(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.
CUSIP NO. 90261KED8
UBS AG
MEDIUM - TERM NOTES, SERIES A
------------
PRINCIPAL PROTECTED NOTES DUE AUGUST [ ], 2010
(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, in
cash the greater of (a) $1,100 or (b) $1,000 plus the Supplemental Payment
Amount, if any.
SUPPLEMENTAL PAYMENT AMOUNT: the Supplemental Payment Amount, if any, per $1,000
of the Face Amount hereof shall equal: $1,000 times the Sum of the Capped
Quarterly Index Returns.
SUM OF THE CAPPED QUARTERLY INDEX RETURNS: the sum of the Capped Quarterly Index
Returns, whether positive or negative, over the 28-quarter term of the Notes.
CAPPED QUARTERLY INDEX RETURN: the Quarterly Index Return expressed as a
percentage, that shall not exceed [ ]% in any Quarter.
QUARTERLY INDEX RETURN: the Quarterly Index Return will equal (i) the difference
between the Index Ending Level and the Index Starting Level, divided by (ii) the
Index Starting Level. In any Quarter, the Quarterly Index Return may be
negative.
INDEX STARTING LEVEL: For the first Quarter, the Index Starting Level will be
the Closing Level of the Index on the last business day of July 2003. For each
Quarter thereafter, the Index Starting Level will be the Index Ending Level from
the prior Quarter.
INDEX ENDING LEVEL: the Closing Level of the Index on the last Business Day of
each Quarter. At maturity, the Index Ending Level will be the Closing Level of
the Index on the Final Valuation Date.
QUARTER: the three calendar month period ending on the last business day of each
July, October, January and April.
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: July [ ], 2003.
ORIGINAL ISSUE DATE: July [ ], 2003.
CALCULATION AGENT: UBS Securities 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.
(Face of Security continued on next page)
-2-
"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.
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 last Business Day of any Quarter
during the term of this Security or 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 such Business Day or 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,
(Face of Security continued on next page)
-3-
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 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 July [ ], 2010; 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
(Face of Security continued on next page)
-4-
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.
"Stated Maturity Date" means August [ ], 2010 or, if such date is not a
Business Day, the next succeeding Business Day; provided, however, that if the
fifth Business Day preceding August [ ], 2010 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 on the face of this
Security.
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.
(Face of Security continued on next page)
-5-
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 calculation
of the Quarterly 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 Starting Level in the case of July 2003, or any Index Ending Level
thereafter, if the Calculation Agent determines that, on the last Business Day
of the relevant Quarter, 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 Starting Level in the case of July
2003, or any Index Ending Level thereafter, shall not be postponed by more than
ten Business Days following the last Business Day of the relevant Quarter.
In the event the calculation of the Index Starting Level in the case of
July 2003, or any Index Ending Level thereafter, 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 Starting Level in the case
of July 2003, or any Index Ending Level thereafter (as the case may be), 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
(Face of Security continued on next page)
-6-
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 canceled. 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.
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 Closing
Level of the Index on any date; the Quarterly Index Return; the Capped Quarterly
Index Return; the Sum of the Quarterly Index Returns; 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. Payment
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
(Face of Security continued on next page)
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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.
7. 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.
8. 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.
9. 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).
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 Indenture at a redemption price determined by the Calculation
Agent in a manner
(Reverse of Security continued on next page)
-10-
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 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 this Security as herein
provided.
As provided in the Indenture and subject to certain limitations therein
set forth, the 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
(Reverse of Security continued on next page)
-11-
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.
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