Risk Factors

The return on the Securities is linked to the performance of one or more underlying assets or underlying baskets. Investing in the Securities is not equivalent to a direct investment in the applicable underlying asset(s), underlying basket(s) or the underlying constituents. This section describes the most significant risks relating to the Securities. We urge you to read the following information about these risks, together with the specific risks of your Securities described in the applicable supplement, the other information in this product supplement, the accompanying prospectus and the index supplement before investing in the Securities.

RISKS RELATED TO GENERAL CREDIT AND RETURN CHARACTERISTICS

The Securities differ from conventional debt securities and may not pay interest or return any or all of your principal amount.

You may lose some, a significant portion or all of your principal amount at maturity. The Securities will not pay any periodic coupon payments unless specified in the applicable supplement, and any periodic coupon payments may be contingent on the performance of one more underlying assets or underlying baskets.

The contingent repayment of principal applies only at maturity or upon an early redemption, as applicable.

You should be willing to hold your Securities to maturity. If you are able to sell your Securities in the secondary market prior to maturity or, if applicable, prior to an early redemption, you may have to sell them at a loss relative to your initial investment even if the applicable underlying assets or underlying basket are performing favorably to you. All payments on the Securities are subject to the creditworthiness of UBS.

The determination of any amounts payable and, if applicable, whether the Securities are subject to an automatic call, does not take into account all developments in the level of an underlying asset or underlying basket.

The calculation of any amounts payable on the Securities and, if applicable, whether the Securities are subject to an automatic call, may not reflect changes in the levels of the underlying asset(s) or underlying basket(s) during the periods between each applicable valuation date or valuation period, as applicable, may not be reflected in the determinations of any amounts payable on the Securities or, if applicable, whether the Securities are subject to an automatic call, or the calculation of the amount payable at maturity of the Securities. The calculation agent will determine any amounts payable on the Securities and, if applicable, whether the Securities are subject to an automatic call, by observing only the applicable levels of the underlying asset(s) or underlying basket(s) on each applicable valuation date or valuation period. If the Securities are not subject to an applicable early redemption, the calculation agent will calculate the payment at maturity based on the performance of one or more underlying assets or underlying baskets only on the applicable valuation dates or valuation periods. No other levels or values will be taken into account. As a result, you may lose some, a significant portion or all of your initial investment even if the level of one or more underlying assets or underlying baskets have performed favorably at certain times during the term of the Securities before rising or falling to applicable levels unfavorable to you on the applicable valuation dates or periods.

There can be no assurance that the investment view implicit in the Securities will be successful.

It is impossible to predict whether and the extent to which the level of an underlying asset or underlying basket will rise or fall and there can be no assurance that any underlying asset or underlying basket will perform favorably for a holder under the terms of the Securities specified in the applicable supplement. The levels of an underlying asset or underlying basket will be influenced by complex and interrelated political, economic, financial and other factors that affect the issuer of an underlying equity (the “ underlying equity issuer ”), the respective issuers of any underlying constituents (“ underlying constituent issuers ”) or the constituent commodities (“ constituent commodities ”) of an index or ETF (collectively with the underlying equity constituents, the “ underlying constituents ”). If an underlying asset or basket asset, as applicable, is an equity, you should be willing to accept the risks of owning equities in general and each such underlying equity in particular, and the risk of losing some, a significant portion or all of your initial investment. If an underlying asset or basket asset is an index or ETF, you should be willing to accept the risks associated with the relevant markets tracked by each such index or ETF in general and its underlying constituents in particular, and the risk of losing some, a significant portion or all of your initial investment.

Any payment on the Securities is subject to the creditworthiness of UBS.

The Securities are unsubordinated, unsecured debt obligations of UBS and are not, either directly or indirectly, an obligation of any third party. Any payment to be made on the Securities, including any repayment of principal at maturity, depends on the ability of UBS to satisfy its obligations as they come due. As a result, UBS’ actual and perceived creditworthiness may affect the market value of the Securities and you may not receive any amounts owed to you under the terms of the Securities and you could lose all of your initial investment if UBS were to default on its obligations.

You will not receive dividend payments on any underlying equity or underlying constituents or have the same rights as holders of any underlying equity or underlying constituent.

You will not receive any dividend payments or other distributions on any underlying equity or underlying constituents unless otherwise specified in the applicable supplement. As an owner of the Securities, you will not have voting rights or any other rights that holders of any underlying equity or underlying constituents may have.

The return on your Securities will not reflect the return you would realize if you actually owned the underlying assets, basket assets or underlying constituents and held such investment for a similar period because:

You have limited protection in the case of antidilution and reorganization events.

For antidilution and reorganization events affecting an underlying equity, the calculation agent may adjust the initial level, call threshold, coupon barrier, downside threshold, and/or final level, as applicable, of the affected underlying equity and any other term of the Securities. However, the calculation agent is not required to adjust the terms of the Securities for every corporate event that could affect an underlying equity. For example, the calculation agent is not required to make any adjustments if an underlying equity issuer or anyone else makes a partial tender offer or a partial exchange offer with respect to an underlying equity. An event that does not require the calculation agent to make an adjustment may materially and adversely affect the value of the Securities. In addition, the calculation agent will make all determinations and calculations concerning any such adjustment and may make any such adjustment, determination or calculation in a manner that differs from, or that is in addition to, the manner described in this product supplement or the applicable supplements as necessary to achieve an equitable result. You should refer to “General Terms of the Securities — Antidilution Adjustments for Securities Linked to an Underlying Equity or Equity Basket Asset”, “General Terms of the Securities — Reorganization Events for Securities Linked to an Underlying Equity or Equity Basket Asset” and “General Terms of the Securities — Role of Calculation Agent” for a description of the items that the calculation agent is responsible for determining.

In some circumstances, the payment you receive on the Securities may be based on securities issued by a different issuer and not on the original underlying equity.

Reorganization Events: If an underlying equity is subject to certain reorganization events relating to the respective underlying equity issuer, where such issuer is not the surviving entity, the determination of any amounts payable and, if applicable, whether the Securities are subject to an automatic call, may be based on the equity security of a successor to the respective underlying equity issuer in combination with any cash or any other assets distributed to holders of the underlying equity in such reorganization event, which may include securities issued by a non-U.S. company and quoted and traded in a non-U.S. currency. If any underlying equity issuer becomes subject to (i) a reorganization event (as defined herein) and the relevant distribution property (as defined herein) consists solely of cash or (ii) a merger or consolidation with UBS or any of its affiliates, the calculation agent may select a substitute security to replace the underlying equity as defined below under “General Terms of the Securities — Reorganization Events for Securities Linked to an Underlying Equity or Equity Basket Asset”. The occurrence of these reorganization events and the consequent adjustments may materially and adversely affect the value of the Securities. We describe the specific reorganization events that may lead to these adjustments and the procedures for selecting distribution property or a substitute security in the section of this product supplement called “General Terms of the Securities — Reorganization Events for Securities Linked to an Underlying Equity or Equity Basket Asset”. The calculation agent will make any such adjustments in order to achieve an equitable result.

ADRs: If an underlying equity is an ADR and the ADR is no longer listed or admitted to trading on a U.S. securities exchange registered under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), nor included in the OTC Bulletin Board Service operated by the Financial Industry Regulatory Authority, Inc. (“ FINRA ”), or if the ADR facility between the non-U.S. stock issuer and the ADR depositary is terminated for any reason, the determination as to any amounts payable and, if applicable, whether the Securities are subject to an automatic call will be based on the non-U.S. stock. Such delisting of the ADRs or termination of the ADR facility and the consequent adjustments may materially and adversely affect the value of the Securities. We describe such delisting of the ADRs or termination of the ADR facility and the consequent adjustments in the section of this product supplement called “General Terms of the Securities — Delisting of ADRs or Termination of ADR Facility”.

Delisting, suspension or discontinuance: If either a common stock or an ETF that is serving as an underlying equity is delisted or trading is suspended, or the ETF is otherwise discontinued, the underlying equity may be replaced with a security issued by another company, or in the case of an ETF, may be replaced with a share of another ETF or a basket of securities, futures contracts, commodities or other assets. Such delisting or suspension of trading in an underlying equity, or discontinuance of an ETF, and the consequent adjustments may materially and adversely affect the value of the Securities. We describe such discontinuance, delisting or suspension of trading in an underlying equity or ETF and the consequent adjustments in the sections of this product supplement called “General Terms of the Securities — Delisting or Suspension of Trading in an Underlying Equity” and “General Terms of the Securities — Delisting, Discontinuance or Modification of an ETF”, respectively.

The calculation agent can postpone the determination of an applicable level of an underlying asset, underlying basket or any basket asset, and therefore any valuation date and payment date, if a market disruption event occurs on the applicable valuation date.

The calculation agent will determine the applicable level(s) of an underlying asset, underlying basket or any basket asset on each applicable valuation date. The determination of the applicable level(s) with respect to those dates may be postponed with respect to an underlying asset, underlying basket or a basket asset if the calculation agent determines that a market disruption event has occurred or is continuing with respect to such underlying asset or basket asset on such date. If such a postponement occurs, the calculation agent will determine the applicable level(s) of the underlying asset, underlying basket or basket asset by reference to the applicable level(s) for the underlying asset or affected basket asset at a time on which no market disruption event occurs or is continuing with respect to such underlying asset or affected basket asset as discussed further under “General Terms of the Securities — Market Disruption Events”.

In no event, however, will any applicable valuation date be postponed by more than eight trading days, except as described under “General Terms of the Securities — Market Disruption Events — For Securities which reference averaging dates”, and in no event will the last valuation date in a valuation period be postponed by more than eight trading days. As a result, a payment date, including the maturity date, for the Securities could also be postponed,

although not by more than eight trading days. If the determination of the applicable level(s) of the underlying asset or affected basket asset on any applicable valuation date is postponed to the last possible day, but a market disruption event occurs or is continuing with respect to such underlying asset or basket asset on that day, the calculation agent will nevertheless determine the applicable level(s) of the underlying asset or basket asset on such day. In such an event, the calculation agent will estimate the applicable level(s) for such underlying asset or basket asset that would have prevailed in the absence of the market disruption event in the manner described under “General Terms of the Securities — Market Disruption Events”, which may adversely affect the return on your investment in the Securities. If a market disruption event has occurred or is continuing with respect to an underlying asset or basket asset on the originally-scheduled applicable valuation date, applicable payment date will be postponed to maintain the same number of business days leading to the relevant payment date as existed prior to the postponement(s).

