(Face of Security)
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO UBS AG, OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY PURCHASING THIS SECURITY, THE HOLDER AGREES TO CHARACTERIZE THIS SECURITY FOR
ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED IN SECTION 6 ON THE FACE OF
THIS SECURITY.
CUSIP NO. 90261KDD9
UBS AG
MEDIUM-TERM NOTES, SERIES A
---------------
ENHANCED APPRECIATION SECURITIES DUE MAY [ ], 2004
(Linked to the performance of the S&P 500(R) Index)
---------------
The following terms apply to this Security. Capitalized terms that
are not defined the first time they are used in this Security shall have the
meanings indicated elsewhere in this Security.
FACE AMOUNT: $[ ]
PRINCIPAL AMOUNT: on the Stated Maturity Date, the Company shall redeem this
Security by paying to the Holder, for each $1,000 of the Face Amount hereof, the
net sum of $1,000 plus (i) if the Index Return is positive, the product of (y)
$1,000 and (z) the lesser of (1) three times the Index Return and (2)[ ]% or
(ii) if the Index Return is negative, the product of (y) $1,000 and (z) the
Index Return
INDEX RETURN: an amount, expressed as a percentage, equal to (i) the Index
Ending Level minus the Index Starting Level divided by (ii) the Index Starting
Level.
INDEX STARTING LEVEL: the Closing Level of the Index on the Trade Date.
INDEX ENDING LEVEL: the Closing Level of the Index on the Final Valuation Date.
INDEX SPONSOR: Standard & Poor's, a division of The McGraw-Hill Companies, Inc.,
or any successor that determines and publishes the Index as then in effect.
INDEX: the S&P 500(R) Index.
TRADE DATE: April [ ], 2003.
ORIGINAL ISSUE DATE: April [ ], 2003.
CALCULATION AGENT: UBS Warburg LLC.
DEFEASANCE: Neither full defeasance nor covenant defeasance applies to this
Security.
INTEREST RATE: The principal of this Security shall not bear interest.
LISTING: American Stock Exchange.
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500" and
"500" are trademarks of The McGraw-Hill Companies, Inc. and have been licensed
for use by UBS AG. This Security is not sponsored, endorsed, sold or promoted by
the Index Sponsor and the Index Sponsor makes no representation regarding the
advisability of investing in this Security.
(Face of Security continued on next page)
-2-
OTHER TERMS:
All terms used in this Security that are not defined in this
Security but are defined in the Indenture referred to on the reverse of this
Security shall have the meanings assigned to them in the Indenture. Section
headings on the face of this Security are for convenience only and shall not
affect the construction of this Security.
"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.
"Closing Level" means, with respect to the Index, on any day, the
official closing level or last reported level of the Index; provided, however,
that, if the Index Sponsor changes the manner in which it calculates the Index,
discontinues or suspends calculation or publication of the Index, or if the
level of the Index is not available on the Final Valuation Date because of a
Market Disruption Event or for any other reason, the Calculation Agent will
determine the Closing Level of the Index on the Final Valuation Date, as the
case may be, in the manner provided in Section 3 on the face of this Security.
"Default Amount" means, on any day, an amount in U.S. dollars, as
determined by the Calculation Agent in its sole discretion, equal to the cost of
having a Qualified Financial Institution (selected as provided below) expressly
assume the due and punctual payment of the principal of this Security, and the
performance or observance of every covenant hereof and of the Indenture on the
part of the Company to be performed and observed with respect to this Security
(or to undertake other obligations providing substantially equivalent economic
value to the Holder of this Security as the Company's obligations hereunder).
Such cost will equal (i) the lowest amount that a Qualified Financial
Institution would charge to effect such assumption (or undertaking) plus (ii)
the reasonable expenses (including reasonable attorneys' fees) incurred by the
Holder of this Security in preparing any documentation necessary for such
assumption (or undertaking). During the Default Quotation Period, each Holder of
this Security and the Company may request a Qualified Financial Institution to
provide a quotation of the amount it would charge to effect such assumption (or
undertaking) and notify the other in writing of such quotation. If either party
obtains a quotation, it must notify the other party in writing of the quotation.
