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EXHIBIT 3.2
starting version of 8 JAN 97
ORGANIZATION REGULATIONS
OF UBS AG
Based on art. 716b of the Swiss Code of Obligations and art. 24 of
the Articles of Association of UBS AG, the Board of Directors has
issued the following Organization Regulations on July 7, 1999.
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The "Appendix" (Authorities) is an integrated part of these
Organization Regulations
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I. THE BOARD OF DIRECTORS
Art. 1 Constitution
(1)The Board of Directors constitutes itself in the last meeting preceding the
Annual General Meeting of Shareholders (subject to approval of elections at the
AGM).
(2)The Board elects its Chairman, one full time and one or two part-time Vice
Chairmen and appoints its Secretary.
Art. 2 Meetings and invitations to convene
(1)The Board meets as prescribed by art. 21 of the Articles of Association.
(2)Except in urgent cases the invitations to the meeting, together with the
agenda, are sent to the directors at least one week before the date of the
meeting.
(3)As a rule, the members of the Group Executive Board participate in board
meetings in an advisory capacity. The presiding director decides where
exceptions will be made. Together with the President & CEO, the presiding
director determines whether other persons may attend.
Art. 3 Decisions and minutes
(1)The Board takes its decisions as prescribed by art. 22 of the Articles of
Association. As an exception, directors may participate in meetings via
telephone or video. They are counted as present in such cases.
(2)In urgent cases decisions may be taken via circular mail. Such decisions are
only valid when all directors are sent the text of the resolution, when more
than two thirds of the directors cast a vote, and when the absolute majority of
directors voting approve the resolution submitted to them. Any dissenting
director is entitled to request a meeting to be convened. In such a case the
decision via circular mail is not valid.
(3)Minutes are kept of decisions taken by the Board and are signed by the
presiding director and the Secretary. They shall be made available for
inspection before the next board meeting and shall be approved at this meeting.
(4)Any member of the Board may demand that his/her dissenting vote be noted in
the minutes. Directors are any time entitled to examine the minutes.
Art. 4 Functions and authorities
(1)The functions and authorities of the Board are based on the provisions
contained in arts. 23 - 28 of the Articles of Association. All details are
governed in the "Appendix".
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Art. 5 Right to information and examination
(1)At a meeting, any member of the Board is entitled to demand information on
any matter relating to the Group regardless of what is on the agenda. The other
directors and any members of the Group Executive Board that are present shall
provide such information to the best of their knowledge.
(2)If a director has the matter on which he or she is seeking information placed
on the agenda, the Chairman's Office shall arrange through the President & CEO
for a knowledgeable member of staff to provide comprehensive information on this
matter.
(3)Where it is imperative for compliance with his/her duties any director may
request information outside of meetings from members of the Group Executive
Board concerning the Group's business development. Requests to examine books and
files must be made in writing to the Chairman's Office. The director who makes
such a request must examine the documents in person. Where the Chairman's Office
rejects a request to examine books and files, the director making the request
may submit it to the Board.
Art. 6 Term of office, end of active service
(1)A director who has reached the age of seventy automatically retires from the
Board with effect from the next Annual General Meeting of Shareholders.
(2)A director who has ended his or her active involvement in the company or
organization of which he or she used to be a representative shall offer to
vacate his or her directorship. The Board decides whether a resignation is to be
submitted or whether the director may exercise the mandate until completion of
his/her term of office.
II. THE CHAIRMAN'S OFFICE
Art. 7 Composition
The Board of Directors establishes a Chairman's Office, composed of the Chairman
and at least one Vice Chairman.
Art. 8 Meetings
(1)As a rule the Chairman's Office meets four to six times a year to deal with
the issues of its authority. The President & CEO participates at these meetings
in an advisory capacity. Other members of the Group Executive Board may be
invited to participate for special purposes.
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(2)The Chairman and/or the full-time Vice Chairman participate in the meetings
of the Group Executive Board. Such participation serves to ensure that the Board
is apprised of current developments and permits the exercise of its supervisory
and control functions. The Chairman and the full-time Vice Chairman participate
in these meetings in an advisory capacity.
Art. 9 Decisions and minutes
(1)The presence of the Chairman and one Vice Chairman is required for
resolutions to be passed at meetings of the Chairman's Office.
(2)Minutes are kept on the resolutions passed and are signed by the Chairman and
the Secretary. The minutes are sent to the members of the Chairman's Office and
the CEO. They are then made available for perusal at the following Board of
Directors' meeting.
Art. 10 Functions and authorities
(1)The authorities of the Chairman's Office are governed in detail in the
"Appendix". In addition it has responsibility for preparing proposals to be
submitted to the Board of Directors and for monitoring the implementation of the
Board of Directors' decisions.
