business Day immediately preceding the first day of an applicable Measurement

Period, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day (v) any calendar day from and including the first day of

an applicable Measurement Period, (vi) the First or Second Permanent Deleveraging Valuation Dates, (vii) any calendar day

after the Second Permanent Deleveraging Valuation Date, and (viii) any calendar day on or after which a Zero Value Event has

occurred.

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”; and

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

270

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0 over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 2.0 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities than it would have had before the occurrence of the

Permanent Deleveraging Event. If such an event were to occur, it most likely would occur only following a Loss Rebalancing

Event and prior to the completion of the associated leverage reset to 2.0, which would generally occur at the end of the Index

Business Day following the Index Business Day on which the Loss Rebalancing Event occurred or, if the Loss Rebalancing

Event occurs 3:15 p.m. on an Index Business Day, at the end of the second Index Business Day following the Index Business

Day on which the Loss Rebalancing Event occurred.

A “

Permanent Deleveraging Event

” occurs if, at any time on an Index Business Day (other than an Excluded Day, as defined

below), the Intraday Index Value decreases by 40% or more from the Last Reset Index Closing Level. If a Permanent

Deleveraging Event occurs, the Current Principal Amount of the Securities will be reset over two Index Business Days.

As used above, an “

Excluded Day

” means (i) the First or Second Permanent Deleveraging Valuation Dates, (ii) any calendar

day after the Second Permanent Deleveraging Valuation Date, (iii) any day on or after which a Zero Value Event occurs, (iv)

the day which is two Index Business Days prior to the first day of a Measurement Period, if a Permanent Deleveraging Event

occurs after 3:15 p.m. on such day, and (v) any calendar day from and including the Index Business Day immediately

preceding the first day of a Measurement Period.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

(a) The “

First Permanent Deleveraging Valuation Date

” means:

i. any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but on

which a Permanent Deleveraging Event has occurred, subject to adjustment as described under “— Market

Disruption Event”; or

ii. if a Permanent Deleveraging Event occurs after 3:15 p.m. on any Index Business Day which would not

otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day following the

occurrence of such Permanent Deleveraging Event, subject to adjustment as described under “— Market

Disruption Event.”

The leverage of your Securities will be reset to approximately 2.0 at the close of trading on the First Permanent

Deleveraging Valuation Date.

(b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event.”

The leverage of your Securities will be reset to 1.0 at the close of trading on the Second Permanent Deleveraging

Valuation Date.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split, the record date for any split

or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next Business

Day after the record date.

If the Securities undergo a split or reverse split, we will adjust the Current Principal Amount, Closing Indicative Value,

Current Indicative Value, Accrued Fees, Measurement Period Cash Amount and other relevant terms of the Securities

accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The Depository Trust

Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will be made as

described below. The Current Principal Amount on such record date will be divided by four to reflect the 4:1 split. The

adjusted Current Principal Amount will be rounded to eight decimal places. The split or reverse split will become effective at

the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

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In the case of a reverse split, the Current Principal Amount and other relevant terms of the Securities will be adjusted

accordingly and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Current Principal

Amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Current

Principal Amount will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Current Principal Amount of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the “Security Calculation Agent.” The Security Calculation Agent will be solely responsible

for all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (which we also refer to as

the intraday indicative value), Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the

Leverage Factor, the Index Factor, the Index Performance Ratio, the Residual Factor, the Index Closing Level, the Financing

Rate, the Accrued Fees (including determining any successor to the SOFR base rate), the Redemption Fee Amount, the Cash

Settlement Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, that we will pay you upon

redemption, the Call Settlement Amount, that we will pay you if we call the Securities, whether a Loss Rebalancing Event has

occurred, whether a Permanent Deleveraging Event has occurred and whether any day is an Index Business Day and all such

other matters as may be specified elsewhere herein as matters to be determined by the Security Calculation Agent. If any

Intraday Index Value as published by Bloomberg on any Index Business Day is manifestly incorrect, the Security Calculation

Agent may base its determination of whether a Loss Rebalancing Event, Permanent Deleveraging Event or Zero Value Event

shall have occurred on such Index Business Day on its own determination of such Intraday Index Value. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates. The Security

Calculation Agent will also be responsible for determining whether the Index has been discontinued and whether there has

been a material change in the Index. The Security Calculation Agent will make all such determinations and calculations in its

sole discretion, and absent manifest error, all determinations of the Security Calculation Agent will be conclusive for all

purposes and binding on us, you, and all other persons having an interest in the Securities, without liability on the part of the

Security Calculation Agent. You will not be entitled to any compensation from us for any loss suffered as a result of any

determinations or calculations made by the Security Calculation Agent. We may appoint a different Security Calculation Agent

from time to time after the date of the prospectus supplement without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date or any Call Settlement Date.

All dollar amounts related to determination of the Accrued Fees, the Current Principal Amount, and any

Redemption Amount, Redemption Fee Amount, Call Settlement Amount or Cash Settlement Amount per Security will be

rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded up

to .7655); and all dollar amounts paid to any holder of Securities will be rounded to the nearest cent, with one-half cent

rounded upward.

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Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period

is the Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

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Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five Index Business Days after that first Index Business Day, however, the default quotation period will

continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

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Discontinuance of, Adjustments to or Benchmark Event Affecting the Index or Termination of Our License Agreement

with the Index Sponsor; Alteration of Method of Calculation

If (i) the Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) a Benchmark Event (as described below) under the EU Benchmarks Regulation or

UK Benchmarks Regulation (each as described under “Risk Factors – The Securities are linked to the Index and are subject to

certain regulatory risks”) occurs with respect to the Index or the Index Sponsor, if applicable, (iii) our license agreement with

the Index Sponsor terminates or (iv) the Index Sponsor or Index Calculation Agent does not make the Index Constituent

Securities and/or their unit weighting available to the Security Calculation Agent, and, in each case, any other person or entity

publishes an EU Benchmarks Regulation compliant index licensed to UBS that the Security Calculation Agent determines is

comparable to the Index and for which the Index Constituent Securities and/or their unit weighting are available to the Security

Calculation Agent (such index being referred to herein as a “

successor index

”), and the Security Calculation Agent approves

such index as a successor index, then on and after the date determined by the Security Calculation Agent, the Security

Calculation Agent will determine the Index Closing Level on the applicable dates of determination and the amount payable at

maturity or upon early redemption or call and all other related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

For purposes of the above, a “

Benchmark Event

” may occur if the EU Benchmarks Regulation and/or UK Benchmarks

Regulation, as applicable, applies to this issuance of Securities, and the applicable registration for the Index or Index Sponsor

is not effective or has been suspended or withdrawn by the relevant authority with the effect that the use of the Index or the

Index Sponsor is not permitted under the EU Benchmarks Regulation or UK Benchmarks Regulation, as applicable.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, Current Principal Amount, Current Indicative Value

(intraday indicative value), Closing Indicative Value, Index Factor, Index Performance Ratio, Residual Factor, Accrued Fees,

Index Closing Levels on the applicable dates of determination, all other related payment terms and the amount payable at

maturity or upon early redemption or call by reference to such Substitute Index. If the Security Calculation Agent so elects to

replace the original Index with a Substitute Index, the Security Calculation Agent will cause written notice thereof to be

furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

275

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities, or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after September 14,

2021 that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent

Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the Index

Constituent Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the

cost to us, our affiliates, third parties with whom we transact or similarly situated third parties in performing our or

their obligations in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates,

third parties with whom we transact or a similarly situated third party to perform our or their obligations in connection

with the Securities, or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(c) any event that occurs on or after September 14, 2021 that makes it a violation of any law, regulation or rule of the

United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located, or of any official administrative decision, judicial decision, administrative action, regulatory

interpretation or other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS

AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other

derivatives on the Index or on the Index Constituent Securities (including but not limited to exchange-imposed

position limits), (ii) for us, our affiliates, third parties with whom we transact or similarly situated third parties to

perform our or their obligations in connection with the Securities, or (iii) for us to issue or transact in exchange traded

notes similar to the Securities, each as determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor or Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Index Performance Ratio, the Last Reset Index Closing Level, the Accrued Fees, and any Redemption Amount,

Redemption Fee Amount, Cash Settlement Amount or Call Settlement Amount, and all related payment terms based directly or

indirectly on the Index Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating

the Index or a successor or Substitute Index is modified so that the level of the Index or such successor or Substitute Index is a

fraction or multiple of what it would have been if there had been no such modification (e.g., due to a rebasing of the Index),

which, in turn, causes the Index Closing Level of the Index or such successor or Substitute Index to be a fraction of what it

would have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor or Substitute Index as if it had not been

modified (e.g., as if such rebasing had not occurred).

276

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in the

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The Securities do

not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

277

17. ETRACS 2x Leveraged IFED Invest with the Fed TR Index ETN due September 15, 2061

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or upon early redemption or call. Instead, at

maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance and path

of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement Period as

described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero, the Cash

Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is September 15, 2061, which will be the third Index Business Day following the last Index Business

Day in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated upon Zero Value Event, you will receive at maturity a cash

payment equal to its Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer

to this cash payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment

will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees, you may lose all or a substantial portion of your investment at maturity. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

UBS may call the Securities prior to the Maturity Date pursuant to its Call Right. If the Securities are called by UBS,

the Call Settlement Amount may be zero and you may lose all or a substantial portion of your investment.

 See “— UBS

Call Right”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The Closing Indicative Value represents the dollar value per Security that an investor would receive on any day if it redeemed

the Security that day (without giving effect to any Redemption Fee Amount).

The “

Closing Indicative Value

” per Security, will be calculated as follows:

278

(a) On the Initial Trade Date, $25.00 per Security.

(b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) – Accrued Fees

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) – Accrued Fees + Measurement Period Cash Amount

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value is

less than or equal to the Measurement Period Cash Amount from the immediately preceding calendar day, the Closing

Indicative Value for that day and all subsequent days will be fixed to be equal to the Measurement Period Cash

Amount from the immediately preceding calendar day.

(d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs, the Closing Indicative Value will be equal to zero on the day it occurs and on all future

calendar days. Upon the occurrence of a Zero Value Event, investors will lose their entire investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

 See “— Automatic

Acceleration Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged notional investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate

the leveraged returns would approximately equal the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero for the remaining term of the Securities. If a Zero Value Event occurs prior to

your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your

Securities will be automatically accelerated and mandatorily redeemed and you will lose your entire investment.

The Current Principal Amount per Security, will be calculated as follows:

(a) From and including the Initial Trade Date to and excluding the first Reset Valuation Date, $25.00 per Security.

(b) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

 Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index Factor)

– Accrued Fees

The Current Principal Amount will not change until the first Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, such day will

not be a valid Reset Valuation Date.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset.

The “Reset Valuation Date

” means:

(a) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valuation Date, or (v) the Second Permanent Deleveraging Valuation Date; and

(b) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The valuation dates are defined below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, it will not be

a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the second Wednesday of January, April, July and October of each calendar year

during the term of the Securities (other than an Excluded Day, as defined below), subject to adjustment as described under “—

Market Disruption Event”.

279

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding the first day of an applicable

Measurement Period, and any calendar day thereafter, and (ii) any calendar day after the Second Permanent Deleveraging

Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor times the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

(b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period, divided by (b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 3/4, on the second Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 2/4, on the third Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 1/4 and on the last Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal zero.

(c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 2.0. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level”

 is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is the Index Closing Level on the Initial Trade Date, as reported by Bloomberg and

Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset Index

Closing Level) was determined on September 14, 2021 by the Security Calculation Agent. If the closing level of the Index, as

reported on Bloomberg and Reuters for any Index Business Day, is manifestly incorrect, the “

Index Closing Level

” for such

Index Business Day shall be the closing level of the Index as determined by the Security Calculation Agent. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or, if UBS exercises its Call Right, the Call Measurement

Period.

280

The “

Current Indicative Value

” or “

intraday indicative value

”, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

(a) On the Initial Trade Date, $25.00.

(b) On any other calendar day prior to the first day of a Measurement Period:

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) – Accrued Fees

(c) From and including the first day of a Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value × Residual Factor on the immediately preceding calendar

day) – Accrued Fees + Measurement Period Cash Amount, from the immediately preceding calendar day

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value is

less than or equal to the Measurement Period Cash Amount from the immediately preceding calendar day, the Current

Indicative Value for the remainder of that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(intraday indicative value).

If a Zero Value Event occurs, the Current Indicative Value (intraday indicative value) will be equal to zero for the

remainder of the day it occurs and on all future calendar days. Upon the occurrence of a Zero Value Event, investors

will lose their entire investment. You will not benefit from any future exposure to the Index after the occurrence of a

Zero Value Event.

 See “— Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly.

The Securities are subject to an “Accrued Tracking Fee” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day, plus (b) the Daily Tracking Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Tracking Fee is zero.

(b) On any subsequent calendar day, the Daily Tracking Fee is equal to:

(1) (i) 0.95% times (ii) the Current Principal Amount on the immediately preceding calendar day times (iii) the Index

Factor on such calendar day times (iv) the Residual Factor on the immediately preceding calendar day, divided by (2)

365.

(c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly.

The Securities are subject to an “

Accrued Financing Fee

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

281

(b) On any subsequent calendar day, the Accrued Financing Fee is equal to:

(1) the Accrued Financing Fee as of the immediately preceding calendar day, plus (2) the Daily Financing Fee on

such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

(d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Daily Financing Fee is equal to:

(1) (i) the Financing Rate on such calendar day

times

 (ii) the Current Principal Amount on the immediately preceding

calendar day

 times

 (iii) the Residual Factor on the immediately preceding calendar day,

divided by

 (2) 360.

(c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

(d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Index. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 1.55% and (b) SOFR on the immediately preceding U.S. Government

Securities Business Day. The minimum value of SOFR (or any successor base rate, as described below) used on any calendar

day will be zero. The minimum Financing Rate at any time will be 1.55%.

For example, 0.05% was the SOFR rate on September 10, 2021, which was a U.S. Government Securities Business Day. The

Financing Rate on September 13, 2021 would therefore have been equal to 1.55% + 0.05%, or 1.60.

“

SOFR

” means, with respect to any U.S. Government Securities Business Day, the daily secured overnight financing rate for

such U.S. Government Securities Business Day as provided by the SOFR Administrator on the SOFR Administrator’s

Website. If for any U.S. Government Securities Business Day, the SOFR in respect of that day has not been published on the

SOFR Administrator’s Website by the time the Security Calculation Agent determines the Financing Rate for the immediately

succeeding day and the Security Calculation Agent has not determined that SOFR has been discontinued, then the SOFR for

such day will be the secured overnight financing rate as published in respect of the first preceding U.S. Government Securities

Business Day for which the secured overnight financing rate was published on the SOFR Administrator’s Website.

“

SOFR Administrator

” means the Federal Reserve Bank of New York (or a successor administrator of SOFR).

“

SOFR Administrator’s Website

” means the website of the SOFR Administrator, currently at http://www.newyorkfed.org, or

any successor source.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Information About the Secured Overnight Financing Rate

282

All disclosures contained herein regarding the secured overnight financing rate, including, without limitation, its make-up and

method of calculation, have been derived from publicly available sources. The information reflects the policies of, and is

subject to change by the Federal Reserve Bank of New York. The secured overnight financing rate is published by the Federal

Reserve Bank of New York, but the Federal Reserve Bank of New York has no obligation to continue to publish, and may

discontinue publication of, the secured overnight financing rate. Neither UBS nor any of its affiliates accepts any responsibility

for the calculation, maintenance or publication of the secured overnight financing rate or any successor or replacement rate.

Information from outside sources including, but not limited to any website referenced in this section, is not incorporated by

reference in, and should not be considered part of, this document or any document incorporated herein by reference. UBS has

not conducted any independent review or due diligence of any publicly available information with respect to the secured

overnight financing rate.

The secured overnight financing rate is published by the Federal Reserve Bank of New York and is intended to be a broad

measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities. The Federal Reserve Bank of New

York reports that secured overnight financing rate includes all trades in the "Broad General Collateral Rate" (as defined on the

Federal Reserve Bank of New York's Website), plus bilateral Treasury repurchase agreement transactions cleared through the

delivery-versus-payment service offered by the Fixed Income Clearing Corporation (the “

FICC

”), a subsidiary of the

Depository Trust and Clearing Corporation (“

DTCC

”). The secured overnight financing rate is filtered by the Federal Reserve

Bank of New York to remove a portion of the foregoing transactions considered to be "Specials", which are repurchases for

specific-issue collateral, which take place at cash-lending rates below those for general collateral repurchases because cash

providers are willing to accept a lesser return on their cash in order to obtain a particular security.

The Federal Reserve Bank of New York reports that the secured overnight financing rate is calculated as a volume-weighted

median of transaction-level tri-party repo data collected from The Bank of New York Mellon (“

BNYM

”) as well as General

Collateral Finance repurchase agreement transaction data and data on bilateral Treasury repurchase transactions cleared

through the FICC's delivery-versus-payment service. The Federal Reserve Bank of New York notes that it obtains information

from DTCC Solutions LLC, an affiliate of DTCC. The Federal Reserve Bank of New York notes on its publication page for

the secured overnight financing rate that use of the secured overnight financing rate is subject to important limitations and

disclaimers, including that the Federal Reserve Bank of New York may alter the methods of calculation, publication schedule,

rate revision practices or availability of the secured overnight financing rate at any time without notice. The secured overnight

financing rate is published at approximately 8:00 a.m. (New York time) on each U.S. Government Securities Business Day for

trades made on the immediately preceding U.S. Government Securities Business Day. If the Federal Reserve Bank of New

York discovers errors in the transaction data provided by either BNYM or DTCC, or in the calculation process, subsequent to

the rate publication but on that same day, the secured overnight financing rate and accompanying summary statistics may be

republished at approximately 2:30 p.m. (New York time). Similarly, if transaction data from BNYM or DTCC had previously

not been available in time for publication, but became available later in the day, the secured overnight financing rate may be

republished at approximately 2:30 p.m. (New York time). Rate revisions will only be effected on the same day as initial

publication and will only be republished if the change in the rate exceeds one basis point (0.01%), though the Federal Reserve

Bank of New York will review this revision threshold periodically and could modify it after any such review. The description

of the secured overnight financing rate herein does not purport to be exhaustive.

Because the secured overnight financing rate is published by the Federal Reserve Bank of New York based on data received

from other sources, neither UBS nor any of our affiliates has any control over its determination, calculation or publication.

There can be no guarantee that the secured overnight financing rate will not be discontinued or fundamentally altered in a

manner that is materially adverse to the interests of investors in the Securities. If the manner in which the secured overnight

financing rate is calculated is changed, that change may result in an increase in the Financing Rate on the Securities.

The Federal Reserve Bank of New York began publishing the secured overnight financing rate in April 2018. The Federal

Reserve Bank of New York has also published historical indicative secured overnight financing rates going back to August

2014. Investors should not rely on any historical changes or trends in the secured overnight financing rate as an indicator of

future changes in the secured overnight financing rate. Also, since the secured overnight financing rate is relatively new, the

Securities are not expected to have established trading market when issued, and an established trading market may never

develop or may not be very liquid. In addition, if the secured overnight financing rate does not become widely used as a

benchmark in securities that are similar or comparable to the Securities, the trading price of the Securities may be lower than

those of other securities that are linked to rates that are more widely used. Similarly, market terms for exchange traded notes

with financing rates linked to the secured overnight financing rate may evolve over time, and trading prices of the Securities

may be lower than those of later-issued secured overnight financing rate-linked exchange traded notes as a result. Investors in

the Securities may not be able to sell the Securities at all or may not be able to sell the Securities at prices comparable to

similar investments that have a developed secondary market, and may consequently suffer from increased pricing volatility and

market risk.

The Federal Reserve Bank of New York is not responsible for publication of the secured overnight financing rate rates by

UBS, does not sanction or endorse any particular republication, and has no liability for your use. For a more complete

discussion of the secured overnight financing rate , see the website of SOFR Administrator’s Website.

Notwithstanding the foregoing:

283

Ø

If the Security Calculation Agent determines on the relevant determination date that SOFR (or any successor base rate)

has been discontinued, then the Security Calculation Agent will use a substitute or successor base rate that it has

determined in its sole discretion is most comparable to the SOFR base rate (or such successor base rate), provided that

if the Security Calculation Agent determines there is an industry-accepted successor base rate for exchange traded notes

similar to the Securities, then the Security Calculation Agent shall use such successor base rate; and

Ø

If the Security Calculation Agent has determined a substitute or successor base rate in accordance with the foregoing,

the Security Calculation Agent in its sole discretion may determine the business day convention, definition of business

day and any other relevant methodology for calculating such substitute or successor base rate, including any adjustment

factor needed to make such substitute or successor base rate comparable to the SOFR base rate (or such successor base

rate), in a manner that is consistent with industry-accepted practices for such substitute or successor base rate.

The establishment of SOFR (or such successor base rate, as applicable) for each period by the Security Calculation Agent shall

(in the absence of manifest error) be final and binding.

The “

Measurement Period Cash Amount”

 is an amount per Security equal to:

(a) $0.00 on any calendar day, to but excluding the first day of a Measurement Period.

(b) On the first day of a one-day Measurement Period:

At the close of trading on such Index Business Day, (Current Principal Amount on the immediately preceding

calendar day × Index Factor, on such Index Business Day).

(c) From and including the first day of a four-day Measurement Period:

(i) At the close of trading on each Index Business Day during the four-day Measurement Period, the Measurement

Period Cash Amount on the immediately preceding calendar day + (Current Principal Amount on the calendar

day immediately preceding the first day of such Measurement Period × 0.25 × Index Factor, on such Index

Business Day); and

(ii) On any calendar day during the Measurement Period that is not an Index Business Day, the Measurement Period

Cash Amount on the immediately preceding Index Business Day.

(d) On any calendar day after the last Index Business Day of a Measurement Period, the Measurement Period Cash

Amount on the last Index Business Day of such Measurement Period.

Notwithstanding the foregoing, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is

less than or equal to

 the Measurement Period Cash Amount from the immediately preceding calendar day,

then the Measurement Period Cash Amount for that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash Amount from the immediately preceding calendar day.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable portion of the notional financing amount will separately be deemed converted to cash as

well. After the close of trading on the final Index Business Day of a four-day Measurement Period, the Measurement Period

Cash Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the

four-days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current

Principal Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed

converted to cash, at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is less than $500,000,000, the Calculation Date, subject to adjustments as described under “—

Market Disruption Event”;

(b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is equal to or greater than $500,000,000, the four Index Business Days from and including the

Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

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(i) the Closing Indicative Value as of such Index Business Day times (ii) the number of Securities outstanding as

reported by FEDLSO <Index> on Bloomberg.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently Indxx

LLC.

The “

Calculation Date

” means September 7, 2061, unless such day is not an Index Business Day, in which case the

Calculation Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Business Day

” means any day that is not a Saturday, Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

Underlying Index

The IFED Large-Cap US Equity Index Total Return (Bloomberg: “IFEDLT”) is the total return version of the IFED Large-Cap

US Equity Index (Bloomberg: “IFEDL”). The Index tracks large-cap U.S. equities that are determined by Economic Index

Associates, LLC (“EIA” or the “Index Sponsor”) to be best positioned to benefit from the prevailing monetary environment.

We refer to the companies included in the Index as the “Index Constituent Securities”. The Index is developed by EIA and

calculated by Indxx LLC (“Indxx”).

The Index is a total return index and the Index level reflects the notional

reinvestment of the cash distributions from its constituent securities.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event”, you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon and a confirmation of redemption by no later than 5:00 p.m. on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The First Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures”, for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount.

285

We refer to this cash payment as the “

Redemption Amount.

” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to reduce or waive the Redemption Fee

Amount in our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and

you should not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount = Closing Indicative Value – Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable, or if the

compounded leveraged quarterly return of the Index (or the unleveraged return of the Index, following a Permanent

Deleveraging Event) is negative, you may lose all or a substantial portion of your investment upon early redemption.

Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

The Securities may be called by UBS prior to the Maturity Date pursuant to its Call Right and, upon the occurrence of

a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

 See “— UBS

Call Right” and “— Automatic Acceleration Upon Zero Value Event”.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “Redemption Confirmation”, to us via email in

the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to reduce or waive the minimum redemption amount or the Redemption Fee Amount in

our sole discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice

rather than the following Index Business Day. You should not assume you will be entitled to any such waiver or election to

accelerate the Redemption Valuation Date.

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UBS Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities. To exercise its Call Right,

UBS must provide notice to the holders of such Securities (which may be provided via press release) not less than 18 calendar

days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a cash

payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer to this

cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event”.

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately

preceding the date we issue a notice of exercise of our Call Right is less than $500,000,000, the Call Valuation

Date, subject to adjustments as described under “— Market Disruption Event”; and

(b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately

preceding the date we issue a notice of exercise of our Call Right is equal to or greater than $500,000,000, the

four Index Business Days from and including the Call Valuation Date, subject to adjustment as described under

“— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of its Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day times (ii) the number of Securities outstanding as

reported by FEDLSO <Index> on Bloomberg.

The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment if we exercise our Call Right. The combined negative effect

of the Accrued Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the

unleveraged return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect

of the Accrued Fees, or if the compounded leveraged quarterly return of the Index (or the unleveraged return of the

Index, following a Permanent Deleveraging Event) is negative, you may lose all or a substantial portion of your

investment upon a call. Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

In addition, upon the occurrence of a Zero Value Event, the Securities will be automatically accelerated and

mandatorily redeemed by UBS

. See “— Automatic Acceleration Upon Zero Value Event” below.

Automatic Acceleration Upon Zero Value Event

A Zero Value Event represents the first instance when the Current Indicative Value (intraday indicative value) or the Closing

Indicative Value is less than or equal to zero (other than on an Excluded Day, as defined below). It will have the effect of

permanently resetting the value of your Securities to zero and accelerating the Securities. You will not benefit from any future

exposure to the Index after the occurrence of a Zero Value Event.

287

A Zero Value Event can occur only if a Permanent Deleveraging Event occurs and the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value declines to zero before the leverage of your Securities is reset to 1.0 at the

close of trading on the Index Business Day following such event (or if such event occurs after 3:15 p.m. on any Index Business

Day which would not otherwise have been a Loss Rebalancing Valuation Date, the second Index Business Day following such

event), as described under “Permanent Deleveraging Valuation Dates” above.

A “

Zero Value Event

” occurs if the Current Indicative Value (intraday indicative value) or the Closing Indicative Value on

any Index Business Day (other than an Excluded Day, as defined below) is less than or equal to zero. From immediately after

the Zero Value Event and on all future calendar days, the Current Indicative Value (intraday indicative value) and the Closing

Indicative Value will be set equal to zero.

As used above, an “

Excluded Day

” means (i) any calendar day after the Second Permanent Deleveraging Valuation Date (ii)

any calendar day on or after which a Zero Value Event has already occurred, and (iii) any calendar day after the last day of an

applicable Measurement Period.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event; provided that the

failure to do so shall not affect the automatic acceleration and redemption of the Securities. The Securities will be suspended

from trading intraday shortly after the event occurs and will likely not be open for trading again on NYSE Arca.

You will lose your entire investment upon the occurrence of a Zero Value Event.

In addition, we may call the Securities prior to the Maturity Date pursuant to our Call Right.

 See “Specific Terms of the

Securities — UBS Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day, as used below) decreases by 20% or more from the previous Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding any Quarterly Reset Valuation

Date, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day, (ii) any Quarterly Reset Valuation Date, (iii) any Loss

Rebalancing Valuation Date, (iv) the Index Business Day immediately preceding the first day of an applicable Measurement

Period, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day (v) any calendar day from and including the first day of

an applicable Measurement Period, (vi) the First or Second Permanent Deleveraging Valuation Dates, (vii) any calendar day

after the Second Permanent Deleveraging Valuation Date, and (viii) any calendar day on or after which a Zero Value Event has

occurred.

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event” beginning on

page S-84; and

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day

following the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market

Disruption Event.”

288

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0 over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 2.0 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities than it would have had before the occurrence of the

Permanent Deleveraging Event. If such an event were to occur, it most likely would occur only following a Loss Rebalancing

Event and prior to the completion of the associated leverage reset to 2.0, which would generally occur at the end of the Index

Business Day following the Index Business Day on which the Loss Rebalancing Event occurred or, if the Loss Rebalancing

Event occurs 3:15 p.m. on an Index Business Day, at the end of the second Index Business Day following the Index Business

Day on which the Loss Rebalancing Event occurred.

A “

Permanent Deleveraging Event

” occurs if, at any time on an Index Business Day (other than an Excluded Day, as defined

below), the Intraday Index Value decreases by 40% or more from the Last Reset Index Closing Level. If a Permanent

Deleveraging Event occurs, the Current Principal Amount of the Securities will be reset over two Index Business Days.

As used above, an “

Excluded Day

” means (i) the First or Second Permanent Deleveraging Valuation Dates, (ii) any calendar

day after the Second Permanent Deleveraging Valuation Date, (iii) any day on or after which a Zero Value Event occurs, (iv)

the day which is two Index Business Days prior to the first day of a Measurement Period, if a Permanent Deleveraging Event

occurs after 3:15 p.m. on such day, and (v) any calendar day from and including the Index Business Day immediately

preceding the first day of a Measurement Period.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

(a) The “

First Permanent Deleveraging Valuation Date”

 means:

(i) any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but on

which a Permanent Deleveraging Event has occurred, subject to adjustment as described under “— Market

Disruption Event”; or

(ii) if a Permanent Deleveraging Event occurs after 3:15 p.m. on any Index Business Day which would not

otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day following the

occurrence of such Permanent Deleveraging Event, subject to adjustment as described under “— Market

Disruption Event.”

The leverage of your Securities will be reset to approximately 2.0 at the close of trading on the First Permanent

Deleveraging Valuation Date.

(b) The “Second Permanent Deleveraging Valuation Date” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event.”

The leverage of your Securities will be reset to 1.0 at the close of trading on the Second Permanent Deleveraging

Valuation Date.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split, the record date for any split

or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next Business

Day after the record date.

If the Securities undergo a split or reverse split, we will adjust the Current Principal Amount, Closing Indicative Value,

Current Indicative Value, Accrued Fees, Measurement Period Cash Amount and other relevant terms of the Securities

accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The Depository Trust

Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will be made as

described below. The Current Principal Amount on such record date will be divided by four to reflect the 4:1 split. The

adjusted Current Principal Amount will be rounded to eight decimal places. The split or reverse split will become effective at

the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

289

In the case of a reverse split, the Current Principal Amount and other relevant terms of the Securities will be adjusted

accordingly and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Current Principal

Amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Current

Principal Amount will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Current Principal Amount of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the “Security Calculation Agent.” The Security Calculation Agent will be solely responsible

for all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (which we also refer to as

the intraday indicative value), Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the

Leverage Factor, the Index Factor, the Index Performance Ratio, the Residual Factor, the Index Closing Level, the Financing

Rate, the Accrued Fees (including determining any successor to the SOFR base rate), the Redemption Fee Amount, the Cash

Settlement Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, that we will pay you upon

redemption, the Call Settlement Amount, that we will pay you if we call the Securities, whether a Loss Rebalancing Event has

occurred, whether a Permanent Deleveraging Event has occurred and whether any day is an Index Business Day and all such

other matters as may be specified elsewhere herein as matters to be determined by the Security Calculation Agent. If any

Intraday Index Value as published by Bloomberg on any Index Business Day is manifestly incorrect, the Security Calculation

Agent may base its determination of whether a Loss Rebalancing Event, Permanent Deleveraging Event or Zero Value Event

shall have occurred on such Index Business Day on its own determination of such Intraday Index Value. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates. The Security

Calculation Agent will also be responsible for determining whether the Index has been discontinued and whether there has

been a material change in the Index. The Security Calculation Agent will make all such determinations and calculations in its

sole discretion, and absent manifest error, all determinations of the Security Calculation Agent will be conclusive for all

purposes and binding on us, you, and all other persons having an interest in the Securities, without liability on the part of the

Security Calculation Agent. You will not be entitled to any compensation from us for any loss suffered as a result of any

determinations or calculations made by the Security Calculation Agent. We may appoint a different Security Calculation Agent

from time to time after the date of the prospectus supplement without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date or any Call Settlement Date.

