Strategy Indices

UBS-DSI Tracker Certificate (EUR) Linked to the UBS Diversified Strategy EUR Total Return Index Issued by UBS AG Open ended certificate SVSP Product Type: Tracker Certificate (1300) Valor: 11318117 ISIN: CH0113181173 Indicative termsheet

1. Description of the Product Information on Underlying Underlying

Initial Underlying Level

Underlying Participation

Conversion Ratio

UBS Diversified Strategy EUR Total Return Index

Underlying Level on Pricing Date

100%

1:1

Bloomberg Page: ULTADSIE

Product Details Security Numbers Valor: 11318117 ISIN: CH0113181173 WKN: UB1SDG Common Code: 051120205 SIX Symbol [tbc] Issue Size Up to 500,000 Certificates (with reopening clause) Issue Price 100% of Initial Underlying Level (Level of the Underlying on 20 May 2010 was 412.29) Settlement Currency EUR Management Fee 1.50% p.a. (included in Underlying Level) Stop-Loss Level 50% of the Initial Underlying Level Stop-Loss Event A Stop-Loss Event has occurred if on any Business Day after the Issue Date, the Underlying Level falls below the Stop-Loss Level, as determined by the Calculation Agent. For redemption procedures please refer to section Redemption Details. Dates Subscription Period Pricing Date (“Trade Date”) Payment Date (“Issue Date”) First SIX Trading Date

21 May 2010 until and including 23 June 2010, 15:00 hrs CET 23 June 2010 28 June 2010 On or about 28 June 2010

Redemption Date / Maturity Date This Product is open-end and does not have a fixed Redemption Date. In case of a Stop-Loss Event, Issuer Call Option or Investor Put Option the Product will be redeemed as further described in the Redemption Details.

UBS Strategy Indices Contact: UBS Limited, 100 Liverpool Street, London EC2M 2RH Internet: www.ubs.com/strategyindices Product Helpline: +44-20-756-72399 UBS WM Distribution: FICC Structured Flow Group, +41-44-239-7380

Europe: +44-20-756-72399 Asia: +65-649-53795 USA: +1-203-719-1712 Internal: 1931-72399 Internal Email: DL-Strategy-Indices Also available on www.ubs.com/keyinvest

Please note that calls made to these numbers may be recorded. Should you call one of these numbers, we will assume that you consent to this business practice. Please note that the keyinvest website is not available to UK residents. UBS Investment Bank is a business division of UBS AG

Valor: 11318117 ISIN: CH0113181173 Page 2/9 Final Terms

Redemption details This Product is open-ended and does not have a fixed Redemption Date. In case of a Stop-Loss Event, Issuer Call Option or Investor Put Option, the Investor is entitled to receive from the Issuer an amount per Product, according to the following scenarios and taking into account the Conversion Ratio: 1. In case of an Issuer Call Option The Redemption Amount per Product will be the Underlying Level on the Option Exercise Date. If an Option Exercise Date is not a Business Day, the Redemption Amount will be the Underlying Level on the Business Day immediately following the Option Exercise Date. The Redemption Amount will be paid within 10 Business Days after the Issuer has exercised its option on such Option Exercise Date, subject to adjustments in accordance with the Business Day Convention. Issuer Call Option The Issuer has the option, on each 31 December, 31 March, 30 June and 30 September, starting on 30 June 2011 (the “Option Exercise Date”), whereby notice to the Investor has to be given 10 Business Days prior to such Option Exercise Date, to call all the Certificates then outstanding. 2. In case of an Investor Put Option If an Investor decides to exercise his put option, the Redemption Amount per Product will be the Underlying Level on the Put Redemption Date. If a Put Redemption Date is not a Business Day, the Redemption Amount will be the Underlying Level on the Business Day immediately following the Put Redemption Date. In addition to the above, the Investors will be charged an unwinding fee, which will be 1% of the Underlying Level. The Redemption Amount will be repaid within 10 Business Days, subject to adjustments in accordance with the Business Day Convention. Investor Put Option Each Investor has the option, on each 30 June, starting on 30 June 2011 (the “Put Redemption Date”), whereby notice has to be received by the Calculation Agent no later than 12am London time on such Put Redemption Date, to put all the Certificates then outstanding and held by such Investor. 3. In case of a Stop-Loss Event If a Stop-Loss Event occurs, the Product shall automatically terminate the following Business Day and be redeemed at its Stop Loss Certificate Value. The redemption amount will be repaid within 10 Business Days, subject to adjustments in accordance with the Business Day Convention. Stop Loss Certificate Value Corresponds to the Underlying Level less unwind costs determined by the Calculation Agent in its sole and absolute discretion in good faith. Product Description Underlying The UBS Tracker Certificate (the “Certificate”) is linked to the UBS Diversified Strategy EUR Total Return Index (the “Underlying” or “Index”). The Index consists of a basket of six individual underlying indices (the “Underlying Indices”). The Underlying Indices reflect the performance of systematic algorithm based strategies designed to capture uncorrelated trends or risk premia across various financial markets, including equities, commodities, currencies and fixed income. The Underlying Index weights have been determined to offer consistent risk profiles across the Index. The Underlying Strategies are implemented through liquid underlying futures contracts in each asset class. The Underlying Indices and the respective Underlying Strategies which the Underlying Indices track are the following:

