Mutual Reliance ReviewSystem for Exemptive Relief Applications - Canadian corporationrelated to the issuer not technically an "affiliate"of Swiss issuer - Distribution of shares in connectionwith Swiss issuer's equity ownership plan to employeesof related Canadian corporation exempt from the prospectusand registration requirement - First trade in shares acquiredby employees of related Canadian corporation deemed adistribution unless ss. 2.14(1) of MI 45-102 satisfied- Trade in shares of Swiss issuer acquired in connectionwith plan by employees of related Canadian corporationand affiliates of Swiss issuer, and made through the agent,exempt from the registration requirement provided a deminimis Canadian market and trade executed outsideof Canada.
UPON the applicationof UBS AG ("UBS") to the Ontario SecuritiesCommission (the "Commission") for a ruling (the"Ruling") pursuant to subsection 74(1) of theAct that the requirement contained in section 25 of theAct to be registered to trade in a security and the requirementin section 53 of the Act to file and obtain a receiptfor a preliminary prospectus and a prospectus in respectof such security shall not apply to trades in securitiesof UBS under the UBS Equity Ownership Plan, as amendedfrom time to time (the "Plan");
AND UPON consideringthe application and recommendation of staff of the Commission;
AND UPON UBS havingrepresented to the Commission as follows:
1. UBS is incorporatedunder the laws of Switzerland and is an investment servicesfirm. Its head office is located at Bahnhofstrasse 45,Zurich, Switzerland.
2. The authorized capitalof UBS consists of 1,294,735,215 UBS registered shareswith a par value of CHF 2.80 each (the "UBS Shares")of which 1,281,717,499 UBS Shares were outstanding asat December 31, 2001.
3. As at December 31,2001, the number of UBS Shares held by holders of recordwith addresses in Canada represented less than 1% ofthe number of outstanding UBS Shares, and the numberof holders of record with addresses in Canada was lessthan 1% of the total number of holders of record.
4. The UBS Shares arelisted on the virt-x European Exchange ("virt-x"),the New York Stock Exchange ("NYSE") and theTokyo Stock Exchange.
5. UBS is not, and hasno present intention of becoming, a reporting issueror the equivalent under the Act.
6. UBS has a representativeoffice in Canada and four wholly owned operating subsidiariesthat carry on business in Canada.
7. Bunting Warburg is100% beneficially owned by UBS Bunting Warburg Limited("Bunting Warburg Holdco"), a holding company,which in turn is 50% beneficially owned by a wholly-ownedsubsidiary of UBS. The remaining indirect 50% interestin Bunting Warburg Holdco is owned by the employeesof Bunting Warburg. UBS therefore has an indirect 50%ownership interest in Bunting Warburg.
8. Bunting Warburg isnot an "affiliated entity" of UBS as definedin Ontario Securities Commission Rule 45-503 Tradesto Employees, Executives and Consultants (the "EmployeeTrade Rule").
9. UBS has de factocontrol of Bunting Warburg pursuant to a shareholdersagreement of Bunting Warburg Holdco, which provides,among others, that a majority of the members of theboard of directors of Bunting Warburg Holdco are representativesof UBS.
10. Bunting Warburgis a corporation existing under the laws of the Provinceof Ontario and its head office is located in Toronto.It is not, and has no present intention of becoming,a reporting issuer under the Act.
11. Any person who isan employee, including officers, of UBS or any of itssubsidiaries (including Bunting Warburg) may be invitedby the managing board of UBS (the "Committee")to participate in the Plan (an "Eligible Employee").
12. The Plan will providea convenient and economic way for Eligible Employeesin Ontario and elsewhere in the world to invest in UBSthrough the granting of awards over notional UBS Shares(the "Notional Shares") that reflect notionalinterests and not actual ownership of UBS Shares inlieu of the payment of a cash bonus of an equivalentamount at the date of grant. Upon vesting of the NotionalShares, the value of the Notional Shares will be distributedin cash or, at the option of UBS, UBS Shares net ofany applicable withholding taxes, therefore providingan opportunity for the Eligible Employee to participatein the value they helped create. Notional Shares issuedunder the Plan are non-transferable.
13. The number of NotionalShares that will be credited to an Eligible Employee'saccount under the Plan will be determined by referenceto the average closing price of a UBS Share on the virt-xor the NYSE for the last 10 trading days in a particularmonth as determined under the Plan.
14. UBS, UBS WarburgLLC, UBS PaineWebber Inc. or another UBS subsidiaryor related entity (hereinafter referred to as the "Agent")will open an account for each Eligible Employee whois granted awards of Notional Shares under the Plan.The Agent will be registered under applicable securitieslegislation in Europe or the United States, but willnot be registered under the Act.
15. Subject to certainvesting requirements, sales of UBS Shares issued uponvesting of Notional Shares, made by Eligible Employeeswill be made on behalf of the Eligible Employees (includingformer employees) by or through the Agent pursuant toinstructions given by the Eligible Employees throughthe facilities of, and in accordance with the rulesof, the virt-x or the NYSE.
16. Participation inthe Plan is voluntary and Eligible Employees will notbe induced to participate in the Plan by expectationof employment or continued employment.
17. As at December 31,2001, there were approximately seven (7) Eligible Employeesresident in Ontario.
18. A copy of the Planwill be made available to each Eligible Employee inelectronic form, through their personal page on theUBS Group Compensation internal website.
19. All informationsent to security holders of UBS in general will be sentto Eligible Employees resident in Canada who acquireUBS Shares under the Plan.
20. There is no marketfor the UBS Shares in Canada and UBS does not intendto list the UBS Shares on any stock market in Canada.
21. The Act does notcontain exemptions from the requirement contained insection 25 of the Act and the requirement in section53 of the Act for trades, from time to time, of UBSNotional Shares or UBS Shares under the Plan to EligibleEmployees of Bunting Warburg located in Ontario, asBunting Warburg is not an affiliated entity for thepurposes of the Employee Trade Rule.
22. The Act does notcontain exemptions from the Registration Requirementfor first trades in UBS Shares issued in connectionwith the Plan effected by or through the Agent on behalfof Eligible Employees (including former employees) locatedin Ontario, as Bunting Warburg is not an affiliatedentity for the purposes of the Employee Trade Rule.
AND UPON the Commissionbeing satisfied that to do so would not be prejudicialto the public interest;
IT IS ORDERED pursuantto subsection 74(1) of the Act that:
(a) sections 25 and53 of the Act shall not apply to the distribution,from time to time, of Notional Shares and UBS Sharesin connection with the Plan to Eligible Employeesof Bunting Warburg located in Ontario provided thatthe first trade in Notional Shares or UBS Shares acquiredpursuant to this Ruling shall be deemed to be a distributionto the public under the Act unless the conditionsin section 2.14(1) of Multilateral Instrument 45-102Resale of Securities are satisfied;
(b) section 25 ofthe Act shall not apply to a trade by an EligibleEmployee (including a former employee) of BuntingWarburg located in Ontario in UBS Shares acquiredin connection with the Plan by or through the Agentif:
(i) at the timeof the trade, UBS is not a reporting issuer underthe Act;
(ii) at the timeof the distribution of the Notional Shares to theEligible Employee (including a former employee)of Bunting Warburg, after giving effect to the issueof such security, residents of Canada: (A) did notown directly or indirectly more than 10 percentof the outstanding UBS Shares, and (B) did not representin number more than 10 percent of the total numberof owners directly or indirectly of UBS Shares;and
(iii) the tradeis executed through an exchange, or a market, outsideof Canada.
June 14, 2002.
"Robert W. Korthals" "HaroldP. Hands"