UBS AG — Capital/Financing Update 2014

Aug 5, 2014

Filed Pursuant to Rule 424(b)(2) Registration Statement No. 333-178960

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities Offered	Maximum Aggregate Offering Price	Amount of Registration Fee (1)
Contingent Income Auto-Callable Securities based on the Performance of the American Depositary
Shares of Baidu, Inc. due August 6, 2015	$2,466,400.00	$317.67

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

August 2014 PRICING SUPPLEMENT (To Prospectus dated January 11, 2012 and Product Supplement dated April 24, 2012)

STRUCTURED INVESTMENTS

Opportunities in U.S. Equities

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

Contingent Income Auto-Callable Securities (the “securities”) offer the opportunity for investors to earn a quarterly contingent payment with respect to each determination date on which the closing price of the underlying stock is greater than or equal to 75.00% of the initial stock price, which we refer to as the downside threshold level. In addition, if the closing price of the underlying stock is greater than or equal to the initial stock price on any determination date, the securities will be automatically redeemed or repaid at maturity, as applicable, for an amount per security equal to the stated principal amount and the contingent payment. However, if on any determination date the closing price of the underlying stock is less than the initial stock price, the securities will not be redeemed and if that closing price is less than the downside threshold level, you will not receive any contingent payment for that quarterly period. As a result, investors must be willing to accept the risk of not receiving any contingent payment and also the risk of receiving shares of the underlying stock, which will occur if the securities are not redeemed prior to maturity and the closing price of the underlying stock is below the downside threshold level on the final determination date, in which case investors will be exposed to the decline in the closing price of the underlying stock and the value of those shares investors receive at maturity will be significantly less than the stated principal amount of the securities and could be zero. Accordingly, the securities do not guarantee any return of principal at maturity. Investors will not participate in any appreciation of the underlying stock. The securities are unsubordinated, unsecured debt obligations issued by UBS AG, and all payments on the securities are subject to the credit risk of UBS AG.

SUMMARY TERMS

Issuer:	UBS AG, London Branch
Underlying stock:	American depositary shares of Baidu, Inc. (Bloomberg Ticker: “BIDU”)
Aggregate principal amount:	$2,466,400
Stated principal amount:	$10.00 per security
Issue price:	$10.00 per security (see “Commissions and issue price” below)
Pricing date:	August 1, 2014
Original issue date:	August 6, 2014 (3 business days after the pricing date)
Maturity date:	August 6, 2015 subject to postponement for certain market disruption events and as described under “General Terms of the Securities — Maturity Date” in the
accompanying product supplement.
Early redemption:	If, on any of the first three determination dates, the closing price of the underlying stock is greater than or equal to the initial stock price, the securities will be
automatically redeemed for an early redemption amount on the first contingent payment date immediately following the related determination date.
Early redemption amount:	The early redemption amount will be an amount equal to (i) the stated principal amount plus (ii) the contingent payment with respect to the related determination
date.
Contingent payment:	§ If, on any determination date, the closing price or the final stock price is greater than or equal to the downside threshold
level, we will pay a quarterly contingent payment of $0.3130 (equivalent to 12.52% per annum of the stated principal amount) per security on the related contingent payment date. § If, on any determination date, the closing price or the
final stock price is less than the downside threshold level, no contingent payment will be made with respect to that determination date.
Determination dates:	November 3, 2014, February 2, 2015, May 1, 2015 and August 3, 2015, subject to postponement for non-trading days and certain market disruption events (as described under
“General Terms of the Securities — Determination Dates”,” — Final Determination Date” and “— Market Disruption Events” in the product supplement). We also refer to August 3, 2015 as the final
determination date.
Contingent payment dates:	With respect to each determination date other than the final determination date, the third business day after the related determination date. The payment of the quarterly
contingent payment, if any, with respect to the final determination date will be made on the maturity date.

Payment at maturity:	(i) the stated principal amount plus (ii) the quarterly contingent payment with respect to the final determination date
§ If the final stock price is less than the downside threshold level:	(i) a number of shares of the underlying stock equal to the exchange ratio (and, if applicable, cash in lieu of fractional shares), or (ii) at our option, the cash value of such shares as
of the final determination date.

Exchange ratio:	The exchange ratio is less than 1 and your payment at maturity for each security will be the cash value of the fractional share. — The stated principal amount divided by the initial stock price
Downside threshold level:	$159.29, which is equal to 75.00% of the initial stock price (as may be adjusted in the case of certain adjustment events as described under ‘‘General Terms of the
Securities — Antidilution Adjustments’’ in the product supplement).
Initial stock price:	$212.38, which is equal to the closing price of the underlying stock on the pricing date (as may be adjusted in the case of certain adjustment events as described under
‘‘General Terms of the Securities — Antidilution Adjustments’’ in the product supplement).
Final stock price:	The closing price of the underlying stock on the final determination date.
CUSIP:	90273E712
ISIN:	US90273E7123
Listing:	The securities will not be listed on any securities exchange.
Agent:	UBS Securities LLC
Commissions and issue price:	Price to Public (1)	Fees and Commissions (1)	Proceeds to Issuer
Per security	100%	1.50%	98.50%
Total	$2,466,400.00	$36,996.00	$2,429,404.00

(1) UBS Securities LLC, acting as agent for UBS AG, will receive a fee of $0.15 per $10.00 stated principal amount of securities and will pay the entire fee to Morgan Stanley Smith Barney LLC as a fixed sales commission of $0.15 per $10.00 stated principal amount of securities that Morgan Stanley Smith Barney LLC sells. See “Supplemental information concerning plan of distribution (conflicts of interest); secondary markets (if any).”

The estimated initial value of the securities as of the pricing date is $9.734 for securities linked to the performance of the American depositary shares of Baidu, Inc. The estimated initial value of the securities was determined as of the close of the relevant markets on the date of this pricing supplement by reference to UBS’ internal pricing models, inclusive of the internal funding rate. For more information about secondary market offers and the estimated initial value of the securities, see “Risk Factors — Fair value considerations” and “Risk Factors —Limited or no secondary market and secondary market price considerations” on pages 9 and 10 of this pricing supplement.

The securities involve risks not associated with an investment in ordinary debt securities. See “Risk Factors” beginning on page 9.

The Securities and Exchange Commission and state securities regulators have not approved or disapproved these securities, or determined if this document or the accompanying product supplement and prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The securities are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

You should read this document together with the related product supplement and prospectus, each of which can be accessed via the hyperlinks below, before you decide to invest.

Product supplement dated April 24, 2012 Prospectus dated January 11, 2012

Pricing Supplement dated August 1, 2014

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

Additional Information about UBS and the Securities

UBS AG (“UBS”) has filed a registration statement (including a prospectus as supplemented by a product supplement) with the Securities and Exchange Commission, or SEC, for the offering to which this document 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 1-877-387-2275.

