Exhibit 4.18
Additional Tier 1 capital (Basel III-compliant)
Issuer
UBS Group AG, or other employing entities of the UBS group
ISIN
-
Issue Date
16.02.2024
1
Currency
USD
Nominal
2
(million)
Coupon Rate
8.30% / 4.60%
3
Maturity Date
perpetual
4
First Call Date
1 March 2029
5
1
Issuance date which corresponds to grant date for employees.
2
For information on the outstanding amount, refer to the table “Capital and total loss-absorbing capacity
instruments of UBS Group AG (consolidated), UBS AG and Credit Suisse AG (both consolidated and
standalone) - Key features”.
3
EU/UK MRTs and SMFs, both as defined within this document.
4
5
Deferred Contingent Capital Plan 2023/24 (DCCP)
Summary description of the terms and conditions of DCCP as a capital instrument
Overview
Issues under the DCCP are made by UBS Group AG or certain other employing
entities to key contributors at UBS Group AG or any of its subsidiaries (together,
the "Group"). Eligibility is determined by the Issuer and issues are granted at its
sole discretion.
Issuer
UBS Group AG or certain other employing entities of the UBS group
Type of in-
strument
Non-transferable contingent right against the Issuer to receive
(i)
discretionary annual interest equivalent payments on the nominal
value of a hypothetical perpetual Additional Tier 1 ("AT1") security
notionally issued by UBS Group AG at grant (the "Notional Bond"),
and
(i)
at redemption, as determined by the Issuer in its sole discretion, ei-
ther the value of the Notional Bond in cash or perpetual AT1 secu-
rities issued or guaranteed by UBS Group AG or any other member
of the Group of equivalent value (in each case net of any applica-
ble taxes and social security contributions to the employee's ac-
count).
For DCCP awarded to EU/UK Material Risk Takers (MRT)
1
forming designated UK Senior Management Functions (SMF)
2
contingent right to receive discretionary annual interest payments; only a non-
transferable contingent right against the Issuer to receive the amount indicated
under (ii) above.
Conditional In-
terest Equiva-
lents
Subject to (i) the conditions set out under "Trigger Event or Viability Event" and
"Forfeiture and Vesting Provisions" and (ii) the discretionary and mandatory inter-
est cancellation provisions as set out below, interest equivalents will be payable
annually in arrears on the nominal value of the Notional Bond at a rate of 4.60%
for CHF-denominated issues and 8.30% for USD-denominated issues.
The Issuer may, at its discretion, elect to cancel any interest equivalent that is
otherwise scheduled to be paid on any interest payment date. In addition, without
limitation to the foregoing, payments of interest equivalents will not be made un-
less sufficient distributable items (i.e., net profits carried forward and freely dis-
tributable reserves) of UBS Group AG are available.
Maturity date
Issues under the DCCP have no scheduled maturity date.
Notwithstanding the foregoing, but subject to the conditions set out under "Trigger
Event or Viability Event" and "Forfeiture and Vesting Provisions", issues to US
taxpayers will mature and be settled on or about 1 March 2029 (the "First Call
Date"), or for US-based SMFs on 1 March 2030 and 1 March 2031 as mentioned
below. The Notional Bond underlying such issues will have no scheduled maturity
date.
1
Based on relevant European Banking Authority's ("EBA") Regulatory Technical Standards (RTS) for EU MRTs,
and for UK MRTs, based on the EBA RTS and the UK Prudential Regulation Authority's and Financial Conduct Au-
thority's rules.
2
As defined by the UK’s Prudential Regulation Authority and Financial Conduct Authority.
Trigger Event
or Viability
Event
All outstanding issuances under the DCCP (or, in case of a Trigger Event (as de-
fined below), all outstanding awards under the DCCP in relation to which a Trig-
ger Event has occurred) will be automatically and permanently written down to
zero, no further amounts will be due or paid thereunder and such awards will be
permanently cancelled, if:
a)
Group AG 's quarterly financial accounts, results, the annual report, or in
any reviewed interim measurement published upon the instruction of the
Swiss Financial Market Supervisory Authority FINMA ("FINMA"), falls be-
low 7% or, with respect to grants awarded to Group Executive Board
members, 10%, as of the relevant balance sheet date (each, a "Trigger
Event");
b)
that amounts outstanding under the DCCP are required to be written
down to prevent the insolvency, bankruptcy or failure of UBS Group AG;
or
c)
nary support from the public sector that FINMA has determined and con-
firmed in writing to UBS Group AG is necessary to prevent the insolven-
cy, bankruptcy or failure of UBS Group AG (an event described in clause
(b) or (c), a "Viability Event").
