UBS Group AG

Capital/Financing Update • Aug 22, 2012

$UBS$

FINAL TERMS

The Final Terms dated 20 August 2012

UBS AG, acting through its Jersey Branch

Issue of USD 20,000,000 Zero Coupon Callable Note due 20 August 2042 issued under the Euro Note Programme

PART A - CONTRACTUAL TERMS

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions set forth in the Base Prospectus dated 27 June 2012 and any Base Prospectus Supplements dated thereafter but prior to the Issue Date of the Notes which together constitute a base prospectus for the purposes of the Prospectus Directive (Directive 2003/71/EC) (the "Prospectus Directive"). This document constitutes the Final Terms of the Notes described herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with such Base Prospectus as so supplemented.

Full information on the Issuer and the offer of the Notes described herein is only available on the basis of the combination of these Final Terms and the Base Prospectus. The Base Prospectus and the supplemental Base Prospectus are available for viewing at the website of the Irish Competent Authority (www.centralbank.ie) and copies may be obtained from the offices of the Paying Agents, The Bank of New York Mellon, acting through its London Branch, One Canada Square, London E14 5AL, The Bank of New York Mellon (Luxembourg) S.A., Vertigo Building - Polaris, 2-4 rue Eugène Ruppert, L-2453, Luxembourg and The Bank of New York Mellon (Ireland) Limited, 4th Floor, Hanover Building, Windmill Lane, Dublin 2, Ireland.

An investment in the Notes is subject to the credit risk of UBS AG and the actual and perceived creditworthiness of UBS AG may affect the market value of the Notes.

Any Notes purchased by any person for resale may not be offered in any jurisdiction in circumstances that would result in the Issuer being obliged to register any further prospectus or corresponding document relating to the Notes in that jurisdiction.

No secondary market for the Notes currently exists, nor is one likely to develop. Noteholders should have the ability and intent to hold the Notes until their Maturity Date.

The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws in the United States and are being offered and sold outside the United States to non-US persons (as such terms are defined in Regulation S under the Securities Act ("Regulation S")) in reliance on the exemption from registration provided pursuant to Regulation S. Notes sold in reliance on Regulation S will initially be represented by one or more permanent global notes in registered form without interest coupons (each, a "Regulation S Global Note"), deposited with or on behalf of a common depository for Euroclear or Clearstream. Beneficial interests in a Regulation S Global Note may be held only through Euroclear or Clearstream, except in the limited

circumstances described in the Base Prospectus. Investors may hold their interests in a Regulation S Global Note directly through Euroclear or Clearstream, if they are participants in such systems, or indirectly through organizations which are participants in such systems.

1.	Issuer:		UBS AG, acting through its Jersey Branch
2.	(i)	Series Number:	10893/2012
	(ii)	Tranche Number:	1
3.		Currency or Currencies:	United States Dollars ("USD")
4.	Aggregate Nominal Amount:		USD 20,000,000
5.	Issue Price:		100 per cent. of the Aggregate Nominal Amount
6.	(i)	Specified Denominations:	USD 100,000
	(ii)	Calculation Amount:	USD 100,000
7.		Issue Date:	20 August 2012
8.	Maturity Date:		20 August 2042, subject to adjustment in accordance with the Modified Following Business Day Convention
9.		Interest Basis:	Zero Coupon
10.		Redemption/Payment Basis:	Redemption at 396.643599 per cent. of the Aggregate Nominal Amount, subject to paragraph 22 below.
11.		Change of Interest or Redemption Payment Basis:	Not Applicable
12.		Put/Call Options:	Issuer Call
			(further particulars specified in paragraph 22 below)
13.		Status of the Notes:	Senior
14.		Method of distribution:	Non-syndicated
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

15.	Fixed Rate Note Provisions:	Not Applicable
16.	Floating Rate Note Provisions:	Not Applicable
17.	Zero Coupon Note Provisions:	Applicable

UBS

• (i) Amortisation Yield
• (ii) Reference Price

4.70 per cent. per annum

In respect of each Note, USD 100,000 per Calculation Amount

(iii) Any other formula/basis of determining Not Applicable amount payable:

1. Index/Credit-Linked Note Provisions:

2. Dual Currency Note Provisions: Not Applicable

Not Applicable

PROVISIONS RELATING TO REDEMPTION

• 1. Redemption Amount:
• 1. Tax Redemption Amount:

396.643599 per cent. of the Aggregate Nominal Amount, unless the Issuer exercises its Optional Redemption (Call) in accordance with paragraph 22 below, in which case the Notes will be redeemed at the Optional Redemption Amount (as defined in paragraph 24 below).