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

§ Prospectus dated January 11, 2012:

http://www.sec.gov/Archives/edgar/data/1114446/000119312512008669/d279364d424b3.htm

§ Product Supplement dated April 24, 2012:

http://www.sec.gov/Archives/edgar/data/1114446/000139340112000040/c310169_690705-424b2.htm

References to “UBS,” “we,” “our” and “us” refer only to UBS AG and not to its consolidated subsidiaries. In this document, the “securities” refers to the Contingent Income Auto-Callable Securities that are offered hereby. Also, references to the “accompanying prospectus” mean the UBS prospectus titled “Debt Securities and Warrants,” dated January 11, 2012, and references to the “accompanying product supplement” mean the UBS product supplement “Contingent Income Auto-Callable Securities”, dated April 24, 2012.

You should rely only on the information incorporated by reference or provided in this document, the accompanying product 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 document, the accompanying product supplement or the accompanying prospectus is accurate as of any date other than the date on the front of the document.

UBS reserves the right to change the terms of, or reject any offer to purchase, the securities prior to their issuance. In the event of any changes to the terms of the securities, UBS will notify you and you will be asked to accept such changes in connection with your purchase. You may also choose to reject such changes in which case UBS may reject your offer to purchase.

August 2014 2

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

Investment Summary

The Contingent Income Auto-Callable Securities due August 6, 2015 Based on the Performance of the American depositary shares of Baidu, Inc., which we refer to as the securities, provide an opportunity for investors to earn a quarterly contingent payment, which is an amount equal to $0.3130 (equivalent to 12.52% per annum of the stated principal amount) per security, with respect to each quarterly determination date on which the closing price or the final stock price, is greater than or equal to 75.00% of the initial stock price, which we refer to as the downside threshold level. The contingent payment, if any, will be payable quarterly on the relevant contingent payment date, which is the third business day after the related determination date. It is possible that the closing price of the underlying stock could remain below the downside threshold level for extended periods of time or even throughout the term of the securities so that you may receive little or no contingent payments.

If the closing price is greater than or equal to the initial stock price on any of the first three determination dates, the securities will be automatically redeemed for an early redemption amount equal to the stated principal amount plus the contingent payment with respect to the related determination date. If the securities have not previously been redeemed and the final stock price is greater than or equal to the downside threshold level, the payment at maturity will also be the sum of the stated principal amount and the contingent payment with respect to the final determination date. However, if the securities have not previously been redeemed and the final stock price is less than the downside threshold level, investors will be exposed to the decline in the closing price of the underlying stock, as compared to the initial stock price, on a 1 to 1 basis and investors will be entitled to receive (i) a number of shares of the underlying stock equal to the exchange ratio (and, if applicable, cash in lieu of fractional shares) or (ii) at our option, the cash value of such shares as of the final determination date. If UBS elects to deliver to you cash in lieu of shares, the “cash value” will be equal to the exchange ratio multiplied by the final price. The value of such shares (or that cash) will be less than 75.00% of the stated principal amount of the securities and could be zero. Investors in the securities must be willing to accept the risk of losing their entire principal and also the risk of not receiving any contingent payment. In addition, investors will not participate in any appreciation of the underlying stock.

August 2014 3

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

Key Investment Rationale

The securities offer investors an opportunity to earn a quarterly contingent payment equal to 12.52% per annum of the stated principal amount per security, with respect to each determination date on which the closing price or the final stock price is greater than or equal to 75.00% of the initial stock price, which we refer to as the downside threshold level. The securities may be redeemed prior to maturity for the stated principal amount per security plus the contingent payment, and the payment at maturity will vary depending on the final stock price, as follows:

| Scenario 1 | On any of the first three determination dates, the closing price is greater than or equal to the
initial stock price. § The securities will be automatically redeemed for (i) the
stated principal amount plus (ii) the contingent payment with respect to the related determination date. § Investors will not participate in any appreciation of the underlying stock from the initial stock price. |
| --- | --- |
| Scenario 2 | The securities are not automatically redeemed prior to maturity and the final stock price is greater than
or equal to the downside threshold level. § The payment due at
maturity will be (i) the stated principal amount plus (ii) the contingent payment with respect to the final determination date. § Investors will not participate in any appreciation of the underlying stock from the initial stock price. |
| Scenario 3 | The securities are not automatically redeemed prior to maturity and the final stock price is less than the downside threshold level. § The payment due at maturity will be (i) a number of shares
of the underlying stock equal to the exchange ratio (and, if applicable, cash in lieu of fractional shares) or (ii) at our option, the cash value of those shares as of the final determination date. § Investors will lose some and may lose all of their
principal in this scenario. |

INVESTING IN THE SECURITIES INVOLVES SIGNIFICANT RISKS. YOU MAY LOSE SOME OR ALL OF THE STATED PRINCIPAL AMOUNT. ANY PAYMENT ON THE SECURITIES, 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 SECURITIES AND YOU COULD LOSE YOUR ENTIRE INVESTMENT.

Investor Suitability

The securities may be suitable for you if:

§ You fully understand the risks inherent in an investment in the securities, including the risk of loss of your entire initial investment.

§ You can tolerate a loss of all or a substantial portion of your investment and are willing to make an investment that may have the same downside market risk as an investment in the underlying stock.

§ You believe the closing price of the underlying stock will be equal to or greater than the downside threshold level on the specified determination dates (including the final determination date).

§ You understand and accept that you will not participate in any appreciation in the price of the underlying stock and that your potential return is limited to the quarterly contingent payments specified in the final pricing supplement.

§ You can tolerate fluctuations in the price of the securities prior to maturity that may be similar to or exceed the downside price fluctuations of the underlying stock.

§ You are willing to invest in the securities based on the contingent payment of $0.3130 (equivalent to 12.52% per annum of the stated principal amount) per security.

§ You are willing to forgo dividends paid on the underlying stock and you do not seek guaranteed current income from this investment.

§ You are willing to invest in securities that may be redeemed early and you are otherwise willing to hold such securities to maturity, a term of approximately 12 months, and accept that there may be little or no secondary market for the securities.

August 2014 4

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

§ You are willing to assume the credit risk of UBS for all payments under the securities, and understand that if UBS defaults on its obligations you may not receive any amounts due to you including any repayment of principal.

§ You understand that the estimated initial value of the securities determined by our internal pricing models is lower than the issue price and that should UBS Securities LLC or any affiliate make secondary markets for the securities, the price (not including their customary bid-ask spreads) will temporarily exceed the internal pricing model price.

The securities may not be suitable for you if:

§ You do not fully understand the risks inherent in an investment in the securities, including the risk of loss of your entire initial investment.

§ You require an investment designed to provide a full return of principal at maturity.

§ You cannot tolerate a loss of all or a substantial portion of your investment, and you are not willing to make an investment that may have the same downside market risk as an investment in the underlying stock.

§ You believe that the price of the underlying stock will decline during the term of the securities and is likely to close below the downside threshold level on the determination dates (including the final determination date).

§ You seek an investment that participates in the full appreciation in the price of the underlying stock or that has unlimited return potential.

§ You cannot tolerate fluctuations in the price of the securities prior to maturity that may be similar to or exceed the downside price fluctuations of the underlying stock.

§ You are unwilling to invest in the securities based on the contingent payment of $0.3130 (equivalent to 12.52% per annum of the stated principal amount) per security.

§ You prefer to receive the dividends paid on the underlying stock and you seek guaranteed current income from this investment.