All dollar amounts related to determination of the Accrued Fees, the Current Principal Amount, and any Redemption Amount,

Redemption Fee Amount, Call Settlement Amount or Cash Settlement Amount per Security will be rounded to the nearest ten-

thousandth, with five one hundred-thousandths rounded upward (

e.g

., .76545 would be rounded up to .7655); and all dollar

amounts paid to any holder of Securities will be rounded to the nearest cent, with one -half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

290

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period

is the Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities,

whether by reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled

“Use of Proceeds and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced

change in the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

291

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five Index Business Days after that first Index Business Day, however, the default quotation period will

continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of, Adjustments to or Benchmark Event Affecting the Index or Termination of Our License Agreement

with the Index Sponsor; Alteration of Method of Calculation

If (i) the Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) a Benchmark Event (as described below) under the EU Benchmarks Regulation or

UK Benchmarks Regulation (each as described under “Risk Factors – The Securities are linked to the Index and are subject to

certain regulatory risks”) occurs with respect to the Index or the Index Sponsor, if applicable, (iii) our license agreement with

the Index Sponsor terminates or (iv) the Index Sponsor or Index Calculation Agent does not make the Index Constituent

Securities and/or their unit weighting available to the Security Calculation Agent, and, in each case, any other person or entity

publishes an EU Benchmarks Regulation compliant index licensed to UBS that the Security Calculation Agent determines is

comparable to the Index and for which the Index Constituent Securities and/or their unit weighting are available to the Security

Calculation Agent (such index being referred to herein as a “

successor index

”), and the Security Calculation Agent approves

such index as a successor index, then on and after the date determined by the Security Calculation Agent, the Security

Calculation Agent will determine the Index Closing Level on the applicable dates of determination and the amount payable at

maturity or upon early redemption or call and all other related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

to be furnished to the trustee, to us and to the holders of the Securities.

292

If the Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

For purposes of the above, a “

Benchmark Event

” may occur if the EU Benchmarks Regulation and/or UK Benchmarks

Regulation, as applicable, applies to this issuance of Securities, and the applicable registration for the Index or Index Sponsor

is not effective or has been suspended or withdrawn by the relevant authority with the effect that the use of the Index or the

Index Sponsor is not permitted under the EU Benchmarks Regulation or UK Benchmarks Regulation, as applicable. In

addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else publishes

an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then the Security

Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute Index for all

purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index will

thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments, if

any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, Current Principal Amount, Current Indicative Value

(intraday indicative value), Closing Indicative Value, Index Factor, Index Performance Ratio, Residual Factor, Accrued Fees,

Index Closing Levels on the applicable dates of determination, all other related payment terms and the amount payable at

maturity or upon early redemption or call by reference to such Substitute Index. If the Security Calculation Agent so elects to

replace the original Index with a Substitute Index, the Security Calculation Agent will cause written notice thereof to be

furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities, or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after September 14,

2021 that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent

Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the Index

Constituent Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the

cost to us, our affiliates, third parties with whom we transact or similarly situated third parties in performing our or

their obligations in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates,

third parties with whom we transact or a similarly situated third party to perform our or their obligations in connection

with the Securities, or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

293

(c) any event that occurs on or after September 14, 2021 that makes it a violation of any law, regulation or rule of the

United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located, or of any official administrative decision, judicial decision, administrative action, regulatory

interpretation or other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS

AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other

derivatives on the Index or on the Index Constituent Securities (including but not limited to exchange-imposed

position limits), (ii) for us, our affiliates, third parties with whom we transact or similarly situated third parties to

perform our or their obligations in connection with the Securities, or (iii) for us to issue or transact in exchange traded

notes similar to the Securities, each as determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor or Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Index Performance Ratio, the Last Reset Index Closing Level, the Accrued Fees, and any Redemption Amount,

Redemption Fee Amount, Cash Settlement Amount or Call Settlement Amount, and all related payment terms based directly or

indirectly on the Index Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating

the Index or a successor or Substitute Index is modified so that the level of the Index or such successor or Substitute Index is a

fraction or multiple of what it would have been if there had been no such modification (e.g., due to a rebasing of the Index),

which, in turn, causes the Index Closing Level of the Index or such successor or Substitute Index to be a fraction of what it

would have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor or Substitute Index as if it had not been

modified (

e.g

., as if such rebasing had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in this

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

294

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of this prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The Securities do

not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

295

18. ETRACS IFED Invest with the Fed TR Index ETN due September 15, 2061

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or call, or upon early redemption. Instead, at

maturity, you will receive a cash payment the amount of which will vary depending on the performance and path of the Index

calculated in accordance with the formula set forth below and will be reduced by the Daily Tracking Fee as of the last Index

Business Day in the applicable

Measurement Period or Redemption Valuation Date.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment on the Redemption Date equal to the Redemption Amount as described below under

“— Early Redemption at the Option of the Holders.” If the amount so calculated is equal to or less than zero, the Redemption

Amount will be zero and you will not receive a cash payment.

If we elect to exercise our call right to redeem all of the Securities, subject to compliance with the procedures set forth below,

for each Security you will receive a cash payment on the Call Settlement Date equal to the Call Settlement Amount, as

described below under “— UBS Call Right.” If the amount so calculated is equal to or less than zero, the Call Settlement

Amount will be zero and you will not receive a cash payment.

The Securities will not pay any cash coupon during their term.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is September 15, 2061, which will be the third Index Business Day following the last Index Business

Day in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called or redeemed, you will receive at maturity a cash payment equal to the Closing

Indicative Value on the last day of the Final Measurement Period. We refer to this payment as the “

Cash Settlement

Amount

”. If the amount so calculated is equal to or less than zero, the payment at maturity will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Closing Indicative Value, on last Index

Cash Settlement Amount = Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The Securities are fully exposed to any decline

in the level of the Index. The negative effect of the Daily Tracking Fee will reduce your final payment. If the level of the

Index (as measured by the Index Closing Level at the end of the Final Measurement Period, as compared to the initial

Index Closing Level or the Index level at the time you purchase the Securities, as applicable) does not increase by an

amount sufficient to offset the negative effect of the Daily Tracking Fee, or if the final Index level is less than the initial

Index Closing Level (or the Index level at the time you purchase the Securities, as applicable), you may lose all or a

substantial portion of your investment at maturity. The Daily Tracking Fee also takes into account the performance of

the Index, as measured by the Closing Indicative Value.

The Securities may be called by UBS prior to the Maturity Date pursuant to the UBS Call Right. If the Securities are

called by UBS, the Call Settlement Amount may be zero and you may lose all or a substantial portion of your

investment. See “— UBS Call Right”.

296

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The “

Closing Indicative Value

” represents the dollar value per Security that an investor would receive on any day if it

redeemed the Security on such day (excluding any Redemption Fee Amount). The Closing Indicative Value per Security will

be calculated as follows:

(a) On the Initial Trade Date, $25.00 per Security

(b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period, an amount

per Security equal to:

(Closing Indicative Value on the previous calendar day * Index Factor)—Daily Tracking Fee

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Closing Indicative Value on the calendar day immediately preceding the first day of the Measurement Period × Index

Factor × Residual Factor) + Measurement Period Cash Amount

The minimum value of the Closing Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Index Factor

” on any Index Business Day prior to but excluding the first day of an applicable Measurement Period, will

equal:

(i) the Index Closing Level, on such Index Business Day, divided by, (ii) the Index Closing Level, on the immediately

preceding Index Business Day.

From and including the first day of an applicable Measurement Period, the Index Factor will equal:

(i) the Index Closing Level, on such calendar day, divided by, (ii) the Index Closing Level on the calendar day

immediately preceding the first day of such Measurement Period.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the immediately preceding Index Business Day. The Index Factor will therefore equal one (1) on any calendar day that is not

an Index Business Day and is prior to the first Index Business Day of a five-day Measurement Period.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, prior to but excluding the first day of an applicable Measurement Period

(b) From and including the first day of an applicable five-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such five-day

Measurement Period, divided by (b) five.

The Residual Factor is intended to approximate the percentage of the Closing Indicative Value that is tracking the Index on any

given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a component of

the Closing Indicative Value or Current Indicative Value formulas.

For example, on the first Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal

(4/5), on the second Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (3/5),

on the third Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (2/5), on the

fourth Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (1/5) and on the last

Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal zero.

On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the Residual Factor

will be equal to zero.

297

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. If the closing level of the Index, as reported on Bloomberg and Reuters for

any Index Business Day, is manifestly incorrect, the “Index Closing Level” for such Index Business Day shall be the closing

level of the Index as determined by the Security Calculation Agent. In making such determination, the Security Calculation

Agent may consider any relevant information, including, without limitation, relevant market data in the relevant market

supplied by one or more third parties or from internal sources or affiliates. 23572.14 is the initial Index Closing Level

measured on September 14, 2021 (the Initial Trade Date), as determined by the Security Calculation Agent.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level from

the last Index Business Day prior to such calendar day.

“

Measurement Period

” means the Final Measurement Period or Call Measurement Period, as applicable.

The “

Current Indicative Value

” or “intraday indicative value”, as determined by the Security Calculation Agent, means the

Closing Indicative Value per Security calculated on an intraday basis on any Index Business Day.

For the purposes of calculating the Current Indicative Value, the Index Factor will be determined using the Intraday Index

Value. Additionally, from and including the first day of an applicable Measurement Period, the Current Indicative Value will

be calculated using (i) the Measurement Period Cash Amount from the immediately preceding calendar day, and (ii) the

Residual Factor from the immediately preceding calendar day.

The minimum value of the Current Indicative Value (or intraday indicative value) on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(or intraday indicative value).

If the Securities undergo a split or reverse split, the Current Indicative Value (or intraday indicative value) will be adjusted

accordingly.

The “

Daily Tracking Fee

” means, as of any date of determination, an amount per Security equal to 0.45% per annum,

calculated as follows:

(a) On the Initial Trade Date, $0.00 per Security;

(b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period, an amount

per Security equal to:

(0.45% / 365) × Closing Indicative Value on the immediately preceding calendar day × Index Factor

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(0.45% / 365) × Closing Indicative Value on the calendar day immediately preceding the first day of the Measurement

Period × Index Factor × Residual Factor on the immediately preceding calendar day

The minimum value of the Daily Tracking Fee on any calendar day will be zero.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00, on any calendar day prior to but excluding the first day of an applicable Measurement Period

(b) On the first day of an applicable one-day Measurement Period:

(i) At the close of trading on such Index Business Day, the (Closing Indicative Value, on the immediately

preceding calendar day, times Index Factor, on such Index Business Day), minus Daily Tracking Fee.

(c) From and including the first day of an applicable five-day Measurement Period:

(i) At the close of trading on each Index Business Day, will equal:

(a) Measurement Period Cash Amount on the immediately preceding calendar day,

plus

(b) ( (i) Closing

Indicative Value, on the calendar day immediately preceding the first day of such Measurement Period,

times

(ii) Index Factor,

 divided

 by (iii) five),

minus

 (c) Daily Tracking Fee.

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(ii) On any calendar day that is not an Index Business Day, will equal the Measurement Period Cash Amount on

the immediately preceding Index Business Day,

minus

 Daily Tracking Fee.

(d) On any calendar day after the last Index Business Day of an applicable Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

The minimum value of the Measurement Period Cash Amount on any calendar day will be zero.

The Measurement Period Cash Amount represents the portion of the Closing Indicative Value that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business day during a five-day Measurement Period, approximately 20% of the Closing

Indicative Value, on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash. After the close of trading on the final Index Business Day of an applicable five-day Measurement Period,

the Measurement Period Cash Amount will represent the averaged value of the Closing Indicative Value that was deemed

converted to cash across the five-days of such Measurement Period. In case of a one-day Measurement Period, approximately

100% of the Closing Indicative Value will be deemed converted to cash, at the close of trading of the first day of such

Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is less than $250,000,000, the Calculation Date, subject to adjustments as described under “—

Market Disruption Event”;

(b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the Calculation Date is equal to or greater than $250,000,000, the five (5) Index Business Days from and including the

Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “Market Value” of the Securities outstanding as of the close

of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day, times (ii) the number of Securities outstanding as

reported by IFEDSO <Index> on Bloomberg.

The “Index Calculation Agent” means the entity that calculates and publishes the level of the Index, which is currently Indxx

LLC.

The “

Calculation Date

” means September 6, 2061 unless such day is not an Index Business Day, in which case the

Calculation Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Business Day

” means any day that is not a Saturday, Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

Underlying Index

The IFED Large-Cap US Equity Index Total Return (Bloomberg: “IFEDLT”) is the total return version of the IFED Large-Cap

US Equity Index (Bloomberg: “IFEDL”). The Index tracks large-cap U.S. equities that are determined by Economic Index

Associates, LLC (“

EIA

” or the “

Index Sponsor

”) to be best positioned to benefit from the prevailing monetary environment.

We refer to the companies included in the Index as the “Index Constituent Securities”.

The Index is developed by EIA and

calculated by Indxx LLC (“Indxx”). The Index is a total return index and the Index level reflects the notional

reinvestment of the cash distributions from its constituent securities.

299

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, and a confirmation of redemption by no later than 5:00 p.m., on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time-to-time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume that you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The First Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valua tion Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount.

We refer to this cash payment as the “

Redemption Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon early redemption will be zero.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of such Redemption Valuation Date).

We reserve the right from time to time to reduce or waive the Redemption Fee Amount in our sole discretion and on a case-by-

case basis. There can be no assurance that we will elect to waive this fee and you should not assume you will be entitled to

such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount = Closing Indicative Value — Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Daily Tracking Fee and the Redemption Fee Amount will reduce your Redemption Amount. If the level of the Index

does not increase by an amount sufficient to offset the combined negative effect of the Daily Tracking Fee and the

Redemption Fee Amount, or if the final Index level is less than the initial Index Closing Level (or the Index level at the

time you purchase the Securities, as applicable), you may lose some or all of your investment upon early redemption.

The Securities may be called by UBS prior to the Maturity Date pursuant to the UBS Call Right.

 See – UBS Call Right”.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

300

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

,” to us via e-mail

in the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to reduce or waive the minimum redemption amount or the Redemption Fee Amount in

our sole discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice

rather than the following Index Business Day. You should not assume you will be entitled to any such waiver or election to

accelerate the Redemption Valuation Date.

UBS Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities. To exercise its Call Right,

UBS must provide notice to the holders of such Securities (which notice may be provided via press release), not less than 18

calendar days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a

cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer

to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event.”

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date we issue a notice of exercise of our Call Right is less than $250,000,000, the Call Valuation Date, subject to

adjustments as described under “— Market Disruption Event”; or

(b) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date we issue a notice of exercise of our Call Right is equal to or greater than $250,000,000, the five (5) Index

Business Days from and including the Call Valuation Date, subject to adjustment as described under “— Market

Disruption Event.”

For the purpose of determining the Call Measurement Period, the “

Market Value

” of the Securities outstanding as of the close

of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which may

be provided via press release) of its exercise of its Call Right, will equal:

(a) the Closing Indicative Value as of such Index Business Day, times (ii) the number of Securities outstanding as

reported by IFEDSO <Index> on Bloomberg.

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The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Closing Indicative Value on last Index

Call Settlement Amount = Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment upon a call. The negative effect of the Daily Tracking Fee

will reduce your final payment. If the level of the Index does not increase by an amount sufficient to offset the negative

effect of the Daily Tracking Fee, or if the final Index level is less than the initial Index Closing Level (or the Index level

at the time you purchase the Securities, as applicable), you may lose some or all of your investment upon UBS’s exercise

of its call right.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split, and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split. The record date for any

split or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next

Business Day after the record date.

If the Securities undergo a split or reverse split, we will adjust the Closing Indicative Value and other relevant terms of the

Securities accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The

Depository Trust Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will

be made as described below. The Closing Indicative Value on such record date will be divided by four to reflect the 4:1 split.

The adjusted Closing Indicative Value will be rounded to eight decimal places. The split or reverse split will become effective

at the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

In the case of a reverse split, the Closing Indicative Value and other relevant terms of the Securities will be adjusted

accordingly, and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Closing Indicative

Value of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Closing

Indicative Value will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Closing Indicative Value of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

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Security Calculation Agent

UBS Securities LLC will act as the “Security Calculation Agent.” The Security Calculation Agent will be solely responsible

for all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, Current Indicative Value (which we also refer to as the “intraday indicative value”),

Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the Index Factor, the Residual

Factor, the Index Closing Level, the Daily Tracking Fee, the Redemption Fee Amount, the Cash Settlement Amount, if any,

that we will pay you at maturity, the Redemption Amount, if any, that we will pay you upon redemption, if applicable and the

Call Settlement Amount, if any, that we will pay you in the event that UBS calls the Securities, and whether any day is a

Business Day or an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. The Security Calculation Agent will also be responsible for determining

whether the Index has been discontinued and whether there has been a material change in the Index. The Security Calculation

Agent will make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of

the Security Calculation Agent will be conclusive for all purposes and binding on us, you and all other persons having an

interest in the Securities, without liability on the part of the Security Calculation Agent. You will not be entitled to any

compensation from us for any loss suffered as a result of any determinations or calculations made by the Security Calculation

Agent. We may appoint a different Security Calculation Agent from time to time after the date of the prospectus supplement

without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date, or any Call Settlement Date.

All dollar amounts related to determination of the Daily Tracking Fee, the Redemption Amount and Redemption Fee Amount,

if any, per security, the Call Settlement Amount, if any, per security, and the Cash Settlement Amount, if any, per security, will

be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded

up to .7655); and all dollar amounts paid to any holder of Securities will be rounded to the nearest cent, with one-half cent

rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a five-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the five-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4, June 5 and June 6, and there is a Market Disruption Event with respect to the Index on

June 2, but no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index

Business Day of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day,

June 6th the fourth Index Business Day and the next Index Business Day after June 6th would be the final day of the

Measurement Period. The same approach would be applied if there is a Market Disruption Event during a five-day Final

Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date) or the Calculation Date

(in the event that the Final Measurement Period is the Calculation Date), the Index Closing Level for such Redemption

Valuation Date, Call Valuation Date or Calculation Date will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. For example, if the Redemption Valuation Date, for purposes of calculating a Redemption Amount,

is based on the Index Closing Level on June 2 and there is a Market Disruption Event with respect to the Index on June 2, then

the Index Closing Level on June 3 will be used to calculate the Redemption Amount, assuming that no such Market Disruption

Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date) or Calculation Date (in the event that the Final Measurement

Period is the Calculation Date) occurring more than five Index Business Days following the day originally scheduled to be

such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation Date or Calculation

Date. If a Market Disruption Event has occurred or is continuing with respect to the Index on the fifth Index Business Day

following the date originally scheduled to be such Index Business Day of the Measurement Period or any Redemption

Valuation Date, Call Valuation Date or Calculation Date, the Security Calculation Agent or one of its affiliates will determine

the Index Closing Level based on its good faith estimate of the Index Closing Level that would have prevailed on such fifth

Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

303

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “

absence of trading

” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent, in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking, plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

304

Ø

every quotation of that kind obtained is objected to within five (5) Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five (5) Index Business Days after that first Index Business Day, however, the default quotation period

will continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of, Adjustments to or Benchmark Event Affecting the Index or Termination of Our License Agreement

with the Index Sponsor; Alteration of Method of Calculation

If (i) the Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) a Benchmark Event (as described below) under the EU Benchmarks Regulation or

UK Benchmarks Regulation (each as described under “Risk Factors – The Securities are linked to the Index and are subject to

certain regulatory risks”) occurs with respect to the Index or the Index Sponsor, if applicable, (iii) our license agreement with

the Index Sponsor terminates or (iv) the Index Sponsor or Index Calculation Agent does not make the Index Constituent

Securities and/or their unit weighting available to the Security Calculation Agent, and, in each case, any other person or entity

publishes an EU Benchmarks Regulation compliant index licensed to UBS that the Security Calculation Agent determines is

comparable to the Index and for which the Index Constituent Securities and/or their unit weighting are available to the Security

Calculation Agent (such index being referred to herein as a “

successor index

”), and the Security Calculation Agent approves

such index as a successor index, then on and after the date determined by the Security Calculation Agent, the Security

Calculation Agent will determine the Index Closing Level on the applicable dates of determination, and the amount payable at

maturity or upon early redemption or call and all other related payments terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

to be furnished to the trustee, to us and to the holders of the Securities.

If the Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date, as applicable, or on any other relevant date on which the Index Closing Level is to be determined and the Security

Calculation Agent determines that no successor index is available at such time, or the Security Calculation Agent has

previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date or any other relevant date on which the Index Closing Level is to be determined, then the Security

Calculation Agent will determine the Index Closing Level using the Index Closing Level on the last Index Business Day

immediately prior to such discontinuation or unavailability, as adjusted for certain corporate actions. In such event, the

Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

For purposes of the above, a “

Benchmark Event

” may occur if the EU Benchmarks Regulation and/or UK Benchmarks

Regulation, as applicable, applies to this issuance of Securities, and the applicable registration for the Index or Index Sponsor

is not effective or has been suspended or withdrawn by the relevant authority with the effect that the use of the Index or the

Index Sponsor is not permitted under the EU Benchmarks Regulation or UK Benchmarks Regulation, as applicable.

305

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, including the Current Indicative Value (or “intraday

indicative value”), Closing Indicative Value, Index Factor, Residual Factor, Daily Tracking Fee, Index Closing Levels on the

applicable dates of determination, all other related payment terms and the amount payable at maturity, call, upon early

redemption by reference to such Substitute Index. If the Security Calculation Agent so elects to replace the original Index with

a Substitute Index, the Security Calculation Agent will cause written notice thereof to be furnished to the trustee, to us and to

the holders of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange- imposed position limits),

(ii) materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third

parties in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on

any of these parties’ ability to perform their obligations in connection with the Securities or (iv) materially affects our

ability to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security

Calculation Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after September 14,

2021 that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent

Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the Index

Constituent Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the

cost to us, our affiliates, third parties with whom we transact or similarly situated third parties in performing our or

their obligations in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates,

third parties with whom we transact or a similarly situated third party to perform our or their obligations in connection

with the Securities or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(c) any event that occurs on or after September 14, 2021 that makes it a violation of any law, regulation or rule of the

United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located, or of any official administrative decision, judicial decision, administrative action, regulatory

interpretation or other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS

AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other

derivatives on the Index or on the Index Constituent Securities (including but not limited to exchange-imposed

position limits), (ii) for us, our affiliates, third parties with whom we transact or similarly situated third parties to

perform our or their obligations in connection with the Securities or (iii) for us to issue or transact in exchange traded

notes similar to the Securities, each as determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

306

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Daily Tracking Fee, the Redemption Fee Amount, if any, the Cash Settlement Amount, if any, that we will pay you

at maturity, the Redemption Amount, if any, upon early redemption, if applicable, the Call Settlement Amount, if any, that we

will pay you in the event UBS calls the Securities, and all related payment terms based directly or indirectly on the Index

Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating the Index or a successor

or Substitute Index is modified so that the level of the Index or such successor index is a fraction of what it would have been if

there had been no such modification (e.g., due to a rebasing of the Index), which, in turn, causes the Index Closing Level of the

Index or such successor or Substitute Index to be a fraction of what it would have been if there had been no such modification,

then the Security Calculation Agent will make such calculations and adjustments in order to arrive at an Index Closing Level

for the Index or such successor or Substitute Index as if it had not been modified (e.g., as if such rebasing had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in the

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The Securities do

not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

307

19. ETRACS 2x Leveraged US Value Factor TR ETN due February 9, 2051

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

Each of the seven series of Securities offered by the prospectus supplement is separate and independent of each other series of

Securities. Apart from the applicable Index, however, all of the terms of each series of Securities are the same. Since each

series references a different Index, all calculations and adjustments and related events with respect to each series are

independent of calculations and adjustments and related events for each other series of Securities, and we may exercise our

call right as well as our right to initiate a split or a reverse split independently for each series. The following discussion

therefore applies independently to each series of Securities offered by the prospectus supplement and, except as the context

may otherwise require, the defined terms refer separately to each series. References to the “Securities” should be understood

as references to a single series of Securities and the defined terms should be understood in reference only to that series of

Securities.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 2, 2015 between

us and U.S. Bank Trust National Association, as trustee.

Please note that the information about the offering prices and the net proceeds to UBS on the front cover of the prospectus

supplement relates only to the initial sale of the Securities. If you have purchased the Securities in a secondary market

transaction after the initial sale, information about the price and date of sale to you will be provided in a separate confirmation

of sale.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or upon early redemption or call. Instead, at

maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance and path

of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement Period as

described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero, the Cash

Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is February 9, 2051, which will be the third Index Business Day following the last Index Business Day

in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated upon Zero Value Event, you will receive at maturity a cash

payment equal to its Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer

to this cash payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment

will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last

Index Business Day in Final

Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees, you may lose all or a substantial portion of your investment at maturity. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

308

UBS may call the Securities prior to the Maturity Date pursuant to its Call Right. If the Securities are called by UBS,

the Call Settlement Amount may be zero and you may lose all or a substantial portion of your investment.

 See “Specific

Terms of the Securities — UBS’s Call Right” beginning on page S-117.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The Closing Indicative Value represents the dollar value per Security that an investor would receive on any day if it redeemed

the Security that day (without giving effect to any Redemption Fee Amount).

The “

Closing Indicative Value

” per Security, will be calculated as follows:

(a) On the Initial Trade Date, $25.00 per Security.

(b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per

Security equal to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) – Accrued Fees

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement

Period × Index Factor × Residual Factor) – Accrued Fees + Measurement Period Cash Amount

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value

is less than or equal to

the Measurement Period Cash Amount from the immediately

preceding calendar day, the Closing Indicative Value for that day and all subsequent days will be fixed to be

equal to the Measurement Period Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs, the Closing Indicative Value will be equal to zero on the day it occurs and on all future

calendar days. Upon the occurrence of a Zero Value Event, investors will lose their entire investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “— Automatic

Acceleration Upon Zero Value Event” beginning on page S-118.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged notional investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate

the leveraged returns would approximately equal the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero for the remaining term of the Securities. If a Zero Value Event occurs prior to

your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your

Securities will be automatically accelerated and mandatorily redeemed and you will lose your entire investment.

The Current Principal Amount per Security, will be calculated as follows:

(a) From and including the Initial Trade Date to and excluding the first Reset Valuation Date, $25.00 per

Security.

(b) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal

Amount of the Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index

Factor) – Accrued Fees

The Current Principal Amount will not change until the first Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, such day will

not be a valid Reset Valuation Date.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset.

The “

Reset Valuation Date

” means:

(a) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i)

the Initial Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing

Valuation Date (iv) the First Permanent Deleveraging Valuation Date, or (v) the Second Permanent

Deleveraging Valuation Date; and

309

(b) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The valuation dates are defined below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, it will not be

a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the second Wednesday of January, April, July and October of each calendar year

during the term of the Securities (other than an Excluded Day, as defined below), subject to adjustment as described under “—

Market Disruption Event” beginning on page S-122.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding the first day of an applicable

Measurement Period, and any calendar day thereafter, and (ii) any calendar day after the Second Permanent Deleveraging

Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

(b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index

Business Days from, but excluding, the date of determination to, and including, the last Index Business Day

in such four-day Measurement Period, divided by (b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual

Factor will equal 3/4, on the second Index Business Day in an applicable four-day Measurement Period, the

Residual Factor will equal 2/4, on the third Index Business Day in an applicable four-day Measurement

Period, the Residual Factor will equal 1/4 and on the last Index Business Day in an applicable four-day

Measurement Period, the Residual Factor will equal zero.

(c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period,

the Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 2.0. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level 

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is the Index Closing Level on the Initial Trade Date, as reported by Bloomberg and

Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset Index

Closing Level) was determined on February 4, 2021 by the Security Calculation Agent. If the closing level of an Index, as

reported on Bloomberg and Reuters for any Index Business Day, is manifestly incorrect, the “

Index Closing Level

” for such

Index Business Day shall be the closing level of the Index as determined by the Security Calculation Agent. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates.

310

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or, if UBS exercises its Call Right, the Call Measurement

Period.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

(a) On the Initial Trade Date, $25.00.

(b) On any other calendar day prior to the first day of a Measurement Period:

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the

Intraday Index Value) – Accrued Fees

(c) From and including the first day of a Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement

Period × Index Factor, calculated using the Intraday Index Value × Residual Factor on the immediately

preceding calendar day) – Accrued Fees + Measurement Period Cash Amount, from the immediately

preceding calendar day

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is less than or equal to the Measurement Period Cash Amount from the immediately

preceding calendar day, the Current Indicative Value for the remainder of that day and all subsequent days

will be fixed to be equal to the Measurement Period Cash Amount from the immediately preceding calendar

day.

(d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(intraday indicative value).

If a Zero Value Event occurs, the Current Indicative Value (intraday indicative value) will be equal to zero for the

remainder of the day it occurs and on all future calendar days. Upon the occurrence of a Zero Value Event, investors

will lose their entire investment. You will not benefit from any future exposure to the Index after the occurrence of a

Zero Value Event.

See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly.

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of

the immediately preceding calendar day, plus the Daily Tracking Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the

Daily Tracking Fee on such calendar day.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Tracking Fee is zero.

(b) On any subsequent calendar day, the Daily Tracking Fee is equal to:

(1) (i) 0.95% times (ii) the Current Principal Amount on the immediately preceding calendar day times (iii)

the Index Factor on such calendar day times (iv) the Residual Factor on the immediately preceding calendar

day, divided by (2) 365.

(c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity or upon early redemption or call.

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If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly.

The Securities are subject to an “

Accrued Financing Fee

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Financing Fee is equal to:

(1) the Accrued Financing Fee as of the immediately preceding calendar day, plus (2) the Daily Financing

Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the

Daily Financing Fee on such calendar day.

(d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent

Deleveraging Valuation Date, the Accrued Financing Fee will be equal to zero.

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Daily Financing Fee is equal to:

(1) (i) the Financing Rate on such calendar day

times

(ii) the Current Principal Amount on the immediately

preceding calendar day

times

(iii) the Residual Factor on the immediately preceding calendar day,

divided by

(2) 360.

(c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent

Deleveraging Valuation Date, the Daily Financing Fee will be equal to zero.

(d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Index. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00 on any calendar day, to but excluding the first day of a Measurement Period.

(b) On the first day of a one-day Measurement Period:

At the close of trading on such Index Business Day, (Current Principal Amount on the immediately

preceding calendar day × Index Factor, on such Index Business Day).

(c) From and including the first day of a four-day Measurement Period:

(i) At the close of trading on each Index Business Day during the Measurement Period, the Measurement

Period Cash Amount on the immediately preceding calendar day + (Current Principal Amount on the

calendar day immediately preceding the first day of such Measurement Period × 0.25 × Index Factor, on such

Index Business Day); and

(ii) On any calendar day during the Measurement Period that is not an Index Business Day, the Measurement

Period Cash Amount on the immediately preceding Index Business Day.

(d) On any calendar day after the last Index Business Day of a Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

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Notwithstanding the foregoing, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day,

then the Measurement Period Cash Amount for that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash amount from the immediately preceding calendar day.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable portion of the notional financing amount will separately be deemed converted to cash as

well. After the close of trading on the final Index Business Day of a four-day Measurement Period, the Measurement Period

Cash Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the

four-days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current

Principal Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed

converted to cash, at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

(a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day

immediately preceding the Calculation Date is less than $500,000,000, the Calculation Date, subject to

adjustments as described under “— Market Disruption Event”;

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day

immediately preceding the Calculation Date is equal to or greater than $500,000,000, the four Index Business

Days from and including the Calculation Date, subject to adjustments as described under “— Market

Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities

outstanding as reported on Bloomberg.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which for each series of

Securities is the entity set forth below:

Title of Securities

Index Calculation Agent

ETRACS 2x Leveraged US Dividend Factor TR ETN

S&P Dow Jones Indices

ETRACS 2x Leveraged US Growth Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Size Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Value Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Quality Factor TR ETN

MSCI, Inc.

The “

Calculation Date

” means February 1, 2051, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return of each series of Securities is based upon the performance of the applicable Index set forth on the cover page of the

prospectus supplement. Each Index is designed to track the performance of a sector of the U.S. equity market and to reflect

an investing style.

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Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event”, you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon and a confirmation of redemption by no later than 5:00 p.m. on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures”, for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount = Closing Indicative Value – Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable, or if the

compounded leveraged quarterly return of the Index (or the unleveraged return of the Index, following a Permanent

Deleveraging Event) is negative, you may lose all or a substantial portion of your investment upon early redemption.

Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

The Securities may be called by UBS prior to the Maturity Date pursuant to its Call Right and, upon the occurrence of

a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

 See “Specific

Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic Acceleration Upon Zero

Value Event”.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption;

314

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice rather than the

following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities of any series. To exercise its

Call Right, UBS must provide notice to the holders of such Securities (which may be provided via press release) not less than

18 calendar days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a

cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer

to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event”.

