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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrantý

Filed by a Party other than the Registranto

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

USANA Health Sciences, Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1) Title of each class of securities to which transaction applies:
         
  (2) Aggregate number of securities to which transaction applies:
         
  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
         
  (4) Proposed maximum aggregate value of transaction:
         
  (5) Total fee paid:
         

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
  (2) Form, Schedule or Registration Statement No.:
         
  (3) Filing Party:
         
  (4) Date Filed:
         

 

 

 

 

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

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LOGOLOGO

3838 West Parkway Boulevard
Salt Lake City, Utah 84120-6336
(801) 954-7100

March 23, 20162018

Dear USANA Shareholders,

        You        We are cordially invitedexcited to invite you to attend the 2016first completely virtual Annual Meeting of Shareholders of USANA Health Sciences, Inc. (the "Annual Meeting") to be held at 9:30 a.m. MDT on Monday,Wednesday, May 2, 2016,2018 at our offices at 3838 West Parkway Boulevard, Salt Lake City, Utah. Details regarding11:00 a.m., Mountain Daylight Time. We will conduct the Annual Meeting via a live webcast. You will be able to attend the annual meeting and vote your shares electronically during the live webcast of the meeting by visitingwww.virtualshareholdermeeting.com/USNA and entering the business16-digit control number provided in your proxy materials. We are pleased to be conducted,provide access to our proxy materials over the Internet under the U.S. Securities and information aboutExchange Commission's "notice and access" rules. As a result, we are mailing to many of our shareholders a notice of Internet availability instead of a paper copy of the proxy statement and our 2017 Annual Report.

        The notice contains instructions on how to access those documents over the Internet as well as how to receive a paper copy of our proxy materials. All shareholders who do not receive a notice will receive a paper copy by mail unless they have previously requested delivery of proxy materials electronically. Continuing to employ this distribution process will conserve natural resources and reduce the costs of printing and distributing our proxy materials.

        You may vote by proxy over the Internet or by telephone, or, if you received paper copies of the proxy materials by mail. You also may vote by mail by following the instructions on the proxy card or voting instruction card. Your vote will ensure your representation at the Annual Meeting regardless of whether you participate virtually in the Annual Meeting.

        Your vote is important to us and I do hope you will vote as soon as possible. Thank you for your continued support of USANA.

Sincerely,

GRAPHIC

Kevin Guest
Chief Executive Officer


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NOTICE OF 2018 VIRTUAL ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT

LOGO

Virtual Annual Meeting of Shareholders
Online Meeting Only—No Physical Meeting Location

To the Shareholders of USANA Health Sciences, Inc. that you should consider when you:

        The 2018 Annual Meeting of Shareholders of USANA Health Sciences, Inc. will be held on May 2, 2018, at 11:00 a.m. Mountain Time. Our Annual Meeting will be a virtual meeting held over the Internet. You will be able to attend the Annual Meeting and vote your shares are describedelectronically during the live webcast of the meeting by visitingwww.virtualshareholdermeeting.com/USNA and entering your 16-digit control number included in the following pages, which contain the formal Notice ofnotice containing instructions on how to access Annual Meeting andmaterials, your proxy card, or the voting instructions that accompanied your proxy materials.

Items of Business:

        The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice of Annual Meeting. You are entitled to notice of, and eligible to vote at, this year's Annual Meeting if you were a shareholder of record as of the close of business on March 7, 2018.

        UnderIn accordance with Securities and Exchange Commission rules, that allow companies to furnishwe are furnishing these proxy materials and our Annual Report on Form 10-K for fiscal 2017 via the Internet. On March 23, 2018, we mailed to shareholders overas of the Internet, we have elected to deliver our proxy materials to the majority of our shareholders over the Internet. This allows us to mail our shareholdersrecord date a notice instead of a paper copy of our proxy materials. We believe this process will facilitate accelerated delivery of proxy materials, save costs, and reduce the environmental impact of our Annual Meeting. On or about March 23, 2016, we began sending to our shareholders a Notice of Internet Availability of Proxy Materials containingwith instructions on how to access our Annual Meeting materials and vote via the Internet, or by mail or telephone.

        Your vote is important to us. Whether or not you plan to participate in the Annual Meeting, we encourage you to review the accompanying proxy statement for our Annual Meeting and our Annual Reportinformation relating to Shareholders on the Internet. This notice also provides instructions on how to vote online or by telephone and includes instructions on how to receive a paper copyeach of the proxy materials by mail.

        We hope you will be ableproposals and to attend the Annual Meeting. Whether you plan to attend the Annual Meeting or not, it is important that you cast your vote. You may vote over the Internet as well as by telephone. In addition, if you requested to receive printed proxy materials, you may vote by completing, signing, dating and returning your proxy card by mail. You are urged to vote promptly in accordance with the instructions set forth in the Notice of Internet Availability of Proxy Materials or on your proxy card. We encourage you to vote by proxy so that your shares will be represented and voted at the meeting, whether or not you can attend.promptly.

 Sincerely,




GRAPHIC



David A. Wentz
Co-Chief Executive Officer

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LOGO

3838 West Parkway Boulevard
Salt Lake City, Utah 84120-6336
(801) 954-7100

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 2016

TIME:9:30 a.m. MDT

DATE:


Monday, May 2, 2016

PLACE:


The offices of USANA Health Sciences, Inc.
3838 West Parkway Boulevard, Salt Lake City, Utah 84120

PURPOSES:







1.


To elect seven directors to serve for one year each, until the next Annual Meeting of Shareholders and until a successor is elected and shall qualify;



2.


To ratify the selection of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year 2016; and



3.


To consider and act upon such other business as may properly come before the meeting or at any postponement or adjournment thereof.

WHO MAY VOTE:

        You will receive notice of and be entitled to vote at the Annual Meeting if you were the record owner of USANA Health Sciences, Inc. common stock at the close of business on March 1, 2016. A list of shareholders of record will be available at the meeting and during the 10 days prior to the meeting, at the office of the Secretary at the above address.

        All shareholders are cordially invited to attend the Annual Meeting. Whether you plan to attend the Annual Meeting or not, please vote by following the instructions on the Notice of Internet Availability of Proxy Materials that you have previously received, which we refer to as the Notice, or in the section of the Proxy Statement entitled "Important Information About the Annual Meeting—How Do I Vote," or, if you requested to receive printed proxy materials, your proxy card. You may change or revoke your proxy at any time before it is voted. The Notice contains instructions on how our shareholders may access our proxy materials and Annual Report over the Internet and how our shareholders may receive a paper copy of the proxy materials, including the Proxy Statement, Annual Report on Form 10-K, and a form of proxy card.

        On or about March 23, 2016, we began sending the Notice of Internet Availability of Proxy Materials to all shareholders entitled to vote at the annual meeting.

 By Order of the Board of Directors,

 

 


GRAPHICGRAPHIC

James H. Bramble
 James H. Bramble
Chief Legal Officer, General Counsel and Corporate Secretary

Salt Lake City, Utah
March 23, 20162018


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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE SHAREHOLDER MEETING TO BE HELD ON MAY 2, 2016

This Proxy Statement and our annual report to shareholders for the fiscal year ended January 2, 2016, along with our proxy card, are available for viewing, printing, and downloading free of charge at www.proxyvote.com. To view these materials please have your 12-digit control number available that appears on your Notice or proxy card. On this website, you can also elect to receive future distributions of our proxy statements and annual reports to shareholders by electronic delivery.

        Additionally, you can find a copy of our Annual Report on Form 10-K, which includes our financial statements for the fiscal year ended January 2, 2016, on the website of the Securities and Exchange Commission at www.sec.gov, or on the "Investor Relations" section of our website at www.usanahealthsciences.com. You may also obtain a printed copy of our Annual Report on Form 10-K, including our financial statements, free of charge, from us by sending a written request to: Secretary, USANA Health Sciences, Inc., 3838 West Parkway Boulevard, Salt Lake City, Utah 84120. Exhibits will be provided upon written request and payment of an appropriate processing fee.