(2)As an exception, urgent decisions falling within the authority of the Board
of Directors may be taken by the Chairman's Office. Such decisions are to be
brought to the attention of the Board of Directors at its next meeting. This
regulation shall not apply to such functions and duties of the Board of
Directors which, pursuant to art. 716a of the Swiss Code of Obligations, are
non-transferable and inalienable.
(3)The credit approval authorities of the Chairman's Office can be delegated to
the full-time Vice Chairman who brings his decisions to the next meeting of the
Chairman's Office for information. Extraordinary cases will be submitted to
circular approval by all members of the Chairman's Office.
Art. 11 The Chairman's Office as Audit Supervisory Board
(1)The Chairman's Office performs the duties as Audit Supervisory Board as
defined in the Federal Banking Commission's circular letter on internal auditing
dated 14 December 1995. In this function, the Chairman's Office shall convene
four times a year for special meetings with the Head of Group Internal Audit.
(2)At these meetings, the objectives for the year and the activity report of the
Head of Group Internal Audit will be discussed. The meetings also serve to
discuss matters of general policy and to inform the Chairman's Office of
important findings made by Group Internal Audit.
Art. 12 The Chairman's Office as Compensation Committee
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The Chairman's Office performs the duties as Compensation Committee for the
Group Executive Board and the Group Managing Board. Its authorities are governed
in detail in the "Appendix".
III. THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Art. 13 Functions and authorities
The Board of Directors appoints an Audit Committee of three of its part-time
members to control the functional quality and the performance adequacy of the
Group and Statutory Auditors as well as their interaction with Group Internal
Audit. Duties and procedures are governed in a special regulation issued by the
Board of Directors.
IV. THE CHAIRMAN OF THE BOARD OF DIRECTORS
Art. 14 Functions
(1)The Chairman - or in his/her absence one of the Vice Chairmen - presides over
the meetings of the Board of Directors and the General Meeting of Shareholders.
(2)The Chairman of the Board of Directors, together with the full-time Vice
Chairman, exercises ongoing supervision over the Group Executive Board on behalf
of the Board of Directors. The Chairman and the full-time Vice Chairman are
responsible for providing information to the Chairman's Office and the Board of
Directors that is relevant to their function.
(3)Group Internal Audit directly reports to the Chairman of the Board of
Directors.
Art. 15 Authorities
(1)The Chairman of the Board of Directors and the full-time Vice Chairman may
demand information about any matters relating to the Group, and examine reports,
proposals and minutes of meetings of the Group Executive Board, the Functional
Areas of the Corporate Center and the Divisions.
(2)Decisions of the Group Executive Board concerning the Group's risk profile
and the risk policies of the Divisions are to be submitted to the Chairman of
the Board of Directors for approval.
V. THE GROUP EXECUTIVE BOARD
Art. 16 Composition
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The Group Executive Board consists of the President & CEO, the Chief Financial
Officer and the Heads of the Divisions. Additional members may be appointed for
specific Group functions.
Art. 17 Meetings, decisions, minutes
(1)As a rule, the Group Executive Board meets every two weeks. Extraordinary
meetings will be held as required or at the request of a member.
(2)A quorum is constituted when at least three members of the Group Executive
Board are present, or can be reached for discussion and voting. For voting on
matters of fundamental importance, however, two thirds of the members, including
the member responsible for the area concerned, must attend.
(3)Decisions are taken by the absolute majority of the members present. In case
of a tie the presiding officer has the casting vote.
(4)Minutes are kept of decisions taken by the Group Executive Board and are
signed by the presiding officer and the recording secretary. They are taken as
approved if no comment is made on them in the next meeting. They shall be sent
to the members of the Chairman's Office and the Group Executive Board.
Art. 18 Functions and authorities
(1)The Group Executive Board is the Group's supreme executive body within the
meaning of the Swiss Banking Law. It ensures cooperation and unity within the
Group across divisional lines and is responsible for the Group's performance.
(2)The authorities of the Group Executive Board are governed in detail in the
"Appendix", based on article 30 of the Articles of Association. The Group
Executive Board prepares the proposals which have to be submitted to the
Chairman's Office and the Board of Directors for approval and supports them in
their decision making process. It regularly informs the Board of Directors on
the Group's business development.
(3)The Group Executive Board may wholly or partially delegate approval
authorities to one of its members.
Art. 19 The Group Executive Board as Risk Council
The Group Executive Board assumes the responsibilities of a Risk Council. Based
on proposals submitted by the Chief Risk Officer it defines the principles for
the measurement of market, credit, country and operational risks. It monitors
the size and development of exposures at group level and manages the risk
profile and the risk mix by allocating limits to the Divisions within the
parameters set by the Board of Directors.
Art. 20 The President & CEO
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(1)The President & CEO is responsible for the overall executive management of
the Group; he/she heads the Group Executive Board and presides over its
meetings.
