UBS AG - Capital/Financing Update 2011

Filed Pursuant to Rule 424(b)(2)

Registration No. 333-156695

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities Offered	Maximum Aggregate Offering Price	Amount of Registration Fee(1)
UBS AG Callable Contingent Accrual Notes with Interest Linked to 6-Month USD LIBOR and the Level of the S&P 500 ® Index due April 20, 2026	$ 1,000,000	$ 116.10

(1) Calculated in accordance with Rule 457(r) of the Securities Act of 1933, as amended.

PRICING SUPPLEMENT (To Prospectus dated January 13, 2009)

UBS AG $1,000,000 Callable Contingent Accrual Notes with Interest Linked to 6-Month USD LIBOR and the Level of the S&P 500 ® Index due April 20, 2026

Investment Description

Callable Contingent Accrual Notes (the Notes) are unsubordinated, unsecured debt obligations of UBS AG (UBS) with interest linked to both (i) 6-Month USD LIBOR (as defined herein) and (ii) the closing level of the S&P 500 ® Index (the Index). The Notes pay interest quarterly in arrears, which accrues at a rate of 7.00% per annum for each day during the relevant Interest Period on which both (i) 6-Month USD LIBOR is within a range of 0.00% to and including 7.00% (the Specified Range) and (ii) the Index closes at or above 855 (the Index Barrier). For a detailed description of how 6-Month USD LIBOR and the closing level of the Index will be determined, see General Terms of the Notes Coupon beginning on page 15. The Issuer may, in its sole discretion, elect to redeem the Notes in whole, but not in part, at a redemption price equal to the outstanding principal amount plus any accrued but unpaid interest to, but excluding, the date of redemption, on any interest payment date scheduled to occur on or after April 20, 2012, by giving at least 5 Business Days prior written notice. Any payment on the Notes, 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 Notes and you could lose your entire investment.

Your Note will not earn interest for any day on which either 6-Month USD LIBOR is outside the Specified Range or the closing level of the Index is below the Index Barrier. Accordingly, the actual interest payable on your Notes for any given Interest Period may be zero, and the return on your Notes for any Interest Period or over the life of the Notes could be significantly less than the Base Rate of 7.00% per annum or the return on a comparable debt instrument and may even be zero.

Features

q Variable Income: Interest will accrue at 7.00% per annum for each day that both (i) 6-Month USD LIBOR 6-Month is within the Specified Range and (ii) the Index closes at or above the Index Barrier. No interest will accrue for any day on which either 6-Month USD LIBOR is outside the Specified Range or the closing level of the Index is below the Index Barrier.

q Issuer Call Right: We may, at our election, redeem the Notes in whole, but not in part, on any Interest Payment Date, commencing on the Interest Payment Date falling on April 20, 2012, at a redemption price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest to but excluding the redemption date.

q Principal Protection Feature: If you hold the Notes to maturity (or earlier redemption by the Issuer), you will receive at least 100% of your principal, subject to the creditworthiness of UBS.

Key Dates

Trade Date	April 15, 2011
Settlement Date	April 20, 2011
Interest Payment Dates	Quarterly, on the 20th day of each January, April, July and October, commencing on July 20, 2011, during the term of the Notes (subject to adjustments, as described
herein).
Maturity Date	April 20, 2026
CUSIP:	90261JGY3
ISIN:	US90261JGY38
Issue Price:	Variable Price Reoffer

Note Offering

See Additional Information about UBS and the Notes on page 2. The Notes we are offering will have the terms set forth in the accompanying prospectus and this pricing supplement. See Risk Factors beginning on page 12 of this pricing supplement for risks related to an investment in the Notes.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these Notes or passed upon the adequacy or accuracy of this pricing supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense. The Notes are not deposit liabilities of UBS AG and are not FDIC insured.

UBS Securities LLC has agreed to purchase the notes from us at 98.00% of the principal amount, resulting in aggregate proceeds to us of $980,000. UBS Securities LLC has agreed to sell to one or more other securities dealers, and such securities dealers have agreed to purchase from UBS Securities LLC, all or a portion of the aggregate principal amount of the notes at 98.00% of the principal amount. Such other dealers propose to offer the notes from time to time for sale in negotiated transactions, or otherwise, at varying prices to be determined at the time of each sale. Agents or dealers participating in the initial offering of the notes to the public may only sell the notes in such offering at a price that is greater than 96.50% but not more than 100.00% of the principal amount, resulting in an aggregate initial price to public of between $965,000 and $1,000,000.

UBS Investment Bank Pricing Supplement dated April 15, 2011

Additional Information about UBS and the Notes

UBS has filed a registration statement (including a prospectus) with the Securities and Exchange Commission, or SEC, for the offering to which this pricing supplement relates. Before you invest, you should read these documents and any other documents relating to this offering that UBS has filed with the SEC for more complete information about UBS and this offering. You may obtain these documents for free from the SEC website at www.sec.gov . Our Central Index Key, or CIK, on the SEC web site is 0001114446. Alternatively, UBS will arrange to send you these documents if you so request by calling toll-free 800-722-7370.

You may access these documents on the SEC website at www.sec .gov as follows:

¨ Prospectus dated January 13, 2009:

http://www.sec.gov/Archives/edgar/data/1114446/000095012309000556/y73628b2e424b2.htm

References to UBS, we, our and us refer only to UBS AG and not to its consolidated subsidiaries. In this document, the Notes refers to the Callable Contingent Accrual Notes that are offered hereby. Also, references to the accompanying prospectus mean the UBS prospectus, dated January 13, 2009. References to the pricing supplement mean the pricing supplement relating to your Notes prepared by UBS AG on the Trade Date .

You should rely only on the information incorporated by reference or provided in this pricing supplement or the accompanying prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this pricing supplement or the accompanying prospectus is accurate as of any date other than the date on the front of the document.

Investor Suitability

The Notes may be suitable for you if:

¨ You seek an investment of up to 15 years with 100% principal protection if held to maturity (or early redemption by the issuer), subject to the creditworthiness of UBS, and variable interest payments linked to 6-Month USD LIBOR and the Index.

¨ You understand the complex factors that influence short-term interest rates and the factors that influence the Index as well as stock prices in general.

¨ You believe that 6-Month USD LIBOR will generally be within the Specified Range and that the Index will generally exceed or be equal to the Index Barrier during the period you will hold the Notes.

¨ You are willing and able to hold the Notes to maturity, a term of 15 years, and are aware that there may be little or no secondary market for the Notes.

¨ You are comfortable holding Notes with unpredictable interest payments, which could result in your receiving little or no interest on your Notes for some or all of the fifteen-year term of the Notes.

¨ You can tolerate the Issuer calling the Notes prior to maturity and are aware that you may not be able to reinvest the principal of the Notes at equally advantageous rates if they are called.

¨ You are comfortable with the creditworthiness of UBS, as issuer of the Notes.

The Notes may not be suitable for you if:

¨ You require fixed income from this investment.

¨ You are not familiar with the complex factors that influence short-term interest rates or the factors that influence the Index as well as stock prices in general.

¨ You believe that 6-Month USD LIBOR will generally be outside the Specified Range or that the Index will generally be less than the Index Barrier during the period you will hold the Notes.

¨ You cannot tolerate receiving little or no interest for some or all of the 15-year term of the Notes.

¨ You are unable or unwilling to hold the Notes to maturity, a term of 15 years.

¨ You seek an investment for which there will be an active secondary market.

¨ You cannot tolerate the Issuer calling the Notes prior to maturity and the potential reinvestment risk on your principal if the Notes are called.

¨ You are unable or unwilling to assume the credit risk associated with UBS, as issuer of the Notes.

The suitability considerations identified above are not exhaustive. Whether or not the Notes are a suitable investment for you will depend on your individual circumstances, and you should reach an investment decision only after you and your investment, legal, tax, accounting and other advisors have carefully considered the suitability of an investment in the Notes in light of your particular circumstances. You should also review carefully the Risk Factors beginning on page 12 of this pricing supplement for risks related to an investment in the Notes.

What are the tax consequences of the Notes?

The tax treatment of your Notes depends upon whether or not it is reasonably expected that the return on the Notes during the first half of the Notes term will be significantly greater or less than the return on the Notes during the second half of the Notes term (Front- or Back-Loaded). We believe that the Notes are not Front- or Back-Loaded. This determination is made solely for tax purposes based on currently available objective economic information and is not a prediction or guarantee of the timing or amount of the payments on your Notes. In the opinion of Sullivan & Cromwell LLP, assuming the Notes are not Front-Loaded or Back-Loaded, the Notes should be treated as variable rate debt instruments for U.S. federal income tax purposes. Under this characterization, you should include the interest payments on the Notes in ordinary income at the time you receive or accrue such payments, depending on your method of accounting for tax purposes. You will generally recognize gain or loss upon the sale or maturity of your Notes in an amount equal to the difference, if any, between the fair market value of the amount of cash you receive at such time and your adjusted basis in your Notes. Except to the extent of amounts attributable to accrued but unpaid interest which will be taxed as ordinary income, any gain or loss you recognize upon the sale or maturity of your Notes should be capital gain or loss and should be long-term capital gain or loss if you have held your Notes for more than one year.