The calculation agent may also postpone the determination of the initial level of an underlying asset or the basket assets, as applicable, for each offering of the Securities, if it determines that a market disruption event has occurred or is continuing with respect to an underlying asset or basket asset on the applicable date(s). If the determination of the initial level is postponed, the calculation agent may adjust the subsequent valuation date(s) and payment date(s), including the maturity date, to ensure that the stated term of that offering of the Securities remains the same.

The Securities are not bank deposits

An investment in the Securities carries risks which are very different from the risk profile of a bank deposit placed with UBS or its affiliates. The Securities have different yield and/or return, liquidity and risk profiles and would not benefit from any protection provided to deposits.

If UBS experiences financial difficulties, FINMA has the power to open restructuring or liquidation proceedings in respect of, and/or impose protective measures in relation to, UBS, which proceedings or measures may have a material adverse effect on the terms and market value of the Securities and/or the ability of UBS to make payments thereunder

The Swiss Financial Market Supervisory Authority (“FINMA”) has broad statutory powers to take measures and actions in relation to UBS if (i) it concludes that there is justified concern that UBS is over-indebted or has serious liquidity problems or (ii) UBS fails to fulfil the applicable capital adequacy requirements (whether on a standalone or consolidated basis) after expiry of a deadline set by FINMA. If one of these pre-requisites is met, FINMA is authorized to open restructuring proceedings or liquidation (bankruptcy) proceedings in respect of, and/or impose protective measures in relation to, UBS. The Swiss Banking Act grants significant discretion to FINMA in connection with the aforementioned proceedings and measures. In particular, a broad variety of protective measures may be imposed by FINMA, including a bank moratorium or a maturity postponement, which measures may be ordered by FINMA either on a stand-alone basis or in connection with restructuring or liquidation proceedings. The resolution regime of the Swiss Banking Act is further detailed in the FINMA Banking Insolvency Ordinance (“BIO-FINMA”). In a restructuring proceeding, FINMA, as resolution authority, is competent to approve the resolution plan. The resolution plan may, among other things, provide for (a) the transfer of all or a portion of UBS’ assets, debts, other liabilities and contracts (which may or may not include the contractual relationship between UBS and the holders of Securities) to another entity, (b) a stay (for a maximum of two business days) on the termination of contracts to which UBS is a party, and/or the exercise of (w) rights to terminate, (x) netting rights, (y) rights to enforce or dispose of collateral or (z) rights to transfer claims, liabilities or collateral under contracts to which UBS is a party, (c) the conversion of UBS’ debt and/or other obligations, including its obligations under the Securities, into equity (a “debt-to-equity” swap), and/or (d) the partial or full write-off of obligations owed by UBS (a “write-off”), including its obligations under the Securities. The BIO-FINMA provides that a debt-to-equity swap and/or a write-off of debt and other obligations (including the Securities) may only take place after (i) all debt instruments issued by UBS qualifying as additional tier 1 capital or tier 2 capital have been converted into equity or written-off, as applicable, and (ii) the existing equity of UBS has been fully cancelled. While the BIO-FINMA does not expressly address the order in which a write-off of debt instruments other than debt instruments qualifying as additional tier 1 capital or tier 2 capital should occur, it states that debt-to-equity swaps should occur in the following order: first, all subordinated claims not qualifying as regulatory capital; second, all other claims not excluded by law from a debt-to-equity swap (other than deposits); and third, deposits (in excess of the amount privileged by law). However, given the broad discretion granted to FINMA as the resolution authority, any restructuring plan in respect of UBS could provide that the claims under or in connection with the Securities will be partially or fully converted into equity or written-off, while preserving other obligations of UBS that rank pari passu

with, or even junior to, UBS’ obligations under the Securities. Consequently, holders of Securities may lose all of some of their investment in the Securities. In the case of restructuring proceedings with respect to a systemically important Swiss bank (such as UBS), the creditors whose claims are affected by the restructuring plan will not have a right to vote on, reject, or seek the suspension of the restructuring plan. In addition, if a restructuring plan has been approved by FINMA, the rights of a creditor to seek judicial review of the restructuring plan (e.g., on the grounds that the plan would unduly prejudice the rights of holders of Securities or otherwise be in violation of the Swiss Banking Act) are very limited. In particular, a court may not suspend the implementation of the restructuring plan. Furthermore, even if a creditor successfully challenges the restructuring plan, the court can only require the relevant creditor to be compensated ex post and there is currently no guidance as to on what basis such compensation would be calculated or how it would be funded.

RISKS RELATED TO COUPON FEATURES

If the applicable supplement specifies potential contingent coupons, you may not receive any contingent coupons with respect to your Securities.

If the applicable supplement specifies potential contingent coupons, UBS will not necessarily make such periodic coupon payments on the Securities. UBS will pay a contingent coupon for each applicable valuation date based on the performance of one or more underlying assets or underlying baskets on the applicable valuation date(s) or during the applicable valuation period. If the applicable supplement specifies the contingent coupon is subject to a coupon barrier and the applicable level of an underlying asset or underlying basket is less than its coupon barrier on the applicable valuation date(s) or during the applicable valuation period, UBS may not pay you the contingent coupon on the corresponding payment date. If the applicable level of an underlying asset or underlying basket is less than its coupon barrier on each of the applicable valuation dates, UBS may not pay you any contingent coupons during the term of your Securities. Generally, this non-payment of the contingent coupon coincides with a period of greater risk of principal loss on your Securities.

A higher coupon rate or lower coupon barrier may reflect greater expected volatility of the underlying asset(s) or underlying basket(s), and greater expected volatility generally indicates an increased risk of loss at maturity.

The coupon rate, coupon barrier and other applicable economic terms for the Securities specified in the applicable supplement are based, in part, on the expected volatility of the underlying asset(s) or underlying basket(s) at the time the terms of the Securities are set. “Volatility” refers to the frequency and magnitude of changes in the level of an underlying asset or underlying basket. The greater the expected volatility of an underlying asset or underlying basket as of the trade date, the greater the expectation is as of that date that the applicable level of an underlying asset or underlying basket could be less than its coupon barrier on the applicable valuation date(s) or during the applicable valuation period and, as a consequence, indicates an increased risk of not receiving a contingent coupon. All things being equal, this greater expected volatility will generally be reflected in a higher coupon rate than the yield payable on our conventional debt securities with a similar maturity or on otherwise comparable securities and/or a lower coupon barrier than those terms on otherwise comparable securities. Therefore, a relatively higher coupon rate may indicate an increased risk of not receiving a contingent coupon. Further, a relatively lower coupon barrier may not necessarily indicate that the Securities have a greater likelihood of paying contingent coupons. You should be willing to accept the potential to receive no contingent coupons during the term of the Securities.

An investment in Securities with coupon features and, if applicable, early redemption features, may be more sensitive to interest rate risk than an investment in securities without such features.

Because of the coupon features of the Securities, you may bear greater exposure to fluctuations in interest rates than if you purchased securities without such features. In particular, you may be negatively affected if prevailing interest rates begin to rise, and the coupon rate on the Securities may be less than the amount of interest you could earn on other investments with a similar level of risk available at such time. In addition, if you tried to sell your Securities at such time, the value of your Securities in any secondary market transaction would also be adversely affected. Conversely, in the event that prevailing interest rates are low relative to the coupon rate and, if applicable, the Securities are subject to an early redemption, there is no guarantee that you will be able to reinvest the proceeds from an investment in the Securities at a comparable rate of return for a similar level of risk.

RISKS RELATED TO EARLY REDEMPTION FEATURES

Additional Risks Related To Securities with an Automatic Call Feature

The Securities are subject to an automatic call and are subject to reinvestment risk.

The Securities may be subject to an automatic call based on the performance of one or more underlying assets or underlying baskets on the applicable valuation date(s) or during the applicable valuation period. Because the Securities could be subject to an automatic call as early as the first applicable valuation date or valuation period, the term of your investment may be limited and the total return on the Securities could be less than if the Securities remained outstanding until maturity.

In the event that the Securities are subject to an automatic call, there is no guarantee that you would be able to reinvest the proceeds at a comparable return and/or, if applicable, with a comparable coupon rate for a similar level of risk. In addition, to the extent you are able to reinvest such proceeds in an investment comparable to the Securities, you may incur transaction costs such as dealer discounts and hedging costs built into the price of the new securities. Additionally, if the applicable supplement specifies that the Securities will be subject to an automatic call if the applicable level(s) of one or more underlying assets or underlying baskets is equal to or greater than its call threshold on the applicable valuation date(s) or during the applicable valuation period, periods that do not result in the Securities being subject to an automatic call may generally coincide with a period of greater risk of principal loss on your Securities.

Additional Risks Related To Securities with an Issuer Call Feature

UBS may elect to call the Securities and the Securities are subject to reinvestment risk.

UBS may elect to call the Securities at its discretion prior to the maturity date. If UBS elects to call your Securities early, you will no longer have the opportunity to receive any further payments on the Securities after the corresponding payment date. In the event UBS elects to call the Securities, there is no guarantee that you would be able to reinvest the proceeds at a comparable return and/or, if applicable, with a comparable coupon rate for a similar level of risk. Further, UBS’ right to call the Securities may also adversely impact your ability to sell your Securities in the secondary market.

It is more likely that UBS will elect to call the Securities prior to maturity when the expected amounts payable on the Securities are greater than the amount that would be payable on other instruments issued by UBS of comparable maturity, terms and credit rating trading in the market. The greater likelihood of UBS calling the Securities in that environment increases the risk that you will not be able to reinvest the proceeds from the called Securities in an equivalent investment with similar potential returns. To the extent you are able to reinvest such proceeds in an investment comparable to the Securities, you may incur transaction costs such as dealer discounts and hedging costs built into the price of the new securities. UBS is less likely to call the Securities prior to maturity when the expected amounts payable on the Securities are less than the amounts that would be payable on other comparable instruments issued by UBS, which includes when one or more underlying assets or underlying baskets is performing unfavorably to you. Therefore, the Securities are more likely to remain outstanding when the expected amount payable on the Securities is less than what would be payable on other comparable instruments and when your risk of not receiving any positive return on your initial investment is relatively higher.