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USANA HEALTH SCIENCES, INC.
ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT


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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT

  1 

QUESTIONS AND ANSWERSPROXY STATEMENT

  1 

—Summary

1

—Voting and Quorum, Abstentions and Broker Non-Votes

1

—Shareholder of Record

1

—Beneficial Owner

2

—Quorum

2

—Broker Non-Votes

2

—Required Votes

2

—Revocation and Voting of Proxies

3

—Proxy Solicitations

3

—Attending the Virtual Annual Meeting

3

—Voting Results

3

PROPOSAL #1: #1—ELECTION OF DIRECTORS

3

—Director Nominees

4

RECOMMENDATION OF THE BOARD OF DIRECTORS

  6 

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  96 

Board Leadership StructureIndependent Directors

  96 

Director IndependenceCommunicating with the Board of Directors

  107 

Communications withPrinciples of Corporate Governance

7

—Stock Ownership Requirements

7

—Lead Independent Director

7

—Separation of Chairman and Chief Executive Officer Roles

8

—Term Limits and Mandatory Retirement Age

8

—Executive Sessions of Non-Management Directors

  108

—Prohibition Against Pledging USANA Securities and Hedging Transactions

8

—Code of Ethics

9 

—Committees of the Board of Directors

  109

—Annual Assessment of Board Effectiveness

9 

—Risk Oversight and Management

  129

—Audit Committee

10 

—Compensation Risk AnalysisCommittee

  1310 

BoardGovernance, Risk & Nominating Committee Charters

  1310 

Corporate Governance GuidelinesComposition and Meetings of the Board of Directors and its Committees

  1311 

Code of EthicsAudit Committee

  1311

—Governance, Risk & Nominating Committee

11

—Compensation Committee

12 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

  1413 

EXECUTIVE OFFICERSDIRECTOR COMPENSATION

13

—Fiscal Year 2017 Board Compensation

13

—Cash Compensation

13

—Equity Compensation

13

—Director Compensation Table

  14 

EXECUTIVE COMPENSATIONPROPOSAL #2—RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

15

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—Independence

15

—Audit Fees

15

REPORT OF THE AUDIT COMMITTEE

  16 

—Compensation DiscussionPolicy on Pre-Approval of Audit and Analysis

16

—Compensation Philosophy and ObjectivesPermissible Non-Audit Services

  17 

—Role of Compensation Committee

18

—Role of Corporate Leadership in Assisting Compensation Committee

18

—Compensation Consultants

19

—Components of Compensation

19

—Other Compensation

22

REPORTRECOMMENDATION OF THE COMPENSATION COMMITTEE

24

SUMMARY COMPENSATION TABLE

25

GRANTS OF PLAN-BASED AWARDS

26

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

27

OPTION EXERCISES AND STOCK VESTED

28

COMPENSATIONBOARD OF DIRECTORS

  2917 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  30

EQUITY COMPENSATION PLAN INFORMATION

33

PROPOSAL #2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

3418 

Policy on Pre-ApprovalFive-Percent Beneficial Owners of Audit and Permissible Non-Audit ServicesCommon Stock

  3418 

IndependenceDirector and Executive Officer Beneficial Ownership

  34

—Financial Statements and Reports

34

—Services

34

REPORT OF THE AUDIT COMMITTEE

36

EMPLOYMENT CONTRACTS AND OTHER ARRANGEMENTS

3718 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

  3719 

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

20

—Policies and Procedures Regarding Related Party Transactions

20

—Related Party Transactions

20

EXECUTIVE OFFICERS

21

EXECUTIVE COMPENSATION

24

—Compensation Discussion and Analysis

24

—Introduction

24

—Executive Summary and Overview

24

—Summary of 2017 Accomplishments

24

—Compensation Philosophy and Objectives

25

—Overview of Components of Executive Compensation Program

25

—Role of Compensation Committee

26

—Role of Corporate Management in Assisting Compensation Committee

26

—Compensation Consultant

26

—Compensation Risk Assessment

27

—Components of Compensation

28

—Base Salary

28

—Non-Equity Incentive Plan Compensation

28

—2017 Discretionary Cash Bonus

29

—Equity Compensation

29

—Other Compensation

31

—Accounting Considerations and Tax Deductibility of Executive Compensation

32

REPORT OF THE COMPENSATION COMMITTEE

33

SUMMARY COMPENSATION TABLE

34

FISCAL YEAR 2017 CEO PAY RATIO

35

GRANTS OF PLAN-BASED AWARDS FOR 2017

36

—Grants of Plan-Based Awards Table

36

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

  37 

OTHER MATTERS—Outstanding Equity Awards at Fiscal Year-End Table

37

OPTION EXERCISES AND STOCK VESTED

  38 

ANNUAL REPORTEQUITY COMPENSATION PLAN INFORMATION

  38 

FURTHER INFORMATIONEMPLOYMENT CONTRACTS AND OTHER ARRANGEMENTS

  39 

PROPOSAL #3 ANNUAL ADVISORY "SAY ON PAY" VOTE TO APPROVE OUR NAMED EXECUTIVE OFFICERS' COMPENSATION

39

RECOMMENDATION OF THE BOARD OF DIRECTORS

39

SHAREHOLDER PROPOSALS FOR 2019 ANNUAL MEETING OF SHAREHOLDERS

39

OTHER BUSINESS

40

ANNUAL REPORT ON FORM 10-K

40

ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS

40

HOUSEHOLDING OF ANNUAL MEETING MATERIALS

41

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LOGOPROXY STATEMENT

Summary

PROXY STATEMENT FOR
THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 2016

        The        This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board") of USANA Health Sciences, Inc. ("We," "USANA," or the "Company") is soliciting the accompanying proxy to be used at the 2016for our Annual Meeting of Shareholders to be held virtually on Wednesday, May 2, 2018, at 11:00 a.m. (Mountain Daylight Time), and any adjournment or postponement thereof (the "Annual Meeting") to be held on Monday, May 2, 2016, at 9:30 a.m., local time, or at any adjournments thereof for the purposes set forth in this Proxy Statement and in the accompanying notice of the meeting. On or about March 23, 2016, we began sending the Notice of Internet Availability of Proxy Materials, which we refer to throughout this Proxy Statement as the Notice, to all shareholders entitled to vote at the Annual Meeting.

IMPORTANT INFORMATION ABOUT THE MEETING

Why is the Company Soliciting My Proxy?

. The Board of Directors of USANA is soliciting your proxy to vote at thevirtual Annual Meeting can be accessed by visitingwww.virtualshareholdermeeting.com/USNA, where you will be able to be held at our offices, 3838 West Parkway Boulevard, Salt Lake City, Utah, on Monday, May 2, 2016, at 9:30 a.m. MDT and any adjournments of the meeting. The proxy statement along with the accompanying Notice of Annual Meeting of Shareholders summarizes the purposes oflisten to the meeting live, submit questions, and vote online. In this document, the information you needwords "USANA," the "Company," "we," "our," "ours," and "us" refer only to know to vote at the Annual Meeting.USANA Health Sciences, Inc., and not any other person.

        We have sent you the Notice and made this Proxy Statement and our annual report to shareholders for the 2015 fiscal year available to you on the Internet because you owned sharesare taking advantage of USANA common stock on the record date, which is March 1, 2016. We have also delivered printed versions of these materials to certain shareholders by mail. The Company commenced distribution of the Notice and the proxy materials to shareholders on or about March 23, 2016.

Why Did I Receive a Notice in the Mail Regarding the Internet Availability of Proxy Materials Instead of a Full Set of Proxy Materials?

        As permitted by the rules of the U.S. Securities and Exchange Commission or the SEC, we have elected("SEC") rules that allow us to furnish ourdeliver proxy materials to our shareholders by providing access to such documents on the Internet. Under these rules, we are sending our shareholders a one-page notice regarding the Internet rather than mailingavailability of proxy materials instead of a full printed copiesset of these materials to each shareholder. Mostproxy materials. Our shareholders will not receive printed copies of the proxy materials unless they request them. We believespecifically requested. Instead, the one-page notice that this process should expedite shareholders' receipt of proxy materials, lowerour shareholders receive will tell them how to access and review on the costsInternet all of the annual meetingimportant information contained in the proxy materials. This notice also tells our shareholders how to submit their proxy card on the Internet and helphow to conserve natural resources. If you received a Notice by mail or electronically, you will notrequest to receive a printed or email copy of theour proxy materials, unlessmaterials. We expect to provide notice and electronic delivery of this Proxy Statement to such shareholders on or about March 23, 2018.

        Whether or not you request one by following the instructions includedplan to participate in the Notice. Instead,virtual annual meeting online, we encourage you to vote promptly. A person giving a proxy has the Notice will instructpower to revoke it. If you howattend the virtual annual meeting, you may access and review all of the proxy materials and submitrevoke your proxy onand vote via the Internet. If you requested a paper copy of the proxy materials, you may authorize the voting of your shares by following the instructions on the enclosed proxy card, in addition to the other methods of voting described in this Proxy Statement.virtual meeting website.


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Who Can Vote? Voting and Quorum, Abstentions and Broker Non-Votes

        Only shareholders who owned USANAholders of records ("shareholders") of our common stock at the close of business on March 1, 2016, or the record date,7, 2018 (the "Record Date") are entitled to notice of and to vote at the Annual Meeting. On this record date,the Record Date, there were 11,944,16424,066,524 shares of our common stock outstanding and entitled to vote.outstanding. Common stock is our only class of voting stock.

You do not need to attend the Annual Meeting in person tomay vote your shares. Shares representedall shares owned by valid proxies, received in time for the meeting and not revoked prior to the meeting, will be voted at the meeting. For instructions on how to change or revoke your proxy, see "May I Change or Revoke My Proxy?" below.

How Many Votes Do I Have?

        Each share of USANA common stock that you own as of the Record Date, including (i) shares held directly by you in your name as the shareholder of record, date entitlesand (ii) shares held for you to one vote.as the beneficial owner in street name through a broker, bank, trustee, or other nominee.

How Do I Vote?        Shareholder of Record.