The amount referred to in clause (i) of this paragraph will equal the lowest
(or, if there is only one, the only) quotation so obtained, and as to which
notice is so given, during the Default Quotation Period; provided that, with
respect to any quotation, the party not obtaining the quotation may object, on
reasonable and significant grounds, to the effectuation of such assumption (or
undertaking) by the Qualified Financial Institution providing such quotation and
notify the other party in writing of such 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. The "Default Quotation Period"
shall be the period beginning on the day the Default Amount first becomes due
and ending
(Face of Security continued on next page)
-3-
on the third Business Day after such due date, unless no such quotation is
obtained, or unless every such quotation so obtained is objected to within five
Business Days after such due date as provided above, in which case 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 provided above,
unless such quotation is objected to as provided above within five Business Days
after that first Business Day, in which case, the Default Quotation Period will
continue as provided in this sentence. Notwithstanding the foregoing, if the
Default Quotation Period (and the subsequent two Business Day objection period)
has not ended prior to the Final Valuation Date, then the Default Amount will
equal the Face Amount.
"Final Valuation Date" means May [ ], 2004; provided, however, that
if the Calculation Agent determines that a Market Disruption Event occurs or is
continuing on such date, the Final Valuation Date will be the first following
day on which the Calculation Agent determines that a Market Disruption Event
does not occur and is not continuing, provided further, that in no event will
the Final Valuation Date be postponed more than ten Business Days.
"Market Disruption Event" means, with respect to the Notes, in the
opinion of the Calculation Agent and determined in its sole discretion: (i) the
suspension, absence or material limitation of trading in a material number of
securities included in the Index for more than two hours or during the one-half
hour before the close of trading in that market; (ii) the suspension, absence or
material limitation of trading in option or futures contracts relating to the
Index in the primary 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;
(iii) the failure of the Index Sponsor to publish the official closing level of
the Index or (iv) any other event that materially affects the Index and
materially interferes with the Company's ability or the ability of any of its
Affiliates to unwind all or a material portion of a hedge with respect to the
Notes that the Company or its Affiliates have affected or may affect except that
with respect to the subclauses (i) through (iv) of this definition, the
following shall apply: (a) a limitation on the number of hours or days of
trading will not constitute a Market Disruption Event if it results from an
announced change in the regular business hours of any exchange, (b) a decision
to permanently discontinue trading in the option or futures contracts relating
to the Index will not constitute a Market Disruption Event and (c) "absence of
trading" in the primary securities market on which option or futures contracts
related to the Index are traded will not include any time when that market is
itself closed for trading under ordinary circumstances.
"Qualified Financial Institution" means, at any time, a financial
institution organized under the laws of any jurisdiction in the United States of
America, Europe or Japan that at such time has outstanding debt obligations with
a stated maturity of one year or less from the date of issue and rated A-1 or
higher by Standard & Poor's Ratings Group (or any successor) or P-1 or higher by
Moody's Investors Service, Inc. (or any successor) or, in either case, such
other comparable rating, if any, then used by such rating agency.
(Face of Security continued on next page)
-4-
"Stated Maturity Date" means May [ ], 2004 or, if such date is not a
Business Day, the next succeeding Business Day; provided, however, that if the
fifth Business Day preceding May [ ], 2004 does not qualify as the Final
Valuation Date referred to above, then the Stated Maturity Date will be the
fifth Business Day following the Final Valuation Date.
"Successor Index" means any substitute index approved by the
Calculation Agent as a Successor Index pursuant to Section 3.
-----------------------
1. Promise to Pay Principal
UBS AG, a corporation duly organized and existing under the laws of
Switzerland (herein called the "Company," which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay (or cause to be paid) to Cede & Co., as nominee for The
Depository Trust Company, or registered assigns, the principal sum, calculated
as provided under "Principal Amount" and elsewhere on the face of this Security,
on the Stated Maturity Date.
2. Payment of Interest
The principal of this Security shall not bear interest.
3. Discontinuance or Modification of the Index; Market Disruption
Event
If the Index Sponsor discontinues publication of the Index and the
Index Sponsor 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, in its sole discretion, may
determine the Index Starting Level, the Index Ending Level or the amount payable
on the Stated Maturity Date 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 shall
make the necessary determination by reference to a group of stocks, an index or
a computation methodology that replicates the Index as closely as possible, as
determined by the Calculation Agent.
If the Calculation Agent determines that the securities included in
the Index (the "Index Constituent Stocks") or the method of calculating the
Index have been changed at any time in any respect and for any reason, and as a
result of such change, the Index fails to fairly represent the value of the
Index if such changes had not been made, or such change otherwise affects the
(Face of Security continued on next page)
-5-
calculation of the Index Return, the Index Starting Level, the Index Ending
Level or the Principal Amount, the Calculation Agent shall have the right to
make adjustments to the method of calculating the Index that the Calculation
Agent believes to be appropriate to ensure that the Index Return used to
determine the Principal Amount is equitable.