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately

preceding the date we issue a notice of exercise of our Call Right is less than $500,000,000, the Call

Valuation Date, subject to adjustments as described under “— Market Disruption Event”; and

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day

immediately preceding the date we issue a notice of exercise of our Call Right is equal to or greater than

$500,000,000, the four Index Business Days from and including the Call Valuation Date, subject to

adjustment as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of its Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day times (ii) the number of Securities outstanding

as reported on Bloomberg.

The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

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Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment if we exercise our Call Right. The combined negative effect

of the Accrued Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the

unleveraged return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect

of the Accrued Fees, or if the compounded leveraged quarterly return of the Index (or the unleveraged return of the

Index, following a Permanent Deleveraging Event) is negative, you may lose all or a substantial portion of your

investment upon a call. Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

In addition, upon the occurrence of a Zero Value Event, the Securities will be automatically accelerated and

mandatorily redeemed by UBS.

 See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”

below.

Automatic Acceleration Upon Zero Value Event

For each series of Securities, a Zero Value Event represents the first instance when the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value is less than or equal to zero (other than on an Excluded Day, as defined

below). It will have the effect of permanently resetting the value of your Securities to zero and accelerating the Securities. You

will not benefit from any future exposure to the applicable Index after the occurrence of a Zero Value Event.

A Zero Value Event can occur only if a Permanent Deleveraging Event occurs and the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value declines to zero before the leverage of your Securities is reset to 1.0 at the

close of trading on the Index Business Day following such event (or if such event occurs after 3:15 p.m. on any Index Business

Day which would not otherwise have been a Loss Rebalancing Valuation Date, the second Index Business Day following such

event), as described under “Permanent Deleveraging Valuation Dates” above.

A “

Zero Value Event

” occurs if the Current Indicative Value (intraday indicative value) or the Closing Indicative Value on

any Index Business Day (other than an Excluded Day, as defined below) is less than or equal to zero. From immediately after

the Zero Value Event and on all future calendar days, the Current Indicative Value (intraday indicative value) and the Closing

Indicative Value will be set equal to zero.

As used above, an “

Excluded Day

” means (i) any calendar day after the Second Permanent Deleveraging Valuation Date (ii)

any calendar day on or after which a Zero Value Event has already occurred, and (iii) any calendar day after the last day of an

applicable Measurement Period.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event; provided that the

failure to do so shall not affect the automatic acceleration and redemption of the Securities. The Securities will be suspended

from trading intraday shortly after the event occurs and will likely not be open for trading again on NYSE Arca.

You will lose your entire investment upon the occurrence of a Zero Value Event.

In addition, we may call the Securities prior to the Maturity Date pursuant to our Call Right.

 See “Specific Terms of the

Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day, as used below) decreases by 20% or more from the previous Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding any Quarterly Reset Valuation

Date, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day, (ii) any Quarterly Reset Valuation Date, (iii) any Loss

Rebalancing Valuation Date, (iv) the Index Business Day immediately preceding the first day of an applicable Measurement

Period, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day (v) any calendar day from and including the first day of

an applicable Measurement Period, (vi) the First or Second Permanent Deleveraging Valuation Dates, (vii) any calendar day

after the Second Permanent Deleveraging Valuation Date, and (ix) any calendar day on or after which a Zero Value Event has

occurred.

“

Loss Rebalancing Valuation Date

” means:

316

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”; and

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day

following the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “—

Market Disruption Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0 over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 2.0 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities than it would have had before the occurrence of the

Permanent Deleveraging Event. If such an event were to occur, it most likely would occur only following a Loss Rebalancing

Event and prior to the completion of the associated leverage reset to 2.0, which would generally occur at the end of the Index

Business Day following the Index Business Day on which the Loss Rebalancing Event occurred or, if the Loss Rebalancing

Event occurs 3:15 p.m. on an Index Business Day, at the end of the second Index Business Day following the Index Business

Day on which the Loss Rebalancing Event occurred.

A “

Permanent Deleveraging Event

” occurs if, at any time on an Index Business Day (other than an Excluded Day, as defined

below), the Intraday Index Value decreases by 40% or more from the Last Reset Index Closing Level. If a Permanent

Deleveraging Event occurs, the Current Principal Amount of the Securities will be reset over two Index Business Days.

As used above, an “

Excluded Day

” means (i) the First or Second Permanent Deleveraging Valuation Dates, (ii) any calendar

day after the Second Permanent Deleveraging Valuation Date, (iii) any day on or after which a Zero Value Event occurs, (iv)

the day which is two Index Business Days prior to the first day of a Measurement Period, if a Permanent Deleveraging Event

occurs after 3:15 p.m. on such day, and (v) any calendar day from and including the Index Business Day immediately

preceding the first day of a Measurement Period.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

(a) The “

First Permanent Deleveraging Valuation Date

” means:

(i) any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but

on which a Permanent Deleveraging Event has occurred, subject to adjustment as described under

“— Market Disruption Event”; or

(ii) if a Permanent Deleveraging Event occurs after 3:15 p.m. on any Index Business Day which would

not otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day

following the occurrence of such Permanent Deleveraging Event, subject to adjustment as described

under “— Market Disruption Event.”

The leverage of your Securities will be reset to approximately 2.0 at the close of trading on the First

Permanent Deleveraging Valuation Date.

(b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately

following the First Permanent Deleveraging Valuation Date, subject to adjustment as described under “—

Market Disruption Event.”

The leverage of your Securities will be reset to 1.0 at the close of trading on the Second Permanent

Deleveraging Valuation Date.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split, the record date for any split

or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next Business

Day after the record date.

If the Securities undergo a split or reverse split, we will adjust the Current Principal Amount, Closing Indicative Value,

Current Indicative Value, Accrued Fees, Measurement Period Cash Amount and other relevant terms of the Securities

accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The Depository Trust

Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will be made as

described below. The Current Principal Amount on such record date will be

divided by

four to reflect the 4:1 split. The

adjusted Current Principal Amount will be rounded to eight decimal places. The split or reverse split will become effective at

the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

317

In the case of a reverse split, the Current Principal Amount and other relevant terms of the Securities will be adjusted

accordingly and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Current Principal

Amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Current

Principal Amount will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Current Principal Amount of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal

Amount, Current Indicative Value (which we also refer to as the intraday indicative value), Closing Indicative Value, Market

Disruption Events, Business Days, Index Business Days, the Leverage Factor, the Index Factor, the Index Performance Ratio,

the Residual Factor, the Index Closing Level, the Financing Rate, the Accrued Fees (including determining any successor to

the LIBOR base rate), the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Redemption Amount, if any, that we will pay you upon redemption, the Call Settlement Amount, that we will pay you if we

call the Securities, whether a Loss Rebalancing Event has occurred, whether a Permanent Deleveraging Event has occurred and

whether any day is an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. If any Intraday Index Value as published by Bloomberg on any Index Business

Day is manifestly incorrect, the Security Calculation Agent may base its determination of whether a Loss Rebalancing Event,

Permanent Deleveraging Event or Zero Value Event shall have occurred on such Index Business Day on its own determination

of such Intraday Index Value. In making such determination, the Security Calculation Agent may consider any relevant

information, including, without limitation, relevant market data in the relevant market supplied by one or more third parties or

from internal sources or affiliates. The Security Calculation Agent will also be responsible for determining whether the Index

has been discontinued and whether there has been a material change in the Index. The Security Calculation Agent will make all

such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Security

Calculation Agent will be conclusive for all purposes and binding on us, you, and all other persons having an interest in the

Securities, without liability on the part of the Security Calculation Agent. You will not be entitled to any compensation from us

for any loss suffered as a result of any determinations or calculations made by the Security Calculation Agent. We may appoint

a different Security Calculation Agent from time to time after the date of the prospectus supplement without your consent and

without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date or any Call Settlement Date.

All dollar amounts related to determination of the Accrued Fees, the Current Principal Amount, and any Redemption Amount,

Redemption Fee Amount, Call Settlement Amount or Cash Settlement Amount per Security will be rounded to the nearest ten-

thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar

amounts paid to any holder of Securities will be rounded to the nearest cent, with one -half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

318

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period

is the Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities,

whether by reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to

a material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge

with respect to the Securities that we or our affiliates have effected or may effect as described in the section

entitled “Use of Proceeds and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced

change in the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any

Index Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

319

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five Index Business Days after that first Index Business Day, however, the default quotation period will

continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index or Termination of Our License Agreements with the Index Sponsors;

Alteration of Method of Calculation

If (i) an Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) our license agreement with the Index Sponsor terminates or (iii) the Index Sponsor

or Index Calculation Agent does not make the Index Constituent Securities and/or their unit weighting available to the Security

Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS that the Security

Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities and/or their unit

weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor index

”), and the

Security Calculation Agent approves such index as a successor index, then on and after the date determined by the Security

Calculation Agent, the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination and the amount payable at maturity or upon early redemption or call and all other related payments terms by

reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

be furnished to the trustee, to us and to the holders of the Securities.

320

If an Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, Current Principal Amount, Current Indicative Value

(intraday indicative value), Closing Indicative Value, Index Factor, Index Performance Ratio, Residual Factor, Accrued Fees,

Index Closing Levels on the applicable dates of determination, all other related payment terms and the amount payable at

maturity or upon early redemption or call by reference to such Substitute Index. If the Security Calculation Agent so elects to

replace the original Index with a Substitute Index, the Security Calculation Agent will cause written notice thereof to be

furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or

rules of the United States (or any political subdivision thereof), or any jurisdiction in which a Primary

Exchange (as defined herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire

or dispose of the Index Constituent Securities included in the Index or options, futures, swaps or other

derivatives on the Index or on the Index Constituent Securities included in the Index (including but not

limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates, third

parties with whom we transact or similarly situated third parties in performing our or their obligations in

connection with the Securities, (iii) has a material adverse effect on any of these parties’ ability to perform

their obligations in connection with the Securities, or (iv) materially affects our ability to issue or transact in

exchange traded notes similar to the Securities, each as determined by the Security Calculation Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other

official pronouncement interpreting or applying those laws, regulations or rules that is announced on or after

February 4, 2021 that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on

the Index Constituent Securities (including but not limited to exchange -imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated

third parties in performing our or their obligations in connection with the Securities, (iii) has a material

adverse effect on the ability of us, our affiliates, third parties with whom we transact or a similarly situated

third party to perform our or their obligations in connection with the Securities, or (iv) materially affects our

ability to issue or transact in exchange traded notes similar to the Securities, each as determined by the

Security Calculation Agent;

(c) any event that occurs on or after February 4, 2021 that makes it a violation of any law, regulation or rule of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as

defined herein) is located, or of any official administrative decision, judicial decision, administrative action,

regulatory interpretation or other official pronouncement interpreting or applying those laws, regulations or

rules, (i) for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities or

options, futures, swaps or other derivatives on the Index or on the Index Constituent Securities (including but

not limited to exchange-imposed position limits), (ii) for us, our affiliates, third parties with whom we

transact or similarly situated third parties to perform our or their obligations in connection with the

Securities, or (iii) for us to issue or transact in exchange traded notes similar to the Securities, each as

determined by the Security Calculation Agent;

321

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or

a similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a

materially increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire,

establish, re-establish, substitute, maintain, unwind or dispose of any transaction or asset it deems necessary

to hedge the risk of the Securities, or realize, recover or remit the proceeds of any such transaction or asset;

or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the

Securities, if any, announces that pursuant to the rules of such exchange or market, as applicable, the

Securities cease (or will cease) to be listed, traded or publicly quoted on such exchange or market, as

applicable, for any reason and are not immediately re-listed, re-traded or re-quoted on an exchange or

quotation system located in the same country as such exchange or market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor or Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Index Performance Ratio, the Last Reset Index Closing Level, the Accrued Fees, and any Redemption Amount,

Redemption Fee Amount, Cash Settlement Amount or Call Settlement Amount, and all related payment terms based directly or

indirectly on the Index Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating

the Index or a successor or Substitute Index is modified so that the level of the Index or such successor or Substitute Index is a

fraction or multiple of what it would have been if there had been no such modification (

e.g.

, due to a rebasing of the Index),

which, in turn, causes the Index Closing Level of the Index or such successor or Substitute Index to be a fraction of what it

would have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor or Substitute Index as if it had not been

modified (

e.g.

, as if such rebasing had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in the

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue any series of Securities. We issued the Securities initially in an amount

having the aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional

Securities in amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The

Securities do not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or

similar restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We

May Offer — Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities of the same

series and will have the same CUSIP number and will trade interchangeably with such Securities immediately upon settlement.

Any additional issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The

price of any additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

322

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

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20. ETRACS 2x Leveraged US Growth Factor TR ETN due February 9, 2051

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

Each of the seven series of Securities offered by the prospectus supplement is separate and independent of each other series of

Securities. Apart from the applicable Index, however, all of the terms of each series of Securities are the same. Since each

series references a different Index, all calculations and adjustments and related events with respect to each series are

independent of calculations and adjustments and related events for each other series of Securities, and we may exercise our

call right as well as our right to initiate a split or a reverse split independently for each series. The following discussion

therefore applies independently to each series of Securities offered by the prospectus supplement and, except as the context

may otherwise require, the defined terms refer separately to each series. References to the “Securities” should be understood

as references to a single series of Securities and the defined terms should be understood in reference only to that series of

Securities.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 2, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or upon early redemption or call. Instead, at

maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance and path

of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement Period as

described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero, the Cash

Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is February 9, 2051, which will be the third Index Business Day following the last Index Business Day

in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated upon Zero Value Event, you will receive at maturity a cash

payment equal to its Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer

to this cash payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment

will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees, you may lose all or a substantial portion of your investment at maturity. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

UBS may call the Securities prior to the Maturity Date pursuant to its Call Right. If the Securities are called by UBS, the Call

Settlement Amount may be zero and you may lose all or a substantial portion of your investment. See “Specific Terms of the

Securities — UBS’s Call Right”.

The “Stated Principal Amount” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

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The Closing Indicative Value represents the dollar value per Security that an investor would receive on any day if it redeemed

the Security that day (without giving effect to any Redemption Fee Amount).

The “Closing Indicative Value” per Security, will be calculated as follows:

(a) On the Initial Trade Date, $25.00 per Security.

(b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) – Accrued Fees

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) – Accrued Fees + Measurement Period Cash Amount

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Closing Indicative Value for that day and all subsequent days will be fixed to be equal to the Measurement Period

Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs, the Closing Indicative Value will be equal to zero on the day it occurs and on all future

calendar days. Upon the occurrence of a Zero Value Event, investors will lose their entire investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

 See “— Automatic

Acceleration Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The

“Current Principal Amount”

 represents the unleveraged notional investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate

the leveraged returns would approximately equal the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero for the remaining term of the Securities. If a Zero Value Event occurs prior to

your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your

Securities will be automatically accelerated and mandatorily redeemed and you will lose your entire investment.

The Current Principal Amount per Security, will be calculated as follows:

(a) From and including the Initial Trade Date to and excluding the first Reset Valuation Date, $25.00 per Security.

(b) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index Factor)

– Accrued Fees The Current Principal Amount will not change until the first Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, such day will

not be a valid Reset Valuation Date.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset. The “

Reset Valuation Date

”

means:

(a) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valuation Date, or (v) the Second Permanent Deleveraging Valuation Date; and

(b) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The valuation dates are defined below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, it will not be

a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the second Wednesday of January, April, July and October of each calendar year

during the term of the Securities (other than an Excluded Day, as defined below), subject to adjustment as described under “—

Market Disruption Event”.

325

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding the first day of an applicable

Measurement Period, and any calendar day thereafter, and (ii) any calendar day after the Second Permanent Deleveraging

Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

(b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period,

divided by

(b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 3/4, on the second Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 2/4, on the third Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 1/4 and on the last Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal zero.

(c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 2.0. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level 

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is the Index Closing Level on the Initial Trade Date, as reported by Bloomberg and

Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset Index

Closing Level) was determined on February 4, 2021 by the Security Calculation Agent. If the closing level of an Index, as

reported on Bloomberg and Reuters for any Index Business Day, is manifestly incorrect, the “

Index Closing Level

” for such

Index Business Day shall be the closing level of the Index as determined by the Security Calculation Agent. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates.

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or, if UBS exercises its Call Right, the Call Measurement

Period.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

(a) On the Initial Trade Date, $25.00.

(b) On any other calendar day prior to the first day of a Measurement Period:

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(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) – Accrued Fees

(c) From and including the first day of a Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value × Residual Factor on the immediately preceding calendar

day) – Accrued Fees + Measurement Period Cash Amount, from the immediately preceding calendar day 

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Current Indicative Value for the remainder of that day and all subsequent days will be fixed to be equal to the

Measurement Period Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(intraday indicative value).

If a Zero Value Event occurs, the Current Indicative Value (intraday indicative value) will be equal to zero for the

remainder of the day it occurs and on all future calendar days. Upon the occurrence of a Zero Value Event, investors

will lose their entire investment. You will not benefit from any future exposure to the Index after the occurrence of a

Zero Value Event.

See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly. The Securities are subject to an

“

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Tracking Fee is zero.

(b) On any subsequent calendar day, the Daily Tracking Fee is equal to:

(1) (i) 0.95%

times

(ii) the Current Principal Amount on the immediately preceding calendar day

times

(iii) the Index

Factor on such calendar day

times

(iv) the Residual Factor on the immediately preceding calendar day,

divided by

(2)

365.

(c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly. The Securities are subject

to an “

Accrued Financing Fee

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Financing Fee is equal to:

(1) the Accrued Financing Fee as of the immediately preceding calendar day,

plus

(2) the Daily Financing Fee on

such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

(d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

327

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Daily Financing Fee is equal to:

(1) (i) the Financing Rate on such calendar day

times

(ii) the Current Principal Amount on the immediately preceding

calendar day

times

(iii) the Residual Factor on the immediately preceding calendar day,

divided by

(2) 360.

(c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

(d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Index. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00 on any calendar day, to but excluding the first day of a Measurement Period.

(b) On the first day of a one-day Measurement Period:

At the close of trading on such Index Business Day, (Current Principal Amount on the immediately preceding

calendar day × Index Factor, on such Index Business Day).

(c) From and including the first day of a four-day Measurement Period:

(i) At the close of trading on each Index Business Day during the Measurement Period, the Measurement Period

Cash Amount on the immediately preceding calendar day + (Current Principal Amount on the calendar day

immediately preceding the first day of such Measurement Period × 0.25 × Index Factor, on such Index

Business Day); and

(ii) On any calendar day during the Measurement Period that is not an Index Business Day, the Measurement

Period Cash Amount on the immediately preceding Index Business Day.

(d) On any calendar day after the last Index Business Day of a Measurement Period, the Measurement Period Cash

Amount on the last Index Business Day of such Measurement Period.

Notwithstanding the foregoing, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day,

then the Measurement Period Cash Amount for that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash amount from the immediately preceding calendar day.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount on the calendar day immediately preceding the first

328

day of the Measurement Period, will be deemed converted to cash and an applicable portion of the notional financing amount

will separately be deemed converted to cash as well. After the close of trading on the final Index Business Day of a four-day

Measurement Period, the Measurement Period Cash Amount will represent the averaged value of the Current Principal

Amount that was deemed converted to cash across the four-days of such Measurement Period. In case of a one-day

Measurement Period, approximately 100% of the Current Principal Amount will be deemed converted to cash and an

applicable amount of financing will separately be deemed converted to cash, at the close of trading of the first day of such

Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

(a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is less than $500,000,000, the Calculation Date, subject to adjustments as described

under “— Market Disruption Event”;

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is equal to or greater than $500,000,000, the four Index Business Days from and

including the Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which for each series of

Securities is the entity set forth below:

Title of Securities

Index Calculation Agent

ETRACS 2x Leveraged US Dividend Factor TR ETN

S&P Dow Jones Indices 

ETRACS 2x Leveraged US Growth Factor TR ETN

FTSE Russell 

ETRACS 2x Leveraged US Size Factor TR ETN

FTSE Russell 

ETRACS 2x Leveraged US Value Factor TR ETN

FTSE Russell 

ETRACS 2x Leveraged MSCI US Minimum Volatility

Factor TR ETN

MSCI, Inc. 

ETRACS 2x Leveraged MSCI US Momentum Factor

TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Quality Factor TR

ETN

MSCI, Inc.

The “

Calculation Date

” means February 1, 2051, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return of each series of Securities is based upon the performance of the applicable Index set forth on the cover page of the

prospectus supplement. Each Index is designed to track the performance of a sector of the U.S. equity market and to reflect an

investing style. We refer to the securities included in each Index as the “Index Constituent Securities” for such Index.

329

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event”, you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon and a confirmation of redemption by no later than 5:00 p.m. on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures”, for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount

=

Closing Indicative

Value

–

Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable, or if the

compounded leveraged quarterly return of the Index (or the unleveraged return of the Index, following a Permanent

Deleveraging Event) is negative, you may lose all or a substantial portion of your investment upon early redemption.

Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

The Securities may be called by UBS prior to the Maturity Date pursuant to its Call Right and, upon the occurrence of a Zero

Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS. See “Specific Terms of the

Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

330

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption

which is attached;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice rather than the

following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities of any series. To exercise its

Call Right, UBS must provide notice to the holders of such Securities (which may be provided via press release) not less than

18 calendar days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a

cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer

to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event”.

The

“Call Measurement Period”

 means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date we issue a notice of exercise of our Call Right is less than $500,000,000, the Call Valuation Date, subject to

adjustments as described under “— Market Disruption Event”; and

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date we issue a notice of exercise of our Call Right is equal to or greater than $500,000,000, the four

Index Business Days from and including the Call Valuation Date, subject to adjustment as described under “—

Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of its Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

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The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index Business

Day in Call Measurement Period

You may lose all or a substantial portion of your investment if we exercise our Call Right. The combined negative effect

of the Accrued Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the

unleveraged return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect

of the Accrued Fees, or if the compounded leveraged quarterly return of the Index (or the unleveraged return of the

Index, following a Permanent Deleveraging Event) is negative, you may lose all or a substantial portion of your

investment upon a call. Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

In addition, upon the occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily

redeemed by UBS. See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event” below.

Automatic Acceleration Upon Zero Value Event

For each series of Securities, a Zero Value Event represents the first instance when the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value is less than or equal to zero (other than on an Excluded Day, as defined

below). It will have the effect of permanently resetting the value of your Securities to zero and accelerating the Securities. You

will not benefit from any future exposure to the applicable Index after the occurrence of a Zero Value Event.

A Zero Value Event can occur only if a Permanent Deleveraging Event occurs and the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value declines to zero before the leverage of your Securities is reset to 1.0 at the

close of trading on the Index Business Day following such event (or if such event occurs after 3:15 p.m. on any Index Business

Day which would not otherwise have been a Loss Rebalancing Valuation Date, the second Index Business Day following such

event), as described under “Permanent Deleveraging Valuation Dates” above.

A “

Zero Value Event

” occurs if the Current Indicative Value (intraday indicative value) or the Closing Indicative Value on

any Index Business Day (other than an Excluded Day, as defined below) is less than or equal to zero. From immediately after

the Zero Value Event and on all future calendar days, the Current Indicative Value (intraday indicative value) and the Closing

Indicative Value will be set equal to zero.

As used above, an “

Excluded Day

” means (i) any calendar day after the Second Permanent Deleveraging Valuation Date (ii)

any calendar day on or after which a Zero Value Event has already occurred, and (iii) any calendar day after the last day of an

applicable Measurement Period.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event; provided that the

failure to do so shall not affect the automatic acceleration and redemption of the Securities. The Securities will be suspended

from trading intraday shortly after the event occurs and will likely not be open for trading again on NYSE Arca.

You will lose your entire investment upon the occurrence of a Zero Value Event.

In addition, we may call the Securities prior to the Maturity Date pursuant to our Call Right.

 See “Specific Terms of the

Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “Loss Rebalancing Event” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day, as used below) decreases by 20% or more from the previous Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

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As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding any Quarterly Reset Valuation

Date, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day, (ii) any Quarterly Reset Valuation Date, (iii) any Loss

Rebalancing Valuation Date, (iv) the Index Business Day immediately preceding the first day of an applicable Measurement

Period, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day (v) any calendar day from and including the first day of

an applicable Measurement Period, (vi) the First or Second Permanent Deleveraging Valuation Dates, (vii) any calendar day

after the Second Permanent Deleveraging Valuation Date, and (ix) any calendar day on or after which a Zero Value Event has

occurred.

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”; and

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0 over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 2.0 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities than it would have had before the occurrence of the

Permanent Deleveraging Event. If such an event were to occur, it most likely would occur only following a Loss Rebalancing

Event and prior to the completion of the associated leverage reset to 2.0, which would generally occur at the end of the Index

Business Day following the Index Business Day on which the Loss Rebalancing Event occurred or, if the Loss Rebalancing

Event occurs 3:15 p.m. on an Index Business Day, at the end of the second Index Business Day following the Index Business

Day on which the Loss Rebalancing Event occurred.

A “

Permanent Deleveraging Event

” occurs if, at any time on an Index Business Day (other than an Excluded Day, as defined

below), the Intraday Index Value decreases by 40% or more from the Last Reset Index Closing Level. If a Permanent

Deleveraging Event occurs, the Current Principal Amount of the Securities will be reset over two Index Business Days.

As used above, an “

Excluded Day

” means (i) the First or Second Permanent Deleveraging Valuation Dates, (ii) any calendar

day after the Second Permanent Deleveraging Valuation Date, (iii) any day on or after which a Zero Value Event occurs, (iv)

the day which is two Index Business Days prior to the first day of a Measurement Period, if a Permanent Deleveraging Event

occurs after 3:15 p.m. on such day, and (v) any calendar day from and including the Index Business Day immediately

preceding the first day of a Measurement Period.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

(a) The “

First Permanent Deleveraging Valuation Date

” means:

(i) any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but on

which a Permanent Deleveraging Event has occurred, subject to adjustment as described under “— Market

Disruption Event”; or

(ii) if a Permanent Deleveraging Event occurs after 3:15 p.m. on any Index Business Day which would not

otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day following the

occurrence of such Permanent Deleveraging Event, subject to adjustment as described under “— Market

Disruption Event.”

The leverage of your Securities will be reset to approximately 2.0 at the close of trading on the First Permanent

Deleveraging Valuation Date.

(b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event.”

The leverage of your Securities will be reset to 1.0 at the close of trading on the Second Permanent Deleveraging

Valuation Date.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split, the record date for any split

or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next Business

Day after the record date.

333

If the Securities undergo a split or reverse split, we will adjust the Current Principal Amount, Closing Indicative Value,

Current Indicative Value, Accrued Fees, Measurement Period Cash Amount and other relevant terms of the Securities

accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The Depository Trust

Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will be made as

described below. The Current Principal Amount on such record date will be

divided by

four to reflect the 4:1 split. The

adjusted Current Principal Amount will be rounded to eight decimal places. The split or reverse split will become effective at

the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

In the case of a reverse split, the Current Principal Amount and other relevant terms of the Securities will be adjusted

accordingly and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Current Principal

Amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Current

Principal Amount will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Current Principal Amount of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal

Amount, Current Indicative Value (which we also refer to as the intraday indicative value), Closing Indicative Value, Market

Disruption Events, Business Days, Index Business Days, the Leverage Factor, the Index Factor, the Index Performance Ratio,

the Residual Factor, the Index Closing Level, the Financing Rate, the Accrued Fees (including determining any successor to

the LIBOR base rate), the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Redemption Amount, if any, that we will pay you upon redemption, the Call Settlement Amount, that we will pay you if we

call the Securities, whether a Loss Rebalancing Event has occurred, whether a Permanent Deleveraging Event has occurred and

whether any day is an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. If any Intraday Index Value as published by Bloomberg on any Index Business

Day is manifestly incorrect, the Security Calculation Agent may base its determination of whether a Loss Rebalancing Event,

Permanent Deleveraging Event or Zero Value Event shall have occurred on such Index Business Day on its own determination

of such Intraday Index Value. In making such determination, the Security Calculation Agent may consider any relevant

information, including, without limitation, relevant market data in the relevant market supplied by one or more third parties or

from internal sources or affiliates. The Security Calculation Agent will also be responsible for determining whether the Index

has been discontinued and whether there has been a material change in the Index. The Security Calculation Agent will make all

such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Security

Calculation Agent will be conclusive for all purposes and binding on us, you, and all other persons having an interest in the

Securities, without liability on the part of the Security Calculation Agent. You will not be entitled to any compensation from us

for any loss suffered as a result of any determinations or calculations made by the Security Calculation Agent. We may appoint

a different Security Calculation Agent from time to time after the date of the prospectus supplement without your consent and

without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date or any Call Settlement Date.

All dollar amounts related to determination of the Accrued Fees, the Current Principal Amount, and any Redemption Amount,

Redemption Fee Amount, Call Settlement Amount or Cash Settlement Amount per Security will be rounded to the nearest ten-

thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar

amounts paid to any holder of Securities will be rounded to the nearest cent, with one -half cent rounded upward.

334

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period

is the Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

335

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five Index Business Days after that first Index Business Day, however, the default quotation period will

continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

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Discontinuance of or Adjustments to the Index or Termination of Our License Agreements with the Index Sponsors;

Alteration of Method of Calculation

If (i) an Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) our license agreement with the Index Sponsor terminates or (iii) the Index Sponsor

or Index Calculation Agent does not make the Index Constituent Securities and/or their unit weighting available to the Security

Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS that the Security

Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities and/or their unit

weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor index

”), and the

Security Calculation Agent approves such index as a successor index, then on and after the date determined by the Security

Calculation Agent, the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination and the amount payable at maturity or upon early redemption or call and all other related payments terms by

reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

be furnished to the trustee, to us and to the holders of the Securities.

If an Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, Current Principal Amount, Current Indicative Value

(intraday indicative value), Closing Indicative Value, Index Factor, Index Performance Ratio, Residual Factor, Accrued Fees,

Index Closing Levels on the applicable dates of determination, all other related payment terms and the amount payable at

maturity or upon early redemption or call by reference to such Substitute Index. If the Security Calculation Agent so elects to

replace the original Index with a Substitute Index, the Security Calculation Agent will cause written notice thereof to be

furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities, or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

337

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after February 4, 2021

that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities

included in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent

Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our

affiliates, third parties with whom we transact or similarly situated third parties in performing our or their obligations

in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities, or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

(c) any event that occurs on or after February 4, 2021 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities, or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor or Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Index Performance Ratio, the Last Reset Index Closing Level, the Accrued Fees, and any Redemption Amount,

Redemption Fee Amount, Cash Settlement Amount or Call Settlement Amount, and all related payment terms based directly or

indirectly on the Index Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating

the Index or a successor or Substitute Index is modified so that the level of the Index or such successor or Substitute Index is a

fraction or multiple of what it would have been if there had been no such modification (

e.g.

, due to a rebasing of the Index),

which, in turn, causes the Index Closing Level of the Index or such successor or Substitute Index to be a fraction of what it

would have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor or Substitute Index as if it had not been

modified (

e.g.

, as if such rebasing had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in the

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

338

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue any series of Securities. We issued the Securities initially in an amount

having the aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional

Securities in amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The

Securities do not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or

similar restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We

May Offer — Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities of the same

series and will have the same CUSIP number and will trade interchangeably with such Securities immediately upon settlement.

Any additional issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The

price of any additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

339

21. ETRACS 2x Leveraged US Size Factor TR ETN due February 9, 2051

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

Each of the seven series of Securities offered by the prospectus supplement is separate and independent of each other series of

Securities. Apart from the applicable Index, however, all of the terms of each series of Securities are the same. Since each

series references a different Index, all calculations and adjustments and related events with respect to each series are

independent of calculations and adjustments and related events for each other series of Securities, and we may exercise our

call right as well as our right to initiate a split or a reverse split independently for each series. The following discussion

therefore applies independently to each series of Securities offered by the prospectus supplement and, except as the context

may otherwise require, the defined terms refer separately to each series. References to the “Securities” should be understood

as references to a single series of Securities and the defined terms should be understood in reference only to that series of

Securities.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 2, 2015 between

us and U.S. Bank Trust National Association, as trustee.