If the Notes are redeemed as a result of the Issuer being required to pay Additional Amounts, then the Tax Redemption Amount is the fair market value of the Note (excluding any coupon) on the fifth day before the early redemption date (as selected by the Calculation Agent), less the cost of unwinding any underlying related hedging arrangements, all as determined by the Calculation Agent in its absolute discretion. The notice provisions of Condition 7(b) of the Base Prospectus apply to these Notes.

The Issuer may exercise its option to redeem the Notes, in whole but not in part, at the Optional Redemption Amount on any of the Optional Redemption Dates from and including 20 August 2013 up to and including 20 August 2041 as set out in the table in paragraph 25 below, upon giving written notice at least five (5) Business Days prior to the Optional Redemption Date to the Programme's Issuing and Paying Agent.

Not Applicable

As set out in the table in paragraph 25 below

As set out in the table below, each date subject to adjustment in accordance with the Modified Following

1. Optional Redemption (Put):

2. Optional Redemption (Call):

Optional Redemption Amount: 24.

1. Optional Redemption Date:

$\frac{1}{200}$ UBS

Optional Redemption Optional Redemption Date Call Price (%) Amount 20,940,000.00 20 August 2013 104.700000 109.620900 20 August 2014 21,924,180.00 20 August 2015 22,954,616.46 114.773082 20 August 2016 24,033,483.43 120.167417 20 August 2017 25,163,057.16 125.815286 20 August 2018 26,345,720.84 131.728604 20 August 2019 27,583,969.72 137.919849 20 August 2020 28,880,416.30 144.402081 20 August 2021 30,237,795.86 151.188979 20 August 2022 31,658,972.27 158.294861 20 August 2023 33,146,943.97 165.734720 20 August 2024 34,704,850.33 173.524252 20 August 2025 36,335,978.30 181.679891 20 August 2026 38,043,769.28 190.218846 20 August 2027 39,831,826.43 199.159132 20 August 2028 41,703,922.28 208.519611 43,664,006.62 20 August 2029 218.320033 20 August 2030 45,716,214.93 228.581075 20 August 2031 47,864,877.04 239.324385 20 August 2032 50,114,526.26 250.572631 20 August 2033 52,469,908.99 262.349545 20 August 2034 54,935,994.71 274.679974 20 August 2035 57,517,986.47 287.589932 20 August 2036 60,221,331.83 301.106659 20 August 2037 63,051,734.43 315.258672 20 August 2038 66,015,165.94 330.075830 20 August 2039 69,117,878.74 345.589394 20 August 2040 72,366,419.04 361.832095 20 August 2041 75,767,640.74 378.838204

Business Day Convention.

类UBS

$\overline{E}$

	26. Minimum/Higher Redemption Amount:	Not Applicable
27.	Other Redemption details:	Not Applicable
28.	Final Redemption Amount of each Note:	USD 396,643.599 per Calculation Amount
29.	Early Redemption Amount	As set out in the Conditions
GENERAL PROVISIONS APPLICABLE TO THE NOTES
	30. Form of Notes:	Registered Notes:
		Unrestricted Global Note registered in the name of a nominee for a common depositary for Euroclear and Clearstream, Luxembourg.
	31. New Global Note Form:	No
32.	Business Days:	London and New York
33.	Talons for future Coupons or Receipts to be No attached to Definitive Notes (and dates on which such Talons mature):
34.	Details relating to Partly Paid Notes: amount of Not Applicable each payment comprising the Issue Price and date on which each payment is to be made and consequences (if any) of failure to pay, including any right of the Issuer to forfeit the Notes and interest due on late payment:
	35. Redenomination applicable:	No
36.	Exchangeability applicable:	No
37.	Other final terms or special conditions:	Not Applicable
DISTRIBUTION

1. (i) If syndicated, names and addresses of the Not Applicable

$\frac{1}{200}$ UBS

Managers and underwriting commitments:

• (ii) Date of Subscription Agreement:
• (iii) Stabilising Manager (if any):

If non-syndicated, name and address of Dealer: 39.

