The information below is current as of the revision date and is subject to change at our discretion: Last revised September 2014.

Revenue Sharing

UBS Financial Services Inc. receives networking fees or omnibus service fees in consideration for certain services we provide on behalf of mutual funds, which are ancillary to the effecting of mutual fund transactions. These fees generally are paid by mutual fund sponsors from investor assets in mutual funds, but in some cases may be subsidized, in part, by affiliates or the distributor of the mutual funds, and are generally calculated by applying our standard networking rate of $12 to $15 to each mutual fund position that exceeds $500 and is held at UBS Financial Services Inc. and between $14 and $26 for each omnibus position, though some fund companies may choose to calculate this rate expressed in basis points on assets. Depending on asset levels, a basis points fee may result in a higher or lower fee than a per position fee. Exclusions may apply to positions below an asset level mutually agreed upon by UBS and the fund company. Although our standard networking rate is $12 — 15 per mutual fund position, based on the networking level of the Mutual Fund Position (Omnibus) and the associated additional account services provided by UBS, the networking rate can be higher and the $26 omnibus rate may be higher for certain mutual funds. A portion of the payments we receive for Omnibus processing is paid to a sub-account vendor. Your Financial Advisor does not receive a portion of this compensation.

In addition to sales loads,12b-1 fees, networking, omnibus and processing fees, UBS Financial Services Inc. receives other compensation from certain distributors or advisors of mutual funds that we make available for purchase. These separate compensation amounts (commonly referred to as revenue sharing) are based on two components: (i) the amount of sales by UBS Financial Services Inc. of a particular mutual fund family to our clients (excluding sales through wrap-fee programs), and (ii) the asset value of a mutual fund family’s shares held by our clients at UBS Financial Services Inc. (including wrap-fee programs). We require that these payments be paid directly from the distributor or advisor, and not from the mutual funds or indirectly through mutual fund portfolio trading commissions. Revenue-sharing payments are intended to compensate us for ancillary services in connection with effecting sales of mutual fund shares. Except as noted below, none of these amounts are rebated to you or paid to the Financial Advisor or his or her branch office. However, these amounts are allocated to the individual branch offices as non-compensable revenue (revenue that is not paid out to Financial Advisors or Branch Office Managers) but are considered part of the overall profitability of the branch, and as one of several components used in determining Branch Office Manager compensation.

Many mutual funds companies pay revenue sharing to us, including our affiliate, UBS Global Asset Management. UBS Financial Services determines the level of access to our branches based on our own review and evaluation of mutual funds and fund families. There are multiple factors involved in determining a particular mutual fund’s level of access to our branches. Although revenue sharing may be one factor, others include understanding of business goals, quality of sales personnel and marketing material, range of products, level of service to Financial Advisors and Branch Managers, participation of funds in researched investment models, and branch discretion.

In general, we charge each mutual fund family the following amounts (other than money market and offshore funds): (i) up to 0.15% per year (paid quarterly) on all sales of mutual fund shares (excluding sales through wrap-fee programs); (ii) up to 0.20% per year (paid quarterly) of the asset value of all equity mutual fund shares held at UBS Financial Services Inc.; and, (iii) up to 0.20% per year (paid quarterly) of the asset value of all fixed-income mutual fund shares held at UBS Financial Services Inc. Some mutual fund families may be subject to a minimum annual payment which, in some instances, may result in a fee that exceeds the percentages described above. Certain mutual fund companies may pay a flat-fee annually which may, in limited circumstances, exceed the rates listed above. Except as noted below, this calculation includes shares of affiliated and non-affiliated funds in our wrap-fee programs, but does not include PACE Money Market investments, mutual fund assets held at other financial institutions and ERISA and IRA assets in certain advisory programs.

Although we seek to apply a level, standard payment schedule for all of the mutual fund companies whose funds we sell, we recognize that mutual fund companies approach revenue sharing in a variety of ways, and that some mutual fund companies may decline to pay revenue sharing exactly at the levels listed above or at all, which may present a financial disincentive for us to promote the sale of those funds that do not pay us at the levels listed above.