The Calculation Agent shall have the right to postpone the
calculation of the Index Ending Level if the Calculation Agent determines that,
on the Final Valuation Date, a Market Disruption Event occurs or is continuing.
If such a postponement occurs, the Calculation Agent will use the Closing Level
of the Index on the first day on which no Market Disruption Event occurs or is
continuing. The calculation of the Index Ending Level shall not be postponed by
more than ten Business Days following May [ ], 2004.
In the event the calculation of the Index Ending Level is postponed
to the last possible day, but a Market Disruption Event occurs and is continuing
on such day, the Calculation Agent shall determine the Index Ending Level on
such day by a good faith estimate of the Index Ending Level that would have
prevailed in the absence of a Market Disruption Event.
The Calculation Agent shall have the right to make all
determinations and adjustments with respect to the Index in its sole discretion.
4. Principal Amount
The principal of this Security that becomes due and payable on the
Stated Maturity Date shall be the cash amount that must be paid to redeem this
Security as provided above under "Principal Amount." The principal of this
Security that becomes due and payable upon acceleration of the Stated Maturity
Date hereof after an Event of Default has occurred pursuant to the Indenture
shall be the Default Amount. When the principal referred to in either of the two
preceding sentences has been paid as provided herein (or such payment has been
made available), the principal of this Security shall be deemed to have been
paid in full, whether or not this Security shall have been surrendered for
payment or cancellation. References to the payment of the principal of this
Security on any day shall be deemed to mean the payment of cash that is payable
on such day as provided in this Security. Notwithstanding the foregoing, solely
for the purpose of determining whether any consent, waiver, notice or other
action to be given or taken by Holders of Securities pursuant to the Indenture
has been given or taken by Holders of Outstanding Securities in the requisite
aggregate principal amount, the principal amount of this Security will be deemed
to equal the Face Amount. This Security shall cease to be Outstanding as
provided in the definition of such term in the Indenture when the principal of
this Security shall be deemed to have been paid in full as provided above.
(Face of Security continued on next page)
-6-
5. Role of Calculation Agent
The Calculation Agent will be solely responsible for all
determinations and calculations regarding the Default Amount; whether a Market
Disruption Event has occurred and whether, and if so, the dates to which the
Final Valuation Date and Stated Maturity Date are to be postponed; the Index
Return; the Index Starting Level; the Index Ending Level; the Closing Level of
the Index on any date; Business Days; the Principal Amount; the amount payable
on the Notes and all such other matters as may be specified elsewhere herein as
matters to be determined by the Calculation Agent. The Calculation Agent shall
make all such determinations and calculations in its sole discretion, and absent
manifest error, all determinations of the Calculation Agent shall be final and
binding on the Company, the Holder and all other Persons having an interest in
this Security, without liability on the part of the Calculation Agent.
The Company shall take such action as shall be necessary to ensure
that there is at all relevant times a financial institution serving as the
Calculation Agent hereunder. The Company may, in its sole discretion at any time
and from time to time, upon written notice to the Trustee, but without notice to
the Holder of this Security, terminate the appointment of any Person serving as
the Calculation Agent and appoint another Person (including any Affiliate of the
Company) to serve as the Calculation Agent. Insofar as this Security provides
for the Calculation Agent to obtain the Closing Level of the Index on any date
or other information from any institution or other source, the Calculation Agent
may do so from any source or sources of the kind contemplated or otherwise
permitted hereby notwithstanding that any one or more of such sources are the
Calculation Agent, Affiliates of the Calculation Agent or Affiliates of the
Company.
6. Tax Characterization
By its purchase of this Security, the Holder, on behalf of itself
and any other Person having a beneficial interest in this Security, hereby
agrees with the Company (in the absence of an administrative determination or
judicial ruling to the contrary) to characterize this Security for all U.S.
federal income tax purposes as a pre-paid cash-settled forward contract with
respect to the Index Constituent Stocks.
Notwithstanding the foregoing, the Company shall not be obligated to
segregate or otherwise set aside any funds, and no act or omission on the part
of the Company or any other Person, and no event or circumstance, shall give
rise to any default or Event of Default under this Security or the Indenture by
reason of any provision of this Section 6.
7. Payment
(Face of Security continued on next page)
-7-
Payment of any amount payable on this Security will be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. Payment will be made to an
account designated by the Holder (in writing to the Company and the Trustee on
or before the Final Valuation Date) and acceptable to the Company or, if no such
account is designated and acceptable as aforesaid, at the office or agency of
the Company maintained for that purpose in The City of New York, provided,
however, that payment on the Stated Maturity Date shall be made only upon
surrender of this Security at such office or agency (unless the Company waives
surrender). Notwithstanding the foregoing, if this Security is a Global
Security, any payment may be made pursuant to the Applicable Procedures of the
Depositary as permitted in said Indenture.