Please note that the information about the offering prices and the net proceeds to UBS on the front cover of the prospectus

supplement relates only to the initial sale of the Securities. If you have purchased the Securities in a secondary market

transaction after the initial sale, information about the price and date of sale to you will be provided in a separate confirmation

of sale.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or upon early redemption or call. Instead, at

maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance and path

of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement Period as

described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero, the Cash

Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is February 9, 2051, which will be the third Index Business Day following the last Index Business Day

in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated upon Zero Value Event, you will receive at maturity a cash

payment equal to its Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer

to this cash payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment

will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last

Index Business Day in Final

Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees, you may lose all or a substantial portion of your investment at maturity. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

340

UBS may call the Securities prior to the Maturity Date pursuant to its Call Right. If the Securities are called by UBS,

the Call Settlement Amount may be zero and you may lose all or a substantial portion of your investment.

 See “Specific

Terms of the Securities — UBS’s Call Right”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The Closing Indicative Value represents the dollar value per Security that an investor would receive on any day if it redeemed

the Security that day (without giving effect to any Redemption Fee Amount).

The “

Closing Indicative Value

” per Security, will be calculated as follows:

(a) On the Initial Trade Date, $25.00 per Security.

(b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per

Security equal to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) – Accrued Fees

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement

Period × Index Factor × Residual Factor) – Accrued Fees + Measurement Period Cash Amount

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value

is less than or equal to

the Measurement Period Cash Amount from the immediately

preceding calendar day, the Closing Indicative Value for that day and all subsequent days will be fixed to be

equal to the Measurement Period Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs, the Closing Indicative Value will be equal to zero on the day it occurs and on all future

calendar days. Upon the occurrence of a Zero Value Event, investors will lose their entire investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

 See “— Automatic

Acceleration Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged notional investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate

the leveraged returns would approximately equal the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero for the remaining term of the Securities. If a Zero Value Event occurs prior to

your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your

Securities will be automatically accelerated and mandatorily redeemed and you will lose your entire investment.

The Current Principal Amount per Security, will be calculated as follows:

(a) From and including the Initial Trade Date to and excluding the first Reset Valuation Date, $25.00 per

Security.

(b) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal

Amount of the Securities will be reset as follows:

New

 Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index

Factor) – Accrued Fees

The Current Principal Amount will not change until the first Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, such day will

not be a valid Reset Valuation Date.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset. The “

Reset Valuation Date

”

means:

341

(a) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i)

the Initial Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the

First Permanent Deleveraging Valuation Date, or (v) the Second Permanent Deleveraging Valuation Date;

and

(b) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The valuation dates are defined below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, it will not be

a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the second Wednesday of January, April, July and October of each calendar year

during the term of the Securities (other than an Excluded Day, as defined below), subject to adjustment as described under “—

Market Disruption Event”.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding the first day of an applicable

Measurement Period, and any calendar day thereafter, and (ii) any calendar day after the Second Permanent Deleveraging

Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

(b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index

Business Days from, but excluding, the date of determination to, and including, the last Index Business Day

in such four-day Measurement Period,

divided by

(b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual

Factor will equal 3/4, on the second Index Business Day in an applicable four-day Measurement Period, the

Residual Factor will equal 2/4, on the third Index Business Day in an applicable four-day Measurement

Period, the Residual Factor will equal 1/4 and on the last Index Business Day in an applicable four-day

Measurement Period, the Residual Factor will equal zero.

(c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period,

the Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 2.0. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is the Index Closing Level on the Initial Trade Date, as reported by Bloomberg and

Reuters.

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The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset Index

Closing Level) was determined on February 4, 2021 by the Security Calculation Agent. If the closing level of an Index, as

reported on Bloomberg and Reuters for any Index Business Day, is manifestly incorrect, the “

Index Closing Level

” for such

Index Business Day shall be the closing level of the Index as determined by the Security Calculation Agent. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates.

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or, if UBS exercises its Call Right, the Call Measurement

Period.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

(a) On the Initial Trade Date, $25.00.

(b) On any other calendar day prior to the first day of a Measurement Period:

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the

Intraday Index Value) – Accrued Fees

(c) From and including the first day of a Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement

Period × Index Factor, calculated using the Intraday Index Value × Residual Factor on the immediately

preceding calendar day) – Accrued Fees + Measurement Period Cash Amount, from the immediately

preceding calendar day

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is less than or equal to the Measurement Period Cash Amount from the immediately

preceding calendar day, the Current Indicative Value for the remainder of that day and all subsequent days

will be fixed to be equal to the Measurement Period Cash Amount from the immediately preceding calendar

day.

(d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(intraday indicative value).

If a Zero Value Event occurs, the Current Indicative Value (intraday indicative value) will be equal to zero for the

remainder of the day it occurs and on all future calendar days. Upon the occurrence of a Zero Value Event, investors

will lose their entire investment. You will not benefit from any future exposure to the Index after the occurrence of a

Zero Value Event.

 See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly. The Securities are subject to an

“

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of

the immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the

Daily Tracking Fee on such calendar day.

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Tracking Fee is zero.

(b) On any subsequent calendar day, the Daily Tracking Fee is equal to:

343

(1) (i) 0.95%

times

(ii) the Current Principal Amount on the immediately preceding calendar day

times

(iii)

the Index Factor on such calendar day

times

(iv) the Residual Factor on the immediately preceding calendar

day,

divided by

(2) 365.

(c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly. The Securities are subject

to an “

Accrued Financing Fee

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Financing Fee is equal to:

(1) the Accrued Financing Fee as of the immediately preceding calendar day,

plus

(2) the Daily Financing

Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the

Daily Financing Fee on such calendar day.

(d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent

Deleveraging Valuation Date, the Accrued Financing Fee will be equal to zero.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Daily Financing Fee is equal to:

(1) (i) the Financing Rate on such calendar day

times

(ii) the Current Principal Amount on the immediately

preceding calendar day

times

(iii) the Residual Factor on the immediately preceding calendar day,

divided by

(2) 360.

(c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent

Deleveraging Valuation Date, the Daily Financing Fee will be equal to zero.

(d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Index. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00 on any calendar day, to but excluding the first day of a Measurement Period.

(b) On the first day of a one-day Measurement Period:

At the close of trading on such Index Business Day, (Current Principal Amount on the immediately

preceding calendar day × Index Factor, on such Index Business Day).

(c) From and including the first day of a four-day Measurement Period:

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(i) At the close of trading on each Index Business Day during the Measurement Period, the

Measurement Period Cash Amount on the immediately preceding calendar day + (Current Principal

Amount on the calendar day immediately preceding the first day of such Measurement Period ×

0.25 × Index Factor, on such Index Business Day); and

(ii) On any calendar day during the Measurement Period that is not an Index Business Day, the

Measurement Period Cash Amount on the immediately preceding Index Business Day.

(d) On any calendar day after the last Index Business Day of a Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

Notwithstanding the foregoing, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day,

then the Measurement Period Cash Amount for that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash amount from the immediately preceding calendar day.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable portion of the notional financing amount will separately be deemed converted to cash as

well. After the close of trading on the final Index Business Day of a four-day Measurement Period, the Measurement Period

Cash Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the

four-days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current

Principal Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed

converted to cash, at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

(a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day

immediately preceding the Calculation Date is less than $500,000,000, the Calculation Date, subject to

adjustments as described under “— Market Disruption Event”;

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day

immediately preceding the Calculation Date is equal to or greater than $500,000,000, the four Index Business

Days from and including the Calculation Date, subject to adjustments as described under “— Market

Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities

outstanding as reported on Bloomberg.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which for each series of

Securities is the entity set forth below:

Title of Securities

Index Calculation Agent

ETRACS 2x Leveraged US Dividend Factor TR ETN

S&P Dow Jones Indices

ETRACS 2x Leveraged US Growth Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Size Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Value Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Quality Factor TR ETN

MSCI, Inc.

The “

Calculation Date

” means February 1, 2051, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

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“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return of each series of Securities is based upon the performance of the applicable Index set forth on the cover page of the

prospectus supplement. Each Index is designed to track the performance of a sector of the U.S. equity market and to reflect an

investing style. We refer to the securities included in each Index as the “Index Constituent Securities” for such Index.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event”, you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon and a confirmation of redemption by no later than 5:00 p.m. on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures”, for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount = Closing Indicative Value – Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable, or if the

compounded leveraged quarterly return of the Index (or the unleveraged return of the Index, following a Permanent

Deleveraging Event) is negative, you may lose all or a substantial portion of your investment upon early redemption.

Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

346

The Securities may be called by UBS prior to the Maturity Date pursuant to its Call Right and, upon the occurrence of

a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

 See “Specific

Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic Acceleration Upon Zero

Value Event”.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice rather than the

following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities of any series. To exercise its

Call Right, UBS must provide notice to the holders of such Securities (which may be provided via press release) not less than

18 calendar days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a

cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer

to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event”.

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately

preceding the date we issue a notice of exercise of our Call Right is less than $500,000,000, the Call

Valuation Date, subject to adjustments as described under “— Market Disruption Event”; and

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day

immediately preceding the date we issue a notice of exercise of our Call Right is equal to or greater than

$500,000,000, the four Index Business Days from and including the Call Valuation Date, subject to

adjustment as described under “— Market Disruption Event.”

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For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of its Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities

outstanding as reported on Bloomberg.

The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

 =

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment if we exercise our Call Right. The combined negative effect

of the Accrued Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the

unleveraged return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect

of the Accrued Fees, or if the compounded leveraged quarterly return of the Index (or the unleveraged return of the

Index, following a Permanent Deleveraging Event) is negative, you may lose all or a substantial portion of your

investment upon a call. Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

In addition, upon the occurrence of a Zero Value Event, the Securities will be automatically accelerated and

mandatorily redeemed by UBS.

 See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”

below.

Automatic Acceleration Upon Zero Value Event

For each series of Securities, a Zero Value Event represents the first instance when the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value is less than or equal to zero (other than on an Excluded Day, as defined

below). It will have the effect of permanently resetting the value of your Securities to zero and accelerating the Securities. You

will not benefit from any future exposure to the applicable Index after the occurrence of a Zero Value Event.

A Zero Value Event can occur only if a Permanent Deleveraging Event occurs and the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value declines to zero before the leverage of your Securities is reset to 1.0 at the

close of trading on the Index Business Day following such event (or if such event occurs after 3:15 p.m. on any Index Business

Day which would not otherwise have been a Loss Rebalancing Valuation Date, the second Index Business Day following such

event), as described under “Permanent Deleveraging Valuation Dates” above.

A “

Zero Value Event

” occurs if the Current Indicative Value (intraday indicative value) or the Closing Indicative Value on

any Index Business Day (other than an Excluded Day, as defined below) is less than or equal to zero. From immediately after

the Zero Value Event and on all future calendar days, the Current Indicative Value (intraday indicative value) and the Closing

Indicative Value will be set equal to zero.

As used above, an “

Excluded Day

” means (i) any calendar day after the Second Permanent Deleveraging Valuation Date (ii)

any calendar day on or after which a Zero Value Event has already occurred, and (iii) any calendar day after the last day of an

applicable Measurement Period.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event; provided that the

failure to do so shall not affect the automatic acceleration and redemption of the Securities. The Securities will be suspended

from trading intraday shortly after the event occurs and will likely not be open for trading again on NYSE Arca.

You will lose your entire investment upon the occurrence of a Zero Value Event.

In addition, we may call the Securities prior to the Maturity Date pursuant to our Call Right.

 See “Specific Terms of the

Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day, as used below) decreases by 20% or more from the previous Last Reset Index Closing Level.

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Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding any Quarterly Reset Valuation

Date, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day, (ii) any Quarterly Reset Valuation Date, (iii) any Loss

Rebalancing Valuation Date, (iv) the Index Business Day immediately preceding the first day of an applicable Measurement

Period, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day (v) any calendar day from and including the first day of

an applicable Measurement Period, (vi) the First or Second Permanent Deleveraging Valuation Dates, (vii) any calendar day

after the Second Permanent Deleveraging Valuation Date, and (ix) any calendar day on or after which a Zero Value Event has

occurred.

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”; and

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day

following the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “—

Market Disruption Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0 over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 2.0 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities than it would have had before the occurrence of the

Permanent Deleveraging Event. If such an event were to occur, it most likely would occur only following a Loss Rebalancing

Event and prior to the completion of the associated leverage reset to 2.0, which would generally occur at the end of the Index

Business Day following the Index Business Day on which the Loss Rebalancing Event occurred or, if the Loss Rebalancing

Event occurs 3:15 p.m. on an Index Business Day, at the end of the second Index Business Day following the Index Business

Day on which the Loss Rebalancing Event occurred.

A “

Permanent Deleveraging Event

” occurs if, at any time on an Index Business Day (other than an Excluded Day, as defined

below), the Intraday Index Value decreases by 40% or more from the Last Reset Index Closing Level. If a Permanent

Deleveraging Event occurs, the Current Principal Amount of the Securities will be reset over two Index Business Days.

As used above, an “

Excluded Day

” means (i) the First or Second Permanent Deleveraging Valuation Dates, (ii) any calendar

day after the Second Permanent Deleveraging Valuation Date, (iii) any day on or after which a Zero Value Event occurs, (iv)

the day which is two Index Business Days prior to the first day of a Measurement Period, if a Permanent Deleveraging Event

occurs after 3:15 p.m. on such day, and (v) any calendar day from and including the Index Business Day immediately

preceding the first day of a Measurement Period.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

(a) The “

First Permanent Deleveraging Valuation Date

” means:

(i) any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but

on which a Permanent Deleveraging Event has occurred, subject to adjustment as described under

“— Market Disruption Event”; or

(ii) if a Permanent Deleveraging Event occurs after 3:15 p.m. on any Index Business Day which would

not otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day

following the occurrence of such Permanent Deleveraging Event, subject to adjustment as described

under “— Market Disruption Event.”

The leverage of your Securities will be reset to approximately 2.0 at the close of trading on the First

Permanent Deleveraging Valuation Date.

(b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately

following the First Permanent Deleveraging Valuation Date, subject to adjustment as described under “—

Market Disruption Event.”

The leverage of your Securities will be reset to 1.0 at the close of trading on the Second Permanent

Deleveraging Valuation Date.

349

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split, the record date for any split

or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next Business

Day after the record date.

If the Securities undergo a split or reverse split, we will adjust the Current Principal Amount, Closing Indicative Value,

Current Indicative Value, Accrued Fees, Measurement Period Cash Amount and other relevant terms of the Securities

accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The Depository Trust

Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will be made as

described below. The Current Principal Amount on such record date will be

divided by

four to reflect the 4:1 split. The

adjusted Current Principal Amount will be rounded to eight decimal places. The split or reverse split will become effective at

the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

In the case of a reverse split, the Current Principal Amount and other relevant terms of the Securities will be adjusted

accordingly and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Current Principal

Amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Current

Principal Amount will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Current Principal Amount of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (which we also refer to as

the intraday indicative value), Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the

Leverage Factor, the Index Factor, the Index Performance Ratio, the Residual Factor, the Index Closing Level, the Financing

Rate, the Accrued Fees (including determining any successor to the LIBOR base rate), the Redemption Fee Amount, the Cash

Settlement Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, that we will pay you upon

redemption, the Call Settlement Amount, that we will pay you if we call the Securities, whether a Loss Rebalancing Event has

occurred, whether a Permanent Deleveraging Event has occurred and whether any day is an Index Business Day and all such

other matters as may be specified elsewhere herein as matters to be determined by the Security Calculation Agent. If any

Intraday Index Value as published by Bloomberg on any Index Business Day is manifestly incorrect, the Security Calculation

Agent may base its determination of whether a Loss Rebalancing Event, Permanent Deleveraging Event or Zero Value Event

shall have occurred on such Index Business Day on its own determination of such Intraday Index Value. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates. The Security

Calculation Agent will also be responsible for determining whether the Index has been discontinued and whether there has

been a material change in the Index. The Security Calculation Agent will make all such determinations and calculations in its

sole discretion, and absent manifest error, all determinations of the Security Calculation Agent will be conclusive for all

purposes and binding on us, you, and all other persons having an interest in the Securities, without liability on the part of the

Security Calculation Agent. You will not be entitled to any compensation from us for any loss suffered as a result of any

determinations or calculations made by the Security Calculation Agent. We may appoint a different Security Calculation Agent

from time to time after the date of the prospectus supplement without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date or any Call Settlement Date.

350

All dollar amounts related to determination of the Accrued Fees, the Current Principal Amount, and any Redemption Amount,

Redemption Fee Amount, Call Settlement Amount or Cash Settlement Amount per Security will be rounded to the nearest ten-

thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar

amounts paid to any holder of Securities will be rounded to the nearest cent, with one -half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period

is the Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities,

whether by reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to

a material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge

with respect to the Securities that we or our affiliates have effected or may effect as described in the section

entitled “Use of Proceeds and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced

change in the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any

Index Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

351

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five Index Business Days after that first Index Business Day, however, the default quotation period will

continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

352

Discontinuance of or Adjustments to the Index or Termination of Our License Agreements with the Index Sponsors;

Alteration of Method of Calculation

If (i) an Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) our license agreement with the Index Sponsor terminates or (iii) the Index Sponsor

or Index Calculation Agent does not make the Index Constituent Securities and/or their unit weighting available to the Security

Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS that the Security

Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities and/or their unit

weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor index

”), and the

Security Calculation Agent approves such index as a successor index, then on and after the date determined by the Security

Calculation Agent, the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination and the amount payable at maturity or upon early redemption or call and all other related payments terms by

reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

be furnished to the trustee, to us and to the holders of the Securities.

If an Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, Current Principal Amount, Current Indicative Value

(intraday indicative value), Closing Indicative Value, Index Factor, Index Performance Ratio, Residual Factor, Accrued Fees,

Index Closing Levels on the applicable dates of determination, all other related payment terms and the amount payable at

maturity or upon early redemption or call by reference to such Substitute Index. If the Security Calculation Agent so elects to

replace the original Index with a Substitute Index, the Security Calculation Agent will cause written notice thereof to be

furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or

rules of the United States (or any political subdivision thereof), or any jurisdiction in which a Primary

Exchange (as defined herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire

or dispose of the Index Constituent Securities included in the Index or options, futures, swaps or other

derivatives on the Index or on the Index Constituent Securities included in the Index (including but not

limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates, third

parties with whom we transact or similarly situated third parties in performing our or their obligations in

connection with the Securities, (iii) has a material adverse effect on any of these parties’ ability to perform

their obligations in connection with the Securities, or (iv) materially affects our ability to issue or transact in

exchange traded notes similar to the Securities, each as determined by the Security Calculation Agent;

353

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other

official pronouncement interpreting or applying those laws, regulations or rules that is announced on or after

February 4, 2021 that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on

the Index Constituent Securities (including but not limited to exchange -imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated

third parties in performing our or their obligations in connection with the Securities, (iii) has a material

adverse effect on the ability of us, our affiliates, third parties with whom we transact or a similarly situated

third party to perform our or their obligations in connection with the Securities, or (iv) materially affects our

ability to issue or transact in exchange traded notes similar to the Securities, each as determined by the

Security Calculation Agent;

(c) any event that occurs on or after February 4, 2021 that makes it a violation of any law, regulation or rule of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as

defined herein) is located, or of any official administrative decision, judicial decision, administrative action,

regulatory interpretation or other official pronouncement interpreting or applying those laws, regulations or

rules, (i) for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities or

options, futures, swaps or other derivatives on the Index or on the Index Constituent Securities (including but

not limited to exchange-imposed position limits), (ii) for us, our affiliates, third parties with whom we

transact or similarly situated third parties to perform our or their obligations in connection with the

Securities, or (iii) for us to issue or transact in exchange traded notes similar to the Securities, each as

determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or

a similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a

materially increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire,

establish, re-establish, substitute, maintain, unwind or dispose of any transaction or asset it deems necessary

to hedge the risk of the Securities, or realize, recover or remit the proceeds of any such transaction or asset;

or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the

Securities, if any, announces that pursuant to the rules of such exchange or market, as applicable, the

Securities cease (or will cease) to be listed, traded or publicly quoted on such exchange or market, as

applicable, for any reason and are not immediately re-listed, re-traded or re-quoted on an exchange or

quotation system located in the same country as such exchange or market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor or Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Index Performance Ratio, the Last Reset Index Closing Level, the Accrued Fees, and any Redemption Amount,

Redemption Fee Amount, Cash Settlement Amount or Call Settlement Amount, and all related payment terms based directly or

indirectly on the Index Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating

the Index or a successor or Substitute Index is modified so that the level of the Index or such successor or Substitute Index is a

fraction or multiple of what it would have been if there had been no such modification (

e.g.

, due to a rebasing of the Index),

which, in turn, causes the Index Closing Level of the Index or such successor or Substitute Index to be a fraction of what it

would have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor or Substitute Index as if it had not been

modified (

e.g.

, as if such rebasing had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in the

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

354

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue any series of Securities. We issued the Securities initially in an amount

having the aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional

Securities in amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The

Securities do not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or

similar restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We

May Offer — Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities of the same

series and will have the same CUSIP number and will trade interchangeably with such Securities immediately upon settlement.

Any additional issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The

price of any additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

355

22. ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN due February 9, 2051

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

Each of the seven series of Securities offered by the prospectus supplement is separate and independent of each other series of

Securities. Apart from the applicable Index, however, all of the terms of each series of Securities are the same. Since each

series references a different Index, all calculations and adjustments and related events with respect to each series are

independent of calculations and adjustments and related events for each other series of Securities, and we may exercise our

call right as well as our right to initiate a split or a reverse split independently for each series. The following discussion

therefore applies independently to each series of Securities offered by the prospectus supplement and, except as the context

may otherwise require, the defined terms refer separately to each series. References to the “Securities” should be understood

as references to a single series of Securities and the defined terms should be understood in reference only to that series of

Securities.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 2, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or upon early redemption or call. Instead, at

maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance and path

of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement Period as

described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero, the Cash

Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is February 9, 2051, which will be the third Index Business Day following the last Index Business Day

in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated upon Zero Value Event, you will receive at maturity a cash

payment equal to its Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer

to this cash payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment

will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees, you may lose all or a substantial portion of your investment at maturity. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

UBS may call the Securities prior to the Maturity Date pursuant to its Call Right. If the Securities are called by UBS, the Call

Settlement Amount may be zero and you may lose all or a substantial portion of your investment. See “Specific Terms of the

Securities — UBS’s Call Right”.

The “Stated Principal Amount” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

356

The Closing Indicative Value represents the dollar value per Security that an investor would receive on any day if it redeemed

the Security that day (without giving effect to any Redemption Fee Amount).

The “Closing Indicative Value” per Security, will be calculated as follows:

(a) On the Initial Trade Date, $25.00 per Security.

(b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) – Accrued Fees

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) – Accrued Fees + Measurement Period Cash Amount

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Closing Indicative Value for that day and all subsequent days will be fixed to be equal to the Measurement Period

Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs, the Closing Indicative Value will be equal to zero on the day it occurs and on all future

calendar days. Upon the occurrence of a Zero Value Event, investors will lose their entire investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “— Automatic

Acceleration Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged notional investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate

the leveraged returns would approximately equal the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero for the remaining term of the Securities. If a Zero Value Event occurs prior to

your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your

Securities will be automatically accelerated and mandatorily redeemed and you will lose your entire investment.

The Current Principal Amount per Security, will be calculated as follows:

(a) From and including the Initial Trade Date to and excluding the first Reset Valuation Date, $25.00 per Security.

(b) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index Factor)

– Accrued Fees

The Current Principal Amount will not change until the first Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, such day will

not be a valid Reset Valuation Date.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset. The “

Reset Valuation Date

”

means:

(a) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valuatio n Date, or (v) the Second Permanent Deleveraging Valuation Date; and

(b) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The valuation dates are defined below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, it will not be

a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the second Wednesday of January, April, July and October of each calendar year

during the term of the Securities (other than an Excluded Day, as defined below), subject to adjustment as described under “—

Market Disruption Event”.

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As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding the first day of an applicable

Measurement Period, and any calendar day thereafter, and (ii) any calendar day after the Second Permanent Deleveraging

Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

(b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period,

divided by

(b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 3/4, on the second Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 2/4, on the third Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 1/4 and on the last Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal zero.

(c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 2.0. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level 

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is the Index Closing Level on the Initial Trade Date, as reported by Bloomberg and

Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset Index

Closing Level) was determined on February 4, 2021 by the Security Calculation Agent. If the closing level of an Index, as

reported on Bloomberg and Reuters for any Index Business Day, is manifestly incorrect, the “

Index Closing Level

” for such

Index Business Day shall be the closing level of the Index as determined by the Security Calculation Agent. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates.

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or, if UBS exercises its Call Right, the Call Measurement

Period.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

(a) On the Initial Trade Date, $25.00.

(b) On any other calendar day prior to the first day of a Measurement Period:

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(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) – Accrued Fees

(c) From and including the first day of a Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value × Residual Factor on the immediately preceding calendar

day) – Accrued Fees + Measurement Period Cash Amount, from the immediately preceding calendar day However, if,

on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is less than or

equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the Current Indicative

Value for the remainder of that day and all subsequent days will be fixed to be equal to the Measurement Period Cash

Amount from the immediately preceding calendar day.

(d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(intraday indicative value).

If a Zero Value Event occurs, the Current Indicative Value (intraday indicative value) will be equal to zero for the

remainder of the day it occurs and on all future calendar days. Upon the occurrence of a Zero Value Event, investors

will lose their entire investment. You will not benefit from any future exposure to the Index after the occurrence of a

Zero Value Event.

See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly. The Securities are subject to an

“

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Tracking Fee is zero.

(b) On any subsequent calendar day, the Daily Tracking Fee is equal to:

(1) (i) 0.95%

times

(ii) the Current Principal Amount on the immediately preceding calendar day

times

(iii) the Index

Factor on such calendar day

times

(iv) the Residual Factor on the immediately preceding calendar day,

divided by

(2)

365.

(c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly. The Securities are subject

to an “

Accrued Financing Fee

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Financing Fee is equal to:

(1) the Accrued Financing Fee as of the immediately preceding calendar day,

plus

(2) the Daily Financing Fee on

such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

(d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

359

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Daily Financing Fee is equal to:

(1) (i) the Financing Rate on such calendar day

times

(ii) the Current Principal Amount on the immediately preceding

calendar day

times

(iii) the Residual Factor on the immediately preceding calendar day,

divided by

(2) 360.

(c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

(d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Index. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00 on any calendar day, to but excluding the first day of a Measurement Period.

(b) On the first day of a one-day Measurement Period:

At the close of trading on such Index Business Day, (Current Principal Amount on the immediately preceding

calendar day × Index Factor, on such Index Business Day).

(c) From and including the first day of a four-day Measurement Period:

(i) At the close of trading on each Index Business Day during the Measurement Period, the Measurement Period

Cash Amount on the immediately preceding calendar day + (Current Principal Amount on the calendar day

immediately preceding the first day of such Measurement Period × 0.25 × Index Factor, on such Index

Business Day); and

(ii) On any calendar day during the Measurement Period that is not an Index Business Day, the Measurement

Period Cash Amount on the immediately preceding Index Business Day.

(d) On any calendar day after the last Index Business Day of a Measurement Period, the Measurement Period Cash

Amount on the last Index Business Day of such Measurement Period.

Notwithstanding the foregoing, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day,

then the Measurement Period Cash Amount for that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash amount from the immediately preceding calendar day.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable portion of the notional financing amount will separately be deemed converted to cash as

well. After the close of trading on the final Index Business Day of a four-day Measurement Period, the Measurement Period

Cash Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the

four-days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current

Principal Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed

converted to cash, at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

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(a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is less than $500,000,000, the Calculation Date, subject to adjustments as described

under “— Market Disruption Event”;

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is equal to or greater than $500,000,000, the four Index Business Days from and

including the Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which for each series of

Securities is the entity set forth below:

Title of Securities

Index Calculation Agent

ETRACS 2x Leveraged US Dividend Factor TR ETN

S&P Dow Jones Indices 

ETRACS 2x Leveraged US Growth Factor TR ETN

FTSE Russell 

ETRACS 2x Leveraged US Size Factor TR ETN

FTSE Russell 

ETRACS 2x Leveraged US Value Factor TR ETN

FTSE Russell 

ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN

MSCI, Inc. 

ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Quality Factor TR ETN

MSCI, Inc.

The “

Calculation Date

” means February 1, 2051, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return of each series of Securities is based upon the performance of the applicable Index set forth on the cover page of the

prospectus supplement. Each Index is designed to track the performance of a sector of the U.S. equity market and to reflect

an investing style. We refer to the securities included in each Index as the “Index Constituent Securities” for such Index. 

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event”, you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon and a confirmation of redemption by no later than 5:00 p.m. on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

361

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures”, for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount

=

Closing Indicative

Value

–

Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable, or if the

compounded leveraged quarterly return of the Index (or the unleveraged return of the Index, following a Permanent

Deleveraging Event) is negative, you may lose all or a substantial portion of your investment upon early redemption.

Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

The Securities may be called by UBS prior to the Maturity Date pursuant to its Call Right and, upon the occurrence of a Zero

Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS. See “Specific Terms of the

Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

362

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice rather than the

following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities of any series. To exercise its

Call Right, UBS must provide notice to the holders of such Securities (which may be provided via press release) not less than

18 calendar days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a

cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer

to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event”.

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date we issue a notice of exercise of our Call Right is less than $500,000,000, the Call Valuation Date, subject to

adjustments as described under “— Market Disruption Event”; and

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date we issue a notice of exercise of our Call Right is equal to or greater than $500,000,000, the four

Index Business Days from and including the Call Valuation Date, subject to adjustment as described under “—

Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of its Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment if we exercise our Call Right. The combined negative effect of the

Accrued Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the Accrued

Fees, or if the compounded leveraged quarterly return of the Index (or the unleveraged return of the Index, following a

Permanent Deleveraging Event) is negative, you may lose all or a substantial portion of your investment upon a call. Loss

Rebalancing Events will cause compounding to occur more frequently than quarterly.

In addition, upon the occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily

redeemed by UBS. See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event” below.

Automatic Acceleration Upon Zero Value Event

For each series of Securities, a Zero Value Event represents the first instance when the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value is less than or equal to zero (other than on an Excluded Day, as defined

below). It will have the effect of permanently resetting the value of your Securities to zero and accelerating the Securities. You

will not benefit from any future exposure to the applicable Index after the occurrence of a Zero Value Event.

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A Zero Value Event can occur only if a Permanent Deleveraging Event occurs and the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value declines to zero before the leverage of your Securities is reset to 1.0 at the

close of trading on the Index Business Day following such event (or if such event occurs after 3:15 p.m. on any Index Business

Day which would not otherwise have been a Loss Rebalancing Valuation Date, the second Index Business Day following such

event), as described under “Permanent Deleveraging Valuation Dates” above.

A “

Zero Value Event

” occurs if the Current Indicative Value (intraday indicative value) or the Closing Indicative Value on

any Index Business Day (other than an Excluded Day, as defined below) is less than or equal to zero. From immediately after

the Zero Value Event and on all future calendar days, the Current Indicative Value (intraday indicative value) and the Closing

Indicative Value will be set equal to zero.

As used above, an “

Excluded Day

” means (i) any calendar day after the Second Permanent Deleveraging Valuation Date (ii)

any calendar day on or after which a Zero Value Event has already occurred, and (iii) any calendar day after the last day of an

applicable Measurement Period.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event; provided that the

failure to do so shall not affect the automatic acceleration and redemption of the Securities. The Securities will be suspended

from trading intraday shortly after the event occurs and will likely not be open for trading again on NYSE Arca.

You will lose your entire investment upon the occurrence of a Zero Value Event.

In addition, we may call the Securities prior to the Maturity Date pursuant to our Call Right.

See “Specific Terms of the

Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day, as used below) decreases by 20% or more from the previous Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding any Quarterly Reset Valuation

Date, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day, (ii) any Quarterly Reset Valuation Date, (iii) any Loss

Rebalancing Valuation Date, (iv) the Index Business Day immediately preceding the first day of an applicable Measurement

Period, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day (v) any calendar day from and including the first day of

an applicable Measurement Period, (vi) the First or Second Permanent Deleveraging Valuation Dates, (vii) any calendar day

after the Second Permanent Deleveraging Valuation Date, and (ix) any calendar day on or after which a Zero Value Event has

occurred.