Generally, amounts paid to a Non-United States Holder will not be subject to withholding, provided certain certification requirements are satisfied.

For a more complete discussion of the United States federal income tax consequences of your investment in the Notes, please see the discussion under Certain United States Federal Income Tax Consequences and consult your tax advisor.

Please see the accompanying prospectus for a discussion of certain Swiss tax considerations relating to the Notes.

Final Terms

Issuer UBS AG, Jersey Branch

Calculation Agent UBS AG, London Branch

Aggregate Principal Amount $1,000,000

Denomination $1,000 principal amount per Note

Minimum Investment $1,000 (1 Note). Purchases must be in integral multiples of $1,000.

Issue Price Variable price reoffer

Settlement Date April 20, 2011

Maturity Date April 20, 2026

Payment at Maturity (1) UBS will pay the principal amount only if the Notes are held to maturity (or, if called earlier, the redemption date). The total amount due and payable on the Notes on the Maturity Date will equal:

¨ the principal amount; plus

¨ unpaid interest accrued for the Interest Period ending on the Maturity Date.

Interest Payment Amount The Applicable Interest Rate to be paid on the Notes for an Interest Period will be equal to:

(i) 7.00% per annum (the Base Rate) x (ii) n/N, where

n = the total number of calendar days in such Interest Period on which both (i) 6-Month USD LIBOR is within the Specified Range and (ii) the Index Closing Level equals or exceeds the Index Barrier; and

N = the number of calendar days in such Interest Period.

The amount of interest to be paid on the Notes for an Interest Period will be equal to the product of:

(a) the principal amount of the Notes, (b) the Applicable Interest Rate for that Interest Period and (c) the number of days in that Interest Period divided by 360 (with the number of days to be calculated on the basis of a 360-day year consisting of twelve 30-day months);

provided, that:

¨ the rate for 6-Month USD LIBOR with respect to any Saturday, Sunday or any other day which is not a Business Day will be the rate for 6-Month USD LIBOR for the immediately preceding Business Day;

¨ the Index Closing Level with respect to any Saturday, Sunday or any other day which is not an Index Business Day will be the Index Closing Level for the immediately preceding Index Business Day; provided that if a market disruption event with respect to the Index occurs on any day the Index Closing Level for such day will be the Index Closing Level on the immediately preceding Index Business Day on which no market disruption event has occurred; and

¨ the rate for 6-Month USD LIBOR and the Index Closing Level in effect on the fifth Business Day prior to any Interest Period End Date that ends an Interest Period will apply with respect to each subsequent day until and including the last day of such Interest Period (the rate cut-off date provision).

You will not earn interest for any day on which either 6-Month USD LIBOR is outside the Specified Barrier or the Index Closing Level is less than the Index Barrier. Accordingly, the actual interest payable on your Notes may be zero, and your aggregate return over the life of the Notes could be significantly less than the Base Rate or the return on a comparable fixed-income debt instrument and may even be zero.

(1) Principal protection is provided by UBS and, therefore, is dependent on the availability of UBS to satisfy its obligations as they come due.

Rate cut-off date Provision The rate for 6-Month USD LIBOR and the Index Closing Level on the rate cut-off date will apply to each calendar day from and including the rate cut-off date to and including the last day of the applicable Interest Period.

Rate cut-off date With respect to any applicable Interest Period, the fifth Business Day prior to the Interest Period End Date that ends such Interest Period.

Interest Period Quarterly from (and including) an Interest Period End Date (or the Settlement Date, in the case of the first Interest Period) to (but excluding) the next succeeding Interest Period End Date (or the Maturity Date or any earlier redemption date, in the case of the final Interest Period).

Interest Period End Dates The 20th day of each January, April, July and October, commencing on July 20, 2011, and ending on the Maturity Date.

Interest Payment Dates The 20th day of each January, April, July and October, commencing on July 20, 2011, and ending on the Maturity Date (subject to adjustments as described under General Terms of the NotesModified Following Unadjusted Business Day Convention) .

Specified Range 0.00% to and including 7.00%

6-Month USD LIBOR On any day during an Interest Period, the offered rate (British Banker Association) for deposits in U.S. dollars for a period of six months, commencing on such day, which appears on Reuters Screen LIBOR01 Page (or any successor service or page for the purpose of displaying the London interbank offered rates of major banks for U.S. dollars) as of 11:00 a.m., London time, on that day; provided that (i) 6-Month USD LIBOR with respect to any Saturday, Sunday or any other day which is not a Business Day will be the rate for 6-Month USD LIBOR for the immediately preceding Business Day and (ii) the rate for 6-Month USD LIBOR in effect on the fifth Business Day prior to any Interest Period End Date that ends an Interest Period will apply with respect to each subsequent day until and including the last day of such Interest Period. If 6-Month USD LIBOR cannot be determined on a Business Day as described above, then 6-Month USD LIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., London time, on that day, at which deposits in U.S. dollars for a period of six months are offered to prime banks in the London interbank market by four major banks in that market selected by the Calculation Agent, beginning on that day, and in a Representative Amount. The Calculation Agent will request the principal London office of each of these four banks to provide a quotation of its rate. If at least two quotations are provided, 6-Month USD LIBOR for that day will be the arithmetic mean of the quotations. If fewer than two quotations are provided as described above, 6-Month USD LIBOR for that day will be the arithmetic mean of the rates for loans in U.S. dollars for a period of six months to leading European banks quoted, at approximately 11:00 A.M., in New York, New York, on that day, by three major banks selected by the Calculation Agent, beginning on that day and in a Representative Amount. If fewer than three banks selected by the Calculation Agent are quoting such U.S. dollar loans as described above, 6-Month USD LIBOR for the relevant day will be determined by the Calculation Agent, in a commercially reasonable manner and in its sole and absolute discretion.

Representative Amount An amount that, in the Calculation Agents judgment, is representative of a single transaction in the relevant market at the relevant time.

Index S&P 500 ® Index. See Annex A for a description of the Index and related terms.

Index Barrier 855

Index Closing Level On any day during an Interest Period, the closing level of the Index (or any successor index) on such day; provided that (i) the Index Closing Level with respect to any Saturday, Sunday or any other day which is not an Index Business Day will be the Index Closing Level for the immediately preceding Index Business Day, (ii) if a market disruption event with respect to the Index occurs on any day the Index Closing Level for such day will be the Index Closing Level on the immediately preceding Index Business Day on which no market disruption event has occurred, and (iii) the Index Closing Level in effect on the fifth Business Day prior to any Interest Period End Date that ends an Interest Period will apply with respect to each subsequent day until and including the last day of such Interest Period. For more information about determining the Index Closing Level or the closing level of a successor index, see Annex A.

Optional Quarterly Redemption (1) We may, at our election, redeem the Notes in whole, but not in part, on any Interest Payment Date, commencing on the Interest Payment Date falling on April 20, 2012, by giving at least 5 Business Days prior written notice, at a redemption price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest to but excluding the redemption date.

Business Day Any Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in New York City and London generally are authorized or obligated by law, regulation or executive order to close.

Index Business Day Any day, as determined by the Calculation Agent, on which trading is generally conducted on each of the relevant exchange(s) for the Index, other than a day on which trading on such exchange(s) is scheduled to close prior to the time of the posting of its regular final weekday closing price.

Daycount Basis 30/360

Business Day Convention Modified Following Unadjusted

CUSIP 90261JGY3

ISIN US90261JGY38

Listing None

For additional terms related to this offering, please see General Terms of the Notes beginning on page 15 .

(1) Principal protection is provided by UBS and, therefore, is dependent on the ability of UBS to satisfy its obligations as they come due.

Summary

This pricing supplement describes terms that will apply generally to the Notes. This pricing supplement should be read in connection with the accompanying prospectus.

Callable Contingent Accrual Notes

The Callable Contingent Accrual Notes (the Notes) are medium-term notes issued by UBS AG. Interest is payable quarterly in arrears and accrues at a rate of 7.00% per annum (the Base Rate) for each day on which both (i) 6-Month USD LIBOR (as defined herein) is within a range of 0.00% to and including 7.00% (the Specified Range) and (ii) the closing level of the S&P 500 ® Index (the Index) is at or above 855 (the Index Barrier), subject to the rate cut-off provision. The Notes are 100% principal protected if held to maturity, subject to the creditworthiness of UBS. The Notes are senior unsecured obligations of UBS AG that rank equally with its other unsecured unsubordinated obligations.