        Whether you plan to attend the Annual Meeting or not, we urge you to vote by proxy. All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with your instructions    If, on the proxy card or as instructed via Internet or telephone. You may specify whetherRecord Date, your shares should be voted for or withheld for each nominee for director, and whether your shares should be voted for, against or abstain with respect to any other proposal. If you properly submit a proxy without giving specific voting instructions, your shares will be voted in accordance with the Board's recommendations as noted below. Voting by proxy will not affect your right to attend the Annual Meeting. If your shares arewere registered directly in your name throughwith our stock transfer agent, American Stock Transfer and& Trust Company, orLLC, then you have stock certificates registeredare considered the shareholder of record with respect to those shares. As a shareholder of record, you are entitled to vote in your name, you may vote:any one of the following ways:

        Telephone and Internet voting facilities for shareholders of record will be available 24-hours a day and will close at 11:59 p.m. Eastern Time on April 29, 2016.

        If your shares are held in "street name" (heldorder to participate in the namevirtual Annual Meeting. Instructions on how to attend and participate via the Internet, including how to demonstrate proof of a bank, broker or other holder of record or nominee), you will receive instructions from the holder of record. You must follow the instructions of the nominee in order for your shares to be voted. Telephone and Internet voting also will be offered to shareholders owning shares through certain banks and brokers. If your sharesstock ownership, are not registered in your own name andposted at www.proxyvote.com. Even if you plan to vote your sharesparticipate in person at the Annual Meeting you should contact your broker or agent to obtain a legal proxy or broker's proxy card and bring it to the Annual Meeting in order to vote.

How Does the Board of Directors Recommend That I Vote on the Proposals?

        The Board of Directors recommendsonline, we recommend that you also vote by proxy as follows:



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        We do not expect any other business to come before the meeting. If any other matter is presented, your proxy provides that your shares will be voted by the proxy holder listed in the proxy in accordance with his or her best judgment. At the time this Proxy Statement was first made available, we knew of no matters that needed to be acted on at the Annual Meeting, other than those discussed in this Proxy Statement.

May I Change or Revoke My Proxy?

        If you give us your proxy, you may change or revoke it at any time before the meeting. You may change or revoke your proxy in any one of the following ways:

        Your most current vote, whether by telephone, Internet or proxy card, is the one that will be counted.

What if I Receive More Than One Notice or Proxy Card?

        You may receive more than one Notice or proxy card if you hold shares of our common stock in more than one account, which may be in registered form or held in street name. Please vote in the manner described under "How Do I Vote?" for each account to ensure that all of your shares are voted.

What are "broker non-votes"?

        If a broker or other financial institution holds your shares in its name and you do not provide voting instructions to it, New York Stock Exchange, or NYSE, rules allow that firmentitled to vote your shares only on routine matters. Proposal #2,that are not cast in favor of a proposal, abstentions have the ratification of the appointment of our independent registered public accounting firm for 2016, is the only matter for consideration at the meeting that NYSE rules deem to be routine. For all matters other than Proposal #2, you must submit voting instructions to the firm (broker, bank, or other nominee) that holds your shares if you want your vote to count. When a firmsame effect as votes a client's shares on some but not all of the proposals, the missing votes are referred to as "broker non-votes."

Will My Shares be Voted if I Do Not Vote?

        If your shares are registered in your name, they will not be voted if you do not vote as described above under "How Do I Vote?" If your shares are held in street name by a bank, broker or other holder of record (nominee) and you do not provide voting instructions to the nominee that holds your shares as described above, the nominee has the authority to vote your unvoted shares only on"against" this proposal. Because the ratification of our independent registered public accounting firm (Proposal #2), unless the nominee receives instructions from you. Therefore, we encourage you to provide voting instructions. This ensures your sharesis considered a "routine" matter, brokers will be votedentitled to vote on the proposal at their discretion. Therefore, broker non-votes will have the same effect as a vote against the proposal.

        The affirmative vote of the holders of a majority of the shares of common stock represented in person or by proxy at the meetingAnnual Meeting and entitled to vote is required for approval of the advisory vote on executive compensation. Because they represent votes present and entitled to vote that are not cast in favor of a proposal, abstentions have the manner you desire.same effect as votes "against" the say-on pay proposal. Broker non-votes, however, will not be considered as entitled to vote on this proposal, and therefore, will have no effect on the outcome of this proposal.


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What Vote is Required to Approve Each Proposal Revocation and How are Votes Counted?

Proposal #1: Election of Directors

Under Utah law, a nominee who receives a plurality of the votes cast at the Annual Meeting will be elected as a director. The "plurality" standard means the nominees who receive the largest number of "for" votes (also known as a "plurality" of the votes) will be elected. The number of shares not voted for the election of a nominee (and the number of "withhold" votes cast with respect to that nominee) are not counted and will not affect the determination of whether that nominee has received the necessary votes for election under Utah law. You may vote either FOR all of the nominees, WITHHOLD your vote from all of the nominees or WITHHOLD your vote from any one or more of the nominees. Votes that are withheld will not be included in the vote tally for the election of directors. Broker non-votes will have no effect on the results of this vote.

Proposal #2: Ratification of Independent Registered Public Accounting Firm

The affirmative vote of the shareholders representing a majority of the shares present and entitled to vote at the Annual Meeting is required to ratify the selection of KPMG LLP as our independent registered public accounting firm for our 2016 fiscal year. Shares present but not voted because of abstention will have the same effect on the results of this vote as a vote "Against." We are not required to obtain the approval of our shareholders to select our independent registered public accounting firm. However, if our shareholders do not ratify the selection of KPMG LLP as our independent registered public accounting firm for the 2016 fiscal year, the Audit Committee of our Board of Directors may reconsider its selection.

Is Voting Confidential?of Proxies

        We will keep allAny proxy given pursuant to this solicitation may be revoked by the proxies, ballots and voting tabulations private. We only let our Inspector of Elections examine these documents. Management, other than the Inspector of Elections, will not know how you voted on a specific proposal unlessperson giving it is necessary to meet legal requirements. We will, however, forward to managementat any written comments you make, on the proxy card or elsewhere.

Who Will Count the Votes?

        Broadridge Investor Communications Services will tabulate the votes that are receivedtime prior to the voting thereof by (i) delivering to the Corporate Secretary of the Company a revocation of proxy, (ii) executing a new proxy bearing a later date, or (iii) attending and voting at the virtual Annual Meeting. RepresentativesAttendance at the virtual Annual Meeting will not, by itself, revoke a proxy. Please note, however, that if your shares are held of USANArecord by a broker, bank, or other nominee and you wish to revoke a proxy, you must contact that firm to revoke any prior voting instructions.

        All valid, unrevoked proxies will actbe voted in accordance with the specifications and as directed. If a proxy is properly executed and returned and no voting specifications are indicated, the Inspectorsshares will be voted:

        With respect to such other matters as may properly come before the Annual Meeting, votes will tabulatebe cast in the votes, ifdiscretion of the appointed proxies. We are not aware of any other matters that are cast in personto be presented for action at the Annual Meeting.

Where Can I Find Proxy Solicitation

        We are making this proxy solicitation both through the Voting Resultsmail and Internet, although proxies may be solicited by personal interview, telephone, facsimile, letter, e-mail or otherwise. Certain of our directors, officers and other employees, without additional compensation, may participate in the solicitation of proxies. We will pay the cost of this solicitation, including the reasonable charges and expenses of brokerage firms and others who forward solicitation materials to beneficial owners of the common stock.

Attending the Virtual Annual Meeting?Meeting

        Shareholders as of the Record Date are invited to attend the virtual Annual Meeting by visitingwww.virtualshareholdermeeting.com/USNA. To participate in the Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability of the proxy materials. The Annual Meeting will begin promptly at 11:00 a.m. (Mountain Daylight Time). Online check-in will begin at 10:55 a.m., (Mountain Daylight Time), and you should allow sufficient time for the online check-in procedures.

Voting Results

        Voting results will be tabulated and certified by the inspector of elections appointed for the Annual Meeting. The preliminary voting results will be announced at the Annual Meeting, and we will publish preliminary, orMeeting. The final results if available,will be tallied by the inspector of elections and filed with the SEC in a Current Reportcurrent report on Form 8-K within four business days of the Annual Meeting. If final results are unavailable at


PROPOSAL #1—ELECTION OF DIRECTORS

        It is proposed to elect seven directors nominated in this statement to serve until the time we fileannual meeting of shareholders in 2019, and until successors shall have been duly elected and qualified. Proxies cannot be voted for more than seven persons. Unless otherwise specified in the Form 8-K, then we will fileaccompanying


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an amended report on Form 8-K to discloseproxy, the final voting results within four business days after the final voting results are known.

Who Pays the Costs of Soliciting these Proxies?

        These proxies are solicited by our Board of Directors and we will pay all of the costs of soliciting these proxies. Our directors and employees may solicit proxies in person or by telephone, fax or email. We will pay these employees and directors no additional compensation for these services. We will ask banks, brokers and other institutions, nominees and fiduciaries to forward these proxy materials to their principals and to obtain authority to deliver proxies. We will then reimburse them for their expenses.