§ You are unable or unwilling to hold securities that may be redeemed early, or you are otherwise unable or unwilling to hold such securities to maturity, a term of approximately 12 months, or you seek an investment for which there will be an active secondary market for the securities.

§ You are not willing to assume the credit risk of UBS for all payments under the securities, including any repayment of principal.

August 2014 5

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

How the Securities Work

The following diagrams illustrate the potential outcomes for the securities depending on (1) the closing price and (2) the final stock price.

Diagram #1: First Three Determination Dates

Diagram #2: Payment at Maturity if No Automatic Early Redemption Occurs

For more information about the payout upon an early redemption or at maturity in different hypothetical scenarios, see “Hypothetical Examples” starting on page 7.

August 2014 6

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

Hypothetical Examples

The below examples are based on the following terms and are purely hypothetical (the actual terms of your security are specified on the cover of this pricing supplement; amounts may have been rounded for ease of analysis):

Hypothetical Initial Stock Price:	$200.00
Hypothetical Downside Threshold Level:	$150.00, which is 75.00% of the initial stock price
Hypothetical Exchange Ratio*:	0.05, which is the stated principal amount divided by the hypothetical initial stock price
Hypothetical Quarterly Contingent Payment:	$0.3130 (equivalent to 12.52% per annum of the stated principal amount) per security
Stated Principal Amount:	$10.00 per security

• The exchange ratio is less than 1 and your payment at maturity for each security will be the cash value of the fractional share.

In Examples 1 and 2, the closing price of the underlying stock fluctuates over the term of the securities and the closing price of the underlying stock is greater than or equal to the hypothetical initial stock price of $200.00 on one of the first three determination dates. Because the closing price is greater than or equal to the initial stock price on one of the first three determination dates, the securities are automatically redeemed following the relevant determination date. In Examples 3 and 4, the closing price on the first three determination dates is less than the initial stock price, and, consequently, the securities are not automatically redeemed prior to, and remain outstanding until, maturity.

Determination Dates	Example 1 — Hypothetical Closing Price	Contingent Payment	Early Redemption Amount*	Example 2 — Hypothetical Closing Price	Contingent Payment	Early Redemption Amount
#1	$210.00	—*	$10.3130	$160.00	$0.3130	N/A
#2	N/A	N/A	N/A	$140.00	$0	N/A
#3	N/A	N/A	N/A	$250.00	—*	$10.3130
Final Determination Date	N/A	N/A	N/A	N/A	N/A	N/A
Payment at Maturity	N/A			N/A

• The early redemption amount includes the unpaid contingent payment with respect to the determination date on which the closing price is greater than or equal to the initial stock price and the securities are redeemed as a result.

§ In Example 1 , the securities are automatically redeemed following the first determination date as the closing price on the first determination date is equal to the initial stock price. You receive the early redemption amount, calculated as follows:

stated principal amount + contingent payment = $10.00 + $0.3130= $10.3130

In this example, the early redemption feature limits the term of your investment to approximately 3 months and you may not be able to reinvest at comparable terms or returns. If the securities are redeemed early, you will stop receiving quarterly contingent payments. Your total return per security in this example is $10.3130 (a 3.13% total return on the securities).

§ In Example 2, the securities are automatically redeemed following the third determination date as the closing price on the third determination date is greater than the initial stock price. As the closing price on the first and third determination dates are greater than the downside threshold level, you receive the contingent payment of $0.3130 with respect to each such determination date. Following the third determination date, you receive an early redemption amount of $10.3130, which includes the quarterly contingent payment with respect to the third determination date.

August 2014 7

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

In this example, the early redemption feature limits the term of your investment to approximately 9 months and you may not be able to reinvest at comparable terms or returns. If the securities are redeemed early, you will stop receiving quarterly contingent payments. Further, although the underlying stock has appreciated by 25% from its initial stock price on the third determination date, you only receive $10.3130 per security and do not benefit from such appreciation. When added to the contingent payment of $0.3130 received in respect of prior determination dates, UBS will have paid you a total of $10.63 per security for a 6.30% total return on the securities.

Determination Dates	Example 3 — Hypothetical Closing Price	Contingent Payment	Early Redemption Amount	Example 4 — Hypothetical Closing Price	Contingent Payment	Early Redemption Amount
#1	$119.00	$0	N/A	$105.00	$0	N/A
#2	$109.50	$0	N/A	$111.00	$0	N/A
#3	$117.00	$0	N/A	$118.00	$0	N/A
Final Determination Date	$120.00	—*	N/A	$180.00	—*	N/A
Payment
at Maturity	$6.00			$10.3130

• The final contingent payment, if any, will be paid at maturity.

Examples 3 and 4 illustrate the payment at maturity per security based on the final stock price.

§ In Example 3 , the closing price of the underlying stock remains below the downside threshold level throughout the term of the securities. As a result, you do not receive any contingent payment during the term of the securities and, at maturity, you are fully exposed to the decline in the closing price of the underlying stock. As the final stock price is less than the downside threshold level, investors will receive a number of shares of the underlying stock equal to the exchange ratio or the cash value thereof, calculated as follows:

the cash value of 0.05 shares of the underlying stock = $120.00 × 0.05 = $6.00

In this example, the value of shares you receive at maturity is significantly less than the stated principal amount. Your total return per security in this example is $6.00 (a 40.00% loss on the securities).

§ In Example 4 , the closing price of the underlying stock decreases to a final stock price of $180.00. Although the final stock price is less than the initial stock price, because the final stock price is still not less than the downside threshold level, you receive the stated principal amount plus a contingent payment with respect to the final determination date. Your payment at maturity is calculated as follows:

$10.00 + $0.3130 = $10.3130

In this example, although the final stock price represents a 10.00% decline from the initial stock price, you receive the stated principal amount per security plus the contingent payment, equal to a total payment of $10.3130 per security at maturity. Your total return per security in this example is $10.3130 (a 3.13% total return on the securities).

Investing in the securities involves significant risks. The securities differ from ordinary debt securities in that UBS is not necessarily obligated to repay the full amount of your initial investment. If the securities are not redeemed on any determination date, you may lose some or all of your investment. Specifically, if the securities are not redeemed and the final stock price is less than the downside threshold level, UBS will deliver to you a number of shares or the cash value of such shares at maturity, the value of which is expected to be worth significantly less than your stated principal amount resulting in a loss of some or all of your initial investment.

Any payment to be made on the securities, including any repayment of principal, depends on the ability of UBS to satisfy its obligations as they come due. If UBS were to default on its payment obligations you may not receive any amounts owed to you under the securities and you could lose your entire stated principal amount.

August 2014 8

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

Risk Factors

The following is a non-exhaustive list of certain key risk factors for investors in the securities. For further discussion of these and other risks, you should read the section entitled “Risk Factors” in the accompanying product supplement. We urge to consult your investment, legal, tax, accounting and other advisers before you invest in the securities.

§ The securities do not guarantee the return of any principal and your investment in the securities may result in a loss. The terms of the securities differ from those of ordinary debt securities in that the securities do not guarantee the payment of regular interest or the return of any of the principal amount at maturity. Instead, if the securities have not been automatically redeemed prior to maturity and if the final stock price is less than the downside threshold level, you will be exposed to the decline in the closing price of the underlying stock, as compared to the initial stock price, on a 1 to 1 basis and you will receive for each security that you hold at maturity a number of shares of the underlying stock equal to the exchange ratio (or, at our option, the cash value of such shares). The value of those shares on the final determination date (or that cash) will be less than 75.00% of the stated principal amount and could be zero.