6-Month USD LIBOR and the Index Closing Level for any day in the applicable Interest Period will be subject to the rate cut-off date provision, which means that 6-Month USD LIBOR and the Index Closing Level on the rate cut-off date will apply to each calendar day from, and including, the rate cut-off date to, and including, the last day of the applicable Interest Period. The rate cut-off date for each applicable Interest Period will be the date that is five Business Days prior to the Interest Period End Date that ends such Interest Period. Therefore, if 6-Month USD LIBOR on the rate cut-off date is outside the Specified Range or the Index Closing Level is less than the Index Barrier, no interest will accrue for that day and the following four days, even if the actual 6-Month USD LIBOR on those days is within the Specified Range and the Index Closing Level exceeds the Index Barrier.

Interest on the Notes, if any, will be determined by the Calculation Agent as described below, payable quarterly in arrears on the 20 th day of each January, April, July and October, commencing on July 20, 2011 (each such date, an Interest Payment Date), subject to adjustments as described under General Terms of the Notes-Modified Following Unadjusted Business Day Convention. Interest, if any, will be computed on the basis of a 360-day year consisting of twelve 30-day months.

The initial Interest Period will begin on, and include, the Settlement Date and end on, but exclude, July 20, 2011. Each subsequent Interest Period will begin on, and include, the Interest Period End Date for the preceding Interest Period and end on, but exclude, the next succeeding Interest Period End Date. The final Interest Period will end on, but exclude, the Maturity Date or any earlier redemption date.

You will not earn interest for any day on which either 6-Month USD LIBOR is outside the Specified Range or the Index Closing Level is less than the Index Barrier. Accordingly, the actual interest payable on your Notes may be zero, and your aggregate return over the life of the Notes could be significantly less than the Base Rate or the return on a comparable fixed-income debt instrument or could even be zero.

Whether interest is payable on any Interest Payment Date will depend on whether 6-Month USD LIBOR is within the Specified Range and whether the Index Closing Level equals or exceeds the Index Barrier on each day during the related Interest Period, subject to the rate cut-off provision.

For each Interest Period:

Step 1: Determine 6-Month LIBOR for each day

6-Month USD LIBOR means:

On any day during an Interest Period, the offered rate (British Banker Association) for deposits in U.S. dollars for a period of six months, commencing on such day, which appears on Reuters Screen LIBOR01 Page (or any successor service or page for the purpose of displaying the London interbank offered rates of major banks for U.S. dollars) as of 11:00 a.m., London time, on that day; provided that (i) 6-Month USD LIBOR with respect to any Saturday, Sunday or any other day which is not a Business Day will be the rate for 6-Month USD LIBOR for the immediately preceding Business Day and (ii) the rate for 6-Month USD LIBOR in effect on the fifth Business Day prior to any Interest Period End Date that ends an Interest Period will apply with respect to each subsequent day until and including the last day of such Interest Period. If 6-Month USD LIBOR cannot be determined on a Business Day as described above, then 6-Month USD LIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., London time, on that day, at which deposits in U.S. dollars for a period of six months are offered to prime banks in the London interbank market by four major banks in that market selected by the Calculation Agent, beginning on that day, and in a Representative Amount. The Calculation Agent will request the principal London office of each of these four banks to provide a quotation of its rate. If at least two quotations are provided, 6-Month USD LIBOR for that day will be the arithmetic mean of the quotations. If fewer than two quotations are provided as described above, 6-Month USD LIBOR for that day will be the arithmetic mean of the rates for loans in U.S. dollars for a period of six months to leading European banks quoted, at approximately 11:00 A.M., in New York, New York, on that day, by three major banks selected by the Calculation Agent, beginning on that day and in a Representative Amount. If fewer than three banks selected by the Calculation Agent are quoting such U.S. dollar loans as described above, 6-Month USD LIBOR for the relevant day will be determined by the Calculation Agent, in a commercially reasonable manner and in its sole and absolute discretion.

Step 2: Determine the Index Closing Level on each day

The Index Closing Level on any day during an Interest Period is the closing level of the Index on such day; provided that (i) the Index Closing Level with respect to any Saturday, Sunday or any other day which is not an Index Business Day will be the Index Closing Level for the immediately preceding Index Business Day, (ii) the Index Closing Level in effect on the fifth Business Day prior to any Interest Period End Date that ends an Interest Period will apply with respect to each subsequent day until and including the last day of such Interest Period and (iii) if a market disruption event with respect to the Index occurs on any day or if any such day is not an Index Business Day, the Index Closing Level for such day will be the Index Closing Level on the immediately preceding Index Business Day on which no market disruption event has occurred.

Step 3: Calculate the applicable interest rate

The applicable interest rate (the Applicable Interest Rate) for such Interest Period will be equal to the product of (a) the Base Rate of 7.00% per annum and (b) a fraction, the numerator of which is equal to the number of days during such Interest Period on which both (i) 6-Month USD LIBOR is within the Specified Range and (ii) the Index Closing Level equals or exceeds the Index Barrier, and the denominator of which is the number of actual days in such Interest Period.

Step 4: Calculate the amount of interest to be paid on the Notes

The amount of interest to be paid on the Notes for an Interest Period is equal to the product of (a) the principal amount of the Notes, (b) the Applicable Interest Rate for that Interest Period and (c) the number of days in that Interest Period divided by 360 (with the number of days to be calculated on the basis of a 360-day year consisting of twelve 30-day months).

Can you sell the Notes back to us?

Although we are not obligated to do so, our current practice is to quote you a price to purchase your Notes upon your request. However, any purchase price we quote you prior to redemption at maturity or upon an earlier call will take into consideration the then-current market conditions and expectations of future payments on the Notes, among other things, and, as a result, the purchase price at which we would repurchase your Notes prior to maturity may be significantly less than the principal amount of the Notes. You should therefore be prepared to hold the Notes to maturity or until called.

The Notes Are Part of a Series.

The Notes are part of a series of debt securities entitled Medium-Term Notes, Series A which we may issue from time to time under our indenture, which is described in the accompanying prospectus. This pricing supplement summarizes general financial and other terms that apply to the Notes. Terms that apply generally to all Medium-Term Notes, Series A are described in Description of Debt Securities We May Offer in the accompanying prospectus. The terms described here (i.e., in this pricing supplement) supplement those described in the accompanying prospectus and, if the terms described here are inconsistent with those described there, the terms described here are controlling.

Hypothetical examples of how the interest amount for an Interest Period is calculated

The hypothetical examples below are based on the following assumptions:

Principal amount of the Notes: $1,000

Number of days in the Interest Period: 90

Base Rate 7.00% per annum

The following table illustrates how the Applicable Interest Rate is calculated based on the number of days 6-Month USD LIBOR is within the Specified Range and the Index Closing Level is equal to or greater than the Index Barrier.

The examples below are provided for purposes of illustration only. The actual Applicable Interest Rate for any Interest Period will depend on the actual 6-month USD LIBOR and Index Closing Level for each day during such Interest Period.

| Number of Days on which 6-Month USD LIBOR is within the Specified Range and the Index Closing Level is equal or greater than the Index
Barrier | Applicable Interest Rate (per annum) | Interest amount payable on any quarterly Interest Payment Date* |
| --- | --- | --- |
| 90 | 7.00% | $17.50 |
| 60 | 4.67% | $11.67 |
| 30 | 2.33% | $5.83 |
| 0 | 0.00% | $0.00 |

The interest amount payable on an Interest Payment Date per $1,000 Note is equal to:

$1,000 x Applicable Interest Rate, converted to a decimal equivalent, x (number of days in the Interest Period/360)

Fluctuations in 6-Month USD LIBOR and Index Closing Level make the Applicable Interest Rate on the Notes for any Interest Period difficult to predict and, as a result, your effective return on the Notes may be lower than anticipated or even be zero for one or more of those Interest Periods. In addition, if, on the day that is five Business Days prior to the Interest Period End Date for the relevant Interest Period, 6-Month USD LIBOR is outside the Specified Range or the Index Closing Level is less than the Index Barrier, no interest will accrue for that day and the next four days, even if 6-Month USD LIBOR on those days is within the Specified Range or the Index Closing Level exceeds the Index Barrier.

Historical Levels of 6-Month USD LIBOR

We have included the following graph of the historical behavior of 6-Month USD LIBOR for the period April 12, 2001 to April 15, 2011, for your reference. Past movements of 6-Month USD LIBOR are not indicative of future levels or the future behavior of 6-Month USD LIBOR.

Source: Bloomberg Financial Systems

Historical Closing Levels of the Index

We have included the following graph of the historical behavior of the Index Closing Level for the period April 12, 2001 to April 15, 2011, for your reference. Past movements of the Index Closing Level are not indicative of future levels or the future behavior of Index.

Source: Bloomberg Financial Systems

Risk Factors

Your investment in the Notes will involve risks. The Notes are unsecured debt. Unlike ordinary debt securities, the return on the Notes is linked to 6-Month USD LIBOR and the Index Closing Level. This section describes some of the most significant risks relating to an investment in the Notes . We urge you to read the following information about these risks, together with the other information in this pricing supplement and the accompanying prospectus, before investing in the Notes.