What Constitutes a Quorum for the Annual Meeting?

        The presence, in person orshares voted by proxy of the holders of a majority of the voting power of our common stock outstanding on the record date is necessary to constitute a quorum at the meeting. As of the close of business on the record date, there were 11,944,164 shares of our common stock outstanding. Both abstentions and broker non-votes are counted for purposes of determining whether a quorum exists. For the purpose of determining whether the shareholders have approved matters other thanwill be voted FOR the election of directors, abstentions are treated as shares present or represented and voting, so abstainingthe persons listed for a term expiring in 2019.

        Each of the nominees listed below has the same effectagreed to serve as a negative vote. Directors aredirector if elected. We know of no reason why the nominees would not be available for election or, if elected, based onwould not be able to serve. If any nominee is unable to serve or for good cause will not serve as a pluralitynominee at the time of votes cast. Shares held by brokers who do not have discretionary authority to vote on a particular matter and who have not received voting instructions from their customers are counted for determining the presence or absence of a quorum for conducting business but are not counted or deemed to be present or represented for the purpose of determining whether shareholders have approved that matter.

Attending the Annual Meeting

        The Annual Meeting will be held at 9:30 a.m. local time on Monday, May 2, 2016, at our offices at 3838 West Parkway Boulevard, Salt Lake City, Utah. When you arrive at our offices, our personnel will direct you to the appropriate meeting room. You need not attend the Annual Meeting, to vote.

Householding of Annual Disclosure Documents

        SEC rules concerning the delivery of annual disclosure documents allow us or your broker to sendpersons named as proxies may vote for a single Notice or, if applicable, a single set of our proxy materials to any household at which two or more of our shareholders reside, if we or your broker believe that the shareholders are members of the same family. This practice, referred to as "householding," benefits both you and us. It reduces the volume of duplicate information received at your household and helps to reduce our expenses. The rule applies to our Notices, annual reports, proxy statements and information statements. Once you receive notice from your broker or from us that communications to your address will be "householded," the practice will continue until you are otherwise notified or until you revoke your consent to the practice. Shareholders who participate in householding will continue to have access to and utilize separate proxy voting instructions.

        If your household received a single Notice or, if applicable, set of proxy materials this year, but you would prefer to receive your own copy, please contact Broadridge, by calling their toll free number 1-800-542-1061. If you do not wish to participate in "householding" and would like to receive your own Notice or, if applicable, set of proxy materials in future years, follow the instructions described below. Conversely, if you share an address with another USANA shareholder and together


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both of you would like to receive only a single Notice or, if applicable, set of proxy materials, follow these instructions:

Electronic Delivery of Company Shareholder Communications

        Most shareholders can elect to receive notices of the availability of future proxy materials by email instead of receiving a paper copy in the mail. You can choose this option and save us the cost of producing and mailing these documents by following the instructions provided on your Notice or proxy card or following the instructions provided when you vote over the Internet at www.proxyvote.com.

How Do I Submit and What are the Deadlines for Submitting a Shareholder Proposal for Next Year's Annual Meeting?

        Shareholders are entitled to present proposals for consideration at the next annual meeting of shareholders, provided that they comply with the proxy rules promulgateddesignated by the SEC and our Bylaws. Any shareholder who intendsBoard to submit a proposal for consideration atfill the 2017 Annual Meeting of Shareholders must deliver such proposal to the Corporate Secretary, c/o USANA Health Sciences, Inc., 3838 West Parkway Blvd., Salt Lake City, Utah 84120, not later than 120 days prior to the one-year anniversary of the date on which this Proxy Statement is first mailed, which date is November 24, 2016, if the proposal is submitted for inclusion in our proxy materials for that meeting pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 ("Exchange Act").

Who Should I Call if I Have Questions?

        If you have questions about the proposals or the Annual Meeting, you may call Patrique Richards, USANA Investor Relations, at (801) 954-7100. You may also send an e-mail toinvestor.relations@us.usana.com.

PROPOSAL #1—ELECTION OF DIRECTORS

        Our Bylaws provide that the shareholders or the Board of Directors shall determine the number of directors from time to time, but that there shall be no less than three directors. The Board of Directors, by resolution, has set the number of directors at seven. The Governance, Risk and Nominating Committee of the Board of Directors has nominated and recommends that four incumbent directors stand for re-election and that three new individuals be elected at the Annual Meeting. The four incumbent directors that will stand for re-election are Myron W. Wentz, Ph.D., Gilbert A. Fuller, Robert Anciaux and D. Richard Williams. Mr. Williams was appointed to the Board effective March 1, 2016 and has served as a director since that time. The three new individuals who will stand for election to the Board are our Co-Chief Executive Officer, David A. Wentz, Frederic Winssinger and Feng Peng. Incumbent directors Jerry G. McClain and Ronald S. Poelman will serve as directors until the Annual Shareholder Meeting and then retire from the Board.vacancy.

        The Governance, Risk and& Nominating Committee believeshas determined that all directors must, at a minimum, meeteach nominee listed below meets the criteria set forth in its charter and in the USANA Corporate Governance Guidelines and in the Charter of the Governance, Risk and Nominating Committee, which specify, among other things, thatGuidelines. Those guidelines direct the committee willto consider criteria such as the director'snominee's independence, expertise, and experience applicable to our business, substantive knowledge of our industry, high personal and professional ethics and the ability and willingness to devote the required time to the business of the Company.


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        Each director who is elected at the Annual Meeting will hold office until the Company's Annual Meeting in 2017, until a successor is elected and qualified, or until the director resigns, is removed, or becomes disqualified. The Board of Directors has no reason to In addition, we believe that any of the nominees for director will be unwilling or unable to serve, if elected. If due to unforeseen circumstances aeach nominee should become unavailable for election, the Board may either reduce the number of directors or may substitute another person for that nominee, in which event your shares will be voted for that other person.

        The Governance, Risk and Nominating Committee has determined that our incumbent directors and director nominees meet the criteria and qualifications set forth in the Company's Code of Ethics for Directors and Employees, Corporate Governance Guidelines and the Governance, Risk and Nominating Committee Charter. In addition, each director possesses the personal qualities and attributes we believe areconsider to be essential to allow the Board of Directors to fulfill its duties to the shareholders, including personal accountability, integrity, ethical leadership, risk management, business acumen, and the ability to exercise sound and independent business judgment.

Director Nominees

        Seven directors will stand for election at the Annual Meeting. The nominees to the Board of Directors in 2016for director are Robert Anciaux, Gilbert A. Fuller, Kevin Guest, J. Scott Nixon, Feng Peng, Myron W. Wentz, Ph.D., David A. Wentz, D. Richard Williams and Frederic Winssinger. Currently, Robert Anciaux, Gilbert A. Fuller, Myron W. Wentz, Ph.D., and D. Richard Williams serve as members of the Board of Directors. Messrs. Fuller, and Williams are independent directors under the rules of the NYSE. Additionally, the Board has determined that Mr. Peng and Mr. Winssinger, if elected, will be independent directors under the rules of the NYSE. The following information is furnished with respect to these nominees:

        Robert Anciaux 70,, 72. Mr. Anciaux has served as a director of USANA since July 1996. Since 1990, he has been the Managing Director of S.E.I. s.a., a consulting and investment management firm in Brussels, Belgium. Additionally, since 1982, Mr. Anciaux has been self-employed as a venture capitalist in Europe, investing in various commercial, industrial, and real estate venture companies. In some of these privately held companies, Mr. Anciaux also serves as a director. Mr. Anciaux received an Ingenieur Commercial degree from Ecole de Commerce Solvay Universite Libre de Bruxelles. We believe that Mr. Anciaux's qualifications to sit on our Board include his financial expertise and experience in providing consulting and strategic advisory services to complex organizations.organizations, and his extensive experience and familiarity with the business of the Company qualify him to serve on our Board.

        Gilbert A. Fuller, 75,77, Independent Director, Audit Committee Chairman, Governance, Risk & Nominating Committee Chairman. Mr. Fuller has served as a director of USANA since September 2008. Prior to that, he served as our Executive Vice President, Chief Financial Officer, and Secretary since January 2006. Mr. Fuller joined USANA in May 1996, as the Vice President of Finance and served in this role until June 1999, when he was appointed as the Company's Senior Vice President. Before joining USANA, Mr. Fuller served in various executive positions for several companies. Mr. Fuller served as Chief Administrative Officer and Treasurer of Melaleuca, Inc., a manufacturer, and direct seller of personal care products. He was also the Vice President and Treasurer of Norton Company, a multinational manufacturer of ceramics and abrasives. He obtained his certified public accountant license in 1970 and kept it current until his career path developed into corporate finance. Mr. Fuller received a B.S. in Accounting and an M.B.A. from the University of Utah. In December 2012, Mr. Fuller was appointed as a director of Security National Financial Corporation, a NASDAQ-listed company. We believe that Mr. Fuller's qualifications to sit on our Board include hismore than 12 years of experience as an executive officer of USANA, his deep understanding of our business, people and products, his 15 years of experience as a financial officer in the direct selling industry, as well as his accounting, finance and corporate strategy expertise.expertise qualify Mr. Fuller to serve on our Board of Directors.