§ The contingent payment, if any, is based solely on the closing prices of the underlying stock on the specified determination dates. Whether the contingent payment will be made with respect to a determination date will be based on the closing price or the final stock price. As a result, you will not know whether you will receive the contingent payment until the related determination date. Moreover, because the contingent payment is based solely on the closing price on a specific determination date or the final stock price, if that closing price or final stock price is less than the downside threshold level, you will not receive any contingent payment with respect to that determination date, even if the closing price of the underlying stock was higher on other days during the term of the securities.

§ You will not receive any contingent payment for any quarterly period where the closing price of the underlying stock on the determination date is less than the downside threshold level . A contingent payment will be made with respect to a quarterly period only if the closing price is greater than or equal to the downside threshold level. If the closing price remains below the downside threshold level on each determination date over the term of the securities, you will not receive any contingent payment.

§ Higher contingent payments are generally associated with a greater risk of loss . Greater expected volatility with respect to the underlying stock reflects a higher expectation as of the pricing date that the closing price of such stock could close below its downside threshold level on the final determination date of the securities. This greater expected risk will generally be reflected in higher contingent payments for that security. However, while the contingent payments are set on the pricing date, a stock’s volatility can change significantly over the term of the securities. The closing price of the underlying stock for your securities could fall sharply, which could result in a significant loss of principal.

§ The securities are subject to the credit risk of UBS AG, and any actual or anticipated changes to our credit ratings or credit spreads may adversely affect the market value of the securities. Investors are dependent on UBS AG’s ability to pay all amounts due on the securities, and therefore investors are subject to our credit risk and to changes in the market’s view of our creditworthiness. Any actual or anticipated decline in our credit ratings or increase in the credit spreads charged by the market for taking our credit risk is likely to affect adversely the market value of the securities. If we were to default on our payment obligations, you may not receive any amounts owed to you under the securities and you could lose your entire investment.

§ Single stock risk . The closing price of the underlying stock can rise or fall sharply due to factors specific to that underlying stock and the issuer of such underlying stock (the ‘‘underlying stock issuer’’), such as stock price volatility, earnings, financial conditions, corporate, industry and regulatory developments, management changes and decisions and other events, as well as general market factors, such as general stock market volatility and levels, interest rates and economic and political conditions. You, as an investor in the securities, should make your own investigation into the underlying stock issuer and the underlying stock for your securities. For additional information regarding the underlying stock, please see ‘‘Information about the Underlying Stock” and ‘‘Baidu, Inc.” below and the underlying stock issuer’s SEC filings referred to in this section. We urge you to review financial and other information filed periodically by the underlying stock issuer with the SEC.

§ Fair value considerations.

¡ The issue price you pay for the securities exceeds their estimated initial value. The issue price you pay for the securities exceeds their estimated initial value as of the pricing date due to the inclusion in the issue price of the underwriting discount, hedging costs, issuance costs and projected profits. As of the close of the relevant markets on the pricing date, we have determined the estimated initial value of the securities by reference to our internal pricing models and it is set forth in this pricing supplement. The pricing models used to determine the estimated initial value of the securities incorporate certain variables, including the price, volatility and expected dividends on the underlying stock, prevailing interest rates, the term of the securities and our internal funding rate. Our internal funding rate is typically lower than the rate we would pay to issue conventional fixed or floating rate debt securities of a similar term. The underwriting discount, hedging costs, issuance costs, projected profits and the difference in rates will reduce the economic value of the securities to you. Due to these factors, the estimated initial value of the securities as of the pricing date is less than the issue price you pay for the securities.

August 2014 9

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

¡ The estimated initial value is a theoretical price; the actual price that you may be able to sell your securities in any secondary market (if any) at any time after the pricing date may differ from the estimated initial value. The value of your securities at any time will vary based on many factors, including the factors described above and in “— Single stock risk” above and is impossible to predict. Furthermore, the pricing models that we use are proprietary and rely in part on certain assumptions about future events, which may prove to be incorrect. As a result, after the pricing date, if you attempt to sell the securities in the secondary market, the actual value you would receive may differ, perhaps materially, from the estimated initial value of the securities determined by reference to our internal pricing models. The estimated initial value of the securities does not represent a minimum or maximum price at which we or any of our affiliates would be willing to purchase your securities in any secondary market at any time.

¡ Our actual profits may be greater or less than the differential between the estimated initial value and the issue price of the securities as of the pricing date. We may determine the economic terms of the securities, as well as hedge our obligations, at least in part, prior to the pricing date. In addition, there may be ongoing costs to us to maintain and/or adjust any hedges and such hedges are often imperfect. Therefore, our actual profits (or potentially, losses) in issuing the securities cannot be determined as of the pricing date and any such differential between the estimated initial value and the issue price of the securities as of the pricing date does not reflect our actual profits. Ultimately, our actual profits will be known only at the maturity of the securities.

§ Limited or no secondary market and secondary market price considerations.

¡ There may be little or no secondary market for the securities. The securities will not be listed or displayed on any securities exchange or any electronic communications network. There can be no assurance that a secondary market for the securities will develop. UBS Securities LLC and its affiliates may make a market in the securities, although they are not required to do so and may stop making a market at any time. If you are able to sell your securities prior to maturity, you may have to sell them at a substantial loss. The estimated initial value of the securities does not represent a minimum or maximum price at which we or any of our affiliates would be willing to purchase your securities in any secondary market at any time.

¡ The price at which UBS Securities LLC and its affiliates may offer to buy the securities in the secondary market (if any) may be greater than UBS’ valuation of the securities at that time, greater than any other secondary market prices provided by unaffiliated dealers (if any) and, depending on your broker, greater than the valuation provided on your customer account statements. For a limited period of time following the issuance of the securities, UBS Securities LLC or its affiliates may offer to buy or sell such securities at a price that exceeds (i) our valuation of the securities at that time based on our internal pricing models, (ii) any secondary market prices provided by unaffiliated dealers (if any) and (iii) depending on your broker, the valuation provided on customer account statements. The price that UBS Securities LLC may initially offer to buy such securities following issuance will exceed the valuations indicated by our internal pricing models due to the inclusion for a limited period of time of the aggregate value of the underwriting discount, hedging costs, issuance costs and theoretical projected trading profit. The portion of such amounts included in our price will decline to zero on a straight line basis over a period ending no later than the date specified under “Supplemental information concerning plan of distribution (conflicts of interest); secondary markets (if any).” Thereafter, if UBS Securities LLC or an affiliate makes secondary markets in the securities, it will do so at prices that reflect our estimated value determined by reference to our internal pricing models at that time. The temporary positive differential relative to our internal pricing models arises from requests from and arrangements made by UBS Securities LLC with the selling agents of structured debt securities such as the securities. As described above, UBS Securities LLC and its affiliates are not required to make a market for the securities and may stop making a market at any time. The price at which UBS Securities LLC or an affiliate may make secondary markets at any time (if at all) will also reflect its then current bid-ask spread for similar sized trades of structured debt securities. UBS Securities LLC reflects this temporary positive differential on its customer statements. Investors should inquire as to the valuation provided on customer account statements provided by unaffiliated dealers.