The Notes are intended to be held to maturity. Your principal protection is subject to UBSs creditworthiness and applies only if you hold your Notes to maturity. Changes in 6-Month USD LIBOR and/or the Index Closing Level could result in a substantial loss to you if you sell your Notes in any secondary market that may develop prior to maturity.

You will receive at least the minimum payment of 100% of the principal amount of your Notes only if you hold your Notes to maturity (or the redemption date, if the Notes are called earlier). If you choose to sell your Notes in the secondary market prior to maturity, the trading value of the Notes will be affected by factors that interrelate in complex ways, including the level and direction of 6-Month USD LIBOR and the Index, the anticipated level and potential volatility of 6-Month USD LIBOR and the Index, the time remaining to the maturity of the Notes, the creditworthiness of UBS and the availability of comparable instruments. In particular, to the extent that 6-Month USD LIBOR is outside the Specified Range or the Index Closing Level is less than the Index Barrier on any day, or the market perceives that the risk of this occurring increases, the trading price of the Notes may be adversely affected. You should be willing to hold your Notes to maturity. If you sell your Notes in the secondary market prior to maturity, you will not receive principal protection on the portion of your Notes sold, and you may receive a dollar price less than 100% of the applicable principal amount of Notes sold.

Your interest payments on the Notes for any Interest Period are uncertain and could be relatively low amounts or even zero in periods where either 6-Month USD LIBOR is outside the Specified Range or the Index Closing Level is less than the Index Barrier.

The interest payable on the Notes is uncertain and the maximum interest rate for any Interest Period is the Base Rate, which is 7.00% per annum. However, for every day during an Interest Period on which 6-Month USD LIBOR is outside the Specified Range or the Index Closing Level is less than the Index Barrier, no interest will accrue for that day and, therefore, the Applicable Interest Rate for that Interest Period will be reduced, and if, for every day in an Interest Period, 6-Month USD LIBOR is outside the Specified Range or the Index Closing Level is less than the Index Barrier, the Applicable Interest Rate for that Interest Period will be zero. You will not earn interest for any day on which either 6-Month USD LIBOR is outside the Specified Range or the Index Closing Level is less than the Index Barrier. If 6-Month USD LIBOR is outside the Specified Range or the Index Closing Level is less than the Index Barrier on each day during an Interest Period, no interest will accrue on the Notes for that Interest Period and, as a result, your return on the Notes for that Interest Period will be zero and the return over the life of the Notes could be significantly less than the Base Rate or could even be zero . Fluctuations in 6-Month USD LIBOR and the Index may make the value of the Notes difficult to predict and more volatile than conventional fixed or floating interest rate debt securities and can result in effective returns to investors that are lower than anticipated.

When the rate cut-off date provision applies for any day included in any applicable Interest Period, it is possible that no interest will accrue for the remainder of that Interest Period

For each of the five Business Days prior to any Interest Period End Date, the rate cut-off date provision will apply so that 6-Month USD LIBOR and the Index Closing Level for any such day will be determined on the rate cut-off date, i.e., the fifth Business Day prior to the relevant Interest Period End Date that ends such Interest Period. Therefore, if 6-Month USD LIBOR on the rate cut-off date is outside the Specified Barrier or the Index Closing Level is less than the Index Barrier, no interest will accrue for that day and for the remainder of the Interest Period, even if the actual 6-Month USD LIBOR is within the Specified Range or the Index Closing Level exceeds the Index Barrier on any day during that time.

Information about historical values may not be indicative of future values.

Included above in Historical Levels of 6-Month USD LIBOR and Historical Closing Levels of the Index are information about the historical levels of 6-Month USD LIBOR and the Index, respectively. These historical levels have been furnished as a matter of information only, and you should not regard the information as indicative of the range of, or trends in, fluctuations in 6-Month USD LIBOR or the Index Closing Level, as applicable, that may occur in the future. There are multiple factors that have and will continue to impact 6-Month USD LIBOR and the Index. Fluctuations in 6-Month USD LIBOR and the Index may make the value of the Notes difficult to predict and more volatile than conventional fixed or floating interest rate debt securities and can result in effective returns to investors that are lower than anticipated. Such factors include:

¨ movements in 6-Month USD LIBOR or the Index;

¨ the volatility of the Index;

¨ general economic, financial, political or regulatory conditions;

¨ changes in, and volatility of, interest rates and/or stock prices generally;

¨ monetary policies of the Federal Reserve Bank; and

¨ inflation and expectations concerning inflation.

The market value of the Notes may be influenced by unpredictable factors.

The existence, magnitude and longevity of the risks associated with the Notes depend on factors over which we do not have any control and that cannot readily be foreseen, including, but not limited to:

¨ Interest rates and/or stock prices in the market generally;

¨ supply and demand for the Notes, including inventory positions held by UBS Securities LLC or any other market maker;

¨ economic, financial, political, regulatory or judicial events that affect financial markets or the economy generally;

¨ the time remaining to maturity;

¨ our right to redeem the Notes; and

¨ the creditworthiness and credit rating of UBS.

We may redeem the Notes prior to maturity. You may have reinvestment risk.

We have the right to redeem the Notes, in whole but not in part, on any Interest Payment Date, commencing on the Interest Payment Date falling on April 20, 2012, at a redemption price equal to 100% of the outstanding principal amount plus accrued and unpaid interest to but excluding the redemption date. If we redeem the Notes prior to maturity, you will receive no further interest payments and may not be able to re-invest the proceeds at a favorable rate comparable to that of the Notes.

There may not be an active trading market in the Notes, and sales prior to maturity may result in losses.

You should be willing and able to hold your Notes to maturity. There may be little or no secondary market for the Notes. We do not intend to list the Notes on any stock exchange or automated quotation system, and it is not possible to predict whether a secondary market will develop for the Notes. Even if a secondary market for the Notes develops, it may not provide significant liquidity or result in trading of Notes at prices advantageous to you. Sales in the secondary market may result in significant losses. UBS Securities LLC, and other affiliates of UBS currently intend to act as market makers for the Notes, but they are not required to do so. Even if UBS Securities LLC, any of our other affiliates or any other market maker makes a market in the Notes, such market making activities may stop at any time. We expect there will be little or no liquidity in the Notes. The prices we or our affiliates may offer for the Notes will be discounted to reflect our costs and, among other things, changes of, and volatility in, interest rates in the market.

As a result, if you sell your Notes prior to maturity, you may have to do so at a discount from the issue price and you may suffer losses.

The inclusion of commissions and compensation in the initial price to public of the Notes is likely to adversely affect secondary market prices.

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

No dividend payments

You will not receive any dividend payments or other distributions on the securities included in the Index (the Index Constituent Stocks).

The return on your Notes reflects a price return, not a total return

The return on your Notes is based, in part, on the level of the Index, which reflects the changes in the market prices of the Index Constituent Stocks . This is known as a price return index or strategy. The return on your Notes does not reflect a total return index or strategy, which would also reflect dividends paid on the Index Constituent Stocks in addition to reflecting the price returns.

Owning the Notes is not the same as owning the Index or the Index Constituent Stocks

The return on your Notes may not reflect the return you would realize if you actually owned the Index or the Index Constituent Stocks. For instance, you will not receive or be entitled to receive any dividend payments over the life of the Notes.

UBSs or its affiliates investments in instruments relating to interest rate swaps may impair the value of the Notes.

We and our affiliates are active participants in interest rate swaps and other contracts as sellers, buyers, dealers, proprietary traders and agents for our customers. As described under Use of Proceeds and Hedging on page 17, we or one or more of our affiliates may hedge our or their interest rate exposure from the Notes by entering into various transactions. We or our affiliates may adjust these hedges at any time. These activities may impair the value of the Notes. It is possible that we or our affiliates could receive significant returns from these hedging activities while the value of or amounts payable under the Notes may decline.

Our business activities may create conflicts of interest.

Trading activities related to short-term and long-term interest rate swaps and other instruments that may affect 6-Month USD LIBOR the Index Closing Level may be entered into on behalf of UBS, its affiliates or customers other than for the account of the holders of the Notes or on their behalf. In addition, UBS and its affiliates expect to engage in trading activities related to 6-Month USD LIBOR or the Index that are not for the account of holders of the Notes or on their behalf. These trading activities may present a conflict between the holders interests in the Notes and the interests UBS and its affiliates will have in their proprietary accounts 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 levels of 6-Month USD LIBOR and/or the Index, could be adverse to the interests of the holders of the Notes.

UBS and its affiliates have no affiliation with S&P, the Index sponsor, and are not responsible for their public disclosure of information.