8. Modified Business Day
Notwithstanding any provision of this Security or of the Indenture,
if any payment of principal would otherwise be due on this Security on a day
(the "Specified Day") that is not a Business Day, such payment may be made (or
such principal may be made available for payment) on the next succeeding
Business Day with the same force and effect as if such payment were made on the
Specified Day. The provisions of this Section shall apply to this Security in
lieu of the provisions of Section 114 of the Indenture.
9. Reverse of this Security
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
10. Certificate of Authentication
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
(Face of Security continued on next page)
-8-
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
UBS AG
By____________________________
By____________________________
This is one of the Securities of the series designated herein and
referred to in the Indenture.
Dated: , 2003
U.S. BANK TRUST NATIONAL ASSOCIATION,
AS TRUSTEE
By_________________________________
Authorized Signatory
(Reverse of Security)
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities") issued and to be issued in one or more
series under the Indenture, dated as of November 21, 2000 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument) between the Company and U.S. Bank Trust National Association, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee, the Holders of the Securities and of the
terms upon which the Securities are, and are to be, authenticated and delivered.
Insofar as the provisions of the Indenture may conflict with the provisions set
forth on the face of this Security, the latter shall control for purposes of
this Security.
This Security is one of the series designated on the face hereof,
limited to an aggregate initial offering price not to exceed $[ ] (or the
equivalent thereof in any other currency or currencies or currency units), which
amount may be increased at the option of the Company if in the future it
determines that it may wish to sell additional Securities of this series.
References herein to "this series" mean the series designated on the face
hereof.
Payments under the Securities will be made without withholding or
deduction for or on account of any present or future tax, duty, assessment or
governmental charge imposed upon or as a result of such payments by Switzerland
or any jurisdiction in which a branch of the Company through which the
Securities are issued is located (or any political subdivision or taxing
authority thereof or therein) (a "Relevant Jurisdiction") ("Taxes"), unless
required by law. To the extent any such Taxes are so levied or imposed, the
Company will, subject to the exceptions and limitations set forth in Section
1007 of the Indenture, pay such additional amounts ("Additional Amounts") to the
Holder of any Security who is not a resident of the Relevant Jurisdiction as may
be necessary in order that every net payment of the principal of such Security
and any other amounts payable on such Security, after withholding for or on
account of such Taxes imposed upon or as a result of such payment, will not be
less than the amount provided for in such Security to be then due and payable.
If at any time as a result of any change in or amendment to the laws
or regulations of a Relevant Jurisdiction affecting taxation, or a change in any
application or interpretation of such laws or regulations (including the
decision of any court or tribunal) either generally or in relation to any
particular Securities, which change, amendment, application or interpretation
becomes effective on or after the Trade Date in making any payment of, or in
respect of, the principal amount of the Securities, the Company would be
required to pay any Additional Amounts with respect thereto, then the Securities
will be redeemable upon not less than 10 nor more than 60 days' notice by mail,
at any time thereafter, in whole but not in part, at the election of the Company
as provided in the
(Reverse of Security continued on next page)
-10-
Indenture at a redemption price determined by the Calculation Agent in a manner
reasonably calculated to preserve the relative economic position of the Company
and the Holders of Outstanding Securities.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected (considered together as one
class for this purpose). The Indenture also contains provisions (i) permitting
the Holders of a majority in principal amount of the Securities at the time
Outstanding of all series to be affected under the Indenture (considered
together as one class for this purpose), on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and (ii) permitting the Holders of a majority in
principal amount of the Securities at the time Outstanding of any series to be
affected under the Indenture (with each such series considered separately for
this purpose), on behalf of the Holders of all Securities of such series, to
waive certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee indemnity reasonably satisfactory to
it, and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Security as herein provided.
As provided in the Indenture and subject to certain limitations
therein set forth, the
(Reverse of Security continued on next page)
-11-
transfer of this Security is registrable in the Security Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company in any place where the principal of this Security is payable,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing. Thereupon one or more
new Securities of this series and of like tenor, of authorized denominations and
for the same aggregate Face Amount, will be issued to the designated transferee
or transferees.
This Security, and any other Securities of this series and of like
tenor, are issuable only in registered form without coupons in denominations of
any multiple of $1,000. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
This Security is a Global Security and is subject to the provisions
of the Indenture relating to Global Securities, including the limitations in
Section 305 thereof on transfers and exchanges of Global Securities.
THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
-12-