RISKS RELATED TO VALUATION FEATURES

Additional Risks Related To Securities with Daily Closing Level or Intraday Level Monitoring During a Valuation Period

If the applicable supplement specifies that the coupon barrier or downside threshold, as applicable, will be observed on each trading day during a valuation period, it is possible an underlying asset or underlying basket could breach the applicable coupon barrier or downside threshold, as applicable, on any trading day during a valuation period, in which case any amounts payable may be reduced even if such underlying asset or underlying basket subsequently performs favorably to you.

If the applicable supplement specifies potential contingent coupons and that the coupon barrier will be observed on each trading day during a valuation period, UBS will pay a contingent coupon for each valuation period in which the performance of one or more underlying assets or underlying baskets is equal to or greater than its coupon barrier on each trading day during such valuation period. If the performance of any underlying asset is less than its coupon barrier on any trading day during a valuation period, UBS will not pay you the contingent coupon applicable to such valuation period. This will be the case even if the performance of that underlying asset was higher than its coupon barrier on every other day during the valuation period and, if applicable, even if the performances of any other underlying assets are equal to or greater than their respective coupon barriers on each day during that valuation period. If the performance of any underlying asset is less than its coupon barrier on at least one trading day during each of the valuation periods, UBS will not pay you any contingent coupons during the term of, and you will not receive a positive return on, your Securities. Generally, this non-payment of the contingent coupon coincides with a period of greater risk of principal loss on your Securities.

If the applicable supplement specifies that a “ threshold event ” will be observed on each trading day during a valuation period, a threshold event occurs if the performance of one or more underlying assets or underlying baskets is less than its downside threshold on any trading day during the applicable valuation period. If a threshold event occurs and the final level of an underlying asset or underlying basket is less than its initial level or downside threshold, as applicable, you will lose some, a significant portion, or all of your initial investment.

Additional Risks Related to Securities with Averaging Dates Monitoring

The amounts payable on the Securities may be based on the arithmetic average of the applicable level of an underlying asset or underlying basket on each applicable valuation date.

If the applicable supplement specifies an amount payable based on the arithmetic average of the applicable level of an underlying asset or underlying basket on each applicable valuation date, the calculation agent may determine an amount payable on the Securities based on an averaging of such levels as of each of the applicable valuation dates.  Therefore, your return on the Securities may be negative even if the applicable level of an underlying asset or underlying basket is equal to or greater than its coupon barrier or downside threshold, as applicable, on certain valuation dates because the applicable level was less than its coupon barrier or downside threshold, as applicable, on other averaging dates and the average of such levels was less than its applicable coupon barrier or downside threshold.

Additional Risks Related to Securities with Optimal Entry Monitoring

The initial level will not be determined until the end of the initial valuation period.

If the applicable supplement specifies that the initial level of an underlying asset or basket will be based on the lowest applicable level during an initial valuation period, the initial level will not be determined until the end of such period. Unless otherwise specified in the applicable supplement, the initial valuation period will be each trading day on which no market disruption event occurs or is continuing from and including the trade date to and including the end of such period specified in the applicable supplement. Accordingly, you may not know the initial level for a significant period of time after the trade date. There can be no assurance that the applicable level of an underlying asset or underlying basket will decline during such period to less than the applicable level on the trade date or that, regardless of the initial level, the applicable level on a valuation date will not be less than its coupon barrier or

threshold level, as applicable, which may result in the loss of some, a significant portion or all of your initial investment.

Additional Risks Related to Securities That May Deliver Shares of an Underlying Equity

Declines in the level of an underlying equity from the applicable valuation date to the relevant payment date will reduce the value of any shares deliverable on the relevant payment date.

If the applicable supplement specifies that UBS will deliver a number of shares of an underlying equity on the applicable payment date instead of paying the cash equivalent, the number of shares deliverable will be determined on the applicable valuation date. The market value of such shares on the applicable payment date may be less than the cash equivalent of such shares determined on the corresponding valuation date due to any decline in the level of the underlying equity during the period between such valuation date and the corresponding payment date.

Conversely, if the applicable supplement specifies that UBS will pay a cash equivalent instead of delivering a number of shares of an underlying equity on the applicable payment date, the cash equivalent will be determined on the applicable valuation date and the payment that you receive on the corresponding payment date may be less than the market value of such shares that you would have received had UBS instead delivered such shares due to fluctuations in the market value of such shares during the period between the applicable valuation date and the corresponding payment date.

Additional Risks Related to Securities Linked to an Underlying Basket

If the Securities are linked to an underlying basket, changes in the levels of the basket assets may offset each other.

If the Securities are linked to an underlying basket, the return on the Securities will be linked to a weighted basket comprised of the basket assets. While the applicable levels of some basket assets may increase over the term of the Securities, the applicable levels of other basket assets may increase by less during the term of the Securities and may even decline. Therefore, increases in the levels of one or more basket assets may be offset by lesser increases or decreases in the levels of one or more of the other basket assets when determining whether the level of the applicable underlying basket and in calculating the underlying return and any amounts payable on the Securities. Additionally, differing weights of the basket assets amplifies this offsetting effect because more heavily weighted basket assets will have a larger impact on the applicable levels and underlying return than lesser weighted basket assets.

Additional Risks Related to Securities Linked to More than One Underlying Asset

You are exposed to the market risk of each underlying asset.

Your return on the Securities is not linked to a basket consisting of the underlying assets. Rather, it will be contingent upon the performance of each individual underlying asset. Unlike an instrument with a return linked to a basket of indices, common stocks or other underlying securities, in which risk is mitigated and diversified among all of the components of the basket, you will be exposed equally to the risks related to each underlying asset. Poor performance by any underlying asset over the term of the Securities will negatively affect your return and will not be offset or mitigated by a positive performance by any or all of the other underlying assets. For instance, you may receive a negative return equal to the underlying asset return of the least performing underlying asset if the closing level of one underlying asset is less than (or greater than, in the case of Securities linked to the performance of more than one underlying asset) its initial level or downside threshold, as applicable, on an applicable valuation date even if the underlying returns of the other underlying assets are performing more favorably to you. Accordingly, your investment is subject to the market risk of each underlying asset.

Securities linked to the least performing underlying asset expose you to a greater risk of losing some, a significant portion or all of your initial investment at maturity and, if applicable, no contingent coupons, than if the Securities were linked to fewer underlying assets.

The risk that you may lose some, a significant portion or all of your initial investment and, if applicable, that you may not receive any contingent coupons in the Securities is greater if you invest in the Securities linked to the least performing underlying asset than the risk of investing in substantially similar securities that are linked to the performance of fewer underlying assets. With more underlying assets, it is more likely that the applicable level of any underlying asset will be less than its coupon barrier on any applicable valuation date or decline to an applicable level that is less than its downside threshold than if the Securities were linked to fewer underlying assets.

In addition, the lower the correlation is between the performances of a pair underlying assets, the more likely it is that one of the underlying assets will perform unfavorably to you on any valuation date. Although the correlation of the underlying assets’ performance may change over the term of the Securities, the economic terms of the Securities are determined, in part, based on the correlation of the underlying assets’ performance calculated using our internal models at the time when the terms of the Securities are finalized. All things being equal, economics terms more favorable to you (such as, if applicable, a higher coupon rate and lower downside threshold and coupon barrier) is generally associated with lower correlation of the underlying assets. Therefore, if the performance of a pair of underlying assets is not correlated to each other or is negatively correlated, the risk that you will lose some, a significant portion or all of your initial investment and, if applicable, that you will not receive any contingent coupons, is even greater despite economic terms more favorable to you. With three underlying assets, if applicable, it is more likely that the performance of one pair of underlying assets will not be correlated, or will be negatively correlated. Therefore, it is more likely that that you will lose some, a significant portion or all of your initial investment at maturity and, if applicable, that you will not receive any contingent coupons.

RISKS RELATED TO PAYMENT AT MATURITY FEATURES

Additional Risks Related To Securities with No Participation in Any Appreciation in any Underlying Asset or Underlying Basket

Your potential return on the Securities may be limited to a pre-specified return and you will not participate in any appreciation (or depreciation, in the case of Securities linked to the inverse performance) of an underlying asset or underlying basket or any underlying constituents.

The return potential of the Securities may be limited to a pre-specified return, regardless of any appreciation of an underlying asset or underlying basket. Furthermore, you may be subject to the decline in the level of an underlying asset or underlying basket even though you cannot participate in any appreciation in the level of such underlying asset or underlying basket. As a result, the return on an investment in the Securities could be less than the return on a direct investment in an underlying asset or underlying basket. In addition, as an owner of the Securities, you will not have voting rights or any other rights of a holder of any underlying equity or underlying constituents.

Additional Risks Related To Securities with a Participation Rate

The participation rate applies only to any positive performance (or negative performance in the case of Securities that provide inverse participation) of an underlying asset or underlying basket on the specified valuation date(s) and may have the effect of reducing your exposure to such performance.

At maturity, the Securities provide participation in any positive return (or negative return in the case of Securities that provide inverse participation in the performance of an underlying asset or underlying basket) in an underlying asset or underlying basket at the applicable participation rate. If you are able to sell your Securities prior to maturity in the secondary market, the price you receive will likely not reflect the full economic value of the applicable rate or the Securities and the return may be less than the return of the applicable underlying asset or underlying basket multiplied by the applicable rate even if your return is positive (or negative in the case of Securities that provide inverse participation). You can receive the full benefit of the participation rate only if you hold your Securities to the payment date corresponding to the applicable valuation date.

In addition, if the participation rate specified in the applicable supplement is less than 1.0 or 100%, the return you receive at maturity on any positive return (or negative return in the case of Securities that provide inverse participation in the performance of an underlying asset or underlying basket) in an underlying asset or underlying basket will be less than the amount you would have otherwise received if you invested directly in such underlying asset or underlying basket. This is because a participation rate of less than 1.0 or 100% will have the effect of reducing your exposure to any such positive return or negative return (in the case of Securities that provide inverse participation) in an underlying asset or underlying basket.

Additional Risks Related To Securities with a Maximum Gain Feature

Your potential return on the Securities from any positive performance may be limited by a maximum gain.

The return potential of the Securities may be limited by a maximum gain. Therefore, you will not benefit from any positive performance of an underlying asset or underlying basket that results in an amount payable exceeding the maximum gain, and your return on the Securities may be less than a direct investment in such underlying asset or underlying basket.

Additional Risks Related To Securities Linked to the Inverse Performance of One or More Underlying Assets and/or Underlying Baskets

Inverse participation in the performance of an underlying asset or underlying basket is not the same as taking a short position directly in an underlying asset or any underlying constituents.