We and our affiliates are not affiliated with the Index sponsor (except for licensing arrangements discussed in Annex A) and have no ability to control or predict its actions, including any errors in or discontinuation of public disclosure regarding methods or policies relating to the calculation of the Index. If the Index sponsor discontinues or suspends the calculation of the Index, it may become difficult to determine the market value of the Notes and the interest payments. The Calculation Agent may designate a successor index in its sole discretion. If the Calculation Agent determines in its sole discretion that no successor index comparable to the Index exists, the payment you receive on any interest payment date may be determined by the Calculation Agent in its sole discretion. See Annex A Discontinuance of or Adjustments to the Index; Alteration of Method of Calculation. The Index sponsor is not involved in the offer of the Notes in any way and has no obligation to consider your interest as an owner of the Notes in taking any actions that might affect the value of your Notes.

We have derived the information about the Index sponsor and the Index from publicly available information, without independent verification. Neither we nor any of our affiliates assumes any responsibility for the adequacy or accuracy of the information about the Index sponsor or the Index. You, as an investor in the Notes, should make your own independent investigation into the Index sponsor and the Index for your Notes .

There are potential conflicts of interest between you and the Calculation Agent.

UBS AG, London Branch, will serve as the initial Calculation Agent. UBS AG, London Branch, will, among other things, determine the Applicable Interest Rate throughout the term of the Notes. For a description of the Calculation Agents role, see General Terms of the Notes Role of Calculation Agent on page 16. The Calculation Agent will exercise its judgment when performing its functions.

We and our affiliates may have published research, expressed opinions or provided recommendations that are inconsistent with investing in or holding the Notes, and may do so in the future. Any such research, opinions or recommendations could affect the interest rate futures to which the Notes are linked or the market value of the Notes.

UBS and its affiliates publish research from time to time with respect to movements in interest rates and equity markets generally or 6-Month USD LIBOR or the Index specifically and other matters that may influence the value of the Notes, express opinions or provide recommendations that are inconsistent with purchasing or holding the Notes. UBS and its affiliates may have published research or other opinions that call into question the investment view implicit in the Notes. 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. You should make your own independent investigation regarding the merits of investing in the Notes and 6-Month USD LIBOR and the Index to which the Notes are linked.

No current research recommendation.

Neither UBS nor any of its subsidiaries or affiliates currently publishes research on, or assigns a research recommendation to, the Notes.

Credit of UBS

The Notes are unsubordinated, unsecured debt obligations of the issuer, UBS AG, and are not, either directly or indirectly, an obligation of any third party. Any payment to be made on the Notes, including interest and any principal protection provided at maturity, depends on the ability of UBS to satisfy its obligations as they come due. As a result, the actual and perceived creditworthiness of UBS may affect the market value of the Notes and, in the event UBS were to default on its obligations, you may not receive the principal protection or any other amounts owed to you under the terms of the Notes.

The Notes are not insured by the FDIC or any other governmental agency.

The Notes are not deposit liabilities of UBS, and neither the Notes nor your investment in the Notes are insured by the United States Federal Deposit Insurance Corporation (FDIC) or any other governmental agency of the United States, Switzerland or any other jurisdiction.

General Terms of the Notes

The following is a summary of the general terms of the Notes. The information in this section is qualified in its entirety by the information set forth in the accompanying prospectus. In this section, references to holders mean you, as owner of the Notes registered in your name, on the books that we or the trustee maintain for this purpose, and not those holders who own beneficial interests in the Notes registered in street name or in the Notes issued in book-entry form through The Depository Trust Company or another depositary. As an owner of beneficial interests in the Notes, you should read the section entitled Legal Ownership and Book-Entry Issuance in the accompanying prospectus.

In addition to the terms described elsewhere in this pricing supplement, the following general terms will apply to the Notes:

Denominations

Your minimum investment is one Note at the principal amount. The principal amount of each Note will be $1,000.

Maturity Date

The Maturity Date for the Notes will be April 20, 2026.

Interest Payment Dates

Interest Payment Dates shall be the 20 th day of each January, April, July and October, commencing on July 20, 2011, and ending with the Maturity Date, subject to adjustments as described under Modified Following Unadjusted Business Day Convention.

Regular Record Dates for Interest Payments

The regular record date relating to an interest payment on the Notes shall be the second Business Day prior to the Interest Payment Date. For the purpose of determining the holder at the close of business on a regular record date, the close of business will mean 5:00 P.M., New York City time, on that day.

Coupon

Interest on the Notes, if any, will be based on the Applicable Interest Rate, as determined by the Calculation Agent, and will be payable quarterly in arrears on the Interest Payment Date for the applicable Interest Period. Interest, if any, will be computed on the basis of a 360-day year consisting of twelve 30-day months. The initial Interest Period will begin on, and include, the Settlement Date and end on, but exclude, July 20, 2011. Each subsequent Interest Period will begin on, and include, the Interest Period End Date for the preceding Interest Period and end on, but exclude, the immediately succeeding Interest Period End Date. The final Interest Period will end on, but exclude, the Maturity Date or any earlier redemption date. An Interest Period End Date means the 20 th day of each January, April, July and October, commencing on July 20, 2011.

The Applicable Interest Rate for any Interest Period will be equal to the product of (a) the Base Rate of 7.00% per annum and (b) a fraction, the numerator of which is equal to the number of days during such Interest Period on which both the (i) 6-Month USD LIBOR is within the Specified Range of 0.00% (inclusive) to 7.00% (inclusive) and (ii) the Index Closing Level equals or exceeds the Index Barrier, and the denominator of which is the number of days within the Interest Period.

Redemption Price Upon Optional Redemption on an Interest Payment Date

We may, at our election, redeem the Notes in whole, but not in part, on any Interest Payment Date, commencing on the Interest Payment Date falling on April 20, 2012, by giving at least 5 Business Days prior written notice in the manner described under Description of Debt Securities We May Offer Notices in the accompanying prospectus. If the redemption notice is given and funds deposited as required, then interest will cease to accrue on and after the redemption date for the Notes.

If we elect to redeem your Notes as described above, we will pay you an amount equal to 100% of the principal amount of your Notes plus accrued and unpaid interest to but excluding the redemption date (the redemption price) on such redemption date to the holder of record of the Notes as of the close of business on the immediately preceding Business Day. See Description of Debt Securities We May Offer Redemption and Repayment in the accompanying prospectus. If any redemption date is not a Business Day, we will pay the redemption price on the next Business Day without any interest or other payment due to the delay.

Redemption Price upon Optional Tax Redemption

We have the right to redeem the Notes in the circumstances and at the price described under Description of Debt Securities We May Offer Optional Tax Redemption in the accompanying prospectus.

Manner of Payment and Delivery

Any payment on or delivery of the Notes upon redemption or at maturity will be made to accounts designated by you and approved by us, or at the office of the trustee in New York City, but only when the Notes are surrendered to the trustee at that office. We also may make any payment or delivery in accordance with the applicable procedures of the depositary.

Business Day

When we refer to a business day with respect to the Notes, we mean a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in New York City and London generally are authorized or obligated by law, regulation or executive order to close.

Modified Following Unadjusted Business Day Convention

Any payment on the Notes that would otherwise be due on a day that is not a business day may instead be paid on the next day that is a business day, with the same effect as if paid on the original due date. However, if an Interest Payment Date, other than the Interest Payment Date that falls on the Maturity Date or earlier redemption date, falls on a day that is not a business day and the next succeeding business day is in the next calendar month, the date of payment will be the business day immediately preceding the Interest Payment Date, with the same effect as if paid on the originally scheduled due date. If the Maturity Date or any earlier redemption date falls on a day that is not a business day, the payment of principal and interest otherwise due on such day will be paid on the next succeeding business day, and no interest on such payment shall accrue from the period from and after the Maturity Date or redemption date.

Role of Calculation Agent

UBS AG, London Branch, will serve as the initial Calculation Agent. We may change the Calculation Agent after the original issue date of the Notes without notice. The Calculation Agent will make all determinations regarding 6-Month USD LIBOR, the Index Closing Level, market disruption events, discontinuance of or adjustments to the Index, alterations of methods of calculation, the amount of any Interest Payment to which you may be entitled, payments on the Notes due at maturity or any earlier redemption date, Business Days, Index Business Days, the Applicable Interest Rate and any other amounts payable in respect of your Notes. Absent manifest error, all determinations of the Calculation Agent will be final and binding on you and us, without any liability on the part of the Calculation Agent. You will not be entitled to any compensation from us for any loss suffered as a result of any of the above determinations by the Calculation Agent.

Booking Branch

The Notes will be booked through UBS AG, Jersey Branch, as Issuer.

Use of Proceeds and Hedging

We will use the net proceeds we receive from the sale of the Notes for the purposes we describe in the accompanying prospectus under Use of Proceeds. We or our affiliates may also use those proceeds in transactions intended to hedge our obligations under the Notes as described below.