Kevin Guest, 55, Chief Executive Officer. Mr. Guest joined USANA on a part-time basis in April 2003, as Executive Director of Media and Events. Following our acquisition of the media, video, and event-productions company, FMG Productions founded by Mr. Guest, he became a full-time employee


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of the Company and he was promoted to Vice President of Media and Events in February 2004. In January 2006, he was appointed Executive Vice President of Marketing and served in that role until July 2008, when he was appointed Chief Marketing Officer. Mr. Guest served in this role until May 2011, when he was appointed President of North America. In October 2012, he was appointed President of the Americas, Europe and South Pacific. In August 2014, Mr. Guest was appointed President of USANA and served in this role until August 2015, when he was appointed Co-Chief Executive Officer. He served in this role until November 2016 when he was appointed Chief Executive Officer. Mr. Guest earned a B.A. in Communications from Brigham Young University. Mr. Guest's important role as the leading force of our management and sales efforts and his talent as a motivating leader qualify him to serve as a member of the Board.

J. Scott Nixon, 58, Independent Director, Audit Committee, Compensation Committee, Governance, Risk & Nominating Committee member. Mr. Nixon was appointed to our Board of Directors in October 2017. He is a certified public accountant, and retired in 2015 as a partner with PricewaterhouseCoopers LLP (PwC), where he spent over 31 years in various roles including Office Managing Partner and engagement partner over public and private companies in many industries. His career involved providing audit and business advisory services. Mr. Nixon was involved in numerous complex filings with the SEC on behalf of his clients. In 2007, Mr. Nixon returned from a four-year assignment in São Paulo, Brazil where he represented various interests of the PwC global firm to the 18-member firms in South and Central America, and led the implementation and compliance of the Sarbanes-Oxley requirements in those countries. Mr. Nixon has served as a member of the board of directors of ProLung, Inc. since November 2016. He also serves on several boards of directors for private and non-profit companies, including Deseret Trust Company as a member of the audit and executive committees since 2015 and Utah State University Board of Trustees, as chairman of the audit committee since 2011. Mr. Nixon is a National Association of Corporate Directors (NACD) Governance Fellow. He holds both a BA and Master of Accounting from Utah State University. Mr. Nixon was appointed director because of his extensive experience in public accounting, corporate development and leadership.

        Feng Peng, 42, is nominated for election as a director of44, Independent Director, Audit Committee, Compensation Committee and Governance, Risk & Nominating Committee member. Mr. Peng was elected to the Company at the Annual Meeting. SinceBoard in May 2016. From March 2013 to December 2016, Mr. Peng has served as Chief Financial Officer of Ossen Innovation Co., Ltd. (NASDAQ:OSN), a China-based manufacturing company listed on the NASDAQ exchange.company. Prior to that, Mr. Peng served as Senior Vice President at MZ Group from August 2007 until September 2012 where he was


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responsible for providing strategic consulting services related to U.S. capital markets to Chinese clients. At MZ Group, Mr. Peng conducted extensive financial and industry due diligence, performed analysis on companies' financials, and provided management teams of client companies with extensive coaching, including detailed intelligence on investor expectations, perceptions and concerns, industry analysis, compliance, and reporting and disclosure requirements. Prior to working at MZ Group, he served in various capacities at Thomson Financial and Citigroup. Mr. Peng has been trained in both finance and accounting. He received a Master of Science in Computer Science from the New Jersey Institute of Technology. He also received a bachelor's degree in Automation Control from Shanghai Jiao Tong University in Shanghai, China in 1995. Mr. Peng is a certified Senior International Finance Manager (SIFM) in China. Mr. Peng's qualifications to sit on our Board include his extensive business experience in China, as well as his financial and corporate strategy experience.

David A. Wentz. Biographical information for David A. Wentz is set out below with the other executive officers of the Company.

        Myron W. Wentz, Ph.D., 75,77, Founder and Chairman of the Board. Dr. Wentz founded USANA in 1992 and served as the Chief Executive Officer and Chairman of the Board of USANA from the time of its inception1992 to July 2008, when he retired as Chief Executive Officer. Dr. Wentz continues to serve as Chairman of the Board. In 1974, Dr. Wentz founded Gull Laboratories, Inc., which was a developer and manufacturer of medical diagnostic test kits and was the former parent corporation of USANA. Dr. Wentz served aswas Chairman of Gull from 1974 until 1998. In 1998, Dr. Wentz founded Sanoviv, S.A. de C.V. ("Sanoviv"), a healthholistic integrative medical center and wellness center that ishospital located


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near Rosarito, Mexico. Joining a pathology group in Peoria, Illinois, from 1969 to 1973, Dr. Wentz served as infectious disease specialist and directed the microbiology and immunology laboratories for three hospitals in the Peoria area. He received a B.S. in Biology from North Central College, Naperville, Illinois, an M.S. in Microbiology from the University of North Dakota, and a Ph.D. in Microbiology and Immunology from the University of Utah. Dr. Wentz's qualifications to sit onWentz is our Board include hislargest shareholder, founder, and the visionary force behind the science and mission of USANA. His vast education and professional experience as a microbiologist, immunologist, and pioneer in the development of human cell culture technology, as well as his service as our founder, Chairman and formerlyformer Chief Executive Officer, uniquely qualify him to serve as a member of our Board and as our Chief Executive Officer.

D. Richard Williams, 59, was appointed a director in March 2016. Mr. Williams has served as non-executive Chairman of Primerica, Inc. since April 2015 and as Chairman from October 2009 through March 2015. Prior to that, he served as Co-Chief Executive Officer from 1999 through March 2015. Mr. Williams worked for Primerica beginning in 1989 and served in various capacities, including as the Chief Financial Officer and Chief Operating Officer of the Primerica operating unit of Citigroup. Mr. Williams serves on the Board of Trustees of the Woodruff Arts Center, the Anti-Defamation League Southeast Region, the Atlanta Area Council of the Boy Scouts of America, and the Carter Center Board of Councilors. In February 2016, Mr. Williams was appointed to the board of directors of Crawford & Company, an NYSE-listed company. Mr. Williams received both his B.S. degree and his M.B.A. from the Wharton School of the University of Pennsylvania. Mr. William's qualifications to sit on our Board include his extensive expertise in senior management, finance, M&A, strategic planning, and risk and asset management.Chairman.

        Frederic J. Winssinger, 47, is nominated for election as49, Independent Director, Audit Committee, Compensation Committee and Governance, Risk & Nominating Committee member. Mr. Winssinger became a director of the Company at the Annual Meeting.in May 2016. Mr. Winssinger has been a Managing Partner of RW Partners LLC (RWP) since 2006. RWP is a commercial real estate private equity investment company based in Phoenix, Arizona. Mr. Winssinger also oversees his family officefamily's general investment operations and in 2014, he co-founded PlanningCorePlanninCore Wealth Advisors to provide investment advice to individuals and families. Prior to 2006, Mr. Winssinger worked in strategy consulting for the Boston Consulting Group and as a Portfolio Manager/Financial Analyst for JP Morgan Asset Management and other privately held asset management companies. Mr. Winssinger received a B.A. in Mathematics and Economics from Claremont McKenna College and an M.B.A from The Wharton School of the University of Pennsylvania. Mr. Winssinger's qualifications to sit on our Board include his 20 years of experience in


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financial analysis, and his training in evaluating corporate strategy towards the creation of shareholder value under sound corporate governance.

RECOMMENDATION OF THE BOARD OF DIRECTORS

The Board of Directors unanimously recommends a voteFOR each director nominee.nominee named above.


BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

        We have adopted a number of policies and practices, some of which we describe in this section of the proxy statement, which highlight our commitment to sound corporate governance principles. We also maintain a corporate governance page on our website that includes additional related information, as well as our codes of conduct, principles of corporate governance, and the charters for each of the standing committees of the Board of Directors. The "Corporate Governance" page is located on the "Investor Relations" section of our website atwww.usana.com. The information contained on the website is not incorporated by reference in, or considered part of, this Proxy Statement.

Independent Directors

        In accordance with the current listing standards of The New York Stock Exchange ("NYSE"), the Board of Directors, on an annual basis, affirmatively determines the independence of each director or nominee for election as a director. The Board of Directors has determined that, with the exception of Dr. Wentz, Mr. Anciaux and Mr. Guest, who is our Chief Executive Officer, all of its members are "independent directors," using the definition of that term in the listed company manual of the NYSE. All members of the Board's Audit, Compensation, and Governance, Risk & Nominating Committees are independent directors, and all members of the Audit and Compensation Committees are independent in accordance with the additional standards applicable to those committees.


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Communicating with the Board of Directors

        Our shareholders or other interested parties wishing to communicate with the Board of Directors, the non-management directors as a group, or any individual director may do so in writing by addressing the correspondence to that individual or group as follows:

        Please address any communication by e-mail to investor.relations@us.usana.com and mark "Attention: Corporate Secretary" in the "Subject" field.