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”; and

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0 over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 2.0 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities than it would have had before the occurrence of the

Permanent Deleveraging Event. If such an event were to occur, it most likely would occur only following a Loss Rebalancing

Event and prior to the completion of the associated leverage reset to 2.0, which would generally occur at the end of the Index

Business Day following the Index Business Day on which the Loss Rebalancing Event occurred or, if the Loss Rebalancing

Event occurs 3:15 p.m. on an Index Business Day, at the end of the second Index Business Day following the Index Business

Day on which the Loss Rebalancing Event occurred.

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A “

Permanent Deleveraging Event

” occurs if, at any time on an Index Business Day (other than an Excluded Day, as defined

below), the Intraday Index Value decreases by 40% or more from the Last Reset Index Closing Level. If a Permanent

Deleveraging Event occurs, the Current Principal Amount of the Securities will be reset over two Index Business Days.

As used above, an “

Excluded Day

” means (i) the First or Second Permanent Deleveraging Valuation Dates, (ii) any calendar

day after the Second Permanent Deleveraging Valuation Date, (iii) any day on or after which a Zero Value Event occurs, (iv)

the day which is two Index Business Days prior to the first day of a Measurement Period, if a Permanent Deleveraging Event

occurs after 3:15 p.m. on such day, and (v) any calendar day from and including the Index Business Day immediately

preceding the first day of a Measurement Period.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

(a) The “First Permanent Deleveraging Valuation Date” means:

(i) any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but on

which a Permanent Deleveraging Event has occurred, subject to adjustment as described under “— Market

Disruption Event”; or

(ii) if a Permanent Deleveraging Event occurs after 3:15 p.m. on any Index Business Day which would not

otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day following the

occurrence of such Permanent Deleveraging Event, subject to adjustment as described under “— Market

Disruption Event.”

The leverage of your Securities will be reset to approximately 2.0 at the close of trading on the First Permanent

Deleveraging Valuation Date.

(b) The “Second Permanent Deleveraging Valuation Date” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event.”

The leverage of your Securities will be reset to 1.0 at the close of trading on the Second Permanent Deleveraging Valuation

Date.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split, the record date for any split

or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next Business

Day after the record date.

If the Securities undergo a split or reverse split, we will adjust the Current Principal Amount, Closing Indicative Value,

Current Indicative Value, Accrued Fees, Measurement Period Cash Amount and other relevant terms of the Securities

accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The Depository Trust

Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will be made as

described below. The Current Principal Amount on such record date will be

divided by

four to reflect the 4:1 split. The

adjusted Current Principal Amount will be rounded to eight decimal places. The split or reverse split will become effective at

the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

In the case of a reverse split, the Current Principal Amount and other relevant terms of the Securities will be adjusted

accordingly and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Current Principal

Amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Current

Principal Amount will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

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Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Current Principal Amount of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal

Amount, Current Indicative Value (which we also refer to as the intraday indicative value), Closing Indicative Value, Market

Disruption Events, Business Days, Index Business Days, the Leverage Factor, the Index Factor, the Index Performance Ratio,

the Residual Factor, the Index Closing Level, the Financing Rate, the Accrued Fees (including determining any successor to

the LIBOR base rate), the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Redemption Amount, if any, that we will pay you upon redemption, the Call Settlement Amount, that we will pay you if we

call the Securities, whether a Loss Rebalancing Event has occurred, whether a Permanent Deleveraging Event has occurred and

whether any day is an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. If any Intraday Index Value as published by Bloomberg on any Index Business

Day is manifestly incorrect, the Security Calculation Agent may base its determination of whether a Loss Rebalancing Event,

Permanent Deleveraging Event or Zero Value Event shall have occurred on such Index Business Day on its own determination

of such Intraday Index Value. In making such determination, the Security Calculation Agent may consider any relevant

information, including, without limitation, relevant market data in the relevant market supplied by one or more third parties or

from internal sources or affiliates. The Security Calculation Agent will also be responsible for determining whether the Index

has been discontinued and whether there has been a material change in the Index. The Security Calculation Agent will make all

such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Security

Calculation Agent will be conclusive for all purposes and binding on us, you, and all other persons having an interest in the

Securities, without liability on the part of the Security Calculation Agent. You will not be entitled to any compensation from us

for any loss suffered as a result of any determinations or calculations made by the Security Calculation Agent. We may appoint

a different Security Calculation Agent from time to time after the date of the prospectus supplement without your consent and

without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date or any Call Settlement Date.

All dollar amounts related to determination of the Accrued Fees, the Current Principal Amount, and any Redemption Amount,

Redemption Fee Amount, Call Settlement Amount or Cash Settlement Amount per Security will be rounded to the nearest ten-

thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar

amounts paid to any holder of Securities will be rounded to the nearest cent, with one -half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

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To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period

is the Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

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Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five Index Business Days after that first Index Business Day, however, the default quotation period will

continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index or Termination of Our License Agreements with the Index Sponsors;

Alteration of Method of Calculation

If (i) an Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) our license agreement with the Index Sponsor terminates or (iii) the Index Sponsor

or Index Calculation Agent does not make the Index Constituent Securities and/or their unit weighting available to the Security

Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS that the Security

Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities and/or their unit

weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor index

”), and the

Security Calculation Agent approves such index as a successor index, then on and after the date determined by the Security

Calculation Agent, the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination and the amount payable at maturity or upon early redemption or call and all other related payments terms by

reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

be furnished to the trustee, to us and to the holders of the Securities.

If an Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or

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on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be determined

and the Security Calculation Agent determines that no successor index is available at such time, or the Security Calculation

Agent has previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is to

be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level on

the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, Current Principal Amount, Current Indicative Value

(intraday indicative value), Closing Indicative Value, Index Factor, Index Performance Ratio, Residual Factor, Accrued Fees,

Index Closing Levels on the applicable dates of determination, all other related payment terms and the amount payable at

maturity or upon early redemption or call by reference to such Substitute Index. If the Security Calculation Agent so elects to

replace the original Index with a Substitute Index, the Security Calculation Agent will cause written notice thereof to be

furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities, or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after February 4, 2021

that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities

included in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent

Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our

affiliates, third parties with whom we transact or similarly situated third parties in performing our or their obligations

in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities, or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

(c) any event that occurs on or after February 4, 2021 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities, or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

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(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor or Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Index Performance Ratio, the Last Reset Index Closing Level, the Accrued Fees, and any Redemption Amount,

Redemption Fee Amount, Cash Settlement Amount or Call Settlement Amount, and all related payment terms based directly or

indirectly on the Index Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating

the Index or a successor or Substitute Index is modified so that the level of the Index or such successor or Substitute Index is a

fraction or multiple of what it would have been if there had been no such modification (

e.g.

, due to a rebasing of the Index ),

which, in turn, causes the Index Closing Level of the Index or such successor or Substitute Index to be a fraction of what it

would have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor or Substitute Index as if it had not been

modified (

e.g.

, as if such rebasing had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in the

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue any series of Securities. We issued the Securities initially in an amount

having the aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional

Securities in amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The

Securities do not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or

similar restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We

May Offer — Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities of the same

series and will have the same CUSIP number and will trade interchangeably with such Securities immediately upon settlement.

Any additional issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The

price of any additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

370

23. ETRACS 2x Leveraged MSCI US Quality Factor TR ETN due February 9, 2051

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

Each of the seven series of Securities offered by the prospectus supplement is separate and independent of each other series of

Securities. Apart from the applicable Index, however, all of the terms of each series of Securities are the same. Since each

series references a different Index, all calculations and adjustments and related events with respect to each series are

independent of calculations and adjustments and related events for each other series of Securities, and we may exercise our

call right as well as our right to initiate a split or a reverse split independently for each series. The following discussion

therefore applies independently to each series of Securities offered by the prospectus supplement and, except as the context

may otherwise require, the defined terms refer separately to each series. References to the “Securities” should be understood

as references to a single series of Securities and the defined terms should be understood in reference only to that series of

Securities.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 2, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or upon early redemption or call. Instead, at

maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance and path

of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement Period as

described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero, the Cash

Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is February 9, 2051, which will be the third Index Business Day following the last Index Business Day

in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated upon Zero Value Event, you will receive at maturity a cash

payment equal to its Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer

to this cash payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment

will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees, you may lose all or a substantial portion of your investment at maturity. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

UBS may call the Securities prior to the Maturity Date pursuant to its Call Right. If the Securities are called by UBS, the Call

Settlement Amount may be zero and you may lose all or a substantial portion of your investment. See “Specific Terms of the

Securities — UBS’s Call Right”.

The “Stated Principal Amount” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

371

The Closing Indicative Value represents the dollar value per Security that an investor would receive on any day if it redeemed

the Security that day (without giving effect to any Redemption Fee Amount).

The “Closing Indicative Value” per Security, will be calculated as follows:

(a) On the Initial Trade Date, $25.00 per Security.

(b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) – Accrued Fees

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) – Accrued Fees + Measurement Period Cash Amount

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Closing Indicative Value for that day and all subsequent days will be fixed to be equal to the Measurement Period

Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs, the Closing Indicative Value will be equal to zero on the day it occurs and on all future

calendar days. Upon the occurrence of a Zero Value Event, investors will lose their entire investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

See “— Automatic

Acceleration Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged notional investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate

the leveraged returns would approximately equal the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero for the remaining term of the Securities. If a Zero Value Event occurs prior to

your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your

Securities will be automatically accelerated and mandatorily redeemed and you will lose your entire investment.

The Current Principal Amount per Security, will be calculated as follows:

(a) From and including the Initial Trade Date to and excluding the first Reset Valuation Date, $25.00 per Security.

(b) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index Factor)

– Accrued Fees 

The Current Principal Amount will not change until the first Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, such day will

not be a valid Reset Valuation Date.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset. The “

Reset Valuation Date

”

means:

(a) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valuatio n Date, or (v) the Second Permanent Deleveraging Valuation Date; and

(b) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The valuation dates are defined below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, it will not be

a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

372

The “

Quarterly Reset Valuation Date

” is the second Wednesday of January, April, July and October of each calendar year

during the term of the Securities (other than an Excluded Day, as defined below), subject to adjustment as described under “—

Market Disruption Event”.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding the first day of an applicable

Measurement Period, and any calendar day thereafter, and (ii) any calendar day after the Second Permanent Deleveraging

Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

(b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period,

divided by

(b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 3/4, on the second Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 2/4, on the third Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 1/4 and on the last Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal zero.

(c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 2.0. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level 

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is the Index Closing Level on the Initial Trade Date, as reported by Bloomberg and

Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset Index

Closing Level) was determined on February 4, 2021 by the Security Calculation Agent. If the closing level of an Index, as

reported on Bloomberg and Reuters for any Index Business Day, is manifestly incorrect, the “

Index Closing Level

” for such

Index Business Day shall be the closing level of the Index as determined by the Security Calculation Agent. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates.

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or, if UBS exercises its Call Right, the Call Measurement

Period.

373

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

(a) On the Initial Trade Date, $25.00.

(b) On any other calendar day prior to the first day of a Measurement Period:

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) – Accrued Fees

(c) From and including the first day of a Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value × Residual Factor on the immediately preceding calendar

day) – Accrued Fees + Measurement Period Cash Amount, from the immediately preceding calendar day

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Current Indicative Value for the remainder of that day and all subsequent days will be fixed to be equal to the

Measurement Period Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(intraday indicative value).

If a Zero Value Event occurs, the Current Indicative Value (intraday indicative value) will be equal to zero for the

remainder of the day it occurs and on all future calendar days. Upon the occurrence of a Zero Value Event, investors

will lose their entire investment. You will not benefit from any future exposure to the Index after the occurrence of a

Zero Value Event.

See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly. The Securities are subject to an

“

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Tracking Fee is zero.

(b) On any subsequent calendar day, the Daily Tracking Fee is equal to:

(1) (i) 0.95%

times

(ii) the Current Principal Amount on the immediately preceding calendar day

times

(iii) the Index

Factor on such calendar day

times

(iv) the Residual Factor on the immediately preceding calendar day,

divided by

(2)

365.

(c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly. The Securities are subject

to an “

Accrued Financing Fee

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Financing Fee is equal to:

374

(1) the Accrued Financing Fee as of the immediately preceding calendar day,

plus

(2) the Daily Financing Fee on

such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

(d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Daily Financing Fee is equal to:

(1) (i) the Financing Rate on such calendar day

times

(ii) the Current Principal Amount on the immediately preceding

calendar day

times

(iii) the Residual Factor on the immediately preceding calendar day,

divided by

(2) 360.

(c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

(d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Index. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00 on any calendar day, to but excluding the first day of a Measurement Period.

(b) On the first day of a one-day Measurement Period:

At the close of trading on such Index Business Day, (Current Principal Amount on the immediately preceding

calendar day × Index Factor, on such Index Business Day).

(c) From and including the first day of a four-day Measurement Period:

(i) At the close of trading on each Index Business Day during the Measurement Period, the Measurement Period

Cash Amount on the immediately preceding calendar day + (Current Principal Amount on the calendar day

immediately preceding the first day of such Measurement Period × 0.25 × Index Factor, on such Index

Business Day); and

(ii) On any calendar day during the Measurement Period that is not an Index Business Day, the Measurement

Period Cash Amount on the immediately preceding Index Business Day.

(d) On any calendar day after the last Index Business Day of a Measurement Period, the Measurement Period Cash

Amount on the last Index Business Day of such Measurement Period.

Notwithstanding the foregoing, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day,

then the Measurement Period Cash Amount for that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash amount from the immediately preceding calendar day.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount on the calendar day immediately preceding the first

375

day of the Measurement Period, will be deemed converted to cash and an applicable portion of the notional financing amount

will separately be deemed converted to cash as well. After the close of trading on the final Index Business Day of a four-day

Measurement Period, the Measurement Period Cash Amount will represent the averaged value of the Current Principal

Amount that was deemed converted to cash across the four-days of such Measurement Period. In case of a one-day

Measurement Period, approximately 100% of the Current Principal Amount will be deemed converted to cash and an

applicable amount of financing will separately be deemed converted to cash, at the close of trading of the first day of such

Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

(a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is less than $500,000,000, the Calculation Date, subject to adjustments as described

under “— Market Disruption Event”;

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is equal to or greater than $500,000,000, the four Index Business Days from and

including the Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which for each series of

Securities is the entity set forth below:

Title of Securities

Index Calculation Agent

ETRACS 2x Leveraged US Dividend Factor TR ETN

S&P Dow Jones Indices

ETRACS 2x Leveraged US Growth Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Size Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Value Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Quality Factor TR ETN

MSCI, Inc.

The “

Calculation Date

” means February 1, 2051, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

376

Underlying Index

The return of each series of Securities is based upon the performance of the applicable Index set forth on the cover page of the

prospectus supplement. Each Index is designed to track the performance of a sector of the U.S. equity market and to reflect an

investing style. We refer to the securities included in each Index as the “Index Constituent Securities” for such Index. 

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event”, you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon and a confirmation of redemption by no later than 5:00 p.m. on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures”, for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption

Amount

=

Closing Indicative

Value

–

Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of the

Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged quarterly return

of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the

negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable, or if the compounded leveraged quarterly

return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is negative, you may

lose all or a substantial portion of your investment upon early redemption. Loss Rebalancing Events will cause compounding

to occur more frequently than quarterly.

The Securities may be called by UBS prior to the Maturity Date pursuant to its Call Right and, upon the occurrence of a Zero

Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS. See “Specific Terms of the

Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

377

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption;

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice rather than the

following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities of any series. To exercise its

Call Right, UBS must provide notice to the holders of such Securities (which may be provided via press release) not less than

18 calendar days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a

cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer

to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event”.

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date we issue a notice of exercise of our Call Right is less than $500,000,000, the Call Valuation Date, subject to

adjustments as described under “— Market Disruption Event”; and

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date we issue a notice of exercise of our Call Right is equal to or greater than $500,000,000, the four

Index Business Days from and including the Call Valuation Date, subject to adjustment as described under “—

Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of its Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

378

The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment if we exercise our Call Right. The combined negative effect

of the Accrued Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the

unleveraged return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect

of the Accrued Fees, or if the compounded leveraged quarterly return of the Index (or the unleveraged return of the

Index, following a Permanent Deleveraging Event) is negative, you may lose all or a substantial portion of your

investment upon a call. Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

In addition, upon the occurrence of a Zero Value Event, the Securities will be automatically accelerated and mandatorily

redeemed by UBS. See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event” below.

Automatic Acceleration Upon Zero Value Event

For each series of Securities, a Zero Value Event represents the first instance when the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value is less than or equal to zero (other than on an Excluded Day, as defined

below). It will have the effect of permanently resetting the value of your Securities to zero and accelerating the Securities. You

will not benefit from any future exposure to the applicable Index after the occurrence of a Zero Value Event.

A Zero Value Event can occur only if a Permanent Deleveraging Event occurs and the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value declines to zero before the leverage of your Securities is reset to 1.0 at the

close of trading on the Index Business Day following such event (or if such event occurs after 3:15 p.m. on any Index Business

Day which would not otherwise have been a Loss Rebalancing Valuation Date, the second Index Business Day following such

event), as described under “Permanent Deleveraging Valuation Dates” above.

A “

Zero Value Event

” occurs if the Current Indicative Value (intraday indicative value) or the Closing Indicative Value on

any Index Business Day (other than an Excluded Day, as defined below) is less than or equal to zero. From immediately after

the Zero Value Event and on all future calendar days, the Current Indicative Value (intraday indicative value) and the Closing

Indicative Value will be set equal to zero.

As used above, an “

Excluded Day

” means (i) any calendar day after the Second Permanent Deleveraging Valuation Date (ii)

any calendar day on or after which a Zero Value Event has already occurred, and (iii) any calendar day after the last day of an

applicable Measurement Period.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event; provided that the

failure to do so shall not affect the automatic acceleration and redemption of the Securities. The Securities will be suspended

from trading intraday shortly after the event occurs and will likely not be open for trading again on NYSE Arca.

You will lose your entire investment upon the occurrence of a Zero Value Event.

In addition, we may call the Securities prior to the Maturity Date pursuant to our Call Right.

See “Specific Terms of the

Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day, as used below) decreases by 20% or more from the previous Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

379

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding any Quarterly Reset Valuation

Date, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day, (ii) any Quarterly Reset Valuation Date, (iii) any Loss

Rebalancing Valuation Date, (iv) the Index Business Day immediately preceding the first day of an applicable Measurement

Period, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day (v) any calendar day from and including the first day of

an applicable Measurement Period, (vi) the First or Second Permanent Deleveraging Valuation Dates, (vii) any calendar day

after the Second Permanent Deleveraging Valuation Date, and (ix) any calendar day on or after which a Zero Value Event has

occurred.

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”; and

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0 over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 2.0 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities than it would have had before the occurrence of the

Permanent Deleveraging Event. If such an event were to occur, it most likely would occur only following a Loss Rebalancing

Event and prior to the completion of the associated leverage reset to 2.0, which would generally occur at the end of the Index

Business Day following the Index Business Day on which the Loss Rebalancing Event occurred or, if the Loss Rebalancing

Event occurs 3:15 p.m. on an Index Business Day, at the end of the second Index Business Day following the Index Business

Day on which the Loss Rebalancing Event occurred.

A “Permanent Deleveraging Event” occurs if, at any time on an Index Business Day (other than an Excluded Day, as defined

below), the Intraday Index Value decreases by 40% or more from the Last Reset Index Closing Level. If a Permanent

Deleveraging Event occurs, the Current Principal Amount of the Securities will be reset over two Index Business Days.

As used above, an “Excluded Day” means (i) the First or Second Permanent Deleveraging Valuation Dates, (ii) any calendar

day after the Second Permanent Deleveraging Valuation Date, (iii) any day on or after which a Zero Value Event occurs, (iv)

the day which is two Index Business Days prior to the first day of a Measurement Period, if a Permanent Deleveraging Event

occurs after 3:15 p.m. on such day, and (v) any calendar day from and including the Index Business Day immediately

preceding the first day of a Measurement Period.

“Permanent Deleveraging Valuation Dates” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

(a) The “First Permanent Deleveraging Valuation Date” means:

(i) any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but on

which a Permanent Deleveraging Event has occurred, subject to adjustment as described under “— Market

Disruption Event”; or

(ii) if a Permanent Deleveraging Event occurs after 3:15 p.m. on any Index Business Day which would not

otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day following the

occurrence of such Permanent Deleveraging Event, subject to adjustment as described under “— Market

Disruption Event.”

The leverage of your Securities will be reset to approximately 2.0 at the close of trading on the First Permanent

Deleveraging Valuation Date.

(b) The “Second Permanent Deleveraging Valuation Date” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event.”

The leverage of your Securities will be reset to 1.0 at the close of trading on the Second Permanent Deleveraging Valuation

Date.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split, the record date for any split

or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next Business

Day after the record date.

380

If the Securities undergo a split or reverse split, we will adjust the Current Principal Amount, Closing Indicative Value,

Current Indicative Value, Accrued Fees, Measurement Period Cash Amount and other relevant terms of the Securities

accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The Depository Trust

Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will be made as

described below. The Current Principal Amount on such record date will be

divided by

four to reflect the 4:1 split. The

adjusted Current Principal Amount will be rounded to eight decimal places. The split or reverse split will become effective at

the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

In the case of a reverse split, the Current Principal Amount and other relevant terms of the Securities will be adjusted

accordingly and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Current Principal

Amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Current

Principal Amount will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Current Principal Amount of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal

Amount, Current Indicative Value (which we also refer to as the intraday indicative value), Closing Indicative Value, Market

Disruption Events, Business Days, Index Business Days, the Leverage Factor, the Index Factor, the Index Performance Ratio,

the Residual Factor, the Index Closing Level, the Financing Rate, the Accrued Fees (including determining any successor to

the LIBOR base rate), the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Redemption Amount, if any, that we will pay you upon redemption, the Call Settlement Amount, that we will pay you if we

call the Securities, whether a Loss Rebalancing Event has occurred, whether a Permanent Deleveraging Event has occurred and

whether any day is an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. If any Intraday Index Value as published by Bloomberg on any Index Business

Day is manifestly incorrect, the Security Calculation Agent may base its determination of whether a Loss Rebalancing Event,

Permanent Deleveraging Event or Zero Value Event shall have occurred on such Index Business Day on its own determination

of such Intraday Index Value. In making such determination, the Security Calculation Agent may consider any relevant

information, including, without limitation, relevant market data in the relevant market supplied by one or more third parties or

from internal sources or affiliates. The Security Calculation Agent will also be responsible for determining whether the Index

has been discontinued and whether there has been a material change in the Index. The Security Calculation Agent will make all

such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Security

Calculation Agent will be conclusive for all purposes and binding on us, you, and all other persons having an interest in the

Securities, without liability on the part of the Security Calculation Agent. You will not be entitled to any compensation from us

for any loss suffered as a result of any determinations or calculations made by the Security Calculation Agent. We may appoint

a different Security Calculation Agent from time to time after the date of the prospectus supplement without your consent and

without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date or any Call Settlement Date.

All dollar amounts related to determination of the Accrued Fees, the Current Principal Amount, and any Redemption Amount,

Redemption Fee Amount, Call Settlement Amount or Cash Settlement Amount per Security will be rounded to the nearest ten-

thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar

amounts paid to any holder of Securities will be rounded to the nearest cent, with one -half cent rounded upward.

381

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period

is the Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

382

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five Index Business Days after that first Index Business Day, however, the default quotation period will

continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

383

Discontinuance of or Adjustments to the Index or Termination of Our License Agreements with the Index Sponsors;

Alteration of Method of Calculation

If (i) an Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) our license agreement with the Index Sponsor terminates or (iii) the Index Sponsor

or Index Calculation Agent does not make the Index Constituent Securities and/or their unit weighting available to the Security

Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS that the Security

Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities and/or their unit

weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor index

”), and the

Security Calculation Agent approves such index as a successor index, then on and after the date determined by the Security

Calculation Agent, the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination and the amount payable at maturity or upon early redemption or call and all other related payments terms by

reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

be furnished to the trustee, to us and to the holders of the Securities.

If an Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, Current Principal Amount, Current Indicative Value

(intraday indicative value), Closing Indicative Value, Index Factor, Index Performance Ratio, Residual Factor, Accrued Fees,

Index Closing Levels on the applicable dates of determination, all other related payment terms and the amount payable at

maturity or upon early redemption or call by reference to such Substitute Index. If the Security Calculation Agent so elects to

replace the original Index with a Substitute Index, the Security Calculation Agent will cause written notice thereof to be

furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities, or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

384

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after February 4, 2021

that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities

included in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent

Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our

affiliates, third parties with whom we transact or similarly situated third parties in performing our or their obligations

in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities, or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

(c) any event that occurs on or after February 4, 2021 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities, or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor or Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Index Performance Ratio, the Last Reset Index Closing Level, the Accrued Fees, and any Redemption Amount,

Redemption Fee Amount, Cash Settlement Amount or Call Settlement Amount, and all related payment terms based directly or

indirectly on the Index Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating

the Index or a successor or Substitute Index is modified so that the level of the Index or such successor or Substitute Index is a

fraction or multiple of what it would have been if there had been no such modification (

e.g.

, due to a rebasing of the Index),

which, in turn, causes the Index Closing Level of the Index or such successor or Substitute Index to be a fraction of what it

would have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor or Substitute Index as if it had not been

modified (

e.g.

, as if such rebasing had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in the

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

385

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue any series of Securities. We issued the Securities initially in an amount

having the aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional

Securities in amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The

Securities do not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or

similar restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We

May Offer — Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities of the same

series and will have the same CUSIP number and will trade interchangeably with such Securities immediately upon settlement.

Any additional issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The

price of any additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

386

24. ETRACS 2x Leveraged US Dividend Factor TR ETN due February 9, 2051

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

Each of the seven series of Securities offered by the prospectus supplement is separate and independent of each other series of

Securities. Apart from the applicable Index, however, all of the terms of each series of Securities are the same. Since each

series references a different Index, all calculations and adjustments and related events with respect to each series are

independent of calculations and adjustments and related events for each other series of Securities, and we may exercise our

call right as well as our right to initiate a split or a reverse split independently for each series. The following discussion

therefore applies independently to each series of Securities offered by the prospectus supplement and, except as the context

may otherwise require, the defined terms refer separately to each series. References to the “Securities” should be understood

as references to a single series of Securities and the defined terms should be understood in reference only to that series of

Securities.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 2, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or upon early redemption or call. Instead, at

maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance and path

of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement Period as

described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero, the Cash

Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is February 9, 2051, which will be the third Index Business Day following the last Index Business Day

in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated upon Zero Value Event, you will receive at maturity a cash

payment equal to its Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer

to this cash payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment

will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last

Index Business Day in Final

Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees, you may lose all or a substantial portion of your investment at maturity. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

UBS may call the Securities prior to the Maturity Date pursuant to its Call Right. If the Securities are called by UBS,

the Call Settlement Amount may be zero and you may lose all or a substantial portion of your investment.

 See “Specific

Terms of the Securities — UBS’s Call Right”.

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

387

The Closing Indicative Value represents the dollar value per Security that an investor would receive on any day if it redeemed

the Security that day (without giving effect to any Redemption Fee Amount).

The “

Closing Indicative Value

” per Security, will be calculated as follows:

(a) On the Initial Trade Date, $25.00 per Security.

(b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) – Accrued Fees

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(

Current

 Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) – Accrued Fees + Measurement Period Cash Amount

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is

less than or equal to

the Measurement Period Cash Amount from the immediately

preceding

 calendar day, the

Closing Indicative Value for that day and all subsequent days will be fixed to be equal to the Measurement Period

Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs, the Closing Indicative Value will be equal to zero on the day it occurs and on all future

calendar days. Upon the occurrence of a Zero Value Event, investors will lose their entire investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

 See “— Automatic

Acceleration Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged notional investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate

the leveraged returns would approximately equal the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero for the remaining term of the Securities. If a Zero Value Event occurs prior to

your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your

Securities will be automatically accelerated and mandatorily redeemed and you will lose your entire investment.

The Current Principal Amount per Security, will be calculated as follows:

(a) From and including the Initial Trade Date to and excluding the first Reset Valuation Date, $25.00 per Security.

(b) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index Factor)

– Accrued Fees

The Current Principal Amount will not change

until

 the first Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, such day will

not be a valid Reset Valuation Date.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset. 

The “

Reset Valuation Date

” means:

(a) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing

Valuation Date (iv) the First Permanent

Deleveraging Valuation Date, or (v) the Second Permanent Deleveraging Valuation Date; and

(b) Any calendar day following the Second Permanent Deleveraging Valuation Date.

The valuation dates are defined below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, it will not be

a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

388

The “

Quarterly Reset Valuation Date

” is the second Wednesday of January, April, July and October of each calendar year

during the term of the Securities (other than an Excluded Day, as defined below), subject to adjustment as described under “—

Market Disruption Event”.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding the first day of an applicable

Measurement Period, and any calendar day thereafter, and (ii) any calendar day after the Second Permanent Deleveraging

Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

(b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period,

divided by

(b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 3/4, on the second Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 2/4, on the third Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 1/4 and on the last Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal zero.

(c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 2.0. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level

 Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is the Index Closing Level on the Initial Trade Date, as reported by Bloomberg and

Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset Index

Closing Level) was determined on February 4, 2021 by the Security Calculation Agent. If the closing level of an Index, as

reported on Bloomberg and Reuters for any Index Business Day, is manifestly incorrect, the “

Index Closing Level

” for such

Index Business Day shall be the closing level of the Index as determined by the Security Calculation Agent. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates.

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

“

Measurement Period

” means the Final Measurement Period or, if UBS exercises its Call Right, the Call Measurement

Period.

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The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

(a) On the Initial Trade Date, $25.00.

(b) On any other calendar day prior to the first day of a Measurement Period:

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) – Accrued Fees

(c) From and including the first day of a Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value × Residual Factor on the immediately preceding calendar

day) – Accrued Fees + Measurement Period Cash Amount, from the immediately preceding calendar day

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Current Indicative Value for the remainder of that day and all subsequent days will be fixed to be equal to the

Measurement Period Cash Amount from the immediately preceding calendar day.

(d) The minimum value of

the

 Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(intraday indicative value).

If a Zero Value Event occurs, the Current Indicative Value (intraday indicative value) will be equal to zero for the

remainder of the day it occurs and on all future calendar days. Upon the occurrence of a Zero Value Event, investors

will lose their entire investment. You will not benefit from any future exposure to the Index after the occurrence of a

Zero Value Event.

 See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly. 

The Securities are subject to an “

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Tracking Fee is zero.

(b) On any subsequent calendar day, the Daily Tracking Fee is equal to:

(1) (i) 0.95%

times

(ii) the Current Principal Amount on the immediately preceding calendar day

times

(iii) the Index

Factor on such calendar day

times

(iv) the Residual Factor on the immediately preceding calendar day,

divided by

(2)

365.

(c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly. 

The Securities are subject to an “

Accrued Financing Fee

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Financing Fee is equal to:

390

(1) the Accrued Financing Fee as of the immediately preceding calendar day,

plus

(2) the Daily Financing Fee on

such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

(d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

(b) On any

subsequent

 calendar day, the Daily Financing Fee is equal to:

(1) (i) the Financing Rate on such calendar day

times

(ii) the Current Principal Amount on the immediately preceding

calendar day

times

(iii) the Residual Factor on the immediately preceding calendar day,

divided by

(2) 360.

(c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to

zero

.

(d) The minimum value of the Daily

Financing

 Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Index. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00 on any calendar day, to but excluding the first day of a Measurement Period.

(b) On the first day of a one-day Measurement Period:

At the close of trading on such Index Business Day, (Current Principal Amount on the immediately preceding

calendar day × Index Factor, on such Index Business Day).

(c) From and including the first day of a four-day Measurement Period:

(i) At the close of trading on each Index Business Day during the Measurement Period, the

Measurement Period Cash Amount on the immediately preceding calendar day + (Current Principal

Amount on the calendar day immediately preceding the first day of such Measurement Period ×

0.25 × Index Factor, on such Index Business Day); and

(ii) On any calendar day during the Measurement Period that is not an Index Business Day, the

Measurement Period Cash Amount on the immediately preceding Index Business Day.

(d) On any calendar day after the last Index Business Day of a Measurement Period, the Measurement Period Cash

Amount on the last Index Business Day of such Measurement Period.