CommPASS - The index reflects the performance of the UBS Comm-PASS (the “Comm-PASS Strategy”). UBS Commodities Portfolio Algorithmic Strategy System (“UBS Comm-PASS”) is a portfolio-based algorithmic strategy that exploits trending and counter-trending behaviour in Commodity Markets. Some commodities are expected to show trending behaviour, for example where there is a trend that the price of the commodity is rising and it is expected to keep rising for some time. Some commodities show counter-trending behaviour, for example if a trend of rising prices is identified in a commodity and as a result the price of that commodity is expected to fall and revert to its long term average price. The Comm-PASS Strategy

Valor: 11318117 ISIN: CH0113181173 Page 2/9 Final Terms

consists of a basket of positions on 19 commodities. For each commodity there is an independent strategy to decide when a trend has started. Each commodity in the basket is classified as trending or counter-trending and positions are taken on such commodities based on the identification of a trend for the commodity and its classification as trending or counter-trending. The Comm-PASS Strategy basket includes 19 futures markets from the five main commodity sectors: Energy, Precious Metals, Base Metals, Agriculture, and Livestock.

 BS GSI Index - The UBS GSI Index tracks the performance of a diversified basket of U four equally weighted trading strategies on gold. Each uses a fundamental economic driver of the gold price to predict changes and position to benefit from them. Each strategy has an associated economic driver. The drivers are (i) Real Interest Rates; (ii) Open Interest in Gold; (iii) Indian Gold Premium and (iv) Indications from Gold Mining Stocks. Depending on the signals from the above economic drivers, the UBS GSI Index takes positions in the front month contracts. If the signals have accurately predicted the movement of the gold future price, the level of the UBS GSI Index would have a positive performance; if the signals have not accurately predicted the movement, the level of the UBS GSI Index would have a negative performance.



STRAUS - The STRAUS Index is designed to identify trends in interest rate futures in five markets based on historic prices. The objective of the STRAUS Index is to make gains by benefitting from the trending nature of the short term interest rates. The strategy for the STRAUS Index aims to identify trends in short term interest rates and then take positions accordingly in the three-month interest rate futures to try and benefit from the identified trend. The five markets reflected in the STRAUS Index as of the Issue Date are U.S. Dollar, Euro, the British Pound, the Japanese Yen and the Swiss Franc. The STRAUS Index represents a trading strategy based on algorithmic principles and combines observations of near-term and longer-term price fluctuations in 3-month interest rate futures contracts in the markets reflected in the STRAUS Index with simulated purchases or sales, as applicable, of interest rate futures contracts in the relevant market(s) that are triggered when the observed futures price movements reach specified levels. The results of these simulated transactions, i.e. “gains” or “losses” are then calculated to determine the STRAUS Index level. The STRAUS Index was designed by UBS and is administered by UBS.