If the applicable supplement provides inverse participation in the performance of an underlying asset or underlying basket, the return on the Securities may not reflect the return you would realize if you actually took a short position directly in an underlying asset or any underlying constituents. For example, to maintain a short position in any underlying asset or underlying constituent, you would have to pay dividend payments (if any) to the entity that lends you the underlying asset or underlying constituent for your short sale, and you could receive certain interest payments (the short interest rebate) from the lender.

RISKS RELATED TO LIQUIDITY AND SECONDARY MARKET ISSUES

There may not be an active trading market in the Securities; sales in the secondary market may result in significant losses.

You should be willing to hold your Securities to maturity. There may be little or no secondary market for the Securities. The Securities will not be listed or displayed on any securities exchange or any electronic communications network. UBS Securities LLC and other affiliates of UBS intend, but are not required, to make a market for the Securities and may stop making a market at any time.

If you sell your Securities before maturity, you may have to do so at a substantial discount from the issue price to public, and as a result, you may suffer substantial losses, even in cases where the level of an underlying asset or underlying basket has performed favorably for you under the terms of the Securities specified in the applicable supplement. The potential returns described in the applicable supplements are possible only in the case that you hold your Securities to maturity or, if applicable until the Securities are subject to an early redemption.

The terms and features of the Securities at issuance and the market value of the Securities may be influenced by unpredictable factors.

Because structured notes, including the Securities, can be thought of as having a debt component and a derivative component, factors that influence the values of debt instruments and options and other derivatives will also affect the terms and features of the Securities at issuance and the market price of the Securities prior to maturity. Several factors, many of which are beyond our control and interrelate in complex and unpredictable ways, will influence the terms and features of your Securities at issuance and the market value of the Securities prior to maturity. Generally, we expect that the level of an underlying asset or underlying basket on any day will affect the market value of the Securities more than any other single factor. Other factors that may influence terms and features of the Securities and their market value include:

These factors interrelate in complex and unpredictable ways, and the effect of one factor on the terms and features of your Securities at issuance and the market value of your Securities may offset or enhance the effect of another factor. For instance, it is possible for the level of an underlying asset or underlying basket to increase while the market value of the Securities declines and the value of the Securities prior to maturity may be less than the principal amount, and may be significantly different than the amount expected at maturity.

The inclusion of commissions and compensation in the original issue price of the Securities is likely to adversely affect secondary market prices of the Securities.

Assuming no change in market conditions or any other relevant factors, the price, if any, at which UBS Securities LLC or its affiliates (or any third party market maker) are willing to purchase the Securities in secondary market transactions will likely be lower than the original issue price, because the issue price is likely to include, and secondary market prices are likely to exclude, commissions or other compensation paid with respect to, or embedded profit in, the Securities. In addition, any such prices may differ from values determined by pricing models used by UBS Securities LLC or its affiliates, as a result of dealer discounts, mark-ups or other transactions.

RISKS RELATED TO GENERAL CHARACTERISTICS OF UNDERLYING ASSETS AND UNDERLYING BASKETS

The respective underlying asset, basket assets or underlying constituents are subject to various market risks.

The respective underlying asset, basket assets or underlying constituents are subject to various market risks. Consequently, the level of an underlying asset or basket asset, and therefore the underlying basket, may fluctuate depending on the market(s) in which an applicable underlying asset, basket asset or the underlying constituents operate. Market forces outside of our control could cause the level of an underlying asset or underlying basket to perform unfavorably for holders of the Securities under the terms of such Securities specified in the applicable supplement. The level of an underlying asset or underlying basket can rise or fall sharply due to factors specific to an underlying asset, basket asset or the underlying constituents, such as price volatility, earnings and financial conditions, corporate, industry and regulatory developments, management changes and decisions, and other events, and by general market factors, such as general equity or commodity market levels, interest rates and economic and political conditions. To the extent that the underlying asset is an underlying equity, the applicable supplement will provide a brief description of the underlying equity issuer to which the Securities we offer are linked. We urge you to review financial and other information filed periodically by each underlying equity issuer with the SEC.

UBS and its affiliates have no affiliation with any underlying equity issuer or underlying constituent issuer and are not responsible for their public disclosure of information, whether contained in SEC filings or otherwise.

Unless otherwise specified in the applicable supplement, we and our affiliates are not affiliated with any underlying equity issuer or underlying constituent issuer and have no ability to control or predict their actions, including any corporate actions that could constitute an antidilution or reorganization event of the type that would require the calculation agent to adjust the payment to you at maturity, and have no ability to control the public disclosure of these corporate actions or any events or circumstances affecting an underlying equity issuer or underlying constituent issuer. No underlying equity issuer or underlying constituent issuer is involved in the offering of the Securities in any way and has no obligation to consider your interests as owner of the Securities in taking any corporate actions that might affect the market value of your Securities or your payment at maturity. An underlying equity issuer or underlying constituent issuer may take actions that could adversely affect the market value of the Securities.

The Securities are unsecured debt obligations of UBS only and are not obligations of any underlying equity issuer or underlying constituent issuer. No portion of the issue price you pay for the Securities will go to any underlying equity issuer or underlying constituent issuer.

Unless otherwise specified in the applicable supplement, we have derived the information about the respective underlying equity issuer(s) and each underlying equity from publicly available information, without independent verification. UBS has not conducted any independent review or due diligence of any publicly available information with respect to any underlying equity issuer or any underlying equity. You, as an investor in the Securities, should make your own investigation into the respective underlying equity issuer(s) and the underlying asset(s) or underlying basket(s) for your Securities. We urge you to review financial and other information filed periodically by the underlying equity issuer(s) with the SEC.

This product supplement relates only to the Securities and does not relate to any underlying equity or any underlying equity issuer or underlying constituent issuer.

UBS and its affiliates have no affiliation with any underlying index sponsor and are not responsible for their public disclosure of information.

Unless otherwise specified in the applicable supplement, we and our affiliates are not affiliated with the sponsor of any underlying index (an “ index sponsor ”) to which an issuance of the Securities may be linked (except for licensing arrangements discussed in the index supplement or the applicable supplement) and have no ability to control or predict their actions, including any errors in, or discontinuation of, public disclosure regarding methods or policies relating to the calculation of the applicable underlying index. If an index sponsor discontinues or suspends the calculation of an underlying index to which your Securities are linked, it may become difficult to determine the

market value of the Securities and any amounts payable on the Securities. The calculation agent may designate a successor index. If the calculation agent determines that no successor index comparable to the underlying index exists, any amounts payable will be determined by the calculation agent as described under “General Terms of the Securities — Discontinuance of or Adjustments to an Underlying Index; Alteration of Method of Calculation” and “General Terms of the Securities — Role of Calculation Agent”. No index sponsor is involved in the offering of the Securities in any way. The index sponsors do not have any obligation to consider your interests as an owner of the Securities in taking any actions that might affect the market value of your Securities or any amounts payable on the Securities.

Unless otherwise specified in the applicable supplement, we have derived the information about the respective underlying index sponsor(s) and each underlying index to which your Securities are linked from publicly available information, without independent verification. You, as an investor in the Securities, should conduct your own independent investigation of the relevant index sponsor and each underlying index for your Securities .

Changes that affect an underlying index will affect the market value of your Securities and the amount payable under your Securities.

The policies of an index sponsor concerning the calculation of an underlying index, additions, deletions or substitutions of any underlying constituents and the manner in which changes affecting such underlying constituent issuers (such as stock dividends, reorganizations or mergers) and/or the underlying constituents (such as prolonged changes in market value, significantly decreased liquidity or if an underlying commodity ceases to exist) are reflected in the underlying index, could affect the level of the underlying index and, therefore, could affect the amount payable on your Securities and the market value of your Securities prior to maturity. The amount payable on the Securities and their market value could also be affected if an index sponsor changes these policies, such as changing the manner in which it calculates an underlying index, or if an index sponsor discontinues or suspends calculation or publication of an underlying index, in which case it may become difficult to determine the market value of the Securities. If events such as these occur, or if a relevant level is not available because of a market disruption event or for any other reason, and no successor index is selected, the calculation agent — which initially will be UBS Securities LLC, an affiliate of UBS — may determine the relevant level—and thus any amount payable and, if applicable, whether the Securities are subject to an early redemption— as described under “General Terms of the Securities — Market Disruption Events”.

Historical performance of an underlying asset, basket asset or the underlying constituents should not be taken as an indication of the future performance of such underlying asset, basket assets or underlying constituents during the term of the Securities.

The historical performance of an underlying asset, basket asset or the underlying constituents should not be taken as an indication of the future performance of such underlying asset, basket assets or underlying constituents. As a result, it is impossible to predict whether the value(s) of an underlying asset, basket asset or the underlying constituents will rise or fall. The level(s) of the underlying asset, underlying basket and basket assets, as applicable, will be influenced by complex and interrelated political, economic, financial, judicial, force majeure and other factors that can affect the respective underlying asset or basket assets, as applicable, and the market value(s) of an underlying asset, basket asset or the underlying constituents.

Moreover, any underlying basket to which any Securities may be linked does not have a recognized market value and no historical performance data will be available. The applicable levels of the basket assets will determine the applicable levels of the applicable underlying basket.

An investment in the Securities may be subject to risks associated with non-U.S. markets.

An underlying asset, basket asset or underlying constituent may be issued by a non-U.S. company and may trade on a non-U.S. exchange. An investment in Securities linked directly or indirectly to the value of non-U.S. equity securities or non-U.S. exchange-traded futures contracts involves particular risks.

Generally, non-U.S. securities and non-U.S. futures markets may be more volatile than U.S. securities and futures markets, and market developments may affect non-U.S. markets differently from U.S. securities and U.S. futures markets. Direct or indirect government intervention to stabilize these non-U.S. markets, as well as cross shareholdings in non-U.S. companies, may affect market prices and volumes in those markets. There is generally less publicly available information about non-U.S. companies than about those U.S. companies that are subject to

the reporting requirements of the SEC, and non-U.S. companies are subject to accounting, auditing and financial reporting standards and requirements that differ from those applicable to U.S. reporting companies. Similarly, regulations of the Commodity Futures Trading Commission generally do not apply to trading on non-U.S. commodity futures exchanges, and trading on those non-U.S. exchanges may involve different and greater risks than trading on U.S. exchanges.