Conditional
Redemption
Subject to the conditions set out under "Trigger Event or Viability Event" and "For-
feiture and Vesting Provisions" and except as mentioned below, the Issuer may,
at its sole discretion, redeem any issuance by way of either a cash payment or
delivery of AT1 securities on the First Call Date, provided that, where the Issuer
has elected to redeem an issuance by way of a cash payment, a redemption will
not occur until FINMA has approved it.
DCCP issuances to SMFs may be redeemed by the Issuer on the same basis, in
equal quantities on 1 March 2030 and 1 March 2031. However, the following
exceptions will apply:
a)
suances may be redeemed on the same basis with 13% redeemed on 1
March 2030 and 87% redeemed on 1 March 2031;
b)
redeemed on the same basis with 20% redeemed on 1 March 2030 and
80% redeemed on 1 March 2031.
In case of a redemption by way of delivery of securities, the securities will be per-
petual AT1 securities issued or guaranteed by UBS or any other member of the
Group with substantially the same terms and provisions consistent with the No-
tional Bond, including but not limited to, the same Trigger and Viability Events.
Furthermore, the aggregate value of the AT1 securities shall, subject to rounding,
equal the value of the Notional Bond (net of any applicable taxes and social secu-
rity contributions).
For issuances granted to US taxpayers, redemption will be on the First Call Date,
or for US-based SMFs on 1 March 2030 and 1 March 2031 as mentioned above,
such that if FINMA approval for any cash settlement has not been given at the
applicable point in time, issuances must be settled by delivery of AT1 securities,
on or about that date. Any AT1 securities delivered at settlement shall be market-
able subordinated UBS Group AG debt instruments in the AT1 category having
such terms and provisions consistent with the Notional Bond terms and provisions
as determined by UBS Group AG in its sole discretion on or prior to the Grant
Date.
Forfeiture and
Vesting Provi-
sions
Subject to the conditions set out under "Trigger Event or Viability Event", issu-
ances under the DCCP will vest after a minimum of five years.
An outstanding unvested issuance under the DCCP will generally be forfeited and
cancelled, and no further interest equivalents will generally be due or paid, due to
termination of employment or harmful acts by the employee. In certain circum-
stances, vesting of outstanding awards under the DCCP may be subject to condi-
tions relating to the performance of the Group and/or the employee's business di-
vision and similar conditions. In addition, with respect to any award granted to
Group Executive Board members, if the Group does not generate an adjusted
pre-tax profit with respect to any financial year ending during or after the year of
grant, but prior to the relevant vesting date, the nominal amount of such award
will be reduced by 20% (for each year the Group does not generate an adjusted
pre-tax profit) of the nominal amount of such award on the relevant grant date.
In case of death (in or out of service) or disability, an outstanding unvested issu-
ance under the DCCP will vest on the date that the employee's employment con-
tract terminates due to death or disability or any other date as determined by the
Issuer.
Vesting may be accelerated, and forfeiture provisions may be relaxed, in case of
early termination of the DCCP by, or change of control in, UBS Group AG.
Status
In the event of the liquidation or winding up of the Issuer under circumstances
that do not coincide with the occurrence of a Trigger Event or a Viability Event,
the holder will have a claim ranking junior to all rights and claims of priority credi-
tors of the Issuer (i.e., claims in respect of obligations of the Issuer (i) that are un-
subordinated or (ii) that are subordinated (including Tier 2 instruments) and do
not, or are expressly not stated to, rank pari passu with, or junior to, the Issuer's
obligations under the DCCP or any of the Issuer's obligations ranking pari passu
with the Issuer's obligations under the DCCP).
Governing
Law
Swiss law / in certain cases, New York law