In connection with the sale of the Notes, we or our affiliates may enter into hedging transactions involving the execution of interest rate swap, futures and option transactions, purchases and sales of securities linked to 6-Month USD LIBOR or the Index or the execution of other derivative transactions with returns linked to or related to changes in 6-Month USD LIBOR or the Index both before and after the Settlement Date of the Notes. From time to time, we or our affiliates may enter into additional hedging transactions or unwind those we have entered into.

We or our affiliates may acquire a long or short position in securities similar to the Notes from time to time and may, in our or their sole discretion, hold or resell those securities.

The hedging activity discussed above may adversely affect the market value of the Notes from time to time and payment on the Notes at maturity. See Risk Factors beginning on page 12 for a discussion of these adverse effects.

Certain United States Federal Income Tax Consequences

The following is a general description of certain United States tax considerations relating to the Notes. It does not purport to be a complete analysis of all tax considerations relating to the Notes. Prospective purchasers of the Notes should consult their tax advisers as to the consequences under the tax laws of the country of which they are resident for tax purposes and the tax laws of the United States of acquiring, holding and disposing of the Notes and receiving payments of interest, principal and/or other amounts under the Notes. This summary is based upon the law as in effect on the date of this pricing supplement and is subject to any change in law that may take effect after such date. This discussion assumes that the description of the Notes in this pricing supplement is materially correct.

The discussion below supplements the discussion under U.S. Tax Considerations in the attached prospectus. This discussion applies to you only if you hold your Notes as capital assets for tax purposes. This section does not apply to you if you are a member of a class of holders subject to special rules, such as:

¨ a dealer in securities,

¨ a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings,

¨ a bank,

¨ a life insurance company,

¨ a tax-exempt organization,

¨ a person that owns Notes as part of a straddle or a hedging or conversion transaction for tax purposes, or

¨ a United States holder (as defined below) whose functional currency for tax purposes is not the U.S. dollar.

This discussion is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and proposed regulations under the Internal Revenue Code, published rulings and court decisions, all as currently in effect. These laws are subject to change, possibly on a retroactive basis.

If a partnership holds the Notes, the United States federal income tax treatment of a partner will generally depend on the status of the partner and the tax treatment of the partnership. A partner in a partnership holding the Notes should consult its tax advisor with regard to the United States federal income tax treatment of an investment in the Notes.

Except as otherwise noted under Non-United States Holders below, this discussion is only applicable to you if you are a United States Holder. You are a United States holder if you are a beneficial owner of a Note and you are: (i) a citizen or resident of the United States, (ii) a domestic corporation, (iii) an estate whose income is subject to United States federal income tax regardless of its source, or (iv) a trust if a United States court can exercise primary supervision over the trusts administration and one or more United States persons are authorized to control all substantial decisions of the trust.

In the opinion of Sullivan & Cromwell LLP, assuming the Notes are not Front-Loaded or Back-Loaded, the Notes should be treated as variable rate debt instruments for U.S. federal income tax purposes. Except as noted below under Alternative Treatment, the rest of this discussion assumes that the Notes will be subject to these rules.

Under this characterization, you should include the interest payments on the Notes in ordinary income at the time you receive or accrue such payments, depending on your method of accounting for tax purposes. You will generally recognize gain or loss upon the sale or maturity of your Notes in an amount equal to the difference, if any, between the fair market value of the amount of cash you receive at such time and your adjusted basis in your Notes. See discussion under U.S. Tax Considerations Taxation of Debt Securities Purchase, Sale and Retirement of the Debt Securities in the accompanying prospectus for more information. Except to the extent of amounts attributable to accrued but unpaid interest which will be taxed as ordinary income, any gain or loss you recognize upon the sale or maturity of your Notes should be capital gain or loss and should be long-term capital gain or loss if you have held your Notes for more than one year.

If the principal amount of your Notes exceeds the amount you paid for your Notes by more than a de minimis amount, you will be subject to the rules governing market discount as described under U.S. Tax Considerations Taxation of Debt Securities Market Discount in the accompanying prospectus. If you purchase the Notes at an amount that exceeds the principal amount of your Notes, you will be subject to the rules governing premium as described under U.S. Tax Considerations Taxation of Debt Securities Debt Securities Purchased at a Premium in the accompanying prospectus. The rules regarding market discount and the purchase of debt securities at a premium are complex and therefore individuals are urged to consult their tax advisors regarding these rules.

Alternative Treatment. If the Internal Revenue Service disagrees with our conclusion with respect to whether interest is expected to be Front-Loaded or Back-Loaded, the Internal Revenue Service could treat your Notes as debt instruments subject to the special tax rules governing contingent payment debt instruments. If these rules apply to your Notes, you may be required to accrue an amount of interest during certain periods that exceeds the stated interest on your note for such periods and any gain that you recognize upon the sale of the Notes would generally be treated as ordinary income.

It is possible that the Internal Revenue Service could determine that the Notes should be subject to special rules for Notes that provide for alternative payment schedules if one of such schedules is significantly more likely than not to occur. If your Notes are subject to those rules, the Notes would not be treated as variable rate debt instruments and you would be required to include the stated interest on your Notes in income as it accrues even if you are otherwise subject to the cash basis method of accounting for tax purposes. The rules for Notes that provide alternative payment schedules if one of such schedules is significantly more likely than not to occur are discussed under U.S. Tax Considerations Taxation of Debt Securities Original Issue Discount Debt Securities Subject to Contingencies Including Optional Redemption in the accompanying prospectus.

You should consult your tax advisor as to the possible alternative treatments in respect of the Notes.

Information with Respect to Foreign Financial Assets . Under recently enacted legislation, individuals that own specified foreign financial assets with an aggregate value in excess of $50,000 in taxable years beginning after March 18, 2010 will generally be required to file an information report with respect to such assets with their tax returns. Specified foreign financial assets include any financial accounts maintained by foreign financial institutions (which includes the Notes), as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-U.S. persons, (ii) financial instruments and contracts held for investment that have non-U.S. issuers or counterparties and (iii) interests in foreign entities. U.S. holders that are individuals are urged to consult their tax advisors regarding the application of this legislation to their ownership of the Notes.

Medicare Tax . For taxable years beginning after December 31, 2012, a U.S. person that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax (the Medicare tax) on the lesser of (1) the U.S. persons net investment income for the relevant taxable year and (2) the excess of the U.S. persons modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individuals circumstances). A United States holders net investment income will generally include its gross interest income and its net gains from the sale, redemption or maturity of the Notes, unless such interest payments or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a U.S. person that is an individual, estate or trust, you are urged to consult your tax advisors regarding the applicability of the Medicare tax to your gains in respect of your investment in the Notes.

Treasury Regulations Requiring Disclosure of Reportable Transactions . Treasury regulations require United States taxpayers to report certain transactions (Reportable Transactions) on Internal Revenue Service Form 8886. An investment in the Notes or a sale of the Notes should generally not be treated as a Reportable Transaction under current law, but it is possible that future legislation, regulations or administrative rulings could cause your investment in the Notes or a sale of the Notes to be treated as a Reportable Transaction. You should consult with your tax advisor regarding any tax filing and reporting obligations that may apply in connection with acquiring, owning and disposing of Notes.

Backup Withholding and Information Reporting . If you are a noncorporate United States holder, information reporting requirements, on Internal Revenue Service Form 1099, generally will apply to:

Ø payments of principal and interest on Notes within the United States, including payments made by wire transfer from outside the United States to an account you maintain in the United States, and

Ø the payment of the proceeds from the sale of Notes effected at a United States office of a broker.

Additionally, backup withholding will apply to such payments if you are a noncorporate United States holder that:

Ø fails to provide an accurate taxpayer identification number,

Ø is notified by the Internal Revenue Service that you have failed to report all interest and dividends required to be shown on your federal income tax returns, or

Ø in certain circumstances, fails to comply with applicable certification requirements.

Pursuant to recently enacted legislation, certain payments in respect of Notes made to corporate United States holders after December 31, 2011 may be subject to information reporting and backup withholding.

Payment of the proceeds from the sale of a Note effected at a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, a sale of a Note that is effected at a foreign office of a broker will generally be subject to information reporting and backup withholding if:

Ø the proceeds are transferred to an account maintained by you in the United States,

Ø the payment of proceeds or the confirmation of the sale is mailed to you at a United States address, or

Ø the sale has some other specified connection with the United States as provided in U.S. Treasury regulations.

In addition, a sale of a Note effected at a foreign office of a broker will generally be subject to information reporting if the broker is:

Ø a United States person,

Ø a controlled foreign corporation for United States tax purposes,

Ø a foreign person 50% or more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period, or

Ø a foreign partnership, if at any time during its tax year:

Ø one or more of its partners are U.S. persons, as defined in U.S. Treasury regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership, or

Ø such foreign partnership is engaged in the conduct of a United States trade or business.

Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that you are a United States person.