Securities and futures prices in non-U.S. countries are subject to political, economic, financial and social factors that may be unique to the particular country. These factors, which could negatively affect the non-U.S. securities and non-U.S. futures markets, include the possibility of recent or future changes in the non-U.S. government’s economic and fiscal policies, the possible imposition of, or changes in, currency exchange laws or other non-U.S. laws or restrictions applicable to non-U.S. companies or investments in non-U.S. securities or non-U.S. futures contracts and the possibility of fluctuations in the rate of exchange between currencies. Moreover, certain aspects of a particular non-U.S. economy may differ favorably or unfavorably from the U.S. economy in important respects, such as growth of gross national product, rate of inflation, capital reinvestment, resources and self-sufficiency.

Fluctuations relating to exchange rates may affect the value of your investment.

Fluctuations in exchange rates may affect the value of your investment where an underlying asset, basket asset or underlying constituent is: (1) an ADR, which is quoted and traded in U.S. dollars, but represents a non-U.S. stock that is quoted and traded in a non-U.S. currency and that may trade differently from the ADR; (2) is substituted or replaced by another underlying asset, basket asset or underlying constituent, as applicable, that is quoted and traded in a non-U.S. currency; or (3) an ETF or underlying index that invests in underlying constituents that are quoted and traded in a non-U.S. currency. Index sponsors may substitute or replace underlying constituents with non-U.S. underlying constituents in accordance with their own policies and procedures.

For any ETF that invests in underlying constituents that are quoted and traded in a non-U.S. currency, the value of such ETF will generally reflect the U.S. dollar value of those assets. Similarly, the levels of certain underlying indices that are comprised of underlying constituents which are quoted and traded in a non-U.S. currency may reflect the U.S. dollar value of such underlying constituents. Therefore, holders of Securities based upon an ETF or these underlying indices may be exposed to currency exchange rate risk with respect to the currency in which such underlying constituents trade. An investor’s net exposure will depend on the extent to which the relevant non-U.S. currency strengthens or weakens against the U.S. dollar and the relative weight of the relevant non-U.S. constituent(s) in such underlying asset. If, taking into account such weighting, the dollar strengthens against such non-U.S. currency, the level of such underlying the ETF or underlying index, may be adversely affected and the value of the Securities may decrease.

In recent years, the exchange rates between the U.S. dollar and some other currencies have been highly volatile, and this volatility may continue in the future. Risks relating to exchange rate fluctuations generally depend on economic and political events over which we have no control. Fluctuations in any particular exchange rate that have occurred in the past are not necessarily indicative, however, of fluctuations that may occur during the term of the Securities. Changes in the exchange rate between the U.S. dollar and a non-U.S. currency may affect the U.S. dollar equivalent of the price of any underlying asset, basket asset or underlying constituent described in (1) through (3) above, and, as a result, may affect the value of the Securities.

In addition, foreign exchange rates can either be floating or fixed by sovereign governments. Exchange rates of the currencies used by most economically developed nations are permitted to fluctuate in value relative to the U.S. dollar and to each other. However, from time to time governments and, in the case of countries using the euro, the European Central Bank, may use a variety of techniques, such as intervention by a central bank in foreign exchange, money markets, sovereign debt or other financial markets, the imposition of regulatory controls or taxes or changes in interest rates to influence the exchange rates of their currencies. Governments may also issue a new currency to replace an existing currency or alter the exchange rate or relative exchange characteristics by a devaluation or revaluation of a currency. These governmental actions could change or interfere with currency valuations and currency fluctuations that would otherwise occur in response to economic forces, as well as in response to the movement of currencies across borders. As a consequence, these government actions could adversely affect the value of an underlying asset, basket asset or underlying constituent that is quoted and traded in a non-U.S. currency.

The underlying return for the Securities will not be adjusted for changes in exchange rates related to the U.S. dollar, which might affect any underlying asset, basket asset or underlying constituent that are traded in currencies other than the U.S. dollar.

Although, as discussed above, an underlying asset, basket asset or underlying constituents may be traded in, or its market value(s) may be converted into, currencies other than the U.S. dollar, the Securities are denominated in U.S. dollars, and the calculation of the amount payable on the Securities will not be adjusted for changes in the exchange rates between the U.S. dollar and any of the currencies in which the applicable underlying asset, basket asset or underlying constituent is denominated. The amount we pay in respect of the Securities will be determined solely in accordance with the procedures described in the applicable supplement.

The value of the shares of an ETF may not completely track the value of the shares of the securities in which the ETF invests or the level of its respective target index.

With respect to any ETF, you should be aware that, although the trading characteristics and valuations of that ETF will usually mirror the characteristics and valuations of the underlying constituents in which that ETF invests, the value of the ETF may not completely track the value of its underlying constituents. The value of the ETF will reflect transaction costs and fees that the underlying constituents in which the ETF invests do not have.

In addition, an ETF may seek to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of a specific index (the “ target index ”). The correlation between the performance of an ETF and the performance of its target index may not be perfect. Although the performance of an ETF seeks to replicate the performance of its target index, the ETF may not invest in all the securities, futures contracts or commodities comprising such target index but rather may invest in a representative sample of such assets comprising the target index. Also, an ETF may not fully replicate the performance of its target index due to the temporary unavailability of certain securities, futures contracts or commodities comprising such target index. Furthermore, because an ETF is traded on a national securities exchange and is subject to the market supply and demand by investors, the market value of an ETF may differ from the net asset value per share of the ETF. Increased volatility of the ETF can create further dislocations between the market value and net asset value per share of the ETF. Finally, the performance of an ETF will reflect transaction costs and fees that are not included in the calculation of its target index. As a result of the foregoing, the performance of an ETF may not exactly replicate the performance of its target index.

In addition, although shares of an ETF may be currently listed for trading on an exchange, there is no assurance that an active trading market will continue for the shares of an ETF or that there will be liquidity in the trading market.

Securities linked to an ETF may be subject to management risk.

An ETF may be subject to management risk, which is the risk that the investment strategy of the ETF’s investment adviser, the implementation of which is subject to a number of constraints, may not produce the intended results. For example, the ETF’s investment adviser may have the right to use a portion of the ETF’s assets to invest in shares of equity securities that are not included in its target index. The ETF may also not be actively managed and may be affected by a general decline in market segments relating to its target index. The ETF’s investment adviser may also invest in securities included in, or representative of, its target index regardless of their investment merits. The ETF’s investment adviser may also not be obligated to attempt to take defensive positions in declining markets.

If an underlying equity is an ADR, the value of the ADRs may not completely track the price of the non-U.S. stock represented by such ADRs.

If an underlying equity is an ADR, you should be aware that, although the trading characteristics and valuations of the ADRs will usually mirror the characteristics and valuations of the non-U.S. stock represented by the ADRs, the value of an ADR upon which an offering of the Securities is based may not completely track the value of the non-U.S. stock represented by such ADR. Moreover, the terms and conditions of depositary facilities may result in less liquidity or lower market value of the ADRs than for the non-U.S. stock. Since holders of the ADRs may surrender the ADRs to take delivery of and trade the non-U.S. stock (a characteristic that allows investors in ADRs to take advantage of price differentials between different markets), an illiquid market for the non-U.S. stock generally will result in an illiquid market for the ADRs representing such non-U.S. stock.

If an underlying equity is an ADR, the trading price of such ADRs and the trading price of the Securities linked to such ADRs will be affected by conditions in the markets where those ADRs principally trade.

Although the market price of an ADR upon which an offering of Securities is based is not directly tied to the trading price of the non-U.S. stock in the non-U.S. markets where such non-U.S. stock principally trades, the trading price of ADRs is generally expected to track the U.S. dollar value of the currency of the country where the non-U.S. stock principally trades and the trading price of such non-U.S. stock on the markets where that non-U.S. stock principally trades. This means that the trading value of any ADR upon which an offering of the Securities is based is expected to be affected by the exchange rates between the U.S. dollar and the currency of the country where the non-U.S. stock principally trades and by factors affecting the markets where such non-U.S. stock principally trades.

There are important differences between the rights of holders of ADRs and the rights of holders of the non-U.S. stock.

If an underlying equity is an ADR, you should be aware that your Securities are linked to the ADRs and not the non-U.S. stock represented by such ADRs, and there exist important differences between the rights of holders of an ADR and the non-U.S. stock such ADR represents. Each ADR is a security evidenced by an American depositary receipt that represents a specified number of shares of the non-U.S. stock. Generally, an ADR is issued under a deposit agreement, which sets forth the rights and responsibilities of the depositary, the non-U.S. stock issuer and holders of the ADRs, which may be different from the rights of holders of the non-U.S. stock. For example, the non-U.S. stock issuer may make distributions in respect of the non-U.S. stock that are not passed on to the holders of its ADRs. Any such differences between the rights of holders of the ADRs and holders of the non-U.S. stock may be significant and may materially and adversely affect the market value of your Securities.

RISKS RELATED TO CHARACTERISTICS AND ISSUES OF COMMODITY INDICES AND ETFS
WITH UNDERLYING COMMODITIES

In the case of Securities linked to a commodities index or an ETF with underlying commodities, commodity prices may change unpredictably, affecting the value of your Securities in unforeseeable ways.

Commodity prices are affected by a variety of factors, including weather, governmental programs and policies, national and international political, military, terrorist and economic events, changes in interest and exchange rates, and trading activities in commodities and related futures contracts. These factors may affect the applicable level of any underlying index that is a commodity index or an ETF with underlying commodities and, therefore, the value of your Securities in varying ways. Different factors may cause the value of different commodities and the volatilities of their prices to move in inconsistent directions and at inconsistent rates.

In the case of Securities linked to a commodities index or an ETF with underlying commodities, such Securities may not offer direct exposure to commodity spot prices.

Your Securities may be linked to an index (or ETF with underlying commodities) that is comprised of commodity futures contracts and not physical commodities (or their spot prices). The price of a futures contract reflects the expected value of the commodity upon delivery in the future, whereas the spot price of a commodity reflects the immediate delivery value of the commodity. A variety of factors can lead to a disparity between the expected future price of a commodity and the spot price at a given point in time, such as the cost of storing the commodity for the term of the futures contract, interest charges incurred to finance the purchase of the commodity and expectations concerning supply and demand for the commodity. The price movements of a futures contract are typically correlated with the movements of the spot price of the referenced commodity, but the correlation is generally imperfect and price moves in the spot market may not be reflected in the futures market (and vice versa). Accordingly, the Securities may underperform a similar investment that is linked to commodity spot prices.