Total commission and concession: 40.

U.S. Selling Restrictions: 41.

1. Non-exempt Offer:

2. Additional selling restrictions:

Not Applicable

Not Applicable

UBS Limited 1 Finsbury Avenue London EC2M 2PP

Not Applicable

Regulation S related restrictions apply

The tax treatment of the Notes is uncertain. Therefore, if you are a US taxpayer that is not a US person (as defined under Regulation S under the U.S. Securities Act) you are urged to consult with your own tax advisors to determine the appropriate characterization of this Note for US federal income tax purposes. Please contact UBS for any additional information that you may require in making your determination.

Not Applicable

Any Notes purchased by any person for resale may not be offered in any jurisdiction in circumstances which would result in the Issuer being obliged to register any further prospectus or corresponding document relating to the Notes in such jurisdiction.

Noteholders are advised to read the selling restrictions described more fully in the Base Prospectus regarding UBS' Euro Note Programme. The restrictions listed below must not be taken as definitive guidance as to whether this note can be sold in a jurisdiction. Noteholders should seek specific advice before onselling a Note.

USA

The Notes may not be sold or offered within the United States or to U.S. persons

Taiwan

The Notes may not be sold, offered or issued to Taiwan resident investors or in Taiwan unless they are made available, (i) outside Taiwan for purchase outside Taiwan

$-6-$

$\, \raisebox{.5pt}{\text{\circle*{1.5}}}\, \mathrm{UBS}$

by such investors and/or (ii) in Taiwan, (A) in the case of Structured Notes through bank trust departments, licensed securities brokers and/or insurance company investment linked insurance policies pursuant to the Taiwan Rules Governing Offshore Structured Products or (B) in the case of Notes which are not structured, through properly licensed Taiwan intermediaries (including the nondiscretionary monetary trust of licensed banks in Taiwan acting as trustees) in such manner as complies with Taiwan law and regulation and/or (iii) in such other manner as may be permitted in accordance with Taiwan laws and regulations.

LISTING AND ADMISSION TO TRADING APPLICATION

These Final Terms comprise the final terms required for the Notes described herein to be admitted to the Official List of the UK Financial Services Authority and admitted to trading on the regulated market of the London Stock Exchange pursuant to the Euro Note Programme of UBS AG.

RESPONSIBILITY

The Issuer accepts responsibility for the information contained in these Final Terms.

GOVERNING LAW

English law

PLACE OF JURISDICTION

England

Signed on behalf of the Issuer:

By: . . . . . . . . . . . . . . . . . . . . Duly authorised

No UBS

PART B-OTHER INFORMATION

$1.$ LISTING

i. Listing:

London

ii. Admission to Trading:

Application will be made for the Notes to be admitted to the Official List of the UK Financial Services Authority and admitted to trading on the regulated market of the London Stock Exchange. No assurance can be given that such an application to list the Notes will be accepted.

2. INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE ISSUE

Save as discussed in "Selling Restrictions", so far as the Issuer is aware, no person involved in the issue of the Notes has an interest material to the offer.

REASONS FOR THE OFFER $3.$

The net proceeds of the issue of each Series of Notes will be used by the Issuer for its general corporate purposes or towards meeting the general financing requirements of the UBS Group, in each case, outside Switzerland.

FIXED RATE NOTES ONLY - YIELD 4.

Indication of yield:

Not Applicable

5. FLOATING RATE NOTES - HISTORIC INTEREST RATES

Not Applicable

6. OPERATIONAL INFORMATION

ISIN Code:	XS0818930041
Common Code:	081893004
Swiss Valor	18832444
Intended to be held in a manner which would allow No Eurosystem eligibility:
Any clearing system(s) other than Euroclear Bank Not Applicable S.A./N.V. and Clearstream Banking Société Anonyme and the Depositary Trust Company and the relevant identification number(s):
Delivery:	Delivery Against Payment
Additional Paying Agent:	Not Applicable

$-8-$