¡ Price of securities prior to maturity. The market price of the securities will be influenced by many unpredictable and interrelated factors, including the price of the underlying stock; the volatility of the underlying stock; the dividend rate paid on the underlying stock; the time remaining to the maturity of the securities; interest rates in the markets; geopolitical conditions and economic, financial, political, force majeure and regulatory or judicial events; the creditworthiness of UBS and the then current bid-ask spread for the securities.

¡ Impact of fees and the use of internal funding rates rather than secondary market credit spreads on secondary market prices. All other things being equal, the use of the internal funding rates described above under “— Fair value considerations” as well as the inclusion in the issue price of the underwriting discount, hedging costs, issuance costs and any projected profits are, subject to the temporary mitigating effect of UBS Securities LLC’s and its affiliates’ market making premium, expected to reduce the price at which you may be able to sell the securities in any secondary market.

§ Investors will not participate in any appreciation in the closing price of the underlying stock and will not have the same rights as holders of the underlying stock. Investors will not participate in any appreciation in the closing price of the underlying stock from the initial stock price, and the return on the securities will be limited to the contingent payment that is paid with respect to each

August 2014 10

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

determination date on which the closing price or the final stock price is greater than or equal to the downside threshold level. It is possible that the closing price of the underlying stock could be below the downside threshold level on most or all of the determination dates so that you will receive little or no contingent payments. If you do not earn sufficient contingent payments over the term of the securities, the overall return on the securities may be less than the amount that would be paid on a conventional debt security of the issuer of comparable maturity. Investors in the securities will not have voting rights or rights to receive dividends or other distributions or any other rights with respect to the underlying stock.

§ No assurance that the investment view implicit in the securities will be successful. It is impossible to predict whether the closing price of the underlying stock will rise or fall. The closing price of the underlying stock will be influenced by complex and interrelated political, economic, financial and other factors that affect the underlying stock. You should be willing to accept the downside risks of owning equities in general and the underlying stock in particular, and to assume the risk that, if the securities are not automatically redeemed, you may lose some or all of your initial investment.

§ Risks associated with non-U.S. Companies. An investment in the securities linked to the value of non-U.S. companies, such as the American depositary shares of Baidu, Inc. (“Baidu”), which is issued by a company incorporated in China, involves risks associated with the home country of such non-U.S. company. The prices of Baidu’s American depositary shares may be affected by political, economic, financial and social factors in the home country of Baidu, including changes in such country’s government, economic and fiscal policies, currency exchange laws or other laws or restrictions.

§ There are important differences between the American depositary shares and the ordinary shares of a non-U.S. company. One offering of the securities is linked to the American depositary shares of a non-U.S. company, Baidu, Inc. There are important differences between the rights of holders of an American depositary share and the non-U.S. stock such American depositary share represents. The American depositary shares are issued pursuant to a deposit agreement, which sets forth the rights and responsibilities of the depositary, the non-U.S. company and holders of the American depositary shares, which may be different from the rights of holders of the non-U.S. stock. For example, a company may make distributions in respect of the non-U.S. stock that are not passed on to the holders of its American depositary shares. Any such differences between the rights of holders of the American depositary shares and the rights of holders of the ordinary shares of the non-U.S. company may be significant and may materially and adversely affect the value of the American depositary shares and, as a result, the value of your securities.

§ Exchange rate risk. Because American depositary shares are denominated in U.S. dollars but represent non-U.S. equity securities that are denominated in a non-U.S. currency, changes in currency exchange rates may negatively impact the value of the American depositary shares. The value of the non-U.S. currency may be subject to a high degree of fluctuation due to changes in interest rates, the effects of monetary policies issued by the United States, non-U.S. governments, central banks or supranational entities, the imposition of currency controls or other national or global political or economic developments. Therefore, exposure to exchange rate risk may result in reduced returns for securities linked to American depositary shares.

§ The securities linked to American depositary shares are subject to risks associated with non-U.S. securities markets. Because non-U.S. equity securities underlying the American depositary shares may be publicly traded in the applicable non-U.S. countries and are denominated in currencies other than U.S. dollars, investments in the securities linked to American depositary shares involve particular risks. For example, the non-U.S. securities markets may be more volatile than the U.S. securities markets, and market developments may affect these markets differently from the United States or other securities markets. Direct or indirect government intervention to stabilize the securities markets outside the United States, as well as cross-shareholdings in certain companies, may affect trading prices and trading volumes in those markets. Also, the public availability of information concerning the non-U.S. issuers may vary depending on their home jurisdiction and the reporting requirements imposed by their respective regulators. In addition, the non-U.S. issuers may be subject to accounting, auditing and financial reporting standards and requirements that differ from those applicable to United States reporting companies. Securities prices generally are subject to political, economic, financial and social factors that apply to the markets in which they trade and, to a lesser extent, non-U.S. markets. Securities prices outside the United States are subject to political, economic, financial and social factors that apply in non-U.S. countries. These factors, which could negatively affect non-U.S. securities markets, include the possibility of changes in a non-U.S. government’s economic and fiscal policies, the possible imposition of, or changes in, currency exchange laws or other laws or restrictions applicable to non-U.S. companies or investments in non-U.S. equity securities and the possibility of fluctuations in the rate of exchange between currencies. Moreover, non-U.S. economies may differ favorably or unfavorably from the United States economy in important respects such as growth of gross national product, rate of inflation, capital reinvestment, resources and self-sufficiency.

§ Early redemption risk. The term of your investment in the securities may be limited to as short as approximately three months by the automatic early redemption feature of the securities. If the securities are redeemed prior to maturity, you will receive no more quarterly contingent payments and may be forced to invest in a lower interest rate environment and may not be able to reinvest the proceeds from an investment in the securities at a comparable return for a similar level of risk.

§ Economic interests of the calculation agent and other affiliates of the issuer may be different from those of investors. We and our affiliates play a variety of roles in connection with the issuance of the securities, including acting as calculation agent and hedging our obligations under the securities. In performing these duties, the economic interests of the calculation agent and other

August 2014 11

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

affiliates of ours are potentially adverse to your interests as an investor in the securities. The calculation agent will determine the initial stock price and the final stock price and whether the closing price of the underlying stock on any determination date is greater than or equal to the initial stock price or is below the downside threshold level. Determinations made by the calculation agent, including with respect to the occurrence or non-occurrence of market disruption events, may affect the payout to you at maturity or whether the securities are redeemed early. As UBS determines the economic terms of the securities, including the contingent payment and downside threshold level, and such terms include hedging costs, issuance costs and projected profits, the securities represent a package of economic terms. There are other potential conflicts of interest insofar as an investor could potentially get better economic terms if that investor entered into exchange-traded and/or OTC derivatives or other instruments with third parties, assuming that such instruments were available and the investor had the ability to assemble and enter into such instruments. Furthermore, given that UBS Securities LLC and its affiliates temporarily maintain a market making premium, it may have the effect of discouraging UBS Securities LLC and its affiliates from recommending sale of your securities in the secondary market.