Non-United States Holders . If you are not a United States holder, you will not be subject to United States withholding tax with respect to payments on your Notes but you will be subject to generally applicable information reporting and backup withholding requirements with respect to payments on your Notes unless you comply with certain certification and identification requirements as to your foreign status.

Supplemental Plan of Distribution

UBS has agreed to sell to UBS Securities LLC, and UBS Securities LLC has agreed to purchase from UBS, the aggregate principal amount of the Notes specified on the front cover of this pricing supplement. UBS Securities LLC has agreed to purchase the notes from us at 98.00% of the principal amount, resulting in aggregate proceeds to us of $980,000. UBS Securities LLC has agreed to sell to one or more other securities dealers, and such securities dealers have agreed to purchase from UBS Securities LLC, all or a portion of the aggregate principal amount of the notes at 98.00% of the principal amount. Such other dealers propose to offer the notes from time to time for sale in negotiated transactions, or otherwise, at varying prices to be determined at the time of each sale. Agents or dealers participating in the initial offering of the notes to the public may only sell the notes in such offering at a price that is greater than 96.50% but not more than 100.00% of the principal amount, resulting in an aggregate initial price to public of between $ 965,000 and $ 1,000,000. In the future, we or our affiliates may repurchase and resell the offered Notes in market-making transactions. As described in more detail under Use of Proceeds and Hedging, we or one of our affiliates may enter into swap agreements or related hedge transactions with one of our other affiliates or unaffiliated counterparties in connection with the sale of the Notes. UBS Securities LLC and/or its affiliate may earn additional income as a result of payments pursuant to these swap or related hedge transactions.

UBS may use this pricing supplement and the accompanying prospectus in the initial sale of any Notes. In addition, UBS, UBS Securities LLC or any other affiliate of UBS may use this pricing supplement and the accompanying prospectus in a market-making transaction for any Notes after their initial sale. In connection with this offering, UBS, UBS Securities LLC, any other affiliate of UBS or any other securities dealers may distribute this pricing supplement and the accompanying prospectus electronically. Unless UBS or its agent informs the purchaser otherwise in the confirmation of sale, this pricing supplement and the accompanying prospectus are being used in a market-making transaction.

You should rely only on the information incorporated by reference or provided in this pricing supplement or the accompanying prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information in this pricing supplement is accurate as of any date other than the date on the front of the document.

Conflicts of Interest UBS Securities LLC is an affiliate of UBS and, as such, has a conflict of interest in this offering within the meaning of FINRA Rule 5121. In addition, UBS will receive the net proceeds (excluding the underwriting discount) from the initial public offering of the Notes, thus creating an additional conflict of interest within the meaning of Rule 5121. Consequently, the offering is being conducted in compliance with the provisions of FINRA Rule 5121. UBS Securities LLC is not permitted to sell Notes in this offering to an account over which it exercises discretionary authority without the prior specific written approval of the account holder.

The returns on UBS structured products are linked to the performance of the relevant underlying asset or index. Investing in a structured product is not equivalent to investing directly in the underlying asset or index. Before investing, you should carefully read the detailed explanation of risks, together with other information in the relevant offering materials discussed below, including but not limited to information concerning the tax treatment of the investment. UBS AG has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents UBS AG has filed with the SEC for more complete information about UBS AG and this offering. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov or by calling toll-free 800-722-7370.

Annex A

S&P 500 ® Index

The S&P 500 ® Index (the S&P Index) is maintained by the S&P Index Committee (the S&P Index Committee), a team of S&Ps economists and index analysts who meet on a regular basis. The calculation of the value of the S&P Index, discussed below in further detail, is based on the relative value of the aggregate market value of specified classes of common stock of 500 companies (the S&P Index Constituent Stocks) as of a particular time compared to the aggregate average market value of the common stocks of 500 similar companies during the base period of the years 1941 through 1943 (the Base Period). The S&P Index Constituent Stocks do not represent the common stocks of the 500 largest companies listed on the New York Stock Exchange and not all 500 companies whose common stock are included in the S&P Index are listed on the New York Stock Exchange. Stocks are chosen for inclusion in the S&P Index by the S&P Index Committee with the goal of ensuring that the S&P Index is a leading indicator of United States equities (as determined below), reflecting the risk and return characteristics of the broader large cap universe on an ongoing basis. Ten main groups of companies currently comprise the Index.

As of April 15, 2011, the 500 companies included in the S&P Index were divided into ten Global Industry Classification Sectors. The Global Industry Classification Sectors include (with the percentage currently included in such sectors indicated in parentheses): Consumer Discretionary (10.54%), Consumer Staples (10.58%), Energy (12.96%), Financials (15.75%), Health Care (11.21%), Industrials (11.16%), Information Technology (17.88%), Materials (3.64%), Telecommunication Services (3.04%) and Utilities (3.24%). (Sector designations are determined by the index sponsor using criteria it has selected or developed. Index sponsors may use very different standards for determining sector designations. In addition, many companies operate in a number of sectors, but are listed in only one sector and the basis on which that sector is selected may also differ. As a result, sector comparisons between indices with different index sponsors may reflect differences in methodology as well as actual differences in the sector composition of the indices.)

Standard & Poors Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. (S&P), calculates the S&P Index by reference to the prices of the S&P Index Constituent Stocks without taking account of the value of dividends paid on such stocks. As a result, the return on the Securities will not reflect the return you would realize if you actually owned the stocks that compose the S&P Index and received the dividends paid on such stocks.

Stocks Included in the S&P Index

Only common stock of operating companies, real estate investment trusts (excluding mortgage REITs) and business development companies are eligible for inclusion in the S&P Index. The common stock of closed-end funds, holding companies, partnerships, investment vehicles and royalty trusts are not eligible for inclusion in the S&P Index. Further, for the common stock of a company to be eligible for inclusion in the S&P Index it must meet all of the following additional criteria, as determined by the S&P Index Committee in its sole discretion:

ð Market Capitalization Unadjusted market capitalization of US $3 billion or more. The ranges are reviewed from time to time by the S&P Index Committee to assure consistency with market conditions.

ð Liquidity Annual dollar value trade to market capitalization should be 0.3 or greater.

ð Public Float Public float of at least 50% of the common stock.

ð Sector Classification Contribution to the sector balance maintenance of the S&P Index.

ð Financial Viability Financial viability as generally measured for four consecutive quarters of positive as-reported earnings. Another measure of financial viability is a companys balance sheet leverage, which should be operationally justifiable in the context of both its industry peers and its business model.

ð Treatment of Initial Public Offerings Initial public offerings should be seasoned for at least six to twelve months.

ð United States Company The company should be a United States company by either (i) meeting the following criteria: (A) incorporated in the United States, (B) financial reporting should be in U.S. GAAP, in U.S. dollars, and the company should not be considered a foreign entity by the United States Securities and Exchange Commission, (C) a corporate governance structure consistent with U.S. practice, (D) principal executive presence in the United States, (E) the United States portion of revenues, operations, fixed assets and employees should be a significant portion of the total, but not exceed 50%, (F) the common stock should be listed on the New York Stock Exchange, the American Stock Exchange, NASDAQ or NYSE Arca and (G) the company should generally be considered a United States company by analysts and investors, or (ii) meeting all but one of the criteria in subsection (i)(A)-(G) and there is no other major market beside the United States to which the company would logically be assigned.

Generally, only one class of common stock of any company is included in the S&P Index. The stock price and total shares outstanding of common stock of a company included in the S&P Index with more than one class of common stock outstanding is based on the most liquid class of common stock of that company as determined by S&P Index Committee in its sole discretion.

Criteria for Removal from the S&P Index

The common stock of a company may be removed from the S&P Index when the S&P Index Committee determines, in its sole discretion, that one of the following criteria is met:

ð A company involved in a merger, acquisition or significant restructuring no longer meets the inclusion criteria, or

ð A company substantially violates one more of the criteria for inclusion in the S&P Index, as described above.

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Computation of the S&P Index

The calculation of the value of the S&P Index (discussed below in further detail) is based on the relative value of the aggregate Market Value (as defined below) of the common stocks of approximately 500 companies as of a particular time as compared to the aggregate Market Value of the common stocks of approximately 500 similar companies during the Base Period. The Market Value of any S&P Index Constituent Stock is the product of the market price per share times the number of the then outstanding shares of such S&P Index Constituent Stock times an investable weight factor (IWF). An IWF is calculated for each S&P Index Constituent Stock so that the number of shares outstanding is reduced to exclude certain closely held shares from the determination of the level of the S&P Index.

