UBS Group AG

Capital/Financing Update • Oct 10, 2012

FINAL TERMS

The Final Terms dated 09 October 2012

UBS AG, acting through its Jersey Branch

Issue of USD 60,000,000 Zero Coupon Callable Note due 09 October 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, the Base Prospectus Supplement dated 30 August 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:	10982/2012
	(ii)	Tranche Number:	1
3.		Currency or Currencies:	United States Dollars ("USD")
4.	Aggregate Nominal Amount:		USD 60,000,000
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:	09 October 2012
8.		Maturity Date:	09 October 2042, subject to adjustment in accordance with the Modified Following Business Day Convention
9.		Interest Basis:	Zero Coupon
10.		Redemption/Payment Basis:	Redemption at 385.434456 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

1. Zero Coupon Note Provisions: (i) Amortisation Yield

$-2-$

Applicable

4.60 per cent. per annum

	(ii) Reference Price	In respect of each Note, USD 100,000 per Calculation Amount
	(iii) Any other formula/basis of determining Not Applicable amount payable:
18.	Index/Credit-Linked Note Provisions:	Not Applicable
19.	Dual Currency Note Provisions:	Not Applicable
	PROVISIONS RELATING TO REDEMPTION
20.	Redemption Amount:	385.434456 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).
21.	Tax Redemption Amount:	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.
22.	Optional Redemption (Call):	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 09 October 2013 up to and including 09 October 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.
23.	Optional Redemption (Put):	Not Applicable
24.	Optional Redemption Amount:	As set out in the table in paragraph 25 below

à.

1. Optional Redemption Date:

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

Optional Redemption	Optional Redemption
Date 09 October 2013	Amount 62,760,000.00	Call Price (%) 104.600000
09 October 2014	65,646,960.00	109.411600
09 October 2015	68,666,720.16	114.444534
09 October 2016	71,825,389.29	119.708982
09 October 2017
	75,129,357.19	125.215595
09 October 2018	78,585,307.63	130.975513
09 October 2019	82,200,231.78	137.000386
09 October 2020	85,981,442.44	143.302404
09 October 2021	89,936,588.79	149.894315
09 October 2022	94,073,671.87	156.789453
09 October 2023	98,401,060.78	164.001768
09 October 2024	102,927,509.58	171.545849
09 October 2025	107,662,175.02	179.436958
09 October 2026	112,614,635.07	187.691058
09 October 2027	117,794,908.28	196.324847
09 October 2028	123,213,474.06	205.355790
09 October 2029	128,881,293.87	214.802156
09 October 2030	134,809,833.39	224.683056
09 October 2031	141,011,085.72	235.018476
09 October 2032	147,497,595.67	245.829326
09 October 2033	154,282,485.07	257.137475
09 October 2034	161,379,479.38	268.965799
09 October 2035	168,802,935.43	281.338226
09 October 2036	176,567,870.46	294.279784
09 October 2037	184,689,992.50	307.816654
09 October 2038	193, 185, 732. 16	321.976220
09 October 2039	202,072,275.84	336.787126
09 October 2040	211,367,600.52	352.279334
09 October 2041	221,090,510.15	368.484184

Minimum/Higher Redemption Amount: 26.

Not Applicable

1. Other Redemption details: Not Applicable

2. Final Redemption Amount of each Note:

USD 385,434.456 per Calculation Amount

$-4-$

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
38.	If syndicated, names and addresses of the Not Applicable (i) Managers and underwriting commitments:
	Date of Subscription Agreement: (ii)	Not Applicable
	(iii) Stabilising Manager (if any):	Not Applicable
39.	If non-syndicated, name and address of Dealer:	UBS Limited 1 Finsbury Avenue London EC2M 2PP
40.	Total commission and concession:	Not Applicable
41.	U.S. Selling Restrictions:	Regulation S related restrictions apply
		The tax treatment of the Notes is uncertain. Therefore, if

$-5 -$

No UBS

1. Non-exempt Offer:

2. Additional selling restrictions:

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 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

By: Duly authorised

Ste UBS

PART B - OTHER INFORMATION

LISTING $\mathbf{1}$ .

i. Listing:

ii. Admission to Trading:

London

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.

$3.$ REASONS FOR THE OFFER 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 $\overline{4}$ .

Indication of yield:

Not Applicable

5. FLOATING RATE NOTES - HISTORIC INTEREST RATES

Not Applicable

OPERATIONAL INFORMATION 6.

ISIN Code:	XS0835361956
Common Code:	083536195
Swiss Valor	19313422
Intended to be held in a manner which would allow No Eurosystem eligibility:
Any clearing system(s) other than Euroclear Bank S.A./N.V. and Clearstream Banking Société Anonyme and the Depositary Trust Company and the relevant identification number(s):	Not Applicable
Delivery:	Delivery Against Payment
Additional Paying Agent:	Not Applicable