§ No affiliation with the underlying stock issuer. The underlying stock issuer is not an affiliate of ours, is not involved with the offering in any way, and has no obligation to consider your interests in taking any corporate actions that might affect the value of the securities. We have not made any due diligence inquiry with respect to underlying stock in connection with the offering.

§ We may engage in business with or involving the underlying stock issuer without regard to your interests. We or our affiliates may presently or from time to time engage in business with the underlying stock issuer without regard to your interests and thus may acquire non-public information about the underlying stock. Neither we nor any of our affiliates undertakes to disclose any such information to you. In addition, we or our affiliates from time to time have published and in the future may publish research reports with respect to the underlying stock, which may or may not recommend that investors buy or hold the underlying stock.

§ The antidilution protection of the underlying stock is limited and may be discretionary. The calculation agent will make adjustments to the initial stock price and downside threshold level for certain corporate events affecting the underlying stock. However, the calculation agent will not make an adjustment in response to all events that could affect the underlying stock. If an event occurs that does not require the calculation agent to make an adjustment, the value of the securities may be materially and adversely affected. You should also be aware that the calculation agent may make adjustments in response to events that are not described in the accompanying product supplement to account for any diluting or concentrative effect, but the calculation agent is under no obligation to do so or to consider your interests as a holder of the securities in making these determinations.

§ Hedging and trading activities by the calculation agent and its affiliates could potentially affect the value of the securities. The hedging or trading activities of the issuer’s affiliates and of any other hedging counterparty with respect to the securities on or prior to the pricing date and prior to maturity could adversely affect the value of the underlying stock. These hedging or trading activities on or prior to the pricing date could potentially affect the initial stock price and, as a result, the downside threshold level. Additionally, these hedging or trading activities during the term of the securities could potentially affect the price of the underlying stock on the determination dates and, accordingly, whether the securities are automatically called prior to maturity and, if the securities are not called prior to maturity, the payout to you at maturity. It is possible that these hedging or trading activities could result in substantial returns for us or our affiliates while the value of the securities declines

§ Under certain circumstances, the Swiss Financial Market Supervisory Authority (FINMA) has the power to take actions that may adversely affect the securities . Pursuant to article 25 et seq. of the Swiss Banking Act, FINMA has broad statutory powers to take measures and actions in relation to UBS if it (i) is overindebted, (ii) has serious liquidity problems or (iii) fails to fulfill the applicable capital adequacy provisions after expiration of a deadline set by FINMA. If one of these prerequisites is met, the Swiss Banking Act grants significant discretion to FINMA to open restructuring proceedings or liquidation (bankruptcy) proceedings in respect of, and/or impose protective measures in relation to, UBS. In particular, a broad variety of protective measures may be imposed by FINMA, including a bank moratorium or a maturity postponement, which measures may be ordered by FINMA either on a stand-alone basis or in connection with restructuring or liquidation proceedings. In a restructuring proceeding, the resolution plan may, among other things, (a) provide for the transfer of UBS’s assets or a portion thereof, together with debts and other liabilities, and contracts of UBS, to another entity, (b) provide for the conversion of UBS’s debt and/or other obligations, including its obligations under the securities, into equity and/or (c) potentially provide for haircuts on obligations of UBS, including its obligations under the securities. Although no precedent exists, if one or more measures under the revised regime were imposed, such measures may have a material adverse effect on the terms and market value of the securities and/or the ability of UBS to make payments thereunder.

§ Uncertain tax treatment . Significant aspects of the tax treatment of the securities are uncertain. You should consult your own tax advisor about your tax situation.

August 2014 12

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

Information about the Underlying Stock

Baidu, Inc.

According to publicly available information, Baidu, Inc. (“Baidu”) is a Chinese language internet search provider. Baidu offers a Chinese language search platform on its website Baidu.com as well as a Japanese language search platform on its website Baidu.jp. Baidu provides internet search services to enable users to find relevant information online, including web pages, news, images, documents and multimedia files, through links provided on its websites. Baidu also provides online marketing services through its websites to online marketing customers. Information filed by Baidu with the SEC under the Exchange Act can be located by reference to its SEC file number: 000-51469, or its CIK Code: 0001329099. Baidu’s website is http://www.baidu.com. Baidu’s American depositary shares are listed on the NASDAQ Global Select Market under the ticker symbol “BIDU.”

Information as of market close on August 1, 2014:

Bloomberg Ticker Symbol:	BIDU UW	52 Week High (on July 25, 2014):	$226.50
Current Stock Price:	$212.38	52 Week Low (on September 5, 2013):	$132.99
52 Weeks Ago (on August 1, 2013):	$134.93

All disclosures contained herein regarding the underlying stock are derived from publicly available information. Notwithstanding anything stated in the product supplement, we do not disclaim liability or responsibility for any information disclosed herein regarding the underlying stock. However, UBS has not conducted any independent review or due diligence of any publicly available information with respect to the underlying stock. You should make your own investigation into the underlying stock.

The underlying stock is registered under the Securities Exchange Act of 1934 (the “Exchange Act”). Companies with securities registered under the Exchange Act are required to file financial and other information specified by the SEC periodically. Information filed by the underlying stock issuer with the SEC can be reviewed electronically through a website maintained by the SEC. The address of the SEC’s website is http://www.sec.gov. Information filed with the SEC by the underlying stock issuer under the Exchange Act can be located by reference to its SEC file number provided below. In addition, information filed with the SEC can be inspected and copied at the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of this material can also be obtained from the Public Reference Section, at prescribed rates.

August 2014 13

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

Historical Information

The table below sets forth the published high and low closing prices, as well as end-of-quarter closing price, of the underlying stock for the period of January 4, 2010 through August 1, 2014. The closing price of the underlying stock on August 1, 2014 was $212.38. The associated graph shows the closing prices of the underlying stock for each day from January 3, 2006 to August 1, 2014. The dotted line represents the downside threshold level of $159.29, which is equal to 75.00% of the closing price on August 1, 2014. We obtained the information in the table below from Bloomberg Professional ® service (“Bloomberg”), without independent verification. The closing prices may be adjusted by Bloomberg for corporate actions such as stock splits, public offerings, mergers and acquisitions, spin-offs, delistings and bankruptcy. UBS has not undertaken an independent review or due diligence of any publicly available information obtained from Bloomberg. The historical performance of the underlying stock should not be taken as an indication of its future performance, and no assurance can be given as to the price of the underlying stock at any time, including the determination dates.