Notwithstanding the foregoing, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day,

then the Measurement Period Cash Amount for that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash amount from the immediately preceding calendar day.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

391

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount on the calendar day immediately preceding the first

day of the Measurement Period, will be deemed

converted to cash and an applicable portion of the notional financing amount will separately be deemed converted to cash as

well. After the close of trading on the final Index Business Day of a four-day Measurement Period, the Measurement Period

Cash Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the

four-days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current

Principal Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed

converted to cash, at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

(a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is less than $500,000,000, the Calculation Date, subject to adjustments as described

under “— Market Disruption Event”;

(b) if the

Market

 Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is equal to or greater than $500,000,000, the four Index Business Days from and

including the Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which for each series of

Securities is the entity set forth below:

Title of Securities

Index Calculation Agent

ETRACS 2x Leveraged US Dividend Factor TR ETN

S&P Dow Jones Indices

ETRACS 2x Leveraged US Growth Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Size Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Value Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Quality Factor TR ETN

MSCI, Inc.

The “

Calculation Date

” means February 1, 2051, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return of each series of Securities is based upon the performance of the applicable Index set forth on the cover page of this

prospectus supplement. Each Index is designed to track the performance of a sector of the U.S. equity market and to reflect an

investing style. We refer to the securities included in each Index as the “Index Constituent Securities” for such Index.

392

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event”, you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon and a confirmation of redemption by no later than 5:00 p.m. on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures”, for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount = Closing Indicative Value – Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable, or if the

compounded leveraged quarterly return of the Index (or the unleveraged return of the Index, following a Permanent

Deleveraging Event) is negative, you may lose all or a substantial portion of your investment upon early redemption.

Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

The Securities may be called by UBS prior to the Maturity Date pursuant to its Call Right and, upon the occurrence of

a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

 See “Specific

Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic Acceleration Upon Zero

Value Event”.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption;

393

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice rather than the

following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities of any series. To exercise its

Call Right, UBS must provide notice to the holders of such Securities (which may be provided via press release) not less than

18 calendar days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a

cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer

to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event”.

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date we issue a notice of exercise of our Call Right is less than $500,000,000, the Call Valuation Date, subject to

adjustments as described under “— Market Disruption Event”; and

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date we issue a notice of exercise of our Call Right is equal to or greater than $500,000,000, the four

Index Business Days from and including the Call Valuation Date, subject to adjustment as described under “—

Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to holders (which

may be provided via press release) of its exercise of its Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

394

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment if we exercise our Call Right. The combined negative effect

of the Accrued Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the

unleveraged return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect

of the Accrued Fees, or if the compounded leveraged quarterly return of the Index (or the unleveraged return of the

Index, following a Permanent Deleveraging Event) is negative, you may lose all or a substantial portion of your

investment upon a call. Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

In addition, upon the occurrence of a Zero Value Event, the Securities will be automatically accelerated and

mandatorily redeemed by UBS.

 See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”

below.

Automatic Acceleration Upon Zero Value Event

For each series of Securities, a Zero Value Event represents the first instance when the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value is less than or equal to zero (other than on an Excluded Day, as defined

below). It will have the effect of permanently resetting the value of your Securities to zero and accelerating the Securities. You

will not benefit from any future exposure to the applicable Index after the occurrence of a Zero Value Event.

A Zero Value Event can occur only if a Permanent Deleveraging Event occurs and the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value declines to zero before the leverage of your Securities is reset to 1.0 at the

close of trading on the Index Business Day following such event (or if such event occurs after 3:15 p.m. on any Index Business

Day which would not otherwise have been a Loss Rebalancing Valuation Date, the second Index Business Day following such

event), as described under “Permanent Deleveraging Valuation Dates” above.

A “

Zero Value Event

” occurs if the Current Indicative Value (intraday indicative value) or the Closing Indicative Value on

any Index Business Day (other than an Excluded Day, as defined below) is less than or equal to zero. From immediately after

the Zero Value Event and on all future calendar days, the Current Indicative Value (intraday indicative value) and the Closing

Indicative Value will be set equal to zero.

As used above, an “

Excluded Day

” means (i) any calendar day after the Second Permanent Deleveraging Valuation Date (ii)

any calendar day on or after which a Zero Value Event has already occurred, and (iii) any calendar day after the last day of an

applicable Measurement Period.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event; provided that the

failure to do so shall not affect the automatic acceleration and redemption of the Securities. The Securities will be suspended

from trading intraday shortly after the event occurs and will likely not be open for trading again on NYSE Arca.

You will lose your entire investment upon the occurrence of a Zero Value Event.

In addition, we may call the Securities prior to the Maturity Date pursuant to our Call Right.

 See “Specific Terms of the

Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day, as used below) decreases by 20% or more from the previous Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding any Quarterly Reset Valuation

Date, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day, (ii) any Quarterly Reset Valuation Date, (iii) any Loss

Rebalancing Valuation Date, (iv) the Index Business Day immediately preceding the first day of an applicable Measurement

Period, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day (v) any calendar day from and including the first day of

an applicable Measurement Period, (vi) the First or Second Permanent Deleveraging Valuation Dates, (vii) any calendar day

after the Second Permanent Deleveraging Valuation Date, and (ix) any calendar day on or after which a Zero Value Event has

occurred.

395

“

Loss Rebalancing Valuation Date

” means:

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”; and

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0 over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 2.0 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities than it would have had before the occurrence of the

Permanent Deleveraging Event. If such an event were to occur, it most likely would occur only following a Loss Rebalancing

Event and prior to the completion of the associated leverage reset to 2.0, which would generally occur at the end of the Index

Business Day following the Index Business Day on which the Loss Rebalancing Event occurred or, if the Loss Rebalancing

Event occurs 3:15 p.m. on an Index Business Day, at the end of the second Index Business Day following the Index Business

Day on which the Loss Rebalancing Event occurred.

A “

Permanent Deleveraging Event

” occurs if, at any time on an Index Business Day (other than an Excluded Day, as defined

below), the Intraday Index Value decreases by 40% or more from the Last Reset Index Closing Level. If a Permanent

Deleveraging Event occurs, the Current Principal Amount of the Securities will be reset over two Index Business Days.

As used above, an “

Excluded Day

” means (i) the First or Second Permanent Deleveraging Valuation Dates, (ii) any calendar

day after the Second Permanent Deleveraging Valuation Date, (iii) any day on or after which a Zero Value Event occurs, (iv)

the day which is two Index Business Days prior to the first day of a Measurement Period, if a Permanent Deleveraging Event

occurs after 3:15 p.m. on such day, and (v) any calendar day from and including the Index Business Day immediately

preceding the first day of a Measurement Period.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

(a) The “

First Permanent Deleveraging Valuation Date

” means:

(i) any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but

on which a Permanent Deleveraging Event has occurred, subject to adjustment as described under

“— Market Disruption Event”; or

(ii) if a Permanent

Deleveraging

 Event occurs after 3:15 p.m. on any Index Business Day which would

not otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day

following the occurrence of such Permanent Deleveraging Event, subject to adjustment as described

under “— Market Disruption Event.”

The leverage of your Securities will be reset to approximately 2.0 at the close of trading on the First Permanent

Deleveraging Valuation Date.

(b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event.”

The leverage of your Securities will be reset to 1.0 at the close of trading on the Second Permanent Deleveraging Valuation

Date.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split, the record date for any split

or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next Business

Day after the record date.

396

If the Securities undergo a split or reverse split, we will adjust the Current Principal Amount, Closing Indicative Value,

Current Indicative Value, Accrued Fees, Measurement Period Cash Amount and other relevant terms of the Securities

accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The Depository Trust

Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will be made as

described below. The Current Principal Amount on such record date will be

divided by

four to reflect the 4:1 split. The

adjusted Current Principal Amount will be rounded to eight decimal places. The split or reverse split will become effective at

the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

In the case of a reverse split, the Current Principal Amount and other relevant terms of the Securities will be adjusted

accordingly and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Current Principal

Amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Current

Principal Amount will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Current Principal Amount of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal Amount, Current Indicative Value (which we also refer to as

the intraday indicative value), Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the

Leverage Factor, the Index Factor, the Index Performance Ratio, the Residual Factor, the Index Closing Level, the Financing

Rate, the Accrued Fees (including determining any successor to the LIBOR base rate), the Redemption Fee Amount, the Cash

Settlement Amount, if any, that we will pay you at maturity, the Redemption Amount, if any, that we will pay you upon

redemption, the Call Settlement Amount, that we will pay you if we call the Securities, whether a Loss Rebalancing Event has

occurred, whether a Permanent Deleveraging Event has occurred and whether any day is an Index Business Day and all such

other matters as may be specified elsewhere herein as matters to be determined by the Security Calculation Agent. If any

Intraday Index Value as published by Bloomberg on any Index Business Day is manifestly incorrect, the Security Calculation

Agent may base its determination of whether a Loss Rebalancing Event, Permanent Deleveraging Event or Zero Value Event

shall have occurred on such Index Business Day on its own determination of such Intraday Index Value. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates. The Security

Calculation Agent will also be responsible for determining whether the Index has been discontinued and whether there has

been a material change in the Index. The Security Calculation Agent will make all such determinations and calculations in its

sole discretion, and absent manifest error, all determinations of the Security Calculation Agent will be conclusive for all

purposes and binding on us, you, and all other persons having an interest in the Securities, without liability on the part of the

Security Calculation Agent. You will not be entitled to any compensation from us for any loss suffered as a result of any

determinations or calculations made by the Security Calculation Agent. We may appoint a different Security Calculation Agent

from time to time after the date of the prospectus supplement without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date or any Call Settlement Date.

All dollar amounts related to determination of the Accrued Fees, the Current Principal Amount, and any Redemption Amount,

Redemption Fee Amount, Call Settlement Amount or Cash Settlement Amount per Security will be rounded to the nearest ten-

thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar

amounts paid to any holder of Securities will be rounded to the nearest cent, with one -half cent rounded upward.

397

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period

is the Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

398

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five Index Business Days after that first Index Business Day, however, the default quotation period will

continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1

or

 higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

399

Discontinuance of or Adjustments to the Index or Termination of Our License Agreements with the Index Sponsors;

Alteration of Method of Calculation

If (i) an Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) our license agreement with the Index Sponsor terminates or (iii) the Index Sponsor

or Index Calculation Agent does not make the Index Constituent Securities and/or their unit weighting available to the Security

Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS that the Security

Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities and/or their unit

weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor index

”), and the

Security Calculation Agent approves such index as a successor index, then on and after the date determined by the Security

Calculation Agent, the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination and the amount payable at maturity or upon early redemption or call and all other related payments terms by

reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

be furnished to the trustee, to us and to the holders of the Securities.

If an Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be

determined and the Security Calculation Agent determines that no successor index is available at such time, or the Security

Calculation Agent has previously selected a successor index and publication of such successor index is discontinued prior to,

and such discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on

the Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is

to be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level

on the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, Current Principal Amount, Current Indicative Value

(intraday indicative value), Closing Indicative Value, Index Factor, Index Performance Ratio, Residual Factor, Accrued Fees,

Index Closing Levels on the applicable dates of determination, all other related payment terms and the amount payable at

maturity or upon early redemption or call by reference to such Substitute Index. If the Security Calculation Agent so elects to

replace the original Index with a Substitute Index, the Security Calculation Agent will cause written notice thereof to be

furnished to the trustee, to us and to the holders of the Securities of the Securities.

An “

Index Replacement Event

” means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities, or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

400

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after February 4, 2021

that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities

included in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent

Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our

affiliates, third parties with whom we transact or similarly situated third parties in performing our or their obligations

in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities, or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

(c) any event that occurs on or after February 4, 2021 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities, or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

(e) as determined by the Security

Calculation

 Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor or Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Index Performance Ratio, the Last Reset Index Closing Level, the Accrued Fees, and any Redemption Amount,

Redemption Fee Amount, Cash Settlement Amount or Call Settlement Amount, and all related payment terms based directly or

indirectly on the Index Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating

the Index or a successor or Substitute Index is modified so that the level of the Index or such successor or Substitute Index is a

fraction or multiple of what it would have been if there had been no such modification (

e.g.

, due to a rebasing of the Index),

which, in turn, causes the Index Closing Level of the Index or such successor or Substitute Index to be a fraction of what it

would have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor or Substitute Index as if it had not been

modified (

e.g.

, as if such rebasing had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in the

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

401

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue any series of Securities. We issued the Securities initially in an amount

having the aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional

Securities in amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The

Securities do not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or

similar restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We

May Offer — Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities of the same

series and will have the same CUSIP number and will trade interchangeably with such Securities immediately upon settlement.

Any additional issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The

price of any additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

402

25. ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN due February 9, 2051

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

Each of the seven series of Securities offered by the prospectus supplement is separate and independent of each other series of

Securities. Apart from the applicable Index, however, all of the terms of each series of Securities are the same. Since each

series references a different Index, all calculations and adjustments and related events with respect to each series are

independent of calculations and adjustments and related events for each other series of Securities, and we may exercise our

call right as well as our right to initiate a split or a reverse split independently for each series. The following discussion

therefore applies independently to each series of Securities offered by the prospectus supplement and, except as the context

may otherwise require, the defined terms refer separately to each series. References to the “Securities” should be understood

as references to a single series of Securities and the defined terms should be understood in reference only to that series of

Securities.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 2, 2015 between

us and U.S. Bank Trust National Association, as trustee.

Please note that the information about the offering prices and the net proceeds to UBS on the front cover of the prospectus

supplement relates only to the initial sale of the Securities. If you have purchased the Securities in a secondary market

transaction after the initial sale, information about the price and date of sale to you will be provided in a separate confirmation

of sale.

We describe the terms of the Securities in more detail below. The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or upon early redemption or call. Instead, at

maturity, you will receive a cash payment per Security the amount of which will vary depending on the performance and path

of the Index and will be reduced by the Accrued Fees as of the last Index Business Day in the Final Measurement Period as

described under “— Cash Settlement Amount at Maturity.” If the amount as calculated is equal to or less than zero, the Cash

Settlement Amount will be zero and you will not receive a cash payment.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment per Security on the relevant Redemption Date equal to the Redemption Amount as

described under “— Early Redemption at the Option of the Holders.” If the amount as calculated is equal to or less than zero,

the Redemption Amount will be zero and you will not receive a cash payment.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is February 9, 2051, which will be the third Index Business Day following the last Index Business Day

in the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called, redeemed or accelerated upon Zero Value Event, you will receive at maturity a cash

payment equal to its Closing Indicative Value on the last Index Business Day in the applicable Measurement Period. We refer

to this cash payment as the “

Cash Settlement Amount

.” If the amount so calculated is equal to or less than zero, the payment

will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last

Index Business Day in Final

Measurement Period

You may lose all or a substantial portion of your investment at maturity. The combined negative effect of the Accrued

Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the unleveraged

return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect of the

Accrued Fees, you may lose all or a substantial portion of your investment at maturity. The occurrence of Loss

Rebalancing Events will result in more frequent than quarterly compounding.

403

UBS may call the Securities prior to the Maturity Date pursuant to its Call Right. If the Securities are called by UBS,

the Call Settlement Amount may be zero and you may lose all or a substantial portion of your investment.

 See “Specific

Terms of the Securities — UBS’s Call Right”.

The

“Stated Principal Amount”

 of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The Closing Indicative Value represents the dollar value per Security that an investor would receive on any day if it redeemed

the Security that day (without giving effect to any Redemption Fee Amount).

The “

Closing Indicative Value

” per Security, will be calculated as follows:

(a) On the Initial Trade Date, $25.00 per Security.

(b) On any other calendar day, prior to the first day of an applicable Measurement Period, an amount per Security equal

to:

(Current Principal Amount on the immediately preceding calendar day × Index Factor) – Accrued Fees

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor × Residual Factor) – Accrued Fees + Measurement Period Cash Amount

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Closing Indicative Value for that day and all subsequent days will be fixed to be equal to the Measurement Period

Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Closing Indicative Value on any calendar day will be zero.

If a Zero Value Event occurs, the Closing Indicative Value will be equal to zero on the day it occurs and on all future

calendar days. Upon the occurrence of a Zero Value Event, investors will lose their entire investment. You will not

benefit from any future exposure to the Index after the occurrence of a Zero Value Event.

 See “— Automatic

Acceleration Upon Zero Value Event”.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Current Principal Amount

” represents the unleveraged notional investment in the Index Constituent Securities per

Security at the close of trading on any Reset Valuation Date. The notional financing amount per Security in order to generate

the leveraged returns would approximately equal the Current Principal Amount at the close of trading on any Reset Valuation

Date. If a Permanent Deleveraging Event occurs, the leverage of your Securities will be permanently reset to 1.0 and the

notional financing amount will be equal to zero for the remaining term of the Securities. If a Zero Value Event occurs prior to

your Securities permanently resetting to 1.0 at the end of the Second Permanent Deleveraging Valuation Date, then your

Securities will be automatically accelerated and mandatorily redeemed and you will lose your entire investment.

The Current Principal Amount per Security, will be calculated as follows:

(a) From and including the Initial Trade Date to and excluding the first Reset Valuation Date, $25.00 per Security.

(b) At the close of trading on each Reset Valuation Date after the Initial Trade Date, the Current Principal Amount of the

Securities will be reset as follows:

New

Current Principal Amount = (Current Principal Amount on immediately preceding calendar day × Index Factor)

– Accrued Fees

The Current Principal Amount will not change until the first Reset Valuation Date.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, such day will

not be a valid Reset Valuation Date.

If the Securities undergo a split or reverse split, the Current Principal Amount will be adjusted accordingly.

At the close of trading on each Reset Valuation Date, the Current Principal Amount is reset.

The “

Reset Valuation Date

” means:

(a) Any calendar day up to and including the Second Permanent Deleveraging Valuation Date, that is either: (i) the Initial

Trade Date, (ii) a Quarterly Reset Valuation Date, (iii) a Loss Rebalancing Valuation Date (iv) the First Permanent

Deleveraging Valuation Date, or (v) the Second Permanent Deleveraging Valuation Date; and

(b) Any calendar day following the Second Permanent Deleveraging Valuation Date.

404

The valuation dates are defined below.

If a day that would otherwise be a Reset Valuation Date occurs on or after the first day of a Measurement Period, it will not be

a valid Reset Valuation Date and the Last Reset Index Closing Level will remain the same.

The “

Quarterly Reset Valuation Date

” is the second Wednesday of January, April, July and October of each calendar year

during the term of the Securities (other than an Excluded Day, as defined below), subject to adjustment as described under “—

Market Disruption Event”.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding the first day of an applicable

Measurement Period, and any calendar day thereafter, and (ii) any calendar day after the Second Permanent Deleveraging

Valuation Date.

The “

Index Factor

” is: 1 + (Leverage Factor × Index Performance Ratio).

The Index Factor represents the leveraged percentage change in the Index level since the Last Reset Index Closing Level. The

Index Factor

times

the applicable Current Principal Amount on the preceding calendar day represents the current value of the

unleveraged notional amount per Security that is deemed invested in the Index on any calendar day. This does not reflect the

Redemption Amount that an investor would receive upon early redemption on such calendar day.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, to but excluding the first day of an applicable Measurement Period.

(b) From and including the first day of an applicable four-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such four-day

Measurement Period,

divided by

(b) four.

For example, on the first Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 3/4, on the second Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 2/4, on the third Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal 1/4 and on the last Index Business Day in an applicable four-day Measurement Period, the Residual Factor will

equal zero.

(c) On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the

Residual Factor will be equal to zero.

The Residual Factor is intended to approximate the percentage of the Current Principal Amount that is tracking the Index on

any given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a

component of the Closing Indicative Value or Current Indicative Value formulas. At the close of trading on each Index

Business Day during a four-day Measurement Period, approximately 25% of the Current Principal Amount and the

corresponding amount of financing will be deemed converted to cash. In case of a one-day Measurement Period,

approximately 100% of the Current Principal Amount and the corresponding amount of financing will be deemed converted to

cash.

The “

Leverage Factor

” on any calendar day until the occurrence of a Permanent Deleveraging Event and the close of trading

on the Second Permanent Deleveraging Valuation Date, will equal 2.0. If a Permanent Deleveraging Event occurs, then on any

calendar day following the Second Permanent Deleveraging Valuation Date, the Leverage Factor will equal 1.0.

The “

Index Performance Ratio

” on any Index Business Day will be equal to:

Index Closing Level – Last Reset Index Closing Level

Last Reset Index Closing Level

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the Index Business Day immediately preceding such calendar day.

The “

Last Reset Index Closing Level

” is the Index Closing Level on the most recent Reset Valuation Date prior to such day.

The initial Last Reset Index Closing Level is the Index Closing Level on the Initial Trade Date, as reported by Bloomberg and

Reuters.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. The initial Index Closing Level (which is also the first Last Reset Index

Closing Level) was determined on February 4, 2021 by the Security Calculation Agent. If the closing level of an Index, as

reported on Bloomberg and Reuters for any Index Business Day, is manifestly incorrect, the “

Index Closing Level

” for such

Index Business Day shall be the closing level of the Index as determined by the Security Calculation Agent. In making such

determination, the Security Calculation Agent may consider any relevant information, including, without limitation, relevant

market data in the relevant market supplied by one or more third parties or from internal sources or affiliates.

On any calendar day that is not an Index Business Day, the Index Closing level will be equal to the Index Closing Level on the

Index Business Day immediately preceding such calendar day.

405

“

Measurement Period

” means the Final Measurement Period or, if UBS exercises its Call Right, the Call Measurement

Period.

The “

Current Indicative Value

” or “

intraday indicative value”

, as determined by the Security Calculation Agent, is an

amount per Security, on an intraday basis on any Index Business Day, equal to:

(a) On the Initial Trade Date, $25.00.

(b) On any other calendar day prior to the first day of a Measurement Period:

(Current Principal Amount on the immediately preceding calendar day × Index Factor, calculated using the Intraday

Index Value) – Accrued Fees

(c) From and including the first day of a Measurement Period, an amount per Security equal to:

(Current Principal Amount on the calendar day immediately preceding the first day of the Measurement Period ×

Index Factor, calculated using the Intraday Index Value × Residual Factor on the immediately preceding calendar

day) – Accrued Fees + Measurement Period Cash Amount, from the immediately preceding calendar day

However, if, on any day during a Measurement Period, the Current Indicative Value or the Closing Indicative Value

is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day, the

Current Indicative Value for the remainder of that day and all subsequent days will be fixed to be equal to the

Measurement Period Cash Amount from the immediately preceding calendar day.

(d) The minimum value of the Current Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(intraday indicative value).

If a Zero Value Event occurs, the Current Indicative Value (intraday indicative value) will be equal to zero for the

remainder of the day it occurs and on all future calendar days. Upon the occurrence of a Zero Value Event, investors

will lose their entire investment. You will not benefit from any future exposure to the Index after the occurrence of a

Zero Value Event.

See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”.

If the Securities undergo a split or reverse split, the Current Indicative Value (intraday indicative value) will be adjusted

accordingly.

The “

Accrued Fees

” as of any date of determination means the Accrued Tracking Fee + the Accrued Financing Fee.

If the Securities undergo a split or reverse split, the Accrued Fees will be adjusted accordingly. The Securities are subject to an

“

Accrued Tracking Fee

” per Security, calculated as follows:

(a) On the Initial Trade Date, the Accrued Tracking Fee is equal to zero.

(b) On any subsequent calendar day, the Accrued Tracking Fee is equal to: (a) the Accrued Tracking Fee as of the

immediately preceding calendar day,

plus

the Daily Tracking Fee on such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Tracking Fee is reset to be equal to the Daily

Tracking Fee on such calendar day.

“

CME Term SOFR

” means the CME Term SOFR Reference Rates published for one-, three-, six-, and 12-month tenors as

administered by CME Group Benchmark Administration, Ltd. (or any successor administrator thereof).

The “

Daily Tracking Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Tracking Fee is zero.

(b) On any subsequent calendar day, the Daily Tracking Fee is equal to:

(1) (i) 0.95%

times

(ii) the Current Principal Amount on the immediately preceding calendar day

times

(iii) the Index

Factor on such calendar day

times

(iv) the Residual Factor on the immediately preceding calendar day,

divided by

(2)

365.

(c) The minimum value of the Daily Tracking Fee on any calendar day will be zero.

The Daily Tracking Fee represents the investor fees calculated each day on the current value of the unleveraged notional

amount invested in the Index per Security. These charges accrue and compound during the applicable period, and will reduce

any amount you are entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly. The Securities are subject

to an “

Accrued Financing Fee

” per Security calculated as follows:

(a) On the Initial Trade Date, the Accrued Financing Fee is equal to zero.

406

(b) On any subsequent calendar day, the Accrued Financing Fee is equal to:

(1) the Accrued Financing Fee as of the immediately preceding calendar day,

plus

(2) the Daily Financing Fee on

such calendar day.

(c) On the calendar day after each Reset Valuation Date, the Accrued Financing Fee is reset to be equal to the Daily

Financing Fee on such calendar day.

(d) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Accrued Financing Fee will be equal to zero.

The “

Daily Financing Fee

” is an amount per Security calculated as follows:

(a) On the Initial Trade Date, the Daily Financing Fee is equal to zero.

(b) On any subsequent calendar day, the Daily Financing Fee is equal to:

(1) (i) the Financing Rate on such calendar day

times

(ii) the Current Principal Amount on the immediately preceding

calendar day

times

(iii) the Residual Factor on the immediately preceding calendar day,

divided by

(2) 360.

(c) If a Permanent Deleveraging Event occurs, then on any calendar day following the Second Permanent Deleveraging

Valuation Date, the Daily Financing Fee will be equal to zero.

(d) The minimum value of the Daily Financing Fee on any calendar day will be zero.

The Daily Financing Fee seeks to compensate UBS for providing investors with a leveraged participation in movements of the

Index and is intended to approximate the financing costs that investors may have otherwise incurred had they sought to borrow

funds at a similar rate from a third party to invest in the Index. These charges accrue and compound during the applicable

period, and will reduce any amount that you will be entitled to receive at maturity or upon early redemption or call.

If the Securities undergo a split or reverse split, the Daily Financing Fee will be adjusted accordingly.

The “

Financing Rate

” will equal the sum of (a) 0.95% and (b) three-month CME Term SOFR rate plus a 0.2616% adjustment

on the immediately preceding U.S. Government Securities Business Day. The minimum Financing Rate at any time will be

0.95%

For example, 5.24665% was the three-month CME Term SOFR rate on June 29, 2023. The Financing Rate (if it were based on

the SOFR-Based Benchmark Replacement) on June 30, 2023 would have therefore been equal to: 0.95% + 5.24665% +

0.2616%, or 6.45825%.

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00 on any calendar day, to but excluding the first day of a Measurement Period.

(b) On the first day of a one-day Measurement Period:

At the close of trading on such Index Business Day, (Current Principal Amount on the immediately preceding

calendar day × Index Factor, on such Index Business Day).

(c) From and including the first day of a four-day Measurement Period:

(i) At the close of trading on each Index Business Day during the Measurement Period, the

Measurement Period Cash Amount on the immediately preceding calendar day + (Current Principal

Amount on the calendar day immediately preceding the first day of such Measurement Period ×

0.25 × Index Factor, on such Index Business Day); and

(ii) On any calendar day during the Measurement Period that is not an Index Business Day, the

Measurement Period Cash Amount on the immediately preceding Index Business Day.

(d) On any calendar day after the last Index Business Day of a Measurement Period, the Measurement Period Cash

Amount on the last Index Business Day of such Measurement Period.

Notwithstanding the foregoing, if, on any day during a Measurement Period, the Current Indicative Value or the Closing

Indicative Value is

less than or equal to

the Measurement Period Cash Amount from the immediately preceding calendar day,

then the Measurement Period Cash Amount for that day and all subsequent days will be fixed to be equal to the Measurement

Period Cash amount from the immediately preceding calendar day.

The Measurement Period Cash Amount represents the portion of the Current Principal Amount that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

407

At the close of trading of each Index Business Day during a four-day Measurement Period, approximately 25% of the Current

Principal Amount on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash and an applicable portion of the notional financing amount will separately be deemed converted to cash as

well. After the close of trading on the final Index Business Day of a four-day Measurement Period, the Measurement Period

Cash Amount will represent the averaged value of the Current Principal Amount that was deemed converted to cash across the

four-days of such Measurement Period. In case of a one-day Measurement Period, approximately 100% of the Current

Principal Amount will be deemed converted to cash and an applicable amount of financing will separately be deemed

converted to cash, at the close of trading of the first day of such Measurement Period.

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

(a) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is less than $500,000,000, the Calculation Date, subject to adjustments as described

under “— Market Disruption Event”;

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the Calculation Date is equal to or greater than $500,000,000, the four Index Business Days from and

including the Calculation Date, subject to adjustments as described under “— Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of the

close of trading on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which for each series of

Securities is the entity set forth below:

Title of Securities

Index Calculation Agent

ETRACS 2x Leveraged US Dividend Factor TR ETN

S&P Dow Jones Indices

ETRACS 2x Leveraged US Growth Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Size Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged US Value Factor TR ETN

FTSE Russell

ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Momentum Factor TR ETN

MSCI, Inc.

ETRACS 2x Leveraged MSCI US Quality Factor TR ETN

MSCI, Inc.

The “

Calculation Date

” means February 1, 2051, unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustment.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

“

U.S. Government Securities Business Day

” means any day except for a Saturday, a Sunday or a day on which the Securities

Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the

entire day for purposes of trading in U.S. government securities.

Underlying Index

The return of each series of Securities is based upon the performance of the applicable Index set forth on the cover page of the

prospectus supplement. Each Index is designed to track the performance of a sector of the U.S. equity market and to reflect an

investing style. We refer to the securities included in each Index as the “Index Constituent Securities” for such Index.

408

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “— Market Disruption Event”, you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon and a confirmation of redemption by no later than 5:00 p.m. on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The first Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valuation Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable. If a

Zero Value Event occurs, the last Redemption Date will be the date on which the Zero Value Event occurred.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “— Market

Disruption Event”.

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of the Redemption Valuation Date).

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“— Redemption Procedures”, for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date – Redemption Fee Amount

.

We refer to this cash payment as the “

Redemption Amount

.” If the amount calculated above is equal to or less than zero, the

payment upon early redemption will be zero. We reserve the right from time to time to waive the Redemption Fee Amount in

our sole discretion and on a case-by-case basis. There can be no assurance that we will elect to waive this fee and you should

not assume you will be entitled to such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount =

Closing Indicative Value – Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Accrued Fees and the Redemption Fee Amount will reduce your final payment. If the compounded leveraged

quarterly return of the Index (or the unleveraged return of the Index, following a Permanent Deleveraging Event) is

insufficient to offset the negative effect of the Accrued Fees and the Redemption Fee Amount, if applicable, or if the

compounded leveraged quarterly return of the Index (or the unleveraged return of the Index, following a Permanent

Deleveraging Event) is negative, you may lose all or a substantial portion of your investment upon early redemption.

Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

The Securities may be called by UBS prior to the Maturity Date pursuant to its Call Right and, upon the occurrence of

a Zero Value Event, the Securities will be automatically accelerated and mandatorily redeemed by UBS.

 See “Specific

Terms of the Securities — UBS’s Call Right” and “Specific Terms of the Securities — Automatic Acceleration Upon Zero

Value Event”.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

Ø

deliver a notice of redemption, which we refer to as a “

Redemption Notice

” to UBS via email no later than 12:00 noon

on the Index Business Day on which you elect to exercise your redemption right. If we receive your Redemption Notice

by the time specified in the preceding sentence, we will respond by sending you a form of confirmation of redemption;

409

Ø

deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

”, to us via email

in the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your

Redemption Confirmation to be effective;

Ø

instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

Ø

cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the

applicable Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to waive the minimum redemption amount or the Redemption Fee Amount in our sole

discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole discretion on a

case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice rather than the

following Index Business Day. You should not assume you will be entitled to any such waiver or election to accelerate the

Redemption Valuation Date.

UBS’s Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities of any series. To exercise its

Call Right, UBS must provide notice to the holders of such Securities (which may be provided via press release) not less than

18 calendar days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a

cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer

to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its Call Right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “— Market Disruption Event”.

The “

Call Measurement Period

” means:

(a) if the Market Value of Securities outstanding at the close of trading on the Index Business Day immediately preceding

the date we issue a notice of exercise of our Call Right is less than $500,000,000, the Call Valuation Date, subject to

adjustments as described under “— Market Disruption Event”; and

(b) if the Market Value of Securities outstanding as at the close of trading on the Index Business Day immediately

preceding the date we issue a notice of exercise of our Call Right is equal to or greater than $500,000,000, the four

Index Business Days from and including the Call Valuation Date, subject to adjustment as described under “—

Market Disruption Event.”