Revenue-sharing payments may present a conflict between our interests and those of our customers because the payments give us a financial incentive to recommend that our customers buy and hold shares of those funds that we maintain on our distribution platform and for which we receive revenue-sharing payments. Although mutual funds from more than 300 different mutual fund families are available through our distribution platform, this is only part of the universe of mutual funds that are available to our customers in the marketplace. Certain no load and institutional mutual funds may be purchased by our customers at a charge of $75 per transaction, plus other customary sales charges. No portion of the transaction fees are paid to Financial Advisors.

Affiliate payments: Generally, shareholders pay no front-end sales charges on UBS Global Asset Management (US) Inc. Class Y shares, nor does that share class pay ongoing 12b-1 distribution or service fees. We have entered into an agreement with our affiliate, UBS Global Asset Management (US) Inc. pursuant to which UBS Global Asset Management (US) Inc. as principal underwriter of its funds, may make payments out of its own resources for the sales of Class Y shares to eligible purchasers. The payments consist of (1) a one-time finder’s fee consistent with the Fund’s Class A share Reallowance to Selected Dealers’ schedule as indicated in the relevant funds’ prospectus and, (2) beginning in month 13 after purchase, an annual fee in an amount up to 20 basis points for an equity fund, an asset allocation fund or balanced fund; 15 basis points for a fixed-income fund; and 5 basis points for an index fund. These payments are not available for purchases of Y shares after June 2010 but continue to be made for investments prior to that date. UBS Global Asset Management (US) Inc. does not make these payments on accounts holding Class Y shares for employee or employee-related clients. The one-time finder’s fee is calculated on the date of purchase and may be paid in four equal installments over the first 12 months of ownership. We pay a portion of these payments to the Financial Advisor originating the sale. These payments create a financial incentive for our brokers to recommend Class Y shares of UBS proprietary funds over non-proprietary products.

In addition, our Financial Advisors may also receive Dealer Concessions or finder’s fees as described in the fund’s Prospectus or Statement of Additional Information from certain mutual fund companies. Such fees may be up to 1% of sales of a particular mutual fund. Generally, these finder’s fees offset other fees payable to UBS Financial Services Inc. by the client purchasing the particular mutual fund.

Non-Cash Compensation

In addition to the payments described above, mutual fund distributors and/or advisors for mutual funds available on our platform may contribute funds to support our Financial Advisor education programs. The contributions are used to subsidize the cost of training seminars we offer to Financial Advisors through specialized firm-wide programs and regional training forums. These contributions subsidize a significant portion of the costs incurred to support the training of Financial Advisors, Branch Office Managers, Field Leadership, and other personnel as well as client education and product marketing efforts conducted regionally and nationally by product specialists employed by UBS. The training events and seminars can (and often) include a non-training element to the event.

Not all vendors contribute to our education efforts. Neither contribution towards these training and educational expenses, nor lack thereof, is considered as a factor in analyzing or determining whether a vendor should be included or should remain in our programs or our platform. Contributions can vary by vendor and event. In some instances, the contributions per vendor (as well as the aggregate received from all vendors) are significant. Some vendors may decide to contribute at levels different than those we request. Additional contributions may be made by certain vendors in connection with specialized events or education or training forums. Your Financial Advisor does not receive a portion of these payments. However, their attendance and participation in these events, as well as the increased exposure to vendors who sponsor the events, may lead Financial Advisors to recommend the products and services of those vendors as compared those who do not.

In addition to the revenue-sharing payments and contributions to training and education described above, in the ordinary course of business, we and our Financial Advisors may, from time to time, receive non-cash compensation from mutual fund companies and sponsors of products that we distribute. This compensation may include promotional items, occasional gifts, meals, tickets and other entertainment, sponsorship support of training events and seminars, various forms of marketing support and, in certain limited circumstances, the development of tools used by the Firm for training or record-keeping purposes. UBS Financial Services Inc. remains committed to investing in long-term relationships and we remain dedicated to helping you pursue your investment goals. If you have further questions regarding mutual funds, please feel free to contact your Financial Advisor.