| Baidu,
Inc. | High | Low | Period End |
| --- | --- | --- | --- |
| 2010 | | | |
| First Quarter | $60.85 | $38.65 | $59.70 |
| Second Quarter | $78.30 | $60.00 | $68.08 |
| Third Quarter | $103.84 | $67.45 | $102.62 |
| Fourth Quarter | $114.10 | $96.22 | $96.53 |
| 2011 | | | |
| First Quarter | $137.81 | $99.73 | $137.81 |
| Second Quarter | $152.37 | $116.26 | $140.13 |
| Third Quarter | $164.42 | $106.91 | $106.91 |
| Fourth Quarter | $144.62 | $105.16 | $116.47 |
| 2012 | | | |
| First Quarter | $150.80 | $120.01 | $145.77 |
| Second Quarter | $151.38 | $108.62 | $114.98 |
| Third Quarter | $133.98 | $104.98 | $116.82 |
| Fourth Quarter | $114.99 | $88.15 | $100.29 |
| 2013 | | | |
| First Quarter | $112.97 | $84.24 | $87.70 |
| Second Quarter | $102.99 | $83.59 | $94.53 |
| Third Quarter | $155.18 | $89.22 | $155.18 |
| Fourth Quarter | $179.93 | $146.54 | $177.88 |
| 2014 | | | |
| First Quarter | $184.64 | $150.52 | $152.38 |
| Second Quarter | $186.81 | $143.51 | $186.81 |
| Third Quarter (Through August 1, 2014) | $226.50 | $182.30 | $212.38 |

August 2014 14

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

The American Depositary Shares of Baidu, Inc. — Daily Closing Prices

January 3, 2006 to August 1, 2014

August 2014 15

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

This document relates only to the securities offered hereby and does not relate to the underlying stock or other securities of the underlying stock. We have derived all disclosures contained in this document regarding the underlying stock from the publicly available documents described in the preceding paragraphs. In connection with the offering of the securities, neither we nor the agent has participated in the preparation of such documents or made any due diligence inquiry with respect to the underlying stock.

Neither the issuer nor any of its affiliates makes any representation to you as to the performance of the underlying stock.

August 2014 16

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

Additional Information about the Securities

Please read this information in conjunction with the summary terms on the front cover of this document.

Additional Provisions:

| Record date: | The record date for each contingent payment date shall be the date one business day prior to such scheduled contingent payment date; provided, however, that any contingent payment payable at maturity or upon redemption shall be payable to the person to whom the payment at maturity or early redemption amount, as the case may be, shall be payable. If you are able to sell the securities in the secondary market on a determination date, the
purchaser of the securities shall be deemed to be the record holder on the applicable record date and therefore you will not be entitled to any contingent payment, if a contingent payment is paid on the contingent payment date with respect to that
determination date. If you are able to sell your securities in the secondary market on the day following an determination date and before the applicable contingent payment date, you will be the record holder on the record date and therefore you
shall be entitled to any contingent payment, if a contingent payment is paid on the contingent payment date with respect to that determination date. |
| --- | --- |
| Trustee: | U.S. Bank Trust National Association |
| Calculation agent: | UBS Securities LLC |
| Tax considerations: | The United States federal income tax consequences of your investment in the securities are uncertain. Some of these tax consequences are
summarized below, but we urge you to read the more detailed discussion in “Supplemental U.S. Tax Considerations” beginning on page PS-44 of the product supplement and to discuss the tax consequences of your particular situation with your
tax advisor. Pursuant to the terms of the securities, UBS and you agree, in the
absence of an administrative or judicial ruling to the contrary, to characterize the securities as a pre-paid derivative contract with respect to the underlying stock. If your securities are so treated, any contingent payment that is paid by UBS
(including on the maturity date or upon early redemption) should be included in your income as ordinary income in accordance with your regular method of accounting for U.S. federal income tax purposes. In addition, excluding amounts or proceeds attributable to any contingent payment, you should
generally recognize capital gain or loss upon the sale, exchange, early redemption, or redemption on maturity of your securities in an amount equal to the difference between the amount you receive at such time (other than amounts or proceeds
attributable to a contingent payment or any amount attributable to any accrued but unpaid contingent payment) and the amount you paid for your securities. Such gain or loss should generally be short term capital gain or loss. The deductibility of
capital losses is subject to limitations. Although uncertain, it is possible that proceeds received from the sale or exchange of your securities prior to a coupon determination date, but that could be attributed to an expected contingent payment,
could be treated as ordinary income. You should consult your tax advisor regarding this risk. We will not attempt to ascertain whether the underlying stock issuer would be treated as a ‘‘passive foreign investment company” (‘‘PFIC’’) within the meaning of Section 1297 of
the Code. In the event that the underlying equity issuer for your securities were treated as a PFIC, certain adverse U.S. federal income tax consequences might apply. You should consult your tax advisor regarding the possible consequences to you in
the event that the underlying stock issuer is or becomes a PFIC. Unless otherwise
specified in this pricing supplement, in the opinion of our counsel, Cadwalader, Wickersham & Taft LLP, it would be reasonable to treat your securities in the manner described above. However, because there is no authority that specifically
addresses the tax treatment of the securities, it is possible that your securities could alternatively be treated for tax purposes as a single short-term contingent debt instrument, or pursuant to some other characterization, such that the timing
and character of your |

August 2014 17

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

| income from the securities could differ materially from the treatment described above, as further described under “Supplemental U.S. Tax Considerations — Alternative
Treatments” |
| --- |
| beginning on page PS-46 of the product supplement. The risk that the securities may be recharacterized for United States federal income tax
purposes as instruments giving rise to current ordinary income (possibly in excess of any contingent payment and before receipt of any cash) is higher than with other equity-linked securities that do not guarantee full repayment of
principal. In addition, in 2007 the U.S. Treasury Department and the Internal
Revenue Service released a notice requesting comments on the U.S. federal income tax treatment of “prepaid forward contracts” and similar instruments, which might include the securities. The notice focuses in particular on whether
to |
| require holders of these instruments to accrue income over the term of their investment. It also asks for comments on a number of related
topics, including the character of income or loss with respect to these instruments and the relevance of factors such as the nature of the underlying property to which the instruments are linked. While the notice requests comments on appropriate
transition rules and effective dates, any U.S. Treasury Department regulations or other guidance promulgated after consideration of these issues could materially and adversely affect the tax consequences of an investment in the securities, possibly
with retroactive effect. You should consult your tax adviser regarding the U.S. federal income tax consequences of an investment in the securities, including possible alternative treatments and the issues presented by this notice. Medicare Tax on Net Investment Income. U.S. holders that are individuals, estates, and
certain trusts are subject to an additional 3.8% Medicare tax on all or a portion of their “net investment income,” which may include any income or gain realized with respect to the securities, to the extent of their net investment income
that when added to their other modified adjusted gross income, exceeds $200,000 for an unmarried individual, $250,000 for a married taxpayer filing a joint return (or a surviving spouse), or $125,000 for a married individual filing a separate
return. The 3.8% Medicare tax is determined in a different manner than the income tax. U.S. holders should consult their tax advisors with respect to their consequences with respect to the 3.8% Medicare tax. Specified Foreign Financial Assets . Certain individuals that own “specified foreign
financial assets” in excess of an applicable threshold may be required to file information with respect to such assets with their tax returns, especially if such assets are held outside the custody of a U.S. financial institution. You are urged
to consult your tax advisor as to the application of this legislation to your ownership of the securities. Non-U.S. Holders . The U.S. federal income tax treatment of the contingent payments is unclear. Subject to the discussion below with respect to Section 871(m) and FATCA, we currently do not intend to withhold
any tax on any contingent payments made to a Non-U.S. Holder that provides us with a fully completed and validly executed applicable Internal Revenue Service (“IRS”) Form W-8. However, it is possible that the IRS could assert that such
payments are subject to U.S. withholding tax, or that we or another withholding agent may otherwise determine that withholding is required, in which case we or the other withholding agent may withhold up to 30% on such payments (subject to reduction
or elimination of such withholding tax pursuant to an applicable income tax treaty) without being required to pay any additional amounts with respect to amounts so withheld. Section 871(m) of the Code requires withholding (up to 30%, depending on whether a treaty
applies) on certain financial instruments to the extent that the payments or deemed payments on the financial instruments are contingent upon or determined by reference to U.S.-source dividends. If withholding is required, we (or the applicable
paying agent) would be entitled to withhold such taxes without being required to pay any additional amounts with respect to amounts so withheld. Non-U.S. holders should consult with their tax advisors regarding the application of
Section 871(m) and the regulations thereunder in respect of their acquisition and ownership of the securities. Foreign Account Tax Compliance Act. The Foreign Account Tax Compliance Act (“FATCA”) was enacted on March 18, 2010, and imposes a 30% U.S. withholding tax on “withholdable payments”
(i.e., certain U.S. source payments, including interest (and OID), dividends, other fixed or determinable annual or periodical gain, profits, and income, and on the gross proceeds from a disposition of property of a type which can produce U.S.
source interest or dividends) and “pass-thru payments” (i.e., certain payments attributable to withholdable payments) made to certain foreign |