        Our General Counsel serves as Corporate Secretary and determines, in his discretion, whether the nature of the communication is such that should be brought to the attention of the Board of Directors, a committee, the Lead Independent Director, or all independent directors. Accounting, audit, internal accounting controls, and other financial matters will be referred to the Chair of the Audit Committee. Other matters will be referred to the non-management directors, or individual directors as appropriate. As a general matter, the Corporate Secretary does not forward spam, junk mail, mass mailings, job inquiries, surveys, business solicitations, advertisements, or offensive or inappropriate material.

Principles of Corporate Governance

        We have summarized below governance practices used to ensure effective independent oversight of Board decisions.

Stock Ownership Requirements

        To align the interests of our executive officers and members of the Board of Directors with the interests of our shareholders, and to promote our commitment to sound corporate governance, in October 2017 we formalized our stock ownership requirements for our executive officers. As approved by the Board of Directors, our officers are required to hold USANA common stock of a value equal to a multiple of their annual base salary as follows:

Position
Stock Ownership Requirement
Chief Executive Officer1.5 times base salary
All other executive officers1 times base salary

        More information about these stock ownership requirements is provided later in this Proxy Statement in the section titled "Compensation Discussion and Analysis."

Lead Independent Director

        Because the Board believes that strong, independent board leadership is an important aspect of corporate governance, the Board has historically utilized a Lead Independent Director. The Lead Independent Director is an independent director elected for a one year term by the other independent directors and is accountable toresponsible for coordinating the shareholdersactivities of the Company.other independent directors. The Board establishes policy and provides strategic direction, oversight, and controlLead Independent Director has the authority to preside at all executive sessions of the Company. The Board met seven times during fiscal year 2015. All 2015independent directors attendedand at least 75% of the meetings of the Board of Directors when the Chairman is not present, and is a contact person for shareholders and third parties who may desire to contact the Board Committeesindependently of which they are members.

Board Leadership Structure;the Chairman. Mr. Fuller was Lead Independent Director during fiscal year 2017.


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Separation of Chairman and Chief Executive Officer Roles

        Although the Board of Directors does not have a formal policy on whether the roles of Chief Executive Officer and Chairman should be separate, USANA has separately maintained these roles since 2008. Separating the Chief Executive Officer and Chairman roles allows us to efficiently develop and implement corporate strategy that is consistent with the Board's oversight role, while facilitating strong day-to-day leadership. Our founder, Dr. Myron Wentz, is the Chairman of our Board of Directors. Historically, David A. Wentz has served asDirectors and Kevin Guest is our Chief Executive Officer. In light of the significant demands on the CEO position at USANA, in August 2015, the Board appointed David A. WentzOfficer and Kevin Guest as Co-Chief Executive Officers or Co-CEOs. In his role, Mr. Wentz oversees USANA's global operations, while Mr. Guest leads USANA's worldwide field development and sales efforts. Both Mr. Wentz and Mr. Guest reportreports directly to the Board of Directors.

        The Board has not adopted a specific policy on whether the same person should serve as both the CEO and chairman of the board or, if the roles are separate, whether the chairman should be selected from the non-employee directors or should be an employee.Board. The Board believes it is most appropriate to retain the discretion and flexibility to make these determinations at any given point in time in the way that it believes best to provide appropriate leadership for the Company at that time.

        We believe it is currently appropriate to separate the roles of CEOChief Executive Officer and Chairman of the Board as a result of the demands of and differences between each role. Our Co-CEOs areChief Executive Officer is responsible for setting the strategic direction for the Company, with guidance from the Board. They areThe Chief Executive Officer is also responsible for the day-to-day leadership and performance of the Company, while the Chairman of the Board provides guidance to the Co-CEOsChief Executive Officer and sets the agenda for Board meetings and presides over meetings of the full Board. Although Dr. Wentz is not independent under the rules of the NYSE, the Board believes the experience, leadership and vision he provides as Chairman of the Board isare essential to the short-and-long-term success of the Company.

Term Limits and Mandatory Retirement Age

        The Board maintainsof Directors does not believe it should establish a numbermaximum length of governance practicesservice or a mandatory retirement age for directors. The Board believes that the skill set and perspectives of its members should remain sufficiently current and broad in dealing with current and changing business dynamics, and therefore seeks to ensure effective independent oversightmaintain a balance of directors with varying lengths of service and ages. While the Board decisions, including (i)recognizes that term limits and/or a mandatory retirement age could assist in this regard, they may have the appointmentunintended consequence of strong, independent directors who constitute a majority offorcing the Board and intimately understand the Company's businessCompany to lose the contribution of directors who over time have developed increased judgment, knowledge, and industry; (ii) executive sessions ofvaluable insight into the independent directors in connection with every Board meeting;Company and (iii) annual evaluations of the performance of the Board, carried out by the independent directors. Because theits operations. The Board also believes that strong,there are other, more effective means to address board refreshment, including through a robust annual self-assessment process.

Executive Sessions of Non-Management Directors

        In accordance with the NYSE, our independent board leadership is an important aspect of corporate governance,directors on the Board established the position of Lead DirectorDirectors and on its standing committees regularly meet in 2013.executive session without employee directors or other executive officers present as part of every regularly scheduled meeting. The Lead Director is an independent director elected for a one year term by the independent directors. The LeadIndependent Director chairs these executive sessions. In the Board meetings during all executive sessions and when the Chairman is unable to participate in Board meetings, and is a contact person for shareholders and third parties who may desire to contact the Board independently of the Chairman. Mr. Poelman was appointed Lead Director in 2015 and will serve in this capacity until the Annual Meeting, after which a new Lead Director will be appointed. Additional responsibilities ofevent that the Lead Director include:

    Settingcannot preside at an executive session, the agenda for and leading regularly-held independent director sessions and briefing the Chairman on those sessions;

    Coordinating the activitiescommittee chairs of the independent directors;
Audit, Compensation and Governance, Risk & Nominating Committees lead these meetings on a rotating basis.

Prohibition Against Pledging USANA Securities and Hedging Transactions

        Consistent with our Insider Trading Policy, we prohibit our executive officers and members of the Board of Directors from pledging our common stock or other securities and engaging in hedging transactions with respect to our securities. Our policies specifically prohibit our executive officers and non-employee directors from holding our securities in any margin account for investment purposes or otherwise using our securities as collateral for a loan. Our policy prohibits the purchasing of certain instruments (including prepaid variable forward contracts, equity swaps, and collars) and engaging in


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short sales of our stock and other similar transactions that could be used to hedge or offset any decrease in the value of our securities.

Code of Ethics

        We have adopted a code of ethics that applies to all of our directors, officers (including our Chief Executive Officer and Chief Financial Officer), and employees. We require that all of our directors, officers, and employees certify on an annual basis that they comply with the code. In the future, if we make any amendment to, or grant any waivers of, a provision of our Code of Ethics that applies to our principal executive officer, principal financial officer or principal accounting officer that requires disclosure under applicable SEC rules, we will disclose such amendment or waiver and the reasons therefor on a Current Report on Form 8-K or on our next periodic report filed under the Securities Exchange Act of 1934, as amended ("Exchange Act").

Corporate Governance Guidelines

        We have also adopted Corporate Governance Guidelines that outline the Company's corporate governance policies and principles.

Committees of the Board of Directors

        Our Board of Directors has three standing committees: the Audit Committee, the Compensation Committee, and the Governance, Risk & Nominating Committee. Each committee meets regularly and you may find the written charters for the committees on the "Corporate Governance" page of the "Investor Relations" section of our website atwww.usana.com. At each regularly scheduled Board meeting, the Chair or a member of each committee reports on any significant matters addressed by the committee.

Annual Assessment of Board Effectiveness

        To ensure that our Board of Directors and its committees are performing effectively and in the best interests of the Company and its shareholders, the Board performs an annual assessment of itself, its committees, and its members, overseen by the Governance, Risk & Nominating Committee.

Risk Oversight and Management

        Our Board of Directors is actively involved in the oversight and management of the material risks that could affect the Company. The Board of Directors carries out its risk oversight and management responsibilities by monitoring risk directly as a full board and, where appropriate, through its committees. Effective risk oversight is a priority of the Board of Directors.

        Our Board of Directors has delegated primary responsibility for overseeing our risk management process to the Audit Committee. The Audit Committee oversees our risk identification and mitigation processes and specifically oversees management of our financial, legal and fraud policies, as well as our regulatory compliance risks. This includes regular evaluation of risks related to the Company's financial statements, including internal control over financial reporting, and risks relating to liquidity, capital structure, and investments, including land acquisition and development. The Board and its committees also receive regular reports from members of senior management on areas of material risk to the company, including strategic, operational, financial, legal, and regulatory risks. While the Board has an oversight role, management has the direct responsibility for management and assessment of risks and the implementation of processes and controls to mitigate their effects on the company. Each standing


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committee of the Board has the following risk oversight responsibilities and provides regular reports to the Board on at least a quarterly basis:

Audit Committee

        The Audit Committee oversees the management of the following financial risks:

    Presiding at meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors;accounting matters

    Acting as a liaisonliquidity and credit risks

    corporate tax positions

    insurance coverage

    cash investment strategy

    financial results

        In addition, the committee is responsible for managing risk relating to our financial and business process systems, including the performance of our internal audit function and its independent registered public accounting firm, whistleblower complaints and internal investigations, systems of internal controls and disclosure controls and procedures, and IT security matters.