In the case of Securities linked to a commodities index or an ETF with underlying commodities, suspensions or disruptions of market trading in the commodity and related futures markets may adversely affect the value of your Securities.

Commodity markets are subject to temporary distortions or other disruptions due to various factors, including the lack of liquidity in the markets, the participation of speculators and government regulation and intervention. In addition, U.S. and some non-U.S. futures exchanges have regulations that limit the amount of fluctuation in futures contract prices that may occur during a single business day. These limits are generally referred to as “daily price

fluctuation limits” and the maximum or minimum price of a contract on any given day as a result of these limits is referred to as a “limit price”. Once the limit price has been reached in a particular contract, no trades may be made at a different price. Limit prices have the effect of precluding trading in a particular contract or forcing the liquidation of contracts at disadvantageous times or prices. These circumstances could adversely affect the level(s) of any underlying index that is a commodity index (or ETF with underlying commodities) and, therefore, the value of your Securities.

In the case of Securities linked to a commodities index or an ETF with underlying commodities, higher future prices of commodities included in the index relative to their current prices may lead to a decrease in any amounts payable on the Securities.

Your Securities may be linked to an index (or ETF with underlying commodities) that is comprised of futures contracts on physical commodities. Unlike equities, which typically entitle the holder to a continuing stake in a corporation, commodity futures contracts normally specify a certain date for delivery of the applicable physical commodity. As the exchange-traded futures contracts approach expiration, they are replaced by contracts that have a later expiration. The relative sale prices of the contracts with earlier and later expiration dates will depend on the index or ETF commodities included in any underlying index or ETF and the markets for those index or ETF commodities during the term of your Securities. To the extent the index or ETF rolls futures contracts from a lower priced futures contract to a higher priced futures contract, the rolls could adversely affect the value of any commodity index (or ETF with underlying commodities) to which your Securities are linked and, accordingly, any amounts payable on the Securities.

The business activities of UBS or its affiliates may create conflicts of interest.

As noted above, UBS and its affiliates expect to engage in trading activities related to an underlying asset, basket asset and the underlying constituents, as applicable, including listed and/or over-the-counter options, futures, exchange-traded funds or other instruments on those assets, that are not for the account of holders of the Securities or on their behalf. These trading activities may present a conflict between the holders’ interest in the Securities and the interests UBS and its affiliates will have in facilitating transactions, including block trades and options and other derivatives transactions, for their customers and in accounts under their management. These trading activities, if they influence the level of such underlying asset, basket asset and/or underlying constituent, as applicable, could be adverse to the interests of the holders of the Securities.

UBS and its affiliates may, at present or in the future, engage in business with an underlying equity issuer or underlying constituent issuer, including making loans to or acting as a counterparty (including with respect to derivatives) or providing advisory services to that company. These services could include investment banking and merger and acquisition advisory services. These activities may present a conflict between the obligations of UBS or another affiliate of UBS and the interests of holders of the Securities as beneficial owners of the Securities. Any of these activities by UBS, UBS Securities LLC or other affiliates may affect the level of any underlying asset, basket asset or underlying constituent, as applicable, and, therefore, any amounts payable on the Securities and the market value of the Securities.

We and our affiliates may publish research, express opinions or provide recommendations that are inconsistent with investing in or holding the Securities. Any such research, opinions or recommendations could affect the level of an underlying asset, basket asset or the underlying constituents or the market value of, and your return on, the Securities.

UBS and its affiliates publish research from time to time on financial markets, commodities markets and other matters that may influence the value of the Securities, or express opinions or provide recommendations that are inconsistent with purchasing or holding the Securities. UBS and its affiliates may have published research or other opinions that call into question the investment view implicit in your Securities. Any research, opinions or recommendations expressed by UBS or its affiliates may not be consistent with each other and may be modified from time to time without notice. Investors should make their own independent investigation of the merits of investing in the Securities and an underlying asset, basket asset or the underlying constituents to which the Securities are linked.

There are potential conflicts of interest between you and the calculation agent.

Our affiliate, UBS Securities LLC, will serve as the calculation agent. UBS Securities LLC will, among other things, determine the performance of an underlying asset or underlying basket on any applicable valuation date or valuation period and, accordingly, the amount payable on the Securities. We may change the calculation agent after the settlement date of any Securities without notice. For a fuller description of the calculation agent’s role, see “General Terms of the Securities — Role of Calculation Agent”. The calculation agent will exercise its judgment when performing its functions. For example, the calculation agent may have to determine whether a market disruption event affecting an underlying asset or a basket asset has occurred or is continuing on any applicable valuation date. This determination may, in turn, depend on the calculation agent’s judgment as to whether the event has materially interfered with our ability or the ability of any of our affiliates to maintain or unwind hedge positions. See “Use of Proceeds and Hedging”. Because this determination by the calculation agent may affect any amounts payable on the Securities, the calculation agent may have a conflict of interest if it needs to make any such decision.

One of our affiliates may serve as the depositary for the ADR that may constitute an underlying equity.

One of our affiliates may serve as the depositary for some foreign companies that issue ADRs. If an underlying equity is an ADR and one of our affiliates serves as depositary for such ADRs, the interests of our affiliate, in its capacity as depositary for the ADRs, may be adverse to your interests as a holder of Securities.

Affiliates of UBS may act as agent or dealer in connection with the sale of the Securities.

UBS and its affiliates act in various capacities with respect to the Securities. We and our affiliates may act as a principal, agent or dealer in connection with the sale of the Securities. Such affiliates, including the sales representatives, will derive compensation from the distribution of the Securities and such compensation may serve

as an incentive to sell these Securities instead of other investments. We may pay dealer compensation to any of our affiliates acting as agents or dealers in connection with the distribution of the Securities.

RISKS RELATED TO TAXATION ISSUES

Significant aspects of the tax treatment of certain offerings of the Securities are uncertain.

There is no direct legal authority regarding the proper U.S. federal income tax treatment of certain Securities (including, in particular, Securities that are not treated as indebtedness for U.S. federal income tax purposes), and we do not plan to request a ruling from the IRS. Consequently, significant aspects of the tax treatment of certain Securities are uncertain, and the IRS or a court might not agree with the treatment of the Securities as described below under “Material U.S. Federal Income Tax Consequences” or in the applicable supplements. If the IRS were successful in asserting an alternative treatment, the tax consequences of owning and disposing of the Securities could be materially and adversely affected. In addition, in 2007, the IRS released Notice 2008-2 that may affect the U.S. federal income tax treatment of “prepaid forward contracts” and similar instruments, and the IRS and the Treasury are actively considering various issues relating to such instruments. Any Treasury regulations or other guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of an investment in certain Securities, possibly with retroactive effect. Prospective investors should review the discussion under “Material U.S. Federal Income Tax Consequences” and the discussion in the applicable supplements relating to an offering of Securities for a discussion of the tax treatment and possible alternative treatments of the Securities.

Both U.S. and non-U.S. holders should consult their tax advisors regarding the U.S. federal income tax consequences of an investment in the Securities (including possible alternative treatments and the issues presented by Notice 2008-2), as well as any tax consequences arising under the laws of any state, local or non-U.S. taxing jurisdiction (including that of any underlying equity issuer and/or any underlying constituent issuers, as applicable).

General Terms of the Securities

The following is a summary of general terms that may apply to the Securities. The information in this section is qualified in its entirety by the more detailed explanation set forth elsewhere in the applicable supplements and in the accompanying prospectus. 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” in the accompanying prospectus.

Specific Terms of Each Security Will Be Described in the Applicable Supplements

In addition to the terms described elsewhere in this product supplement, the following general terms may apply to the Securities. The applicable supplements accompanying this product supplement will describe the specific terms of your Securities. The terms described therein modify or supplement those described herein and in the accompanying prospectus. The applicable supplement may use different defined terms than those used herein to describe the Securities.

You should read any applicable supplements in conjunction with this product supplement, the index supplement and the accompanying prospectus.

The Securities are Part of a Series

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 our indenture, which is described in the accompanying prospectus. This product supplement 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” in the accompanying prospectus.

We may issue separate offerings of the Securities that may be identical in all respects, except that each offering may be linked to the performance of one or more different underlying assets or underlying baskets and will be subject to the particular terms of the respective Securities set forth in the applicable supplements. Each offering of the Securities is a separate and distinct security and you may invest in one or more offerings of the Securities as specified in the applicable supplements. The performance of each offering of the Securities will depend solely upon the performance of the underlying asset(s) or underlying basket(s) to which such offering is linked and will not depend on the performance of any other offering of the Securities.

Denomination

Each Security will have either:

Purchases in excess of the respective minimum investments may be made in integrals of one Security. Purchases and sales of Securities made in the secondary market, if any exists, are not subject to the respective minimum investments.

Coupons

The applicable supplement will specify whether the Securities will pay any coupons during the term of the Securities.

Contingent Coupon Feature

The applicable supplement may specify that a “ contingent coupon ” is applicable for the Securities, in which case UBS may pay a contingent coupon, for each Security you own during the term of the Securities, periodically in arrears on the applicable payment date, based on the performance of one or more underlying assets or underlying baskets on the applicable valuation date(s) or during the applicable valuation period.

The contingent coupon may be a fixed amount based upon a rate per annum (the “ coupon rate ”), each as specified in the applicable supplement. The applicable supplement may specify that the coupon rate will be a variable or floating rate, in which case the contingent coupon will be a non-fixed amount based on unequal installments at such coupon rate.

The applicable supplement may specify that a contingent coupon is subject to a “ coupon barrier ”, in which case the payment of a contingent coupon may be based on whether the performance of one or more underlying assets or underlying baskets is equal to or greater than its coupon barrier on the applicable valuation date(s) or during the applicable valuation period. The coupon barrier of an underlying asset or underlying basket may be based on a percentage of its initial level and may be adjusted in the case of antidilution and reorganization events as described under “— Antidilution Adjustments for Securities Linked to an Underlying Equity or Equity Basket Asset” and “— Reorganization Events for Securities Linked to an Underlying Equity or Equity Basket Asset”.

Unlike ordinary debt securities, UBS will not necessarily pay periodic coupons. You must be willing to accept that if one or more underlying assets or underlying baskets on the applicable valuation date(s) or during the applicable valuation period performs unfavorably to you, UBS will not pay the contingent coupon on the corresponding payment date.