August 2014 18

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

| | financial institutions (and certain of their affiliates) unless the payee foreign financial institution agrees (or is required), among other
things, to disclose the identity of any U.S. individual with an account of the institution (or the relevant affiliate) and to annually report certain information about such account. FATCA also requires withholding agents making withholdable
payments to certain foreign entities that do not disclose the name, address, and taxpayer identification number of any substantial U.S. owners (or certify that they do not have any substantial United States owners) withhold tax at a rate of
30%. Under certain circumstances, a holder may be eligible for refunds or credits of such taxes. Pursuant to final and temporary Treasury regulations, the withholding and reporting requirements under FATCA will generally apply to certain “withholdable payments” made on or after July 1, 2014, certain
gross proceeds on sale or disposition occurring after December 31, 2016, and certain foreign pass-thru payments made after December 31, 2016 (or, if later, the date that final regulations defining the term “foreign pass-thru payment” are
published). Pursuant to these Treasury regulations, withholding tax under FATCA would not be imposed on foreign pass-thru payments pursuant to obligations that are executed on or before the date that is six months after final regulations regarding
such payments are published (and such obligations are not subsequently modified in a material manner) or on withholdable payments solely because the relevant obligation is treated as giving rise to a dividend equivalent (pursuant to Section 871(m)
and the regulations thereunder) where such obligation is executed on or before the date that is six months after the date on which obligations of its type are first treated as giving rise to dividend equivalents. If, however, withholding is
required, we (or the applicable paying agent) will not be required to pay additional amounts with respect to the amounts so withheld. Significant aspects of the application of FATCA are not currently clear. Investors should consult their own advisor about the application of FATCA, in
particular if they may be classified as financial institutions (or if they hold their securities through a foreign entity) under the FATCA rules. Proposed Legislation The House Ways and Means Committee has released in draft form certain proposed legislation relating to financial instruments. If enacted, the effect of this legislation generally would be to require instruments
such as the securities to be marked to market on an annual basis with all gains and losses to be treated as ordinary, subject to certain exceptions. You are urged to consult your tax advisor regarding the draft legislation and its possible impact on
you. Prospective purchasers of securities should consult their tax advisors as to
the U.S. federal, state, local and other tax (including non-U.S. tax) consequences to them of the purchase, ownership and disposition of the securities (including the jurisdiction of the underlying stock issuer). |
| --- | --- |
| Use of proceeds and hedging: | We will use the net proceeds we receive from the sale of the securities 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 securities as described below. In connection with the sale of the securities, we or our affiliates may enter into hedging transactions involving the execution of swaps, futures and option
transactions or purchases and sales of the underlying stock before and after the pricing date of the securities. 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
securities 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 securities from time to time and payment on the securities at
maturity. See “Risk Factors” beginning on page 9 of this document for a discussion of these adverse effects. |

August 2014 19

Contingent Income Auto-Callable Securities due August 6, 2015

$2,466,400 Based on the Performance of the American Depositary Shares of Baidu, Inc.

| Supplemental information concerning plan of distribution (conflicts of interest); secondary markets (if any): | Pursuant to the terms of a distribution agreement, UBS has agreed to sell to UBS Securities LLC, and UBS Securities LLC has agreed to purchase
from UBS, the stated principal amount of the securities specified on the front cover of this document. UBS Securities LLC, acting as agent for UBS, will receive a fee of $0.04 per $10.00 stated principal amount of securities and will pay the entire
fee to Morgan Stanley Smith Barney LLC as a fixed sales commission of $0.04 for each $10.00 stated principal amount of securities that Morgan Stanley Smith Barney LLC sells. UBS, UBS Securities LLC or any other affiliate of UBS may use this document, the accompanying
product supplement and the accompanying prospectus in a market-making transaction for any securities after their initial sale. In connection with the offering, UBS, UBS Securities LLC, any other affiliate of UBS or any other securities dealers may
distribute this document, the accompanying product supplement and the accompanying prospectus electronically. Unless UBS or its agent informs the purchaser otherwise in the confirmation of sale, this document, the accompanying product supplement and
the accompanying prospectus are being used in a market-making transaction. Conflicts of Interest — UBS Securities LLC is an affiliate of UBS and, as such, has a “conflict of interest” in the 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 securities and, thus creates an additional conflict of interest within the meaning of FINRA Rule
5121. Consequently, the offering is being conducted in compliance with the provisions of Rule 5121. UBS Securities LLC and its affiliates may offer to buy or sell the securities in the secondary market (if any) at prices greater than UBS’ internal valuation — The value of the securities at any
time will vary based on many factors that cannot be predicted. However, the price (not including UBS Securities LLC’s or any affiliate’s customary bid-ask spreads) at which UBS Securities LLC or any affiliate would offer to buy or sell the
securities immediately after the pricing date in the secondary market is expected to exceed the estimated initial value of the securities as determined by reference to our internal pricing models. The amount of the excess will decline to zero on a
straight line basis over a period ending no later than 6 weeks after the pricing date, provided that UBS Securities LLC may shorten the period based on various factors, including the magnitude of purchases and other negotiated provisions with
selling agents. Notwithstanding the foregoing, UBS Securities LLC and its affiliates are not required to make a market for the securities and may stop making a market at any time. For more information about secondary market offers and the estimated
initial value of the securities, see “Risk Factors — Fair value considerations” and “Risk Factors — Limited or no secondary market and secondary market price considerations” on pages 9 and 10 of this pricing
supplement. |
| --- | --- |
| Contact: | Morgan Stanley Smith Barney clients may contact their local Morgan Stanley Smith Barney branch office or our principal executive offices at 1585 Broadway, New York, New York 10036
(telephone number (914) 225-7000). All other clients may contact their local brokerage representative. Third-party distributors may contact Morgan Stanley Structured Investment Sales at 1-(800)-233-1087. |

August 2014 20