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities outstanding as of

the close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its notice to

holders (which may be provided via press release) of its exercise of its Call Right will equal:

(i) The Closing Indicative Value as of such Index Business Day

times

(ii) the number of Securities outstanding as

reported on Bloomberg.

The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our Call Right.

In any notice to holders exercising our Call Right, we will specify how many days are included in the Call Measurement

Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

410

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment if we exercise our Call Right. The combined negative effect

of the Accrued Fees will reduce your final payment. If the compounded leveraged quarterly return of the Index (or the

unleveraged return of the Index, following a Permanent Deleveraging Event) is insufficient to offset the negative effect

of the Accrued Fees, or if the compounded leveraged quarterly return of the Index (or the unleveraged return of the

Index, following a Permanent Deleveraging Event) is negative, you may lose all or a substantial portion of your

investment upon a call. Loss Rebalancing Events will cause compounding to occur more frequently than quarterly.

In addition, upon the occurrence of a Zero Value Event, the Securities will be automatically accelerated and

mandatorily redeemed by UBS.

 See “Specific Terms of the Securities — Automatic Acceleration Upon Zero Value Event”

below.

Automatic Acceleration Upon Zero Value Event

For each series of Securities, a Zero Value Event represents the first instance when the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value is less than or equal to zero (other than on an Excluded Day, as defined

below). It will have the effect of permanently resetting the value of your Securities to zero and accelerating the Securities. You

will not benefit from any future exposure to the applicable Index after the occurrence of a Zero Value Event.

A Zero Value Event can occur only if a Permanent Deleveraging Event occurs and the Current Indicative Value (intraday

indicative value) or the Closing Indicative Value declines to zero before the leverage of your Securities is reset to 1.0 at the

close of trading on the Index Business Day following such event (or if such event occurs after 3:15 p.m. on any Index Business

Day which would not otherwise have been a Loss Rebalancing Valuation Date, the second Index Business Day following such

event), as described under “Permanent Deleveraging Valuation Dates” above.

A “

Zero Value Event

” occurs if the Current Indicative Value (intraday indicative value) or the Closing Indicative Value on

any Index Business Day (other than an Excluded Day, as defined below) is less than or equal to zero. From immediately after

the Zero Value Event and on all future calendar days, the Current Indicative Value (intraday indicative value) and the Closing

Indicative Value will be set equal to zero.

As used above, an “

Excluded Day

” means (i) any calendar day after the Second Permanent Deleveraging Valuation Date (ii)

any calendar day on or after which a Zero Value Event has already occurred, and (iii) any calendar day after the last day of an

applicable Measurement Period.

In the event that a Zero Value Event has occurred, UBS will issue a press release shortly after the event; provided that the

failure to do so shall not affect the automatic acceleration and redemption of the Securities. The Securities will be suspended

from trading intraday shortly after the event occurs and will likely not be open for trading again on NYSE Arca.

You will lose your entire investment upon the occurrence of a Zero Value Event.

In addition, we may call the Securities prior to the Maturity Date pursuant to our Call Right.

 See “Specific Terms of the

Securities — UBS’s Call Right”.

Loss Rebalancing Events

A Loss Rebalancing Event will have the effect of deleveraging your Securities with the aim of resetting the then-current

leverage to approximately 2.0. This means that after a Loss Rebalancing Event, a constant percentage increase in the Index

Closing Level will have less of a positive effect on the value of your Securities relative to before the occurrence of the Loss

Rebalancing Event.

A “

Loss Rebalancing Event

” occurs if, at any time, the Intraday Index Value on such Index Business Day (other than an

Excluded Day, as used below) decreases by 20% or more from the previous Last Reset Index Closing Level.

Loss Rebalancing Events may occur multiple times over the term of the Securities and may occur multiple times during a

single calendar quarter. This means both that (i) the Current Principal Amount may be reset more frequently than quarterly and

(ii) the cumulative effect of compounding and fees will have increased as a result of the Loss Rebalancing Event(s). Because

each Loss Rebalancing Event will have the effect of deleveraging your Securities, following a Loss Rebalancing Event your

Securities will have less exposure to a potential positive gain in value relative to the exposure before the occurrence of such

Loss Rebalancing Event.

As used above, an “

Excluded Day

” means (i) the Index Business Day immediately preceding any Quarterly Reset Valuation

Date, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day, (ii) any Quarterly Reset Valuation Date, (iii) any Loss

Rebalancing Valuation Date, (iv) the Index Business Day immediately preceding the first day of an applicable Measurement

Period, if a Loss Rebalancing Event occurs after 3:15 p.m. on such day (v) any calendar day from and including the first day of

an applicable Measurement Period, (vi) the First or Second Permanent Deleveraging Valuation Dates, (vii) any calendar day

after the Second Permanent Deleveraging Valuation Date, and (ix) any calendar day on or after which a Zero Value Event has

occurred.

“

Loss Rebalancing Valuation Date

” means:

411

(a) if a Loss Rebalancing Event occurs at or prior to 3:15 p.m. on an Index Business Day, the day that such Loss

Rebalancing Event occurs, subject to adjustment as described under “— Market Disruption Event”; and

(b) if a Loss Rebalancing Event occurs after 3:15 p.m. on an Index Business Day, the first Index Business Day following

the occurrence of such Loss Rebalancing Event, subject to adjustment as described under “— Market Disruption

Event.”

Permanent Deleveraging Event

A Permanent Deleveraging Event will have the effect of deleveraging your Securities, with the aim of permanently resetting

the then-current leverage to 1.0 over two Index Business Days. The leverage at the end of the First Permanent Deleveraging

Valuation Date is reset to approximately 2.0 and the leverage at the end of the Second Permanent Deleveraging Valuation Date

is reset to 1.0. This means that after a Permanent Deleveraging Event, a constant percentage increase in the Index Closing

Level will have less of a positive effect on the value of your Securities than it would have had before the occurrence of the

Permanent Deleveraging Event. If such an event were to occur, it most likely would occur only following a Loss Rebalancing

Event and prior to the completion of the associated leverage reset to 2.0, which would generally occur at the end of the Index

Business Day following the Index Business Day on which the Loss Rebalancing Event occurred or, if the Loss Rebalancing

Event occurs 3:15 p.m. on an Index Business Day, at the end of the second Index Business Day following the Index Business

Day on which the Loss Rebalancing Event occurred.

A “

Permanent Deleveraging Event

” occurs if, at any time on an Index Business Day (other than an Excluded Day, as defined

below), the Intraday Index Value decreases by 40% or more from the Last Reset Index Closing Level. If a Permanent

Deleveraging Event occurs, the Current Principal Amount of the Securities will be reset over two Index Business Days.

As used above, an “

Excluded Day

” means (i) the First or Second Permanent Deleveraging Valuation Dates, (ii) any calendar

day after the Second Permanent Deleveraging Valuation Date, (iii) any day on or after which a Zero Value Event occurs, (iv)

the day which is two Index Business Days prior to the first day of a Measurement Period, if a Permanent Deleveraging Event

occurs after 3:15 p.m. on such day, and (v) any calendar day from and including the Index Business Day immediately

preceding the first day of a Measurement Period.

“

Permanent Deleveraging Valuation Dates

” means the First Permanent Deleveraging Valuation Date and the Second

Permanent Deleveraging Valuation Date, each as defined below:

(a) The “

First Permanent Deleveraging Valuation Date

” means:

(i) any Index Business Day, which otherwise would have been a Loss Rebalancing Valuation Date, but

on which a Permanent Deleveraging Event has occurred, subject to adjustment as described under

“— Market Disruption Event”; or

(ii) if a Permanent Deleveraging Event occurs after 3:15 p.m. on any Index Business Day which would

not otherwise have been a Loss Rebalancing Valuation Date, then the first Index Business Day

following the occurrence of such Permanent Deleveraging Event, subject to adjustment as described

under “— Market Disruption Event.”

The leverage of your Securities will be reset to approximately 2.0 at the close of trading on the First Permanent

Deleveraging Valuation Date.

(b) The “

Second Permanent Deleveraging Valuation Date

” means the Index Business Day immediately following the

First Permanent Deleveraging Valuation Date, subject to adjustment as described under “— Market Disruption

Event.”

The leverage of your Securities will be reset to 1.0 at the close of trading on the Second Permanent Deleveraging Valuation

Date.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, initiate a split or reverse split of your Securities. If we decide to initiate a split or

reverse split, as applicable, we will issue a press release announcing the split or reverse split and its effective date. The date of

such press release shall be deemed to be the “

announcement date

” of the split or the reverse split, the record date for any split

or reverse split will be the tenth Business Day after the announcement date, and the effective date will be the next Business

Day after the record date.

If the Securities undergo a split or reverse split, we will adjust the Current Principal Amount, Closing Indicative Value,

Current Indicative Value, Accrued Fees, Measurement Period Cash Amount and other relevant terms of the Securities

accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via The Depository Trust

Company (“

DTC

”) on the relevant record date will, after the split, hold four Securities, and adjustments will be made as

described below. The Current Principal Amount on such record date will be

divided by

four to reflect the 4:1 split. The

adjusted Current Principal Amount will be rounded to eight decimal places. The split or reverse split will become effective at

the opening of trading of the Securities on the Index Business Day immediately following the record date. The split will not

occur if we exercise our Call Right before it becomes effective.

412

In the case of a reverse split, the Current Principal Amount and other relevant terms of the Securities will be adjusted

accordingly and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Current Principal

Amount of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Current

Principal Amount will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our Call Right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Current Principal Amount of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, the Current Principal

Amount, Current Indicative Value (which we also refer to as the intraday indicative value), Closing Indicative Value, Market

Disruption Events, Business Days, Index Business Days, the Leverage Factor, the Index Factor, the Index Performance Ratio,

the Residual Factor, the Index Closing Level, the Financing Rate, the Accrued Fees (including determining any successor to

the LIBOR base rate), the Redemption Fee Amount, the Cash Settlement Amount, if any, that we will pay you at maturity, the

Redemption Amount, if any, that we will pay you upon redemption, the Call Settlement Amount, that we will pay you if we

call the Securities, whether a Loss Rebalancing Event has occurred, whether a Permanent Deleveraging Event has occurred and

whether any day is an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. If any Intraday Index Value as published by Bloomberg on any Index Business

Day is manifestly incorrect, the Security Calculation Agent may base its determination of whether a Loss Rebalancing Event,

Permanent Deleveraging Event or Zero Value Event shall have occurred on such Index Business Day on its own determination

of such Intraday Index Value. In making such determination, the Security Calculation Agent may consider any relevant

information, including, without limitation, relevant market data in the relevant market supplied by one or more third parties or

from internal sources or affiliates. The Security Calculation Agent will also be responsible for determining whether the Index

has been discontinued and whether there has been a material change in the Index. The Security Calculation Agent will make all

such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Security

Calculation Agent will be conclusive for all purposes and binding on us, you, and all other persons having an interest in the

Securities, without liability on the part of the Security Calculation Agent. You will not be entitled to any compensation from us

for any loss suffered as a result of any determinations or calculations made by the Security Calculation Agent. We may appoint

a different Security Calculation Agent from time to time after the date of the prospectus supplement without your consent and

without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date or any Call Settlement Date.

All dollar amounts related to determination of the Accrued Fees, the Current Principal Amount, and any Redemption Amount,

Redemption Fee Amount, Call Settlement Amount or Cash Settlement Amount per Security will be rounded to the nearest ten-

thousandth, with five one hundred-thousandths rounded upward (

e.g.

, .76545 would be rounded up to .7655); and all dollar

amounts paid to any holder of Securities will be rounded to the nearest cent, with one -half cent rounded upward.

Market Disruption Event

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a four-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the four-day Measurement Period for purposes of calculating the Call Settlement Amount, is

scheduled for June 2, June 3, June 4 and June 5, and there is a Market Disruption Event with respect to the Index on June 2, but

no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index Business Day

of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day and the next Index

Business Day after June 5th would be the final day of the Measurement Period. The same approach would be applied if there is

a Market Disruption Event during a four-day Final Measurement Period.

413

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the

event that the Final Measurement Period is the Calculation Date) or any Reset Valuation Date, the Index Closing Level for

such Redemption Valuation Date, Call Valuation Date, Calculation Date or Reset Valuation Date will be determined by the

Security Calculation Agent or one of its affiliates on the first succeeding Index Business Day on which a Market Disruption

Event does not occur or is not continuing with respect to the Index. For example, if the Redemption Valuation Date, for

purposes of calculating a Redemption Amount, is based on the Index Closing Level on June 2 and there is a Market Disruption

Event with respect to the Index on June 2, then the Index Closing Level on June 3 will be used to calculate the Redemption

Amount, assuming that no such Market Disruption Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date), Calculation Date (in the event that the Final Measurement Period

is the Calculation Date) or Reset Valuation Date occurring more than five Index Business Days following the day originally

scheduled to be such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation

Date, Calculation Date or Reset Valuation Date. If a Market Disruption Event has occurred or is continuing with respect to the

Index on the fifth Index Business Day following the date originally scheduled to be such Index Business Day of the

Measurement Period or any Redemption Valuation Date, Call Valuation Date, Calculation Date or any Reset Valuation Date,

the Security Calculation Agent or one of its affiliates will determine the Index Closing Level based on its good faith estimate

of the Index Closing Level that would have prevailed on such fifth Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging.”

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; and

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “absence of trading” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “— Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in “Medium-Term Notes, Series B” above under “Description

of Debt Securities We May Offer — Default, Remedies and Waiver of Default” and “Description of Debt Securities We May

Offer — Modification and Waiver of Covenants.”

414

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

Ø

the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking,

plus

Ø

the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest — or, if there is only one, the only — quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

The default quotation period is the period beginning on the day the default amount first becomes due and ending on the third

Index Business Day after that day, unless:

Ø

no quotation of the kind referred to above is obtained, or

Ø

every quotation of that kind obtained is objected to within five Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five Index Business Days after that first Index Business Day, however, the default quotation period will

continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

Ø

A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency, or

Ø

P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating

agency.

Discontinuance of or Adjustments to the Index or Termination of Our License Agreements with the Index Sponsors;

Alteration of Method of Calculation

If (i) an Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) our license agreement with the Index Sponsor terminates or (iii) the Index Sponsor

or Index Calculation Agent does not make the Index Constituent Securities and/or their unit weighting available to the Security

Calculation Agent, and, in each case, any other person or entity publishes an index licensed to UBS that the Security

Calculation Agent determines is comparable to the Index and for which the Index Constituent Securities and/or their unit

weighting are available to the Security Calculation Agent (such index being referred to herein as a “

successor index

”), and the

Security Calculation Agent approves such index as a successor index, then on and after the date determined by the Security

Calculation Agent, the Security Calculation Agent will determine the Index Closing Level on the applicable dates of

determination and the amount payable at maturity or upon early redemption or call and all other related payments terms by

reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

be furnished to the trustee, to us and to the holders of the Securities.

If an Index Sponsor or Index Calculation Agent discontinues publication of the Index, our license agreement with the Index

Sponsor terminates or the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities and/or their

unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or unavailability is

continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the Redemption Valuation

Date or

415

on any Reset Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be determined

and the Security Calculation Agent determines that no successor index is available at such time, or the Security Calculation

Agent has previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date or on any Reset Valuation Date, or any other relevant date on which the Index Closing Level is to

be determined, then the Security Calculation Agent will determine the Index Closing Level using the Index Closing Level on

the last Index Business Day immediately prior to such discontinuation or unavailability, as adjusted for certain corporate

actions. In such event, the Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the

holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in the prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, Current Principal Amount, Current Indicative Value

(intraday indicative value), Closing Indicative Value, Index Factor, Index Performance Ratio, Residual Factor, Accrued Fees,

Index Closing Levels on the applicable dates of determination, all other related payment terms and the amount payable at

maturity or upon early redemption or call by reference to such Substitute Index. If the Security Calculation Agent so elects to

replace the original Index with a Substitute Index, the Security Calculation Agent will cause written notice thereof to be

furnished to the trustee, to us and to the holders of the Securities of the Securities.

An

“Index Replacement Event”

 means:

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined

herein) is located that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index

Constituent Securities included in the Index or options, futures, swaps or other derivatives on the Index or on the

Index Constituent Securities included in the Index (including but not limited to exchange-imposed position limits), (ii)

materially increases the cost to us, our affiliates, third parties with whom we transact or similarly situated third parties

in performing our or their obligations in connection with the Securities, (iii) has a material adverse effect on any of

these parties’ ability to perform their obligations in connection with the Securities, or (iv) materially affects our ability

to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security Calculation

Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after February 4, 2021

that (i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities

included in the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent

Securities (including but not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our

affiliates, third parties with whom we transact or similarly situated third parties in performing our or their obligations

in connection with the Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with

whom we transact or a similarly situated third party to perform our or their obligations in connection with the

Securities, or (iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities,

each as determined by the Security Calculation Agent;

(c) any event that occurs on or after February 4, 2021 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), or any jurisdiction in which a Primary Exchange (as defined herein) is

located, or of any official administrative decision, judicial decision, administrative action, regulatory interpretation or

other official pronouncement interpreting or applying those laws, regulations or rules, (i) for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities or options, futures, swaps or other derivatives on the

Index or on the Index Constituent Securities (including but not limited to exchange-imposed position limits), (ii) for

us, our affiliates, third parties with whom we transact or similarly situated third parties to perform our or their

obligations in connection with the Securities, or (iii) for us to issue or transact in exchange traded notes similar to the

Securities, each as determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the

Securities, or realize, recover or remit the proceeds of any such transaction or asset; or

416

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to

be listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not immediately

re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such exchange or

market, as applicable.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor or Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Index Performance Ratio, the Last Reset Index Closing Level, the Accrued Fees, and any Redemption Amount,

Redemption Fee Amount, Cash Settlement Amount or Call Settlement Amount, and all related payment terms based directly or

indirectly on the Index Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating

the Index or a successor or Substitute Index is modified so that the level of the Index or such successor or Substitute Index is a

fraction or multiple of what it would have been if there had been no such modification (

e.g.

, due to a rebasing of the Index ),

which, in turn, causes the Index Closing Level of the Index or such successor or Substitute Index to be a fraction of what it

would have been if there had been no such modification, then the Security Calculation Agent will make such calculations and

adjustments in order to arrive at an Index Closing Level for the Index or such successor or Substitute Index as if it had not been

modified (

e.g.

, as if such rebasing had not occurred).

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove reference the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors — Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS — There are potential conflicts of interest between you and the Security Calculation Agent” in the

prospectus supplement for a discussion of certain conflicts of interest which may arise with respect to the Security Calculation

Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or upon early redemption or call will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue any series of Securities. We issued the Securities initially in an amount

having the aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional

Securities in amounts that exceed the amount on the cover at any time, without your consent and without notifying you. The

Securities do not limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or

similar restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We

May Offer — Amounts That We May Issue” in “Medium-Term Notes, Series B” above.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities of the same

series and will have the same CUSIP number and will trade interchangeably with such Securities immediately upon settlement.

Any additional issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The

price of any additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.

417

418

26. ETRACS Whitney US Critical Technologies ETN due March 13, 2053

Specific Terms of the Securities

In this section, references to “holders” mean those who own the Securities registered in their own names, on the books that we

or the trustee maintains for this purpose, and not those who own beneficial interests in the Securities registered in street name

or in the Securities issued in book-entry form through The Depository Trust Company (“

DTC

”) or another depositary. Owners

of beneficial interests in the Securities should read the section entitled “Legal Ownership and Book-Entry Issuance” under

“Medium-Term Notes, Series B” above.

These Securities are part of a series of debt securities entitled “Medium-Term Notes, Series B” that we may issue, from time to

time, under the indenture more particularly described under “Medium -Term Notes, Series B” above. This section summarizes

general financial and other terms that apply to the Securities. Terms that apply generally to all Medium-Term Notes, Series B

are described in “Description of Debt Securities We May Offer” under “Medium-Term Notes, Series B” above. The terms

described here supplement those described in “Medium-Term Notes, Series B” above and, if the terms described here are

inconsistent with those described there, the terms described here are controlling.

The Securities are part of a single series of senior debt securities issued under our indenture, dated as of June 12, 2015 between

us and U.S. Bank Trust National Association, as trustee.

We describe the terms of the Securities in more detail below.

The Stated Principal Amount of each Security is $25.00.

The Securities do not guarantee any return of principal at, or prior to, maturity or call, or upon early redemption. Instead, at

maturity, you will receive a cash payment the amount of which will vary depending on the performance and path of the Index

calculated in accordance with the formula set forth below and will be reduced by the Daily Tracking Fee as of the last Index

Business Day in the applicable Measurement Period or Redemption Valuation Date.

If you exercise your right to have us redeem your Securities, subject to compliance with the redemption procedures, for each

Security you will receive a cash payment on the Redemption Date equal to the Redemption Amount as described below under

“—Early Redemption at the Option of the Holders.” If the amount so calculated is equal to or less than zero, the Redemption

Amount will be zero and you will not receive a cash payment.

If we elect to exercise our call right to redeem all of the Securities, subject to compliance with the procedures set forth below,

for each Security you will receive a cash payment on the Call Settlement Date equal to the Call Settlement Amount, as

described below under “—UBS Call Right.” If the amount so calculated is equal to or less than zero, the Call Settlement

Amount will be zero and you will not receive a cash payment.

The Securities will not pay any cash coupon during their term.

Cash Settlement Amount at Maturity

The “

Maturity Date

” is March 13, 2053, which will be the third Index Business Day following the last Index Business Day in

the Final Measurement Period, subject to adjustment as described below under “— Market Disruption Event.”

For each Security, unless earlier called or redeemed, you will receive at maturity a cash payment equal to the Closing

Indicative Value on the last day of the Final Measurement Period. We refer to this payment as the “

Cash Settlement

Amount

”. If the amount so calculated is equal to or less than zero, the payment at maturity will be zero.

The following graphic illustrates the formula to determine the Cash Settlement Amount, which has been simplified for ease of

presentation:

Cash Settlement Amount

=

Closing Indicative Value, on last Index

Business Day in Final Measurement Period

You may lose all or a substantial portion of your investment at maturity. The Securities are fully exposed to any decline

in the level of the Index. The negative effect of the Daily Tracking Fee will reduce your final payment. If the level of the

Index (as measured by the Index Closing Level at the end of the Final Measurement Period, as compared to the initial

Index Closing Level or the Index level at the time you purchase the Securities, as applicable) does not increase by an

amount sufficient to offset the negative effect of the Daily Tracking Fee, or if the final Index level is less than the initial

Index Closing Level (or the Index level at the time you purchase the Securities, as applicable), you may lose all or a

substantial portion of your investment at maturity. The Daily Tracking Fee also takes into account the performance of

the Index, as measured by the Closing Indicative Value.

The Securities may be called by UBS prior to the Maturity Date pursuant to UBS’s Call Right. If the Securities are

called by UBS, the Call Settlement Amount may be zero and you may lose all or a substantial portion of your

investment.

See “—UBS’s Call Right”.

419

The “

Stated Principal Amount

” of each Security is $25.00. The Securities may be issued and sold over time at then-current

market prices which may be significantly higher or lower than the Stated Principal Amount. If the Securities undergo a split or

reverse split, the Stated Principal Amount will be adjusted accordingly.

The “

Closing Indicative Value

” represents the dollar value per Security that an investor would receive on any day if it

redeemed the Security on such day (excluding any Redemption Fee Amount). The Closing Indicative Value per Security will

be calculated as follows:

(a) On the Initial Trade Date, $25.00 per Security

(b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period, an amount

per Security equal to:

(Closing Indicative Value on the previous calendar day * Index Factor)—Daily Tracking Fee

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(Closing Indicative Value on the calendar day immediately preceding the first day of the Measurement Period × Index

Factor × Residual Factor) + Measurement Period Cash Amount

The minimum value of the Closing Indicative Value on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Closing Indicative Value .

If the Securities undergo a split or reverse split, the Closing Indicative Value will be adjusted accordingly.

The “

Index Factor

” on any Index Business Day prior to but excluding the first day of an applicable Measurement Period, will

equal:

(i) the Index Closing Level, on such Index Business Day,

divided by,

(ii) the Index Closing Level, on the immediately

preceding Index Business Day.

From and including the first day of an applicable Measurement Period, the Index Factor will equal:

(i) the Index Closing Level, on such calendar day,

divided by,

(ii) the Index Closing Level on the calendar day

immediately preceding the first day of such Measurement Period.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level on

the immediately preceding Index Business Day. The Index Factor will therefore equal one (1) on any calendar day that is not

an Index Business Day and is prior to the first Index Business Day of a five-day Measurement Period.

The “

Residual Factor

” will be calculated as follows:

(a) 1.0 on any calendar day, prior to but excluding the first day of an applicable Measurement Period

(b) From and including the first day of an applicable five-day Measurement Period, (a) the number of Index Business

Days from, but excluding, the date of determination to, and including, the last Index Business Day in such five-day

Measurement Period,

divided by

(b) five.

The Residual Factor is intended to approximate the percentage of the Closing Indicative Value that is tracking the Index on any

given day. The Residual Factor is relevant only during an applicable Measurement Period but otherwise is not a component of

the Closing Indicative Value or Current Indicative Value formulas.

For example, on the first Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal

(4/5), on the second Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (3/5),

on the third Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (2/5), on the

fourth Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal (1/5) and on the last

Index Business Day in an applicable five-day Measurement Period, the Residual Factor will equal zero.

On any calendar day from and including the last Index Business Day of an applicable Measurement Period, the Residual Factor

will be equal to zero.

The “

Index Closing Level

” on any date of determination is the closing level of the Index, as reported on Bloomberg and

Reuters on such day; however, if the closing level of the Index as reported on Bloomberg (or any successor) differs from the

closing level of the Index as reported on Reuters (or any successor), the Index Closing Level will be the closing level of the

Index as calculated by the Index Calculation Agent. If the closing level of the Index, as reported on Bloomberg and Reuters for

any Index Business Day, is manifestly incorrect, the “Index Closing Level” for such Index Business Day shall be the closing

level of the Index as determined by the Security Calculation Agent. In making such determination, the Security Calculation

Agent may consider any relevant information, including, without limitation, relevant market data in the relevant market

supplied by one or more third parties or from internal sources or affiliates. 3,239.36 is the initial Index Closing Level measured

on March 24, 2023 (the Initial Trade Date), as determined by the Security Calculation Agent.

On any calendar day that is not an Index Business Day, the Index Closing Level will be equal to the Index Closing Level from

the last Index Business Day prior to such calendar day. 

420

“

Measurement Period

” means the Final Measurement Period or Call Measurement Period, as applicable.

The

“Current Indicative Value”

or “

intraday indicative value

”, as determined by the Security Calculation Agent, means the

Closing Indicative Value per Security calculated on an intraday basis on any Index Business Day.

For the purposes of calculating the Current Indicative Value, the Index Factor will be determined using the Intraday Index

Value. Additionally, from and including the first day of an applicable Measurement Period, the Current Indicative Value will

be calculated using (i) the Measurement Period Cash Amount from the immediately preceding calendar day, and (ii) the

Residual Factor from the immediately preceding calendar day.

The minimum value of the Current Indicative Value (or intraday indicative value) on any calendar day will be zero.

The actual trading price of the Securities in the secondary market may vary significantly from their Current Indicative Value

(or intraday indicative value).

If the Securities undergo a split or reverse split, the Current Indicative Value (or intraday indicative value) will be adjusted

accordingly.

The “

Daily Tracking Fee

” means, as of any date of determination, an amount per Security equal to 0.55% per annum,

calculated as follows:

(a) On the Initial Trade Date, $0.00 per Security;

(b) On any subsequent calendar day, prior to but excluding the first day of an applicable Measurement Period, an amount

per Security equal to:

(0.55% / 365) × Closing Indicative Value on the immediately preceding calendar day × Index Factor

(c) From and including the first day of an applicable Measurement Period, an amount per Security equal to:

(0.55% / 365) × Closing Indicative Value on the calendar day immediately preceding the first day of the Measurement

Period × Index Factor × Residual Factor on the immediately preceding calendar day

The minimum value of the Daily Tracking Fee on any calendar day will be zero.

If the Securities undergo a split or reverse split, the Daily Tracking Fee will be adjusted accordingly. 

The “

Measurement Period Cash Amount

” is an amount per Security equal to:

(a) $0.00, on any calendar day prior to but excluding the first day of an applicable Measurement Period

(b) On the first day of an applicable one-day Measurement Period:

(i) At the close of trading on such Index Business Day, the (Closing Indicative Value, on the immediately

preceding calendar day,

times

Index Factor, on such Index Business Day),

minus

Daily Tracking Fee

(c) From and including the first day of an applicable five-day Measurement Period:

(i) At the close of trading on each Index Business Day, will equal:

(A) Measurement Period Cash Amount on the immediately preceding calendar day,

plus

(B) ( (I)

Closing Indicative Value, on the calendar day immediately preceding the first day of such

Measurement Period,

times

(II) Index Factor,

divided by

(III) five),

minus

(C) Daily Tracking Fee

(ii) On any calendar day that is not an Index Business Day, will equal the Measurement Period Cash

Amount on the immediately preceding Index Business Day,

minus

Daily Tracking Fee

(d) On any calendar day after the last Index Business Day of an applicable Measurement Period, the Measurement Period

Cash Amount on the last Index Business Day of such Measurement Period.

The minimum value of the Measurement Period Cash Amount on any calendar day will be zero.

The Measurement Period Cash Amount represents the portion of the Closing Indicative Value that has been converted to cash

on any given day of an applicable Measurement Period and is no longer tracking the Index.

At the close of trading of each Index Business day during a five-day Measurement Period, approximately 20% of the Closing

Indicative Value, on the calendar day immediately preceding the first day of the Measurement Period, will be deemed

converted to cash. After the close of trading on the final Index Business Day of an applicable five-day Measurement Period,

the Measurement Period Cash Amount will represent the averaged value of the Closing Indicative Value that was deemed

converted to cash across the five-days of such Measurement Period. In case of a one-day Measurement Period, approximately

100% of the Closing Indicative Value will be deemed converted to cash, at the close of trading of the first day of such

Measurement Period.

421

If the Securities undergo a split or reverse split, the Measurement Period Cash Amount will be adjusted accordingly.

The “

Final Measurement Period

” means:

(a) the Calculation Date, subject to adjustments as described under “—Market Disruption Event”, if the Market Value of

Securities outstanding at the close of trading on the Index Business Day immediately preceding the Calculation Date is less

than $250,000,000;

(b) the five (5) Index Business Days from and including the Calculation Date, subject to adjustments as described under “—

Market Disruption Event,” if the Market Value of Securities outstanding at the close of trading on the Index Business Day

immediately preceding the Calculation Date is equal to or greater than $250,000,000.

For the purpose of determining the Final Measurement Period, the “

Market Value

” of the Securities as of the close of trading

on the Index Business Day immediately preceding the Calculation Date, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

 (ii) the number of Securities outstanding as reported

by WUCTSO <Index> on Bloomberg (or another source in the event that Bloomberg is unavailable).

The “

Index Calculation Agent

” means the entity that calculates and publishes the level of the Index, which is currently

Solactive AG.

The “

Calculation Date

” means March 4, 2053 unless such day is not an Index Business Day, in which case the Calculation

Date will be the next Index Business Day, subject to adjustments.

The Calculation Date represents the first Index Business Day of the Final Measurement Period.

“

Index Business Day

” means any day on which the Primary Exchange or market for trading of the Securities is scheduled to

be open for trading.

“

Business Day

” means any day that is not a Saturday, a Sunday or a day on which banking institutions in The City of New

York, generally, are authorized or obligated by law, regulation or executive order to close.

“

Primary Exchange

” means, with respect to each Index Constituent Security or each constituent underlying a successor

index, the primary exchange or market of trading such Index Constituent Security or such constituent underlying a successor

index.

Early Redemption at the Option of the Holders

Subject to your compliance with the procedures described below and the potential postponements and adjustments as described

under “—Market Disruption Event,” you may submit a request to have us redeem your Securities on any Index Business Day

no later than 12:00 noon, and a confirmation of redemption by no later than 5:00 p.m., on the same Index Business Day. You

must request that we redeem a minimum of 50,000 Securities, although we reserve the right from time to time to waive this

minimum redemption amount in our sole discretion on a case-by-case basis. You should not assume you will be entitled to the

benefit of any such waiver. For any applicable redemption request, the “

Redemption Valuation Date

” will be the first Index

Business Day following the date that the applicable redemption notice and redemption confirmation are delivered, except that

we reserve the right from time to time to accelerate, in our sole discretion on a case-by-case basis, the Redemption Valuation

Date to the date on which we receive the notice of redemption rather than the following Index Business Day. You should not

assume that you will be entitled to any such acceleration. To satisfy the minimum redemption amount, your broker or other

financial intermediary may bundle your Securities for redemption with those of other investors to reach this minimum amount

of 50,000 Securities; however, there can be no assurance that they can or will do so.