RADA- The UBS RADA Index (the “RADA reflects the performance of an algorithmic strategy that takes directional exposures to Eurostoxx 50 depending on current market sentiment as measured by the Dynamic Equity Risk Indicator (“DERI”). DERI is an indicator which has been developed by UBS Equity Research aiming to measure the market sentiment, investor risk appetite and equity positioning. The DERI indicator is calculated and published on a daily basis. The directional exposure of RADA means that the free-float market capitalization-weighted index of fifty European blue-chip stocks from those countries participating in the European Monetary Union. Each component’s weight is capped at 10 per cent. of the index’s total free float market capitalization. The index was developed with a base value of 1,000 as of 31 December 1991.



V24- The UBS V24 Index (the “V24”) reflects the performance of the V24 strategy, an FX carry strategy based on a universe of G10 and emerging markets currencies. The currency universe is divided into four areas: G10, Emerging, South America & Africa, Emerging Europe, and Emerging Asia. The V24 goes long the high yielding currencies and short the low-yielding currencies with a volatility-based filter. The volatility-based filter allows the V24 to go long carry in normal market environment and long cash in volatile market environment. The volatility filter functions as an indicator that causes the reversal of notional open positions underlying the V24 during times when its model predicts, based on the assumptions reflected in the design of the V24, that long positions in low yielding currencies and short positions in high yielding currencies will likely outperform long positions in high yielding currencies and short positions in low yielding currencies, and vice versa.

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CMCI- The UBS Bloomberg CMCI Essence T10 Index (the “CMCI”) reflects the performance of the CMCI, an algorithmic strategy that aims to generate returns by taking positions across various tenors in the commodity futures, this minimising the exposure of the strategy to shape of the forward price curve. The CMCI strategy goes short the S&P GSCI Light Energy Index and long an index with the same commodity composition but based on the CMCI rolling methodology (diversified across the commodity curves).

The Index is calculated net of Management Fees and includes interest earned, as described in the index manual (available on request). The Index calculation assumes other costs including a) Replication costs, reflecting the costs associated with monthly rebalancing of the index, fixed at 0.08% per month, and b) Costs and fees associated with the Underlying Indices, details of which are available in their respective index manuals (available on request) Underlying Level Corresponds to the official closing level of the Underlying (Bloomberg: ULTADSIE Index) expressed in index points where one index point equals one (1)EUR. Market Disruption Event In case of a Market Disruption Event (the “Market Disruption Event”) the Calculation Agent retains the discretion to suspend the calculation of the Underlying. For further details please refer to the index manuals, which are available on request. General Information Issuer

UBS AG, Jersey Branch

Issuer’s Rating

Aa3 Moody’s / A+ S&P’s / A+ Fitch

Lead Manager

UBS AG, London Branch

Strategy Manager

UBS AG, London Branch

Calculation Agent

UBS AG, London Branch

Principal Paying Agent

UBS AG, Zurich

Listing

Listing on SIX Swiss Exchange will be applied for

Public Offer

Switzerland, Germany, Luxembourg, Austria, Spain, Italy and United Kingdom

Secondary Market Daily price indications will be available on http://www.ubs.com/keyinvest. A bid/ask spread of up to 1.00% will apply (under normal market conditions). (please note the keyinvest website is not available to UK residents) Business Days

London, New York, TARGET and Zurich

Business Day Convention

Modified Following Adjusted

Minimum Investment

10 Certificates

Minimum Trading Lot

10 Certificates

Status

Unsecured and Unsubordinated obligations of the Issuer

Clearing SIX SIS, Euroclear, Clearstream (registered as a Global Note with SIX SIS AG Switzerland) Form of Certificate