The level of the S&P Index is calculated using a base-weighted aggregate methodology: the level of the S&P Index reflects the total Market Value of all the S&P Index Constituent Stocks relative to the Base Period. An indexed number is used to represent the results of this calculation in order to make the value easier to work with and track over time. The actual total Market Value of the S&P Index Constituent Stocks in the S&P Index during the Base Period has been set equal to an indexed value of 10. This is often indicated by the notation 1941-43=10. In practice, the daily calculation of the S&P Index is computed by dividing the total Market Value of the level of S&P Index Constituent Stocks by a number called the S&P Divisor. By itself, the S&P Divisor is an arbitrary number. However, in the context of the calculation of the level of the S&P Index, it is the only link to the original Base Period value of the S&P Index. Continuity in the S&P Index value is maintained by adjusting the S&P Divisor for certain events as described below.

Changes to the S&P Index are made on an as-needed basis. There is no annual or semi-annual reconstitution. Rather changes in response to corporate actions and market developments can be made at any time.

An adjustment to the S&P Divisor is required when any change to any S&P Index Constituent Stocks alters the total market value of the S&P Index while holding stock prices constant. S&P Divisor adjustments are made after the close meaning that after the close of trading the closing prices are used to calculate the new S&P Divisor based on whatever changes are being made. The table below summarizes the types of maintenance adjustments which require a divisor adjustment:

Type of Corporate Action	Adjustment Factor
Company added / deleted	Net change in market value determines the S&P Divisor adjustment.
Spin-Off (Only if spun-off company added to S&P Index and another company deleted from S&P Index)	S&P Divisor adjustment reflects deletion of company from S&P Index.
Special Dividend	When a company pays a special dividend the share price is assumed to drop by the amount of the dividend.
Rights Offering	Increase in market capitalization measured as the shares issued multiplied by the price paid.

Each of the corporate actions in the table above has the effect of altering the market value of an S&P Index Constituent Stock and consequently the aggregate market value of the S&P Index Constituent Stocks. In order that the level of the S&P Index prior to such corporate action, not be affected by the change in market value of the S&P Index Constituent Stocks, a new S&P Divisor is derived as follows:

ð Market value of the S&P Index Constituent Stocks after the corporate action / New S&P Divisor = Market Value of the S&P Index Constituent Stocks prior to the corporate action.

ð New S&P Divisor = Market value of the S&P Index Constituent Stocks after the corporate action / Market Value of the S&P Index Constituent Stocks prior to the corporate action.

In cases where there is no achievable market price for a stock being deleted, such stock may be removed from the S&P Index at zero or minimal price at the discretion of the S&P Index Committee, in recognition of the constraints faced by investors in trading bankrupt or suspended stocks. Constituent changes are typically announced one to five days before they are scheduled to be implemented.

A large part of the maintenance of the S&P Index involves adjustments in response to changes in a companys shares outstanding. The S&P Index Committee follows a 5% rule. Generally, changes in a companys shares outstanding of 5% or more due to mergers, acquisitions, public offerings, private placements, tender offers, Dutch auctions or exchange offers are made as soon as reasonably possible. Other changes of 5% or more are made weekly and are announced on Wednesdays for implementation after the close of trading the following Wednesday (one week later). Changes of less than 5% of a companys shares outstanding are accumulated and made quarterly on the third Friday of March, June, September and December, with the exception of an acquisition of another company in the S&P Index which are made as reasonably as possible. At S&Ps discretion, de minimis merger and acquisition changes will be accumulated and implemented with the updates made at the end of each calendar quarter. In the case of certain rights issuances, in which the number of rights issued and/or terms of their exercise are deemed substantial by the S&P Index Committee, a price adjustment and/or share increase may be implemented immediately.

Neither UBS nor any of its affiliates accepts any responsibility for the calculation, maintenance or publication of, or for any error, omission or disruption in, the S&P Index or any successor index. While S&P currently employs the above methodology to calculate the S&P Index, no assurance can be given that S&P will not modify or change this methodology in a manner that may affect the amount payable at maturity to beneficial owners of the Securities. S&P does not guarantee the accuracy or the completeness of the S&P Index or any data included in the S&P Index. S&P assumes no liability for any errors, omissions or disruption in the calculation and dissemination of the S&P Index. S&P

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disclaims all responsibility for any errors or omissions in the calculation and dissemination of the S&P Index or the manner in which the S&P Index is applied in determining the amount payable at maturity.

We have derived all information regarding the S&P Index contained in this Index supplement, including, without limitation, its make-up, method of calculation and changes in its components, from publicly available information. Such information reflects the policies of, and is subject to change by, S&P.

We do not assume any responsibility for the accuracy or completeness of such information. S&P has no obligation to continue to publish the S&P Index, and may discontinue publication of the S&P Index.

License Agreement

S&P and UBS have entered into a non-exclusive license agreement providing for the license to UBS, and certain of its affiliates, in exchange for a fee, of the right to use the S&P Index, in connection with securities, including the Securities. The S&P Index is owned and published by S&P.

The license agreement between S&P and UBS provides that the following language must be set forth in this Index supplement:

The Securities are not sponsored, endorsed, sold or promoted by S&P. S&P makes no representation or warranty, express or implied, to the owners of the Securities or any member of the public regarding the advisability of investing in securities generally or in the Securities particularly, or the ability of the S&P Index to track general stock market performance. S&Ps only relationship to UBS is the licensing of certain trademarks and trade names of S&P and of the S&P Index which is determined, composed and calculated by S&P without regard to UBS or the Securities. S&P has no obligation to take the needs of UBS or the owners of the Securities into consideration in determining, composing or calculating the S&P Index. S&P is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of the Securities to be issued or in the determination or calculation of the equation by which the Securities are to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Securities.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY UBS, OWNERS OF THE SECURITIES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P INDEX OR ANY DATA INCLUDED THEREIN.

WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

Standard & Poors, S&P, S&P 500, Standard & Poors 500 and 500 are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by UBS. The Securities are not sponsored, endorsed, sold or promoted by S&P and S&P makes no representation regarding the advisability of investing in the Securities.

Index Closing Level

The Index Closing Level on any trading day will be determined based on the closing level of the Index or any successor index or alternative calculation of such index published following the regular official weekday close of the principal trading session of the relevant exchange for such index.

Market Disruption Event

Any of the following may be a market disruption event, in each case as determined by the calculation agent in its sole discretion:

ð a suspension, absence or material limitation of trading in a material number of S&P Index Constituent Stocks for more than two hours or during the one-half hour before the close of trading in the applicable market or markets;

ð a suspension, absence or material limitation of trading in option or futures contracts relating to the Index or a material number of S&P Index Constituent Stocks in the primary market or markets for those contracts for more than two hours of trading or during the one-half hour before the close of trading in such market;

ð the Index is not published; or

ð any other event, if the calculation agent determines in its sole discretion that the event materially interferes with our ability or the ability of any of our affiliates to unwind all or a material portion of a hedge with respect to Notes that we or our affiliates have effected or may effect as described under Use of Proceeds and Hedging.

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The following events will not be market disruption events:

ð a limitation on the hours or numbers of days of trading, but only if the limitation results from an announced change in the regular business hours of the applicable market or markets; and

ð a decision to permanently discontinue trading in the option or futures contracts relating to the Index or, in the Index, or in any index constituent stocks.

For this purpose, an absence of trading in the primary securities market on which option or futures contracts related to the Index or any S&P Index Constituent Stocks are traded will not include any time when that market is itself closed for trading under ordinary circumstances.

Discontinuance of or Adjustments to the Index; Alteration of Method of Calculation

If the sponsor (S&P) discontinues publication of the Index and the index sponsor or any other person or entity publishes a substitute index that the calculation agent determines is comparable to that index and approves the substitute index as a successor index, then the calculation agent will determine the closing levels of the Index by reference to such successor index.

If the calculation agent determines that the publication of the Index is discontinued and that there is no successor index on any date when the value of the Index is required to be determined, the calculation agent will instead make the necessary determination by reference to a group of stocks or another index or indices, as applicable, and will apply a computation methodology that the calculation agent determines will as closely as reasonably possible replicate the Index. If the calculation agent determines that any S&P Index Constituent Stocks or the method of calculating the Index have been changed at any time in any respect including any addition, deletion or substitution and any reweighting or rebalancing of the S&P Index Constituent Stocks, as applicable, and whether the change is made by the index sponsor under its existing policies or following a modification of those policies, is due to the publication of a successor index, is due to events affecting one or more of the S&P Index Constituent Stocks or their issuers, as applicable, or is due to any other reason that causes the Index not to fairly represent the value of that index had such changes not been made or that otherwise affects the calculation of the closing levels of the Index, then the calculation agent may make adjustments in this method of calculating that index that it believes are appropriate to ensure that the Index Closing Level used to determine the amount payable on any Interest Payment Date, Redemption Date or on the Maturity Date is equitable. All determinations and adjustments to be made by the calculation agent with respect to the closing levels of the affected index and the amount payable on any Interest Payment Date, Redemption Date or at maturity or otherwise relating to the level of the index may be made by the calculation agent in its sole discretion.

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UBS AG Capital/Financing Update 2011

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UBS AG — Capital/Financing Update 2011

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