The Securities will be redeemed and the holders will receive payment for their Securities on the second Index Business Day

following the applicable Redemption Valuation Date (the “

Redemption Date

”). The First Redemption Date will be the fourth

Index Business Day immediately following the Initial Trade Date and the Final Redemption Date will be the fourth Index

Business Day immediately preceding the Maturity Date, subject to adjustments. In addition, if we have issued a call notice, the

last Redemption Valua tion Date will be the fourth Index Business Day prior to the Call Settlement Date, as applicable.

If a Market Disruption Event is continuing or occurs on the applicable scheduled Redemption Valuation Date with respect to

any of the Index Constituent Securities, such Redemption Valuation Date may be postponed as described under “—Market

Disruption Event”.

If you exercise your right to have us redeem your Securities, subject to your compliance with the procedures described under

“—Redemption Procedures,” for each applicable Security you will receive a cash payment on the relevant Redemption Date

equal to:

Closing Indicative Value as of the Redemption Valuation Date - Redemption Fee Amount.

We refer to this cash payment as the “

Redemption Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon early redemption will be zero.

422

As of any Redemption Valuation Date, the “

Redemption Fee Amount

” means an amount per Security equal to:

(0.125% × Closing Indicative Value of the Security as of such Redemption Valuation Date).

We reserve the right from time to time to reduce or waive the Redemption Fee Amount in our sole discretion and on a case-by-

case basis. There can be no assurance that we will elect to waive this fee and you should not assume you will be entitled to

such fee waiver.

We will inform you of such Redemption Amount on the first Index Business Day following the applicable Redemption

Valuation Date.

The redemption feature is intended to induce arbitrageurs to counteract any trading of the Securities at a discount to their

indicative value, though there can be no assurance that arbitrageurs will employ the redemption feature in this manner or that

they will be successful in counteracting any divergence in the market price of the Securities and their indicative value.

The following graphic illustrates the formula to determine the Redemption Amount, which has been simplified for ease of

presentation:

Redemption Amount = Closing Indicative Value - Redemption Fee Amount

You may lose all or a substantial portion of your investment upon early redemption. The combined negative effect of

the Daily Tracking Fee and the Redemption Fee Amount will reduce your Redemption Amount. If the level of the Index

does not increase by an amount sufficient to offset the combined negative effect of the Daily Tracking Fee and the

Redemption Fee Amount, or if the final Index level is less than the initial Index Closing Level (or the Index level at the

time you purchase the Securities, as applicable), you may lose some or all of your investment upon early redemption.

The Securities may be called by UBS prior to the Maturity Date pursuant to the UBS Call Right. See “—UBS Call Right”.

Redemption Procedures

To redeem your Securities, you must instruct your broker or other person through whom you hold your Securities to take the

following steps through normal clearing system channels:

➢

 deliver a notice of redemption, which we refer to as a “

Redemption Notice

,” in the form attached to this prospectus

supplement as Annex A, to UBS via e-mail no later than 12:00 noon on the Index Business Day on which you elect to exercise

your redemption right. If we receive your Redemption Notice by the time specified in the preceding sentence, we will respond

by sending you a form of confirmation of redemption, which is attached to this prospectus supplement as Annex B;

➢

 deliver the signed confirmation of redemption, which we refer to as the “

Redemption Confirmation

,” to us via e-mail in

the specified form by 5:00 p.m. on the same day. We or our affiliate must acknowledge receipt in order for your Redemption

Confirmation to be effective;

➢

 instruct your DTC custodian to book a delivery vs. payment trade with respect to your Securities on the applicable

Redemption Date at a price equal to the Redemption Amount; and

➢

 cause your DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 12:00 noon on the applicable

Redemption Date.

Different brokerage firms may have different deadlines for accepting instructions from their customers. Accordingly, as a

beneficial owner of the Securities, you should consult the brokerage firm through which you own your interest for the relevant

deadline. If your broker delivers your Redemption Notice after 12:00 noon, or your Redemption Confirmation after 5:00 p.m.,

on the Index Business Day prior to the applicable Redemption Valuation Date, your Redemption Notice will not be effective,

you will not be able to redeem your Securities until the following Redemption Date and your broker will need to complete all

the required steps if you should wish to redeem your Securities on any subsequent Redemption Date. In addition, UBS may

request a medallion signature guarantee or such assurances of delivery as it may deem necessary in its sole discretion. All

instructions given to participants from beneficial owners of Securities relating to the right to redeem their Securities will be

irrevocable. If your DTC custodian or your brokerage firm is not a current UBS customer, UBS will be required to on-board

such DTC custodian or brokerage firm, in compliance with its internal policies and procedures, before it can accept your

Redemption Notice, your Redemption Confirmation or otherwise process your redemption request. This on-boarding process

may delay your Redemption Valuation Date and Redemption Date. Furthermore, in certain circumstances, UBS may be unable

to on-board your DTC custodian or your brokerage firm.

We reserve the right from time to time to reduce or waive the minimum redemption amount or the Redemption Fee Amount in

our sole discretion on a case-by-case basis. In addition, we reserve the right from time to time to accelerate, in our sole

discretion on a case-by-case basis, the Redemption Valuation Date to the date on which we receive the Redemption Notice

rather than the following Index Business Day. You should not assume you will be entitled to any such waiver or election to

accelerate the Redemption Valuation Date.

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UBS’s Call Right

UBS may at its option redeem all, but not less than all, of the issued and outstanding Securities. To exercise its call right, UBS

must provide notice to the holders of such Securities (which notice may be provided via press release), not less than 18

calendar days prior to the Call Settlement Date specified by UBS in such notice. If we call the Securities, you will receive a

cash payment equal to the Closing Indicative Value on the last Index Business Day in the Call Measurement Period. We refer

to this cash payment as the “

Call Settlement Amount

.”

If the amount calculated above is equal to or less than zero, the payment upon UBS’s exercise of its call right will be zero.

We will inform you of such Call Settlement Amount on the first Index Business Day following the last Index Business Day in

the Call Measurement Period.

The holders will receive payment for their Securities on the third Index Business Day following the last Index Business Day in

the Call Measurement Period (the “

Call Settlement Date

”). If a Market Disruption Event is continuing or occurs on the

scheduled Call Valuation Date with respect to any of the Index Constituent Securities, such Call Valuation Date may be

postponed as described under “—Market Disruption Event.”

The “

Call Measurement Period

” means:

(a) the Call Valuation Date, subject to adjustments as described under “—Market Disruption Event.” If the Market Value

of Securities outstanding at the close of trading on the Index Business Day immediately preceding the date we issue a

notice of exercise of our call right is less than $250,000,000; or

(b) the five (5) Index Business Days from and including the Call Valuation Date, subject to adjustment as described under

“—Market Disruption Event,” if the Market Value of Securities outstanding at the close of trading on the Index Business

Day immediately preceding the date we issue a notice of exercise of our call right is equal to or greater than $250,000,000.

Accordingly, unless the notional value of the Securities is equal to or greater than $250,000,000, the Call Measurement Period

will be option (a). For the purpose of determining the Call Measurement Period, the “

Market Value

” of the Securities

outstanding as of the close of trading on the Index Business Day immediately preceding the date of delivery by UBS of its

notice to holders (which may be provided via press release) of its exercise of its call right, will equal:

(i) the Closing Indicative Value as of such Index Business Day,

times

 (ii) the number of Securities outstanding as reported by

WUCTSO <Index> on Bloomberg (or another source in the event that Bloomberg is unavailable).

The “

Call Valuation Date

” means the date we specify in our notice to holders (which may be provided via press release) of

our exercise of our call right.

In any notice to holders exercising our call right, we will specify how many days are included in the Call Measurement Period.

The following graphic illustrates the formula to determine the Call Settlement Amount, which has been simplified for ease of

presentation:

Call Settlement Amount = Closing Indicative Value on Last Index 

 Business Day in Call Measurement Period

You may lose all or a substantial portion of your investment upon a call. The negative effect of the Daily Tracking Fee

will reduce your final payment. If the level of the Index does not increase by an amount sufficient to offset the negative

effect of the Daily Tracking Fee, or if the final Index level is less than the initial Index Closing Level (or the Index level

at the time you purchase the Securities, as applicable), you may lose some or all of your investment upon UBS’s exercise

of its call right.

Split or Reverse Split of the Securities

We may, at any time in our sole discretion, without your consent, initiate a split or reverse split of your Securities. If we decide

to initiate a split or reverse split, as applicable, we will issue a press release announcing the split or reverse split, and its

effective date. The date of such press release shall be deemed to be the “

announcement date

” of the split or the reverse split.

The record date for any split or reverse split will be the tenth Business Day after the announcement date, and the effective date

will be the next Business Day after the record date.

424

If the Securities undergo a split or reverse split, we will adjust the Closing Indicative Value and other relevant terms of the

Securities accordingly. For example, if the Securities undergo a 4:1 split, every investor who holds a Security via the DTC on

the relevant record date will, after the split, hold four Securities, and adjustments will be made as described below. The

Closing Indicative Value on such record date will be divided by four to reflect the 4:1 split. The adjusted Closing Indicative

Value will be rounded to eight decimal places. The split or reverse split will become effective at the opening of trading of the

Securities on the Index Business Day immediately following the record date. The split will not occur if we exercise our call

right before it becomes effective.

In the case of a reverse split, the Closing Indicative Value and other relevant terms of the Securities will be adjusted

accordingly, and we will determine in our sole discretion the manner in which we will address odd numbers of Securities

(commonly referred to as “partials”). For example, if the Securities undergo a 1:4 reverse split, every investor who holds four

Securities via DTC on the relevant record date will, after the reverse split, hold only one Security and the Closing Indicative

Value of the Securities on such record date will be multiplied by four to reflect the 1:4 reverse split. The adjusted Closing

Indicative Value will be rounded to eight decimal places. The reverse split will become effective at the opening of trading of

the Securities on the Index Business Day immediately following the record date. The reverse split will not occur if we exercise

our call right before it becomes effective.

Holders who own a number of Securities on the record date that is not evenly divisible by the reverse split divisor (which in the

case of a 1:4 reverse split, for example, will be 4) will receive the same treatment as all other holders for the maximum number

of Securities they hold that is evenly divisible by the reverse split divisor. We will determine in our sole discretion the manner

in which we compensate holders for their remaining or “partial” Securities when we announce the reverse split, though our

current intention is to provide holders with a cash payment for their partials on the 17th Business Day following the

announcement date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split-

adjusted Securities on the 15th Business Day following the announcement date. For example, in the case of a 1:4 reverse split,

a holder who held 23 Securities via DTC on the record date would receive five post-reverse split Securities on the immediately

following Business Day, and a cash payment on the 17th Business Day following the announcement date that is equal to 3/4 of

the Closing Indicative Value of the reverse split-adjusted Securities on the 15th Business Day following the announcement

date.

Security Calculation Agent

UBS Securities LLC will act as the Security Calculation Agent. The Security Calculation Agent will be solely responsible for

all determinations and calculations regarding the value of the Securities, including, among other things, at maturity or upon

early redemption or call, or at other times, Current Indicative Value (which we also refer to as the “intraday indicative value”),

Closing Indicative Value, Market Disruption Events, Business Days, Index Business Days, the Index Factor, the Residual

Factor, the Index Closing Level, the Daily Tracking Fee, the Redemption Fee Amount, the Cash Settlement Amount, if any,

that we will pay you at maturity, the Redemption Amount, if any, that we will pay you upon redemption, if applicable and the

Call Settlement Amount, if any, that we will pay you in the event that UBS calls the Securities, and whether any day is a

Business Day or an Index Business Day and all such other matters as may be specified elsewhere herein as matters to be

determined by the Security Calculation Agent. The Security Calculation Agent will also be responsible for determining

whether the Index has been discontinued and whether there has been a material change in the Index. The Security Calculation

Agent will make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of

the Security Calculation Agent will be conclusive for all purposes and binding on us, you and all other persons having an

interest in the Securities, without liability on the part of the Security Calculation Agent. You will not be entitled to any

compensation from us for any loss suffered as a result of any determinations or calculations made by the Security Calculation

Agent. We may appoint a different Security Calculation Agent from time to time after the date of this prospectus supplement

without your consent and without notifying you.

The Security Calculation Agent will provide written notice to the trustee at its New York office, on which notice the trustee

may conclusively rely, of the amount to be paid at maturity or upon early redemption or call, on or prior to 12:00 noon on the

Index Business Day immediately preceding the Maturity Date, any Redemption Date, or any Call Settlement Date.

All dollar amounts related to determination of the Daily Tracking Fee, the Redemption Amount and Redemption Fee Amount,

if any, per security, the Call Settlement Amount, if any, per security, and the Cash Settlement Amount, if any, per security, will

be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would be rounded

up to .7655); and all dollar amounts paid to any holder of Securities will be rounded to the nearest cent, with one-half cent

rounded upward.

Market Disruption Event

425

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing during a five-day

Measurement Period, the Index Closing Level for such day will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. The remaining Index Business Days in the Measurement Period will be postponed accordingly, and

the remaining Index Business Days in the Measurement Period will resume again following the suspension of the Market

Disruption Event. For example, if the five-day Measurement Period for purposes of calculating the Call Settlement Amount is

scheduled for June 2, June 3, June 4, June 5 and June 6, and there is a Market Disruption Event with respect to the Index on

June 2, but no other Market Disruption Event during such Call Measurement Period, then June 3 will become the first Index

Business Day of the Measurement Period, June 4th the second Index Business Day, June 5th the third Index Business Day,

June 6th the fourth Index Business Day and the next Index Business Day after June 6th would be the final day of the

Measurement Period. The same approach would be applied if there is a Market Disruption Event during a five-day Final

Measurement Period.

To the extent a Market Disruption Event with respect to the Index has occurred or is continuing on the Redemption Valuation

Date, Call Valuation Date (in the event that the Call Measurement Period is the Call Valuation Date) or the Calculation Date

(in the event that the Final Measurement Period is the Calculation Date), the Index Closing Level for such Redemption

Valuation Date, Call Valuation Date or Calculation Date will be determined by the Security Calculation Agent or one of its

affiliates on the first succeeding Index Business Day on which a Market Disruption Event does not occur or is not continuing

with respect to the Index. For example, if the Redemption Valuation Date, for purposes of calculating a Redemption Amount,

is based on the Index Closing Level on June 2 and there is a Market Disruption Event with respect to the Index on June 2, then

the Index Closing Level on June 3 will be used to calculate the Redemption Amount, assuming that no such Market Disruption

Event has occurred or is continuing on June 3.

In no event, however, will any postponement pursuant to either of the two immediately preceding paragraphs result in the

affected Index Business Day of the Measurement Period or any Redemption Valuation Date, Call Valuation Date (in the event

that the Call Measurement Period is the Call Valuation Date) or Calculation Date (in the event that the Final Measurement

Period is the Calculation Date) occurring more than five Index Business Days following the day originally scheduled to be

such Index Business Day of the Measurement Period or such Redemption Valuation Date, Call Valuation Date or Calculation

Date. If a Market Disruption Event has occurred or is continuing with respect to the Index on the fifth Index Business Day

following the date originally scheduled to be such Index Business Day of the Measurement Period or any Redemption

Valuation Date, Call Valuation Date or Calculation Date, the Security Calculation Agent or one of its affiliates will determine

the Index Closing Level based on its good-faith estimate of the Index Closing Level that would have prevailed on such fifth

Index Business Day but for such Market Disruption Event.

Any of the following will be a “

Market Disruption Event

” with respect to the Index, in each case as determined by the

Security Calculation Agent in its sole discretion:

(a) suspension, absence or material limitation of trading in a material number of Index Constituent Securities, whether by

reason of movements in price exceeding limits permitted by the Primary Exchange or otherwise;

(b) suspension, absence or material limitation of trading in option or futures contracts relating to the Index or to a

material number of Index Constituent Securities in the primary market or markets for those contracts;

(c) the Index is not published; or

(d) in any other event, if the Security Calculation Agent determines in its sole discretion that the event materially

interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with

respect to the Securities that we or our affiliates have effected or may effect as described in the section entitled “Use

of Proceeds and Hedging”.

The following events will not be Market Disruption Events with respect to the Index:

(a) a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in

the regular business hours of the relevant market; or

(b) a decision to permanently discontinue trading in the option or futures contracts relating to the Index or any Index

Constituent Securities.

For this purpose, an “

absence of trading

” in the primary securities market on which option or futures contracts related to the

Index or any Index Constituent Securities are traded will not include any time when that market is itself closed for trading

under ordinary circumstances.

426

Default Amount on Acceleration

If an event of default occurs and the maturity of the Securities is accelerated, we will pay the default amount in respect of the

principal of the Securities at maturity. We describe the default amount below under “—Default Amount.”

For the purpose of determining whether the holders of our Medium-Term Notes, Series B, of which the Securities are a part,

are entitled to take any action under the indenture, we will treat the outstanding principal amount of the Medium-Term Notes,

Series B, as constituting the outstanding principal amount of the Securities. Although the terms of the Securities may differ

from those of the other Medium-Term Notes, Series B, holders of specified percentages in principal amount of all Medium-

Term Notes, Series B, together in some cases with other series of our debt securities, will be able to take action affecting all the

Medium-Term Notes, Series B, including the Securities. This action may involve changing some of the terms that apply to the

Medium-Term Notes, Series B, accelerating the maturity of the Medium-Term Notes, Series B after a default or waiving some

of our obligations under the indenture. We discuss these matters in the accompanying prospectus under “Description of Debt

Securities We May Offer —Default, Remedies and Waiver of Default” and “Description of Debt Securities We May Offer—

Modification and Waiver of Covenants.”

Default Amount

The default amount for the Securities on any day will be an amount, in U.S. dollars as determined by the Security Calculation

Agent, in its sole discretion, for the aggregate Stated Principal Amount of the Securities, equal to the cost of having a qualified

financial institution, of the kind and selected as described below, expressly assume all our payment and other obligations with

respect to the Securities as of that day and as if no default or acceleration had occurred, or to undertake other obligations

providing substantially equivalent economic value to you with respect to the Securities. That cost will equal:

➢

 the lowest amount that a qualified financial institution would charge to effect this assumption or undertaking; plus

➢

 the reasonable expenses, including reasonable attorneys’ fees, incurred by the holders of the Securities in preparing any

documentation necessary for this assumption or undertaking.

During the default quotation period for the Securities, which we describe below, the holders of the Securities and/or we may

request a qualified financial institution to provide a quotation of the amount it would charge to effect this assumption or

undertaking. If either party obtains a quotation, it must notify the other party in writing of the quotation. The amount referred

to in the first bullet point above will equal the lowest – or, if there is only one, the only – quotation obtained, and as to which

notice is so given, during the default quotation period. With respect to any quotation, however, the party not obtaining the

quotation may object, on reasonable and significant grounds, to the assumption or undertaking by the qualified financial

institution providing the quotation and notify the other party in writing of those grounds within two Business Days after the

last day of the default quotation period, in which case that quotation will be disregarded in determining the default amount.

Default Quotation Period

➢

 no quotation of the kind referred to above is obtained; or

➢

 every quotation of that kind obtained is objected to within five (5) Index Business Days after the due date as described

above.

If either of these two events occurs, the default quotation period will continue until the third Index Business Day after the first

Index Business Day on which prompt notice of a quotation is given as described above. If that quotation is objected to as

described above within five (5) Index Business Days after that first Index Business Day, however, the default quotation period

will continue as described in the prior sentence and this sentence.

In any event, if the default quotation period and the subsequent two (2) Index Business Day objection period have not ended

before the Calculation Date, then the default amount will equal the Stated Principal Amount of the Securities.

Qualified Financial Institutions

For the purpose of determining the default amount at any time, a qualified financial institution must be a financial institution

organized under the laws of any jurisdiction in the United States of America, Europe or Japan, which at that time has

outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated either:

427

➣

 A-1 or higher by Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., or any

successor, or any other comparable rating then used by that rating agency; or

➣

 P-1 or higher by Moody’s Investors Service or any successor, or any other comparable rating then used by that rating agency.

Discontinuance of, Adjustments to or Benchmark Event Affecting the Index or Termination of Our License Agreement

with the Index Sponsor; Alteration of Method of Calculation

If (i) the Index Sponsor or the Index Calculation Agent announces that it intends to discontinue, or discontinues, publication of,

or otherwise fails to publish, the Index, (ii) a Benchmark Event (as described below) under the EU Benchmark Regulation or

UK Benchmark Regulation (each as described under “Risk Factors— Risks Relating to the Index and the Calculation of the

Index—The Securities are linked to the Index and are subject to certain regulatory risks”) occurs with respect to the Index or

the Index Sponsor, if applicable, (iii) our license agreement with the Index Sponsor terminates or (iv) the Index Sponsor or

Index Calculation Agent does not make the Index Constituent Securities and/or their unit weighting available to the Security

Calculation Agent, and, in each case, any other person or entity publishes an EU Benchmark Regulation compliant index

licensed to UBS that the Security Calculation Agent determines is comparable to the Index and for which the Index Constituent

Securities and/or their unit weighting are available to the Security Calculation Agent (such index being referred to herein as a

“

successor index

”), and the Security Calculation Agent approves such index as a successor index, then on and after the date

determined by the Security Calculation Agent, the Security Calculation Agent will determine the Index Closing Level on the

applicable dates of determination, and the amount payable at maturity or upon early redemption or call and all other related

payment terms by reference to such successor index.

Upon any selection by the Security Calculation Agent of a successor index, the Security Calculation Agent will cause written

notice of the successor index and the date on and after which the Index Closing Level will be determined by reference thereto

to be furnished to the trustee, to us and to the holders of the Securities.

If (i) the Index Sponsor or Index Calculation Agent discontinues publication of the Index, (ii) a Benchmark Event (as described

below) under the EU Benchmark Regulation or UK Benchmark Regulation (each as described under “Risk Factors—Risks

Relating to the Index and the Calculation of the Index—The Securities are linked to the Index and are subject to certain

regulatory risks”) occurs with respect to the Index or the Index Sponsor, if applicable, (iii) our license agreement with the

Index Sponsor terminates or (iv) the Index Sponsor or Index Calculation Agent do not make the Index Constituent Securities

and/or their unit weighting available to the Security Calculation Agent, prior to, and such discontinuation, termination or

unavailability is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date, as applicable, or on any other relevant date on which the Index Closing Level is to be determined

and the Security Calculation Agent determines that no successor index is available at such time, or the Security Calculation

Agent has previously selected a successor index and publication of such successor index is discontinued prior to, and such

discontinuation is continuing on the Calculation Date or any Index Business Day during a Measurement Period, or on the

Redemption Valuation Date or any other relevant date on which the Index Closing Level is to be determined, then the Security

Calculation Agent will determine the Index Closing Level using the Index Closing Level on the last Index Business Day

immediately prior to such discontinuation or unavailability, as adjusted for certain corporate actions. In such event, the

Security Calculation Agent will cause notice thereof to be furnished to the trustee, to us and to the holders of the Securities.

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

For purposes of the above, a “

Benchmark Event

” may occur if the EU Benchmark Regulation and/or UK Benchmark

Regulation, as applicable, applies to this issuance of Securities, and the applicable registration for the Index or Index Sponsor

is not effective or has been suspended or withdrawn by the relevant authority with the effect that the use of the Index or the

Index Sponsor is not permitted under the EU Benchmark Regulation or UK Benchmark Regulation, as applicable.

In addition, if an Index Replacement Event (as defined below) occurs at any time and the Index Sponsor or anyone else

publishes an index that the Security Calculation Agent determines is comparable to the Index (the “

Substitute Index

”), then

the Security Calculation Agent may elect, in its sole discretion, to permanently replace the original Index with the Substitute

Index for all purposes under the Securities, and all provisions described in this prospectus supplement as applying to the Index

will thereafter apply to the Substitute Index instead. In such event, the Security Calculation Agent will make such adjustments,

if any, to any level of the Index or Substitute Index that is used for purposes of the Securities as it determines are appropriate in

the circumstances. If the Security Calculation Agent elects to replace the original Index with a Substitute Index, then the

Security Calculation Agent will determine all amounts hereunder, including the Current Indicative Value (or “intraday

indicative value”), Closing Indicative Value, Index Factor, Residual Factor, Daily Tracking Fee, Index Closing Levels on the

applicable dates of determination, all other related payment terms and the amount payable at maturity, call, upon early

redemption by reference to such Substitute Index. If the Security Calculation Agent so elects to replace the original Index with

a Substitute Index, the Security Calculation Agent will cause written notice thereof to be furnished to the trustee, to us and to

the holders of the Securities.

An “

Index Replacement Event

” means:

428

(a) an amendment to or change (including any officially announced proposed change) in the laws, regulations or rules of

the United States (or any political subdivision thereof), the European Union, Switzerland, the United Kingdom or any

jurisdiction in which a Primary Exchange (as defined herein) is located that (i) makes it illegal for UBS AG or its affiliates

to hold, acquire or dispose of the Index Constituent Securities included in the Index or options, futures, swaps or other

derivatives on the Index or on the Index Constituent Securities included in the Index (including but not limited to

exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates, third parties with whom we

transact or similarly situated third parties in performing our or their obligations in connection with the Securities, (iii) has

a material adverse effect on any of these parties’ ability to perform their obligations in connection with the Securities or

(iv) materially affects our ability to issue or transact in exchange traded notes similar to the Securities, each as determined

by the Security Calculation Agent;

(b) any official administrative decision, judicial decision, administrative action, regulatory interpretation or other official

pronouncement interpreting or applying those laws, regulations or rules that is announced on or after March 24, 2023 that

(i) makes it illegal for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities included in

the Index or options, futures, swaps or other derivatives on the Index or on the Index Constituent Securities (including but

not limited to exchange-imposed position limits), (ii) materially increases the cost to us, our affiliates, third parties with

whom we transact or similarly situated third parties in performing our or their obligations in connection with the

Securities, (iii) has a material adverse effect on the ability of us, our affiliates, third parties with whom we transact or a

similarly situated third party to perform our or their obligations in connection with the Securities or (iv) materially affects

our ability to issue or transact in exchange traded notes similar to the Securities, each as determined by the Security

Calculation Agent;

(c) any event that occurs on or after March 24, 2023 that makes it a violation of any law, regulation or rule of the United

States (or any political subdivision thereof), the European Union, Switzerland, the United Kingdom or any jurisdiction in

which a Primary Exchange (as defined herein) is located, or of any official administrative decision, judicial decision,

administrative action, regulatory interpretation or other official pronouncement interpreting or applying those laws,

regulations or rules, (i) for UBS AG or its affiliates to hold, acquire or dispose of the Index Constituent Securities or

options, futures, swaps or other derivatives on the Index or on the Index Constituent Securities (including but not limited

to exchange-imposed position limits), (ii) for us, our affiliates, third parties with whom we transact or similarly situated

third parties to perform our or their obligations in connection with the Securities or (iii) for us to issue or transact in

exchange traded notes similar to the Securities, each as determined by the Security Calculation Agent;

(d) any event, as determined by the Security Calculation Agent, as a result of which we or any of our affiliates or a

similarly situated party would, after using commercially reasonable efforts, be unable to, or would incur a materially

increased amount of tax, duty, expense or fee (other than brokerage commissions) to, acquire, establish, re-establish,

substitute, maintain, unwind or dispose of any transaction or asset it deems necessary to hedge the risk of the Securities, or

realize, recover or remit the proceeds of any such transaction or asset;

(e) as determined by the Security Calculation Agent, the primary exchange or market for trading for the Securities, if any,

announces that pursuant to the rules of such exchange or market, as applicable, the Securities cease (or will cease) to be

listed, traded or publicly quoted on such exchange or market, as applicable, for any reason and are not (or will not be)

immediately re-listed, re-traded or re-quoted on an exchange or quotation system located in the same country as such

exchange or market, as applicable; or

(f) any event, as determined by the Security Calculation Agent, as a result of which the Index or any of the Index

Constituent Securities do not meet the criteria or are no longer eligible for listing on the exchange where the Securities are

listed, or the Security Calculation Agent becomes aware that the Index Sponsor no longer intends to comply with any such

listing criteria (whether as a result of actual or proposed Index methodological changes or otherwise).

Notwithstanding these alternative arrangements, discontinuation of the publication of the Index or successor index, as

applicable, may adversely affect the value of the Securities.

If at any time the method of calculating the Index, a successor index or a Substitute Index, or the value thereof, is changed in a

material respect, or if the Index or a successor or Substitute Index is in any other way modified so that the Index Closing Level

of the Index or such successor or Substitute Index does not, in the opinion of the Security Calculation Agent, fairly represent

the Index Closing Level of the Index or such successor or Substitute Index had such changes or modifications not been made,

then the Security Calculation Agent will make such calculations and adjustments as, in the good-faith judgment of the Security

Calculation Agent, may be necessary in order to arrive at an Index Closing Level of an index comparable to the Index or such

successor index, as the case may be, as if such changes or modifications had not been made, and the Security Calculation

Agent will calculate the Index Closing Level for the Index or such successor or Substitute Index with reference to the Index or

such successor Substitute Index, as adjusted. The Security Calculation Agent will accordingly calculate the Index Closing

Level, the Daily Tracking Fee, the Redemption Fee Amount, if any, the Cash Settlement Amount, if any, that we will pay you

at maturity, the Redemption Amount, if any, upon early redemption, if applicable, the Call Settlement Amount, if any, that we

will pay you in the event UBS calls the Securities, and all related payment terms based directly or indirectly on the Index

Closing Level calculated by the Security Calculation Agent. Accordingly, if the method of calculating the Index or a successor

or Substitute Index is modified so that the level of the Index or such successor index is a fraction of what it would have been if

there had been no such modification (e.g., due to a rebasing of the Index), which, in turn, causes the Index Closing Level of the

Index or such successor or Substitute Index to be a fraction of what it would have been if there had been no such modification,

then the Security Calculation Agent will make such calculations and adjustments in order to arrive at an Index Closing Level

for the Index or such successor or Substitute Index as if it had not been modified (e.g., as if such rebasing had not occurred).

429

In the event that the Security Calculation Agent elects to replace the Index with a successor index or a Substitute Index, UBS

may, in its sole discretion, amend the title of the Securities in order to remove references to the former Index and to make such

other changes to the title of the Securities as it considers necessary or desirable to reflect the name and/or characteristics of the

relevant successor index or Substitute Index, as applicable.

All determinations and adjustments to be made by the Security Calculation Agent may be made in the Security Calculation

Agent’s sole discretion. See “Risk Factors—Risks Relating to Creditworthiness, Conflicts of Interest, Hedging Activities and

Regulation of UBS—There are potential conflicts of interest between you and the Security Calculation Agent” for a discussion

of certain conflicts of interest that may arise with respect to the Security Calculation Agent.

Manner of Payment and Delivery

Any payment on or delivery of the Securities at maturity or call, or upon early redemption will be made to accounts designated

by you and approved by us, or at the corporate trust office of the trustee in New York City, but only when the Securities are

surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable

procedures of the depositary.

Reissuances or Reopened Issues

We may, at our sole discretion, “reopen” or reissue the Securities. We issued the Securities initially in an amount having the

aggregate Stated Principal Amount specified on the cover of the prospectus supplement. We may issue additional Securities in

amounts that exceed the amount on the cover any time, without your consent and without notifying you. The Securities do not

limit our ability to incur other indebtedness or to issue other securities. Also, we are not subject to financial or similar

restrictions by the terms of the Securities. For more information, please refer to “Description of Debt Securities We May Offer

— Amounts That We May Issue” in the accompanying prospectus.

These further issuances, if any, will be consolidated to form a single class with the originally issued Securities and will have

the same CUSIP number and will trade interchangeably with the Securities immediately upon settlement. Any additional

issuances will increase the aggregate Stated Principal Amount of the outstanding Securities of the class. The price of any

additional offering will be determined at the time of pricing of that offering.

Booking Branch

The Securities will be booked through UBS AG, London Branch.

Clearance and Settlement

The DTC participants that hold the Securities through DTC on behalf of investors will follow the settlement practices

applicable to equity securities in DTC’s settlement system with respect to the primary distribution of the Securities and

secondary market trading between DTC participants.