Global Note

TEFRA

Not Applicable

Valor: 11318117 ISIN: CH0113181173 Page 2/9 Final Terms

Governing Law / Jurisdiction

Swiss / Zurich

Product One UBS Tracker Certificate is equivalent to one (1) “Product”. “Products” wherever used herein shall be construed to mean integral multiples of the same. Adjustments The terms of the Product may be subject to adjustments during its lifetime. Detailed information on such adjustments is to be found in the Product Documentation Tax Treatment Switzerland Swiss Federal Stamp Duty For Swiss Federal Stamp Duty purpose, the Product is treated as analogous to a share/unit in a foreign investment fund. Therefore, primary and secondary market transactions are in principle subject to Swiss Federal Stamp Duty (TK 24). Swiss Federal Income Tax For private Investors with tax domicile in Switzerland this Product is treated analogous to a share/unit in a foreign investment fund. The taxable income and capital gains/ losses will be kept apart and will be reported to the Swiss Federal Tax Administration annually on 1 January, for the first time on 1 January 2011. Taxable income is subject to Swiss Federal, cantonal and communal Income Tax. Swiss Withholding Tax The product is not subject to the Swiss Withholding Tax. EU Savings Tax For Swiss paying agents, the Product is not subject to the EU Savings Tax (TK 14) The tax information only provides a general overview of the potential tax consequences linked to this Product at the time of issue. Tax laws and tax doctrine may change, possibly with retroactive effect. Product Documentation UBS Structured Note Programme (Registered with BaFin and EUPD compliant). Final Terms This document serves as and fulfils the requirements of a ‘Simplified Prospectus’ in accordance with Art. 5 of the Swiss Federal Act on Collective Investment Schemes (CISA). The Simplified Prospectus together with the UBS Structured Note Programme (“SNP”) and the respective Final Terms shall form the documentation for this Product (“Product Documentation”), and accordingly the Simplified Prospectus should always be read in conjunction with these documents.”). The terms “Product” respectively ”Investor” as used in this Simplified Prospectus correspond to the terms “Note”/“Certificate” respectively “Notehol der”/”Certificateholder” as defined in the SNP. During the whole term of this Product, the respective documents can be ordered free of charge from UBS AG at P.O. Box, CH8098 Zurich (Switzerland), via telephone (+41-(0)44-239 47 03), fax (+41-(0)44-239 69 14) or via e-mail (swiss-prospectus@ubs. com). In addition, the respective documents are available on the internet at http://www.ubs.com/keyinvest. Notices in connection with this Product shall be validly given by publication in electronic media such as Reuters and/or Investdata. In addition, any changes with regard to the terms of this Product shall be published on the internet at http://www.ubs.com/keyinvest. Classification This Product does not represent a participation in any of the collective investment schemes pursuant to Art. 7 ss of the Swiss Federal Act on Collective Investment Schemes (CISA) and thus does not require an authorisation of the Swiss Financial Market Supervisory Authority (FINMA). Therefore, investors in this Product are not eligible for the specific investor protection under the CISA. (please note the keyinvest website is not available to UK residents) Prudential Supervision UBS AG is authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA). In addition, its London Branch is authorised and regulated by the Financial Services Authority (FSA) and its Jersey Branch by the Jersey Financial Services Commission (JFSC).

Valor: 11318117 ISIN: CH0113181173 Page 2/9 Final Terms

2. Prospects of Profits and Losses Market Expectation Investors in this Product expect that the Underlying Strategies tracked by the Underlying Indices in the Index will be able to achieve their respective objectives. Risk Tolerance Investors in this Product should be aware of the risks related to investments in Commodity, Currency, Interest Rates, Equity Markets and the Underlying Strategies. Profit Potential The Certificate allows the Investor to profit from the performance of the Underlying. The Profit Potential is unlimited. Loss Potential The Product is not capital- protected and the Investors are fully exposed to the fact that the Underlying might not be performing well in the future. In the event of a Stop-Loss Event, Investors bear the risk of further deterioration in the value of their investment in the event of delays in unwinding the underlying positions. In addition, Investors are exposed to the credit risk of the Issuer.