Contingent coupons on the Securities are not guaranteed. UBS will not pay you the contingent coupon for any applicable valuation date(s) or valuation period(s) on which one or more underlying assets or underlying baskets perform unfavorably to you based on the terms specified in the applicable supplement.

Fixed Coupon Feature

The applicable supplement may specify that UBS will pay a coupon at the coupon rate, for each Security you own during the term of the Securities, periodically in arrears on the applicable payment date, regardless of the performance of any underlying asset or underlying basket on any valuation date or during the applicable valuation period.

Early Redemption

Automatic Call Feature

The applicable supplement may specify that UBS will automatically call the Securities (an “ automatic call ”) based on the performance of one or more underlying assets or underlying baskets on the applicable valuation date(s) or during the applicable valuation period. If the Securities are subject to an automatic call, UBS will pay on the payment date corresponding to the applicable valuation date(s) or valuation period an amount specified in the applicable supplement. Following an automatic call, no further payments will be made on the Securities.

The applicable supplement may specify that an automatic call is subject to a “ call threshold ”, in which case UBS will automatically call the Securities based on whether the performance of one or more underlying assets or underlying baskets is equal to or greater than its call threshold on the applicable valuation date(s) or during the applicable valuation period. The call threshold of an underlying asset or underlying basket may be based on a percentage of its initial level and may be adjusted in the case of antidilution and reorganization events as described under “— Antidilution Adjustments for Securities Linked to an Underlying Equity or Equity Basket Asset” and “— Reorganization Events for Securities Linked to an Underlying Equity or Equity Basket Asset”.

Issuer Call Feature

The applicable supplement may specify that UBS may elect to call the Securities at its discretion in whole, but not in part (an “ issuer call ”), on the applicable valuation date(s) or during the applicable valuation period, regardless of the performance of any underlying asset or underlying basket. If UBS elects to call the Securities, UBS will pay on the payment date corresponding to the applicable valuation date(s) or valuation period an amount specified in the applicable supplement. Following an issuer call, no further payments will be made on the Securities.

Holder Redemption Feature

The applicable supplement may specify one or more dates or periods preceding a payment date on which the holder of the Securities may redeem their Securities. Unless otherwise stated in the applicable supplement, if a redemption date (or, in the case of a redemption period, each relevant date during such period) specified in the applicable supplement is not a business day, that redemption date will be the next following business day.

Payment at Maturity for the Securities

If the Securities are not subject to an applicable early redemption, the applicable supplement will specify the formula or method of calculation for any delivery of a number of shares (a “ share delivery amount ”) of an underlying equity or any cash payment, as applicable, for each Security that you hold, that will be based on the performance of one or more underlying assets or underlying baskets.

The applicable supplement may specify a “ participation rate ”, “leverage factor” or “gearing” for the Securities. The participation rate may be expressed as a positive number or percentage equal to, greater than or less than 1.0 or 100%, respectively, in which case the payment at maturity for the Securities may be based on the performance of one or more underlying assets or underlying baskets on the applicable valuation date(s) or during the applicable valuation period, as may be multiplied by the participation rate. As further specified in the applicable supplement, the participation rate may enhance or, if less than 1.0 or 100%, reduce any favorable performance or, conversely, any loss on the relevant underlying asset(s) or underlying basket(s).

The applicable supplement may specify a “ maximum gain ” or “cap” for the Securities, in which case any applicable amounts payable will be limited based on the specified maximum gain.

Investing in the Securities involves significant risks. The Securities differ from ordinary debt securities in that UBS is not necessarily obligated to repay the full amount of your initial investment. If the Securities are not subject to an applicable early redemption, you may lose some, a significant portion or all of your initial investment.

Any payment on the Securities, including any repayment of principal, is subject to the creditworthiness of UBS. If UBS were to default on its payment obligations, you may not receive any amounts owed to you under the Securities and you could lose all of your initial investment.

Defined Terms Relating to Payment on the Securities

The “ underlying return ” is the quotient, expressed as a percentage, of (i) the final level of the underlying asset or underlying basket minus the initial level of the underlying asset or underlying basket, divided by (ii) the initial level of the underlying asset or underlying basket. Expressed as a formula: 

In the case of an offering of the Securities linked to an underlying basket, the underlying return may be referred to as the “ basket return ”, or in such other manner as may be specified in the applicable supplement.

Unless otherwise provided and as further specified in the applicable supplement, the “ initial level ” will be with respect to:

The applicable supplement may specify an “ initial valuation period ” or “ lookback entry ”, in which case the initial level may be the highest or lowest applicable level of an underlying asset or underlying basket during the initial valuation period as further specified in the applicable supplement.

The initial level will be determined by the calculation agent and may be postponed in the case of a market disruption event as described under “— Market Disruption Events” or adjusted in the case of antidilution and reorganization events as described under “— Antidilution Adjustments for Securities Linked to an Underlying Equity or Equity Basket Asset” and “— Reorganization Events for Securities Linked to an Underlying Equity or Equity Basket Asset”.

Unless otherwise provided and as further specified in the applicable supplement, the “ final level ” will be, with respect to:

The final level will be determined by the calculation agent and may be postponed in the case of a market disruption event as described under “— Market Disruption Events” or adjusted in the case of antidilution and reorganization events as described under “— Antidilution Adjustments for Securities Linked to an Underlying Equity or Equity Basket Asset” and “— Reorganization Events for Securities Linked to an Underlying Equity or Equity Basket Asset”.

The calculation agent may adjust the terms of the Securities for an underlying asset or underlying basket in the case of antidilution and reorganization events described below under “— Antidilution Adjustments for Securities Linked to an Underlying Equity or Equity Basket Asset” and “— Reorganization Events for Securities Linked to an Underlying Equity or Equity Basket Asset”.

If the applicable supplement specifies that the Securities are linked to the “ least performing ” or “ worst performing ” underlying asset or underlying basket, the specified amounts payable on such Securities will be based on the underlying asset or underlying basket with the lowest performance on the applicable valuation date(s) or valuation period(s), as compared to the other underlying assets or underlying baskets, all as further specified in the applicable supplement.

If the applicable supplement specifies that the Securities are linked to the “ greatest performing ” or “ best performing ” underlying asset or underlying basket, the specified amounts payable on such Securities will be based on the underlying asset or underlying basket with the highest performance on the applicable valuation date(s) or valuation period(s), as compared to the other underlying assets or underlying baskets, all as further specified in the applicable supplement.

If the applicable supplement specifies that the Securities are linked to the “ relative performance ” or “ outperformance ” of the underlying assets or underlying baskets, the specified amounts payable on such Securities will be based on the performance of an underlying asset or underlying basket relative to one or more other underlying assets or underlying baskets on the applicable valuation date(s) or valuation period(s), all as further specified in the applicable supplement.

If the applicable supplement specifies that the Securities are linked to the “ inverse performance ” of one or more underlying assets or underlying baskets, the specified amounts payable on such Securities will be based on the inverse performance of one or more underlying assets or underlying baskets. For example, if the terms of a Security

specify that such Security is subject to an automatic call if the closing level of an underlying asset is equal to or greater than its initial level, an otherwise equivalent Security linked to the inverse performance of such underlying asset will be subject to an automatic call if the closing level of such underlying asset is equal to or less than its initial level.

Valuation Dates

We refer to each date on which the applicable level of an underlying asset or underlying basket is referenced in the determination of any amounts payable as a “ valuation date ”. The applicable supplement may also refer to a valuation date as an “observation date,” a “review date,” a “determination date” or any other term specified in the applicable supplement.

Trade Date

We refer to the date on which the Securities are initially priced for sale to the public as the “ trade date ,” and such date will, unless otherwise specified in the applicable supplement, be the date on which the initial level is established.

Averaging Dates

If the applicable supplement specifies an averaging date feature, the “ averaging dates ” will be the specified trading days ending on and including the specified valuation date on which the applicable level of an underlying asset or underlying basket is determined. Such applicable level of an underlying asset or underlying basket will be determined based on the arithmetic average of the applicable levels determined on the specified averaging dates.

Final Valuation Date

We refer to the valuation date on which the final level of an underlying asset or underlying basket is determined as the “ final valuation date ”.

Each valuation date for your Securities will be the date specified in the applicable supplement, unless the calculation agent determines that a market disruption event has occurred or is continuing on any such day with respect to an underlying asset or a basket asset, as applicable. In that event, the applicable valuation date for the disrupted underlying asset or basket asset, as applicable, may be postponed as described under “— Market Disruption Events”. In no event, however, will any applicable valuation date be postponed by more than eight trading days, except as described under “— Market Disruption Events — For Securities which reference averaging dates”, and in no event will the last valuation date in a valuation period be postponed by more than eight trading days. As a result, a payment date, including the maturity date, for the Securities could also be postponed, although not by more than eight trading days with respect to any underlying asset or basket asset, as applicable.

If a particular offering of the Securities is linked to an underlying basket, a market disruption event for a particular basket asset included in such underlying basket will not necessarily be a market disruption event for another basket asset included in such underlying basket. If, on the originally scheduled valuation date, no market disruption event with respect to a particular basket asset occurs or is continuing, then the determination of the applicable level relating to such basket asset will be made on the originally scheduled valuation date and will not be postponed with respect to such basket asset, irrespective of the occurrence of a market disruption event on such valuation date with respect to one or more of the other basket assets.

A postponement of a valuation date for a particular offering of the Securities will not affect a valuation date for any other offering of the Securities.

Unless otherwise specified in the applicable supplement, if a valuation date specified in the applicable supplement occurs on a day that is not a trading day, the final valuation date will be the next following trading day.

Valuation Periods

We refer to each period during which the applicable level(s) of an underlying asset or underlying basket is referenced on one or more valuation dates during such period as a “ valuation period ”. The applicable supplement will specify the first and last day of each valuation period. As described further under “— Market Disruption Events”, the calculation agent may postpone a valuation date during a valuation period for an underlying asset or basket asset if a market disruption event occurs or is continuing on such day with respect to such underlying asset or basket asset. Unless otherwise specified in the applicable supplement, a postponement of the end date of a valuation period shall have no effect on the end date of any subsequent valuation periods.

Payment Dates

The applicable supplement will specify the “ payment date ” on which amounts will or may be payable, as applicable, with respect to the Securities. Unless otherwise stated in the applicable supplement, if the applicable payment date stated in the applicable pricing supplement is not a business day, such payment date will be the next following business day.