(2)He/She ensures that matters relating to the Group are dealt with, supervises
the management of the Divisions and ensures that the Divisions work together.
He/She is responsible for ensuring that decisions are taken in a timely fashion
and for supervising their implementation.
(3)He/She is responsible for Human Resources, Management Development and
Corporate Communications and - in consultation with the Chairman of the Board of
Directors - for the image of the Group as a whole.
(4)He/She ensures that the Chairman's Office and the Board of Directors are
informed in a timely and appropriate manner.
(5)The President & CEO has an all-encompassing right to information and
examination regarding all matters handled by the Corporate Center and by the
Divisions. He/She has veto power over any decisions taken by any management
body. A veto has the effect of suspending the decision until the matter is
decided by the Group Executive Board.
Art. 21 The Corporate Center
(1)The Corporate Center supports the Group Executive Board in its duties and
functions. In particular it has responsibility for the provision and management
of resources critical to the Group's success (capital, management capabilities,
all kinds of risks and their related limits), Group Controlling and other staff
functions.
(2)The heads of the Functional Areas of the Corporate Center have functional
directive and functional controlling authority throughout the Group.
Art. 22 The Heads of Divisions
(1)The Division Heads are responsible for the group-wide functional management
of their Division, for the implementation of the business strategy within their
Division and for the implementation of the decisions taken by the Board of
Directors, the Chairman's Office and the Group Executive Board.
(2)They have overall responsibility for the Division and its management and are
accountable for the divisional results.
Art. 23 The Chief Financial Officer
(1)The Group Chief Financial Officer is responsible for the Group's financial
management, for the implementation of group-wide independent risk control and
for group-wide controlling processes. The Chief Risk Officer and the Chief
Credit Officer have group-wide responsibility for the Risk functions.
Art. 24 Special committees
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Matters of common interest to the Group are dealt with in special committees
presided over by the President & CEO, the CFO or another member of Senior
Management appointed to this function by the Group Executive Board.
VI. THE DIVISIONS
Art. 25 Organization of business activities
(1)The Group's business activities are organized into Divisions which in turn
are broken down into Business Areas.
(2)The structure and assignment of activities are reflected in the basic
organizational structure of the Group. Details about responsibilities, functions
and authorities are governed in the Division's Business Regulations and the
"Appendix" to these Organizational Regulations.
Art. 26 Resources, logistics and operations
The Divisions are responsible for resources, logistics and operations. At shared
locations the Group Executive Board assigns all or part of this responsibility
to the most suitable Division.
Art. 27 Divisional Boards
(1)The Divisional Board is made up of the Division Head (who is a member of the
Group Executive Board), members of the Group Managing Board reporting to the
Division Head, plus possibly individual other members of senior management.
(2)The Division Head presides over the Divisional Board.
(3)Authorities and procedures are defined by the Business Regulations of the
Divisions, which are based on these Organization Regulations.
VII. EXECUTIVE MANAGEMENTS OF GROUP COMPANIES
Art. 28 Appointment
The Boards of Directors of group companies appoint their executive managements
and chief executives upon recommendation of the Divisional Boards. Details are
governed in the "Regulation governing the management of group companies of UBS".
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VIII. BUSINESS UNITS, REPRESENTATIVES AND ADVISORS OUTSIDE SWITZERLAND
Art. 29 Appointment
Upon recommendation of the Divisional Boards, the Group Executive Board appoints
the executive managements and chief executives of the business units as well as
the representatives and the permanent advisors of the Group.
IX. GROUP INTERNAL AUDIT
Art. 30 Organization
(1)Group Internal Audit performs the Group's internal audits.
(2)The guidelines for the activities of Group Internal Audit are contained in a
special set of regulations.
(3)The Chairman's Office may order special audits to be conducted. Individual
members of the Board of Directors may submit requests for such audits to the
Chairman's Office. If there is any doubt about whether such a request is
justified, the question is submitted to the Board of Directors by the presiding
director.
(4)The members of the Group Executive Board, with the agreement of the Chairman
of the Board of Directors, may instruct Group Internal Audit to conduct special
audits.
Art. 31 Functions and authorities
(1)Group Internal Audit monitors compliance with the legal and regulatory
requirements and with the provisions of the Articles of Association, as well as
with internal directives and guidelines within the organizational units of the
parent company and the group companies. In doing so, it specifically verifies or
assesses whether the internal controls are commensurate with the risks and are
working effectively, whether activities within the Group are being conducted and
recorded properly, correctly and fully, and whether the organization of
operations, including information technology, is efficient and the information
is reliable.
(2)Group Internal Audit possesses unrestricted auditing rights within the parent
company and the group companies; it has access at all times to all accounts,
books and records. It must be provided with all information and data needed to
fulfill its auditing duties.