Compensation Committee

        The Compensation Committee oversees the management of the independent directors to the Chairmanfollowing risks:

    executive compensation;

    compensation and Co-CEOs for the viewsbenefit plans and any concernsarrangements;

    compensation strategies, practices and issues of the independent directors;policies; and

    Performing other dutiesBoard of Directors' compensation.

        The Compensation Committee ensures that the Board may from timeour compensation programs, including those applicable to time delegateour executives, do not encourage excessive risk taking. The Compensation Committee works periodically with its independent compensation consultant to assist the Boardstructure executive compensation plans that are appropriately balanced and that incentivize management to act in the fulfillmentbest interest of its responsibilities.our shareholders.

Director Independence Governance, Risk & Nominating Committee

        NYSE rules and regulations generally require listed companies to have a board of directors with a majority of independent directors. A majorityThe Governance, Risk & Nominating Committee oversees management of the membersfollowing risks:

    corporate governance practices;

    compliance and ethics programs;

    regulatory risk;

    director independence;

    Board composition;

    Board performance; and

    annual assessment of Board effectiveness.

        The committee also reviews, monitors and assesses the allocation of responsibility for risk oversight among the Board and the standing committees of the Board.


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Composition and Meetings of the Board of Directors and its Committees

        The shareholders elect our Board of Directors are independent, as discussed below.

        To assistannually for one-year terms. Currently we have eight directors, with seven directors standing for re-election at the 2018 Annual Meeting of Shareholders. In connection with pursuing other business endeavors, Mr. Williams is not standing for re-election to the Board in making its determination regarding2018. The Board establishes policy and provides strategic direction, oversight, and control of the Company. The Board of Directors met four times during fiscal year 2017 and each director independence,attended at least 75% in the aggregate of the total number of meetings of the Board of Directors and the committees on which he served during fiscal year 2017. We encourage, but do not require, members of the Board of Directors to attend our Annual Meeting of Shareholders, and five of our (then) seven directors attended last year's Annual Meeting.

Audit Committee

        The Audit Committee has adopted independence standards that conformbeen formed to comply with the independence requirements of the NYSE. In addition to evaluating each director's independence,definition of "audit committee" under Section 3(a)(58)(A) of the Board considers all relevant factsExchange Act. Members of the Audit Committee as of December 30, 2017 include its chair, Mr. Fuller, and circumstances in making its independence determination. We assess director independence on an annual basis.directors Nixon, Peng, Williams, and Winssinger. The Board has determined, after careful review, that all of the currently serving directors, other than Dr. Myron Wentz and Robert Anciaux, are independent based on the applicable rules of the NYSE and the applicable regulations of the SEC. In particular, the Board noted that, other than their service as directors of the Company, Gilbert A. Fuller, D. Richard Williams, Jerry G. McClain and Ronald S. Poelman had no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization thatDirectors has a relationship with the Company) and determined that each member of themthe Audit Committee meets the independence criteria established by the SEC under Rule 10A-3 under the Exchange Act and qualifies under the independence standards of the NYSE. The Board of Directors has determined that each member of the Audit Committee is "independent" under NYSE listing standards.financially literate, as interpreted by the Board in its business judgment. The Board has also determined that each member of the new individuals who will standcommittee, with the exception of Mr. Peng, qualifies as an "audit committee financial expert" as defined in Item 407(d)(5) of Regulation S-K of the Exchange Act. The Board has also determined that each member of the committee qualifies as an "independent director" as independence for election ataudit committee members is defined in the Annual Meeting, other than David A. Wentz (our Co-CEO), would beNYSE listing standards. The Audit Committee met 17 times during fiscal 2017.

        The Audit Committee appoints and establishes the compensation for our independent if elected, based onregistered public accounting firm, approves in advance all engagements with the applicable rulesindependent registered public accounting firm to perform audit and non-audit services, reviews and approves the procedures used by us to prepare our periodic reports, reviews and approves our critical accounting policies. The Audit Committee also discusses audit plans and reviews results of the audit engagement with our independent registered public accounting firm, obtains and reviews a report of our independent registered public accounting firm describing certain matters required by the listing standards of the NYSE, reviews the independence of our independent registered public accounting firm, oversees our internal audit function and our accounting processes, including the applicable regulationsadequacy of the SEC.

Communications with Directors

        Our shareholders or other interested parties wishingour internal control over financial reporting and, where it determines to communicate with the Board of Directors, the non-management directors as a group, or any individual director may do so, in writing by addressing the correspondence to that individual or group, c/o James H. Bramble, Corporate Secretary, USANA Health Sciences, Inc., 3838 West Parkway Boulevard, Salt Lake City, Utah 84120. All such communications will be initially received and processed by our Corporate Secretary. Accounting, audit, internal accounting controls and other financial matters will be referred to our Audit Committee chair. Other matters will be referredmakes recommendations to the Board of Directors the non-management directors, or individual directors as appropriate.

        Directors are encouraged by the Companywith respect to attend the Annual Meeting of Shareholders if their schedules permit. All directors who served in 2015, except Dr. Wentz, were present at the Company's Annual Meetingrotation of the Shareholderslead partner or the independent registered public accounting firm. Our independent registered public accounting firm and internal audit department report directly to the Audit Committee. The Audit Committee also oversees and approves certain related party transactions and other matters that was held in April 2015.

Committeesmay involve conflicts of theinterest. In fulfilling these functions, our Audit Committee reviews and makes recommendations to our Board of Directors with respect to certain financial and accounting matters.

Governance, Risk & Nominating Committee

        The Board of Directors has a separately-designated standing Audit Committee, Compensation Committee, and Governance, Risk and Nominating Committee. Information about the composition and responsibilities of each committee is provided below.

        Governance, Risk and Nominating Committee.    The Governance, Risk and& Nominating Committee of the Board of Directors (the "Governance Committee") was established in February 2004.reviews, develops and makes recommendations regarding various matters related to the Board of Directors, including its size, composition, standing committees and practices. The Committee also reviews and implements corporate governance policies, practices, and procedures. The Governance, Risk & Nominating Committee reviews the performance and effectiveness of the Board of Directors, its standing committees, and its individual members. The Committee met four (4) times during 2015.fiscal 2017. Members of the Governance, Risk & Nominating Committee at the dateas of this Proxy Statement are Gilbert A.December 30, 2017, were its chair, Mr. Fuller, Chairman, Jerry G. McClain, and Ronald S. Poelman.directors


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in the rules of the NYSE. After the Annual Meeting, the Governance Committee will be reorganized if each of the director nominees is elected by the shareholdersNYSE standards.

        The Governance, Committee's responsibilities include: (i) overseeing corporate governance matters, (ii) risk oversight and management, (iii) identifying and evaluating prospective nominees for director, (iv) nominating the director nominees for election at the annual meeting of shareholders, and (v) periodically reviewing the performance of the Board and its members and determining the number, function, and composition of the Board's committees. The Board has delegated much of its responsibility for risk oversight and management to the Governance Committee. The Governance Committee conducts these risk oversight and management functions as part of its corporate governance oversight and reports its findings with respect to risk oversight and management to the entire Board. More information about the Board of Directors and Governance Committee's risk oversight and management practices is provided below under the caption "Risk Oversight and Management".

        The Governance Committee believes, among other things, that the Company's Board of Directors should be composed of directors with varied, complementary backgrounds, which reflect a diversity of viewpoints, backgrounds, experience and other factors. The Governance Committee also believes that directors should, at a minimum, (i) have expertise that may be useful to the Company, (ii) possess the highest personal and professional ethics, and (iii) be willing and able to devote the required amount of time to the Company's business. In light of these beliefs, the Governance Committee considers many factors in evaluating the suitability of candidates for Board membership, and also determining whether a director should be retained and stand for re-election, including: whether the candidate meets the requirements for independence; the candidate's background and experience, particularly in the Company's industry; the candidate's personal qualities, accomplishments, character and reputation in the business community; and the fit of the candidate's individual skills and personality with those of the Company's other directors.

        The GovernanceRisk & Nominating Committee may from time to time consider qualified nominees who are recommended by shareholders. The Governance, Risk & Nominating Committee does not haveuse different standards for evaluating nominees based on whether they have been suggested by our shareholders or by our directors. Shareholders who wish to make such a recommendation may do so by sending a written notice to our Corporate Secretary, as described under the heading "How do I submit a shareholder proposal"Shareholder Proposals for next year's2019 Annual Meeting?" in the section of this Proxy Statement titled "Questions and Answers about the Meeting."Meeting" below.