Unless otherwise specified in the applicable supplement, if the applicable valuation date or the last day of a valuation period is postponed, the corresponding payment date will also be postponed to maintain the same number of business days between the latest postponed valuation date or last day of a valuation period and the corresponding payment date as existed prior to such postponement(s).

Unless otherwise specified in the applicable pricing supplement, any amount payable on a payment date that has been postponed pursuant to a market disruption event will be paid with the same effect as if paid on the originally scheduled payment date.

Maturity Date

The maturity date for your Securities will be the date specified in the applicable supplement. If the Securities are not subject to an applicable early redemption, the Securities will mature on the maturity date, unless that day is not a business day, in which case the maturity date will be the next following business day. As discussed under “—Valuation Dates”, the calculation agent may postpone a valuation date, including the final valuation date, for an underlying asset or a basket asset, as applicable, if a market disruption event occurs or is continuing with respect to such underlying asset or basket asset on a day that would otherwise be a valuation date. We describe market disruption events under “— Market Disruption Events” below.

A postponement of the maturity date for one offering of the Securities will not affect the maturity date for any other offering of the Securities.

Closing Level

Closing Level for an Underlying Equity

Unless otherwise specified in the applicable supplement, the “ closing level ” of any underlying equity on any trading day means:

Closing Level for an Underlying Index

Unless otherwise specified in the applicable supplement, the “ closing level ” of any underlying index on any trading day means:

published following the regular official weekday close of the principal trading session of the primary exchange for the underlying constituents of such index, each as determined by the calculation agent.

Intraday Level

Intraday Level for an Underlying Equity

Unless otherwise specified in the applicable supplement, the “ intraday level ” of any underlying equity on any trading day means a reported sale price for such underlying equity (or such other security) during the principal trading session on such day on the principal U.S. securities exchange registered under the Exchange Act, on which the underlying equity (or such other security) is listed or admitted to trading. To the extent an underlying equity is a non-U.S. company and quoted and traded in a non-U.S. currency, or is otherwise not listed on any national securities exchange, the intraday level will be determined by the calculation agent as specified in the applicable supplement.

Intraday Level for an Underlying Index

Unless otherwise specified in the applicable supplement, an “ intraday level ” of any underlying index on any trading day will be determined based on an intraday level of such underlying index or any successor index or alternative calculation of such underlying index published during the principal trading session of the primary exchange for the underlying constituents of such index, as determined by the Calculation Agent.

Market Disruption Events

For Securities that reference valuations dates that are not part of a valuation period, the calculation agent will determine the closing level(s) (and thereafter, as applicable, the corresponding initial level(s), downside threshold(s), call threshold(s), coupon barrier(s), final level(s) and/or any other relevant term), as applicable, of the underlying asset or the basket assets and whether each final level and/or closing level, as applicable, of the underlying asset or underlying basket is greater than, less than, or equal to the initial level, downside threshold, call threshold, coupon barrier and/or any other relevant term as applicable, on each valuation date for each offering of the Securities. If the calculation agent determines that, on any valuation date, a market disruption event has occurred or is continuing with respect to an underlying asset or basket asset, such valuation date for that offering of the Securities may be postponed. If such a postponement occurs, the calculation agent will determine the closing level by reference to the closing level for the disrupted underlying asset or basket asset, as applicable, on the first trading day on which no market disruption event occurs or is continuing with respect to such underlying asset or basket asset. In no event, however, will any valuation date be postponed by more than eight trading days. If any valuation date is postponed to the last possible day, but a market disruption event occurs or is continuing on that day, the calculation agent will nevertheless determine the closing level on such day. In such an event, the calculation agent will estimate the closing level (and thereafter the corresponding initial level, downside threshold, call threshold, coupon barrier, final level and/or any other relevant term, as applicable) for the underlying asset or basket asset, as applicable, that would have prevailed in the absence of the market disruption event.

For Securities that reference a valuation period, the calculation agent will determine the closing level(s) (and thereafter, as applicable, the corresponding initial level(s), downside threshold(s), call threshold(s), coupon barrier(s), final level(s) and/or any other relevant term) for each underlying asset or the basket assets as specified in the applicable supplement for each offering of the Securities. The calculation agent will also determine whether each final level and/or closing level, as applicable, of the underlying asset or underlying basket is greater than, less than, or equal to the relevant initial level, downside threshold, call threshold, coupon barrier and/or any other relevant term, each as described in the applicable supplement. If the calculation agent determines that, on any valuation date, a market disruption event has occurred or is continuing with respect to an underlying asset or basket asset, such valuation date for that offering of the Securities may be postponed. If such a postponement occurs, the calculation agent will determine the closing level (and thereafter the corresponding initial level, downside threshold, call threshold, coupon barrier, final level and/or any other relevant term, as applicable) by reference to the closing level for the disrupted underlying asset or basket asset, as applicable, on the first trading day on which no market disruption event occurs or is continuing with respect to such underlying asset or basket asset. In no event, however, will any valuation date be postponed by more than eight trading days. If any valuation date is postponed to the last possible day, but a market disruption event occurs or is continuing on that day, the calculation agent will nevertheless determine the closing level on such day. In such an event, the calculation agent will estimate the closing level (and thereafter the corresponding initial level, downside threshold, call threshold, coupon barrier, final level and/or any other relevant term, as applicable) for the underlying asset or basket asset, as applicable, that would have prevailed in the absence of the market disruption event.

Alternatively, the applicable supplement may specify that the applicable valuation period includes each trading day in the applicable valuation period on which no market disruption occurs, provided that if the calculation agent determines that, on the last trading day in the applicable valuation period a market disruption event has occurred or is continuing with respect to an underlying asset or basket asset, such valuation date for that offering of the Securities may be postponed. If such a postponement occurs, the calculation agent will determine the closing level, as applicable, by reference to the closing level for the disrupted underlying asset or basket asset, as applicable, on the first trading day on which no market disruption event occurs or is continuing with respect to such underlying asset or basket asset. In no event, however, will such valuation date be postponed by more than eight trading days. If such valuation date is postponed to the last possible day, but a market disruption event occurs or is continuing on that day, the calculation agent will nevertheless determine the closing level on such day. In such an event, the calculation agent will estimate the closing level (and thereafter the corresponding initial level, downside threshold, call threshold, coupon barrier, final level and/or any other relevant term, as applicable) for the underlying asset or basket asset, as applicable, that would have prevailed in the absence of the market disruption event.

For Securities which reference averaging dates, the calculation agent will determine the closing level(s) of the underlying asset or the basket assets, as applicable, on each averaging date and the initial price(s) (and thereafter the corresponding downside threshold, call threshold, coupon barrier and/or any other relevant term, as applicable) or

final price(s), as applicable, based on the arithmetic average of the closing levels on each averaging date. To the extent a market disruption event occurs on any averaging date, the affected averaging date shall be the first succeeding valid date. A “valid date” is a trading day on which a market disruption event has not occurred and which is not otherwise scheduled to be an averaging date. If the first succeeding valid date in respect of the underlying asset has not occurred as of the close of trading on the eighth trading day immediately following the original date that, but for the occurrence of one or more market disruption events would have been the last averaging date in the applicable valuation period, then (1) that eighth trading day shall be deemed to be the averaging date (irrespective of whether that eighth trading day is already an averaging date) and (2) the calculation agent will determine the closing level (and thereafter, the initial level, downside threshold, call threshold, coupon barrier, final level and/or any other relevant term, as applicable) on such day as specified above.

For Securities which reference intraday levels, the calculation agent will determine the intraday levels of the underlying asset or the basket assets, as applicable, on each valuation date (and thereafter, as applicable, the corresponding initial level(s), downside threshold(s), call threshold(s), coupon barrier(s), final level(s) and/or any other relevant term) for each underlying asset or the basket assets as specified in the applicable supplement for each offering of the Securities. The calculation agent will also determine whether each intra-day level, as applicable, of the underlying asset or underlying basket is greater than, less than, or equal to any applicable initial level, downside threshold, call threshold, coupon barrier and/or any other relevant term, each as described in the applicable supplement. If the calculation agent determines that a market disruption event has occurred or is continuing on any valuation date, (i) any intraday level(s) determined on such day prior to the occurrence and/or continuation of the market disruption event shall apply for purposes of determining whether any applicable downside threshold, call threshold, coupon barrier and/or any other relevant term was breached on such valuation date, (ii) any intraday level(s) determined on such day during the occurrence and/or continuation of the market disruption event will not apply for purposes of determining whether a downside threshold, call threshold, coupon barrier and/or any other relevant term, as applicable, was breached on such valuation date, and (iii) any intraday level(s) observable after the market disruption event ceases will apply for purposes of determining whether a downside threshold, call threshold, coupon barrier and/or any other relevant term, as applicable, was breached on such valuation date.

For each offering of the Securities, if the calculation agent postpones any valuation date for any underlying asset, the corresponding payment date will be postponed to maintain the same number of business days between the latest postponed valuation date for the last underlying asset for which a final level, closing level and/or intraday levels, as applicable, is determined and the payment date as existed prior to the postponement of such valuation date for one or more underlying assets. A postponement of any valuation date other than the trade date shall have no effect on any subsequent valuation dates. If the trade date is postponed, the calculation agent may adjust the subsequent valuation date(s) and payment date(s), including the maturity date, to ensure that the stated term of that offering of the Securities remains the same.

Notwithstanding the occurrence of one or more of the events below, which may constitute a market disruption event, the calculation agent may waive its right to postpone any valuation date, 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 initial level, final level, closing level and/or intraday levels of the underlying asset or a basket asset, as applicable, on such date.

If a particular offering of the Securities is linked to an underlying basket or multiple underlying assets, a market disruption event for a particular basket asset included in such underlying basket or particular underlying asset will not necessarily be a market disruption event for another basket asset included in such underlying basket or another underlying asset, respectively. If, on the originally scheduled valuation date, no market disruption event with respect to a particular basket asset or underlying asset occurs or is continuing, then the determination of the initial level, final level, closing level and/or intraday levels, as applicable, relating to such basket asset or underlying asset will be made on the originally scheduled valuation date, irrespective of the occurrence of a market disruption event with respect to one or more of the other basket assets or underlying assets.

A market disruption event for a particular offering of the Securities will not necessarily be a market disruption event for any other offering of the Securities.