3. Significant Risks for Investors For product specific risks please see above and the section Risk Factors below. Risk Factors relating to the Issuer In addition to the market risk with regard to the development of the Underlying, each Investor bears the general risk that the financial situation of the Issuer could deteriorate. The Products constitute immediate, unsecured and unsubordinated obligations of the Issuer, which, particularly in case of insolvency of the Issuer, rank pari passu with each and all other current and future unsecured and unsubordinated obligations of the Issuer, with the exception of those that have priority due to mandatory statutory provisions. The general assessment of the Issuer’s creditworthiness may affect the value of the Products. This assessment generally depends on the ratings assigned to the Issuer or its affiliated companies by rating agencies such as Moody’s, Fitch and Standard & Poor’s. The Issuer Ratings indicated in this document reflect the situation at the time of issuance and may be subject to changes. The actual Issuer Ratings at any given time can be seen on the Issuer’s website (www.ubs.com) under “Analysts & Investors”. Secondary Market The Issuer or the Lead Manager, as applicable, intends, under normal market conditions, to provide bid and offer prices for this Product on a regular basis. However, the Issuer or the Lead Manager, as applicable, makes no firm commitment to provide liquidity by means of bid and offer prices for this Product, and assumes no legal obligation to quote any such prices or with respect to the level or determination of such prices. Potential Investors therefore should not rely on the ability to sell this Product at a specific time or at a specific price. In special market situations, where the Issuer is completely unable to enter into hedging transactions, or where such transactions are very difficult to enter into, the spread between the bid and offer prices may be temporarily expanded, in order to limit the economic risks of the Issuer. Market Risk The investor is exposed to market disruption events (such as trading disruption, exchange disruption and early closure of the relevant exchange), adjustments and early termination which could have an impact on the redemption amount through delay in payment or change in value. For a detailed description of such events and their effects please read the Final Terms and the base prospectus (Structured Note Programme). Important Information This information is communicated by UBS AG and/or its affiliates (“UBS”). UBS may from time to time, as principal or agent, have positions in, or may buy or sell, or make a market in any securities, currencies, financial instruments or other assets underlying the transaction to which this document relates. UBS may provide investment banking and other services to and/or have officers who serve as directors of the companies referred to in this document. UBS’ trading and/or hedging activities related to this transaction may have an impact on the price of the underlying asset and may affect the likelihood that any relevant barrier is crossed. UBS has policies and procedures designed to minimise the risk that officers and employees are influenced by any conflicting interest or duty and that confidential information is improperly disclosed or made available. UBS may have paid a fee to a third party introducer or broker in relation to this Product. Further, in certain circumstances UBS sells this Product to

dealers and other financial institutions at a discount to the issue price or rebates to them for their own account some proportion of the issue price. Further information on the foregoing is available on request Structured transactions are complex and may involve a high risk of loss. Prior to entering into a transaction you should consult with your own legal, regulatory, tax, financial and accounting advisors to the extent you consider it necessary, and make your own investment, hedging and trading decisions (including decisions regarding the suitability of this transaction) based upon your own judgement and advice from those advisers you consider necessary. Save as otherwise expressly agreed in writing, UBS is not acting as your financial adviser or fiduciary in any transaction. This document should not be construed as an offer, personal recommendation or solicitation to conclude a transaction and should not be treated as giving investment advice. 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Unless and until a prospectus has been published in accordance with the requirements of the EU Directive, these Notes may not be offered or sold other than 1) in minimum denominations of, or total consideration per investor of at least, EUR 50,000 (or equivalent in other currencies) or 2) only to Qualified Investors; and/or (aggregated for all distributors) to less than 100 investors that are not Qualified Investors per EEA jurisdiction. A “Qualified Investor” is a legal entity that (i) is authorised or regulated to operate in the financial markets or (ii) has the sole purpose to invest in securities; or (iii) meets two of the following three criteria (as shown in its last annual or consolidated accounts): (a) an average number of at least 250 employees during the last financial year; (b) a total balance sheet of more than EUR 43,000,000.00; and (c) an annual net turnover of more than EUR 50,000,000.00. 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