Art. 32 Reports
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(1)Group Internal Audit is independent in its reporting and is not subject to
any instructions.
(2)Group Internal Audit addresses its reports ultimately to the Chairman of the
Board of Directors. The procedure employed for this and the list of other
recipients of its audit reports are described in the regulations governing Group
Internal Audit.
(3)In the case of minor errors or shortcomings, it may be sufficient to inform
the head of the organizational unit or supervisor of the staff member concerned.
(4)The Chairman of the Board of Directors and the President & CEO shall inform
the Chairman's Office and the Board of Directors in an appropriate manner of any
findings of Group Internal Audit which raise questions of fundamental importance
or reveal serious errors.
(5)The Chairman of the Board of Directors shall also inform the Board of
Directors of the results of special audits performed at the request of
individual board members (art. 30, paragraph 3).
(6)The members of the Board of Directors and the President & CEO shall receive
the annual activity report of the Head of Group Internal Audit for inspection.
This report is to be discussed at a meeting of the Board of Directors.
X. SIGNATURES
Art. 33 Authority to sign for the parent company
(1)The following persons are authorized to sign:
a) The members of the Chairman's Office as well as the members of the Group
Executive Board sign jointly with another authorized signatory for all
business units of the parent company;
b) In addition to the signatories specified under a) above, groups of
persons designated by the Chairman's Office may also sign for the parent
company's business units in and outside Switzerland.
(2)For the handling of certain matters, the Chairman and the Vice Chairmen of
the Board of Directors as well as the members of the Group Executive Board may
authorize, jointly with another signatory of the same category, a member of the
Board of Directors, of the Group Executive Board, of senior management, or
another person to bind the Corporation with legal effect by his or her sole
signature. This authority may also be accorded to one of the two authorizing
persons.
(3)Members of Senior Management may, in individual cases and in connection with
matters on which decisions have been made by the relevant body of the parent
company, authorize, jointly with another signatory of the same category,
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another internal or external person to bind the parent company with legal effect
by his or her sole signature for acts which can only be performed outside the
business premises, such as the signing of contracts.
(4)The Group Executive Board may rule that forms and other written documents
produced in large quantities in the course of daily business may be distributed
with only one or without signature. Such exceptions to the joint signature
principle shall be made known in a suitable fashion giving details of the
relevant maximum authorized amounts.
Art. 34 Form of signature
The Chairman and Vice Chairmen of the Board of Directors, the members of the
Group Executive Board and the members of the senior management sign by adding
their signature to the Corporation's name.
Art. 35 Signing on behalf of group companies
Analogous to the rules for the parent company, the signature requirements at
group companies are to be established in line with local regulations by the
Boards of Directors or the corresponding bodies of the group companies, subject
to approval by the head of the Division concerned. All members of the respective
Boards of Directors or other corresponding corporate bodies may be granted
signing powers.
XI. GENERAL PROVISIONS
Art. 36 Calculation of approval authorities
(1)For the calculation of the approval authorities mentioned in the appendix to
these regulations the following has to be taken into account:
(2)All direct and indirect exposures and equity interests of the parent company
and the group companies in respect of any single debtor or group of debtors as
well as exposures in respect of individuals who own a substantial interest in a
debtor company. Exposures whose size and risk are insignificant constitute an
exception.
(3)A debtor company is deemed to belong to a group of debtors if another person
or company holds a direct or indirect interest of more than 50% of the votes in
such debtor firm or if this group of debtors otherwise exercises a controlling
influence. In cases of doubt, the exposure is to be viewed as belonging to a
group.
(4)With respect to issues of securities or other uncertificated rights, the
calculation will be based on the entire underwriting amount per transaction.
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(5)The construction of new buildings and alterations to existing ones, as well
as investments for which a budget has been approved by the appropriate bodies,
do not need to be re-submitted if the costs do not exceed the budget.
Art. 37 Abstention
- Members of the Board of Directors, the Group Executive Board, the
Divisional Boards and executive managements are obliged to abstain
from discussions and decisions on transactions or other matters
involving a potential conflict of interest.
XII. AMENDMENTS
Art. 38 Amendments
The members of the Board of Directors must be notified in writing of any
proposals for the amendment of the Organization Regulations at least one week
before the proposals are to be discussed.
XIII. ENTRY INTO FORCE, IMPLEMENTING PROVISIONS
Art. 39 Entry into force, implementing provisions
(1)These Organization Regulations entered into force on 6 February 1998. They
were revised on 7 July 1999.
(2)The Group Executive Board shall enact the necessary rules for the
implementation of these regulations.
UBS AG
Alex Krauer Alberto Togni
Chairman of the Vice Chairman of the
Board of Directors Board of Directors