        Audit Committee.    The Audit Committee of the Board of Directors (the "Audit Committee") is a standing committee of the Board, which has been established as required by Section 3(a) of the Exchange Act and the rules of the NYSE. The Audit Committee met five (5) times during 2015. Members of the Audit Committee at the date of this Proxy Statement are Jerry G. McClain, Chairman, Ronald S. Poelman, and Gilbert A Fuller, each of whom meets the independence standards set forth above. The Board has determined that both Mr. McClain and Mr. Fuller are "audit committee financial experts," as defined by the applicable regulations promulgated by the SEC under the Exchange Act. The Board also believes that each member of the Audit Committee meets the NYSE composition requirements, including the requirements regarding financial literacy. The Audit Committee's responsibilities include: (i) appointing the independent registered public accounting firm of the Company, (ii) reviewing, approving and monitoring the scope and cost of any proposed audit and non-audit services that are provided by, as well as the qualifications and independence of, the independent registered public accounting firm, (iii) reviewing and monitoring with the independent registered public accounting firm, and internal audit staff, the results of audits, any recommendations from the independent registered public accounting firm and the status of management's actions for implementing such recommendations, as well as the quality and adequacy of our internal financial controls and internal audit staff, and (iv) reviewing and monitoring the Company's annual and quarterly financial statements, internal controls and the status of material pending litigation and regulatory


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proceedings. After the Annual Meeting, the Audit Committee will be reorganized if each of the director nominees is elected by the shareholders. Additionally, the Board has determined that each of Mr. Williams, Mr. Peng and Mr. Winssinger, if elected at the Annual Meeting, and subsequently appointed to the Audit Committee, would meet the definition of an "audit committee financial expert," as defined by the applicable regulations promulgated by the SEC under the Exchange Act.

Compensation Committee.Committee

        The Compensation Committee has responsibility, authority, and oversight relating to the development of the Board of Directors (the "Compensation Committee") met twelve (12) times during 2015.our overall compensation strategy and compensation programs. The Compensation Committee establishes our compensation philosophy and policies, and it oversees compensation plans for our executive officers and non-executive employees. The Compensation Committee seeks to ensure that our compensation policies and practices promote shareholder interests and support our compensation objectives and philosophy. Members of the Compensation Committee at the dateas of this Proxy Statement are Ronald S. Poelman, ChairmanDecember 30, 2017, were its Chair, Mr. Williams, and Jerry G. McClain, each of whom meets the definition of "independent" set forth in the rules of the NYSE. In addition, all membersdirectors Nixon, Peng, and Winssinger. Each member of the Compensation Committee are outside directorsqualifies as defined by Rulean "outside director," within the meaning of Section 162(m) of the Internal Revenue Code and are non-employee directorsof 1986, as defined byamended (the "Internal Revenue Code"), as a "non-employee director" within the applicable regulations promulgated by the SECmeaning of Rule 16b-3 under the Exchange Act.Act, and as an independent director under the NYSE listing standards, for purposes of compensation committee service.

        The Compensation Committee met five times during fiscal 2017. The Compensation Committee's responsibilities include: (i) reviewing and recommending to the full Board of Directors the salaries, bonuses, and other forms of compensation and benefit plans for management and (ii) administering USANA'sour equity and long-term incentive compensation plans. The duties of the Compensation Committee as the administrator of those plans include, but are not limited to, determining those persons who are eligible to receive awards, establishing terms of all awards, authorizing officers of the Company to execute grants of awards, and interpreting the provisions of the equity compensation plans and grants that are made under those plans. The Compensation Committee is also responsible for reviewing and approving the Compensation Discussion and Analysis included in this Proxy Statement. After the Annual Meeting, the Compensation Committee will be reorganized if each of the director nominees is elected by the shareholders.

Risk Oversight and Management

        Our Board of Directors is actively involved in the oversight and management of the material risks that could affect the Company. Historically, our Board of Directors has carried out its risk oversight and management responsibilities by both monitoring risk directly as a full board and, where appropriate, through Board committees. The Board's direct role in our risk management process includes receiving regular reports from our executive officers and other members of senior management on areas of material risk to the Company, including operational, strategic, financial, legal and regulatory risks. The Board has delegated much of its direct risk oversight and management responsibility to the Governance Committee. The mandate of the Governance Committee with respect to risk management is to work with management to carry-out an efficient process for assessing and reporting material risk to the Governance Committee and, ultimately, the Board.

        The Board has also historically delegated the oversight and management of certain risks to the Audit Committee and Compensation Committee. The Audit Committee is responsible for the oversight of Company risks relating to accounting matters, financial and internal control reporting and related party transactions. To satisfy these oversight responsibilities, the Audit Committee regularly meets with and receives reports from the Company's Chief Financial Officer, Executive Director of internal audit, the Company's independent registered public accounting firm, KPMG LLP, and the Company's in-house and outside legal counsel. The Audit Committee is also responsible for discussing with management, our independent registered public accounting firm and the chair of the Governance Committee, the areas of risk management overseen by the Governance Committee.

The Compensation Committee is responsible fordetermines the oversightcompensation of risk relating to the Company's compensation and benefits programs.our named executive officers.

        To satisfy these oversightassist it in carrying out its responsibilities, the Compensation Committee is authorized to retain the services of independent advisors. For purposes of advice and consultation with respect to compensation of our executive officers during fiscal 2016 and 2017, the Compensation Committee engaged Frederic W. Cook & Co. ("FW Cook"), a national compensation consulting firm. Prior to engaging FW Cook, the Committee considered and assessed FW Cook's independence. To ensure FW Cook's continued independence and to avoid any actual or apparent conflict of interest, the Committee does not permit FW Cook to be engaged to perform any services for USANA beyond those services provided to the Committee. The Committee has sole authority to retain or terminate FW Cook as its executive compensation consultant and to approve its fees and other terms of engagement. The Committee regularly, meets withbut not less than annually, considers the independence of its compensation consultant and receives reports from the Company's Co-Chief Executive Officers and Chief Financial Officer to understand the financial, human resources and shareholder implicationsdetermines whether any related conflicts of compensation and benefits decisions.interest require disclosure.


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Compensation Risk Analysis

        Our Compensation Committee considers the risk to the Company associated with each component of our executive compensation program, namely base salary, and short-and-long term incentive compensation. In considering these risks, the Compensation Committee believes that the following factors, among others, reduce the likelihood of excessive risk taking in connection with executive compensation at USANA:

    Our compensation components provide a balanced mix of (i) cash and equity compensation, (ii) short-term and long-term incentive compensation, and (iii) financial and non-financial performance metrics;

    Our executives generally all participate in the same short-term incentive program with similar performance metrics;

    Maximum pay-out levels for short-term incentive compensation are generally capped at 100% of an executive's base salary;

    Our equity awards generally vest over several years and are only valuable if the Company performs well financially and our stock price increases over time;

    We maintain strict internal controls over the determination and pay-out of each component of executive compensation;

    We do not typically enter into employment, severance or other management agreements with any of our executive officers that contain post-termination or change-in-control payments; and

    We generally do not provide significant perquisites or personal benefits to our executive officers.

        Based on the Compensation Committee's review of these factors and others, the Committee does not believe that the Company's executive compensation program creates risks that are reasonably likely to have a material adverse effect on the Company.

Board Committee Charters

        A written charter has been adopted for each of the Audit Committee, Compensation Committee and Governance, Risk and Nominating Committee. Copies of the Audit Committee Charter, Compensation Committee Charter, and Governance, Risk and Nominating Committee Charter are available, free of charge, on the Company's website atwww.usanahealthsciences.com under the "Corporate Governance" tab. The information contained on the website is not incorporated by reference in, or considered part of, this Proxy Statement.

Corporate Governance Guidelines

        The Company has adopted Corporate Governance Guidelines that outline the Company's corporate governance policies and principles. The Company's Corporate Governance Guidelines are available, free of charge, on the Company's website atwww.usanahealthsciences.com under the "Corporate Governance" tab. The information contained on the website is not incorporated by reference in, or considered part of, this Proxy Statement.

Code of Ethics

        We have adopted a code of ethics that applies to all of our directors, officers (including our Chief Executive Officer and Chief Financial and Accounting Officer), and employees. We require that all of our directors, officers and employees certify on an annual basis that they are in compliance with the code. A copy of the Code of Ethics for Directors and Employees is available on the corporate governance section of our web site atwww.usanahealthsciences.com. In the event the Company makes any amendments to, or grants any waivers of, a provision of its code of ethics that applies to the


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principal executive officer, principal financial officer or principal accounting officer of the Company that requires disclosure under applicable SEC rules, the Company intends to disclose such amendment or waiver and the reasons therefor on a Current Report on Form 8-K or on its next periodic report filed under the Exchange Act.


COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

        The Compensation Committee during fiscal 2015at December 30, 2017, was composedcomprised of Ronald S. Poelman, Chairman, Robert AnciauxD. Richard Williams, Chair, J. Scott Nixon, Feng Peng, and Jerry G. McClain.Frederic J. Winssinger. All members of the Compensation Committee are independent directors. During fiscal 2015, there were no relationshipsNone of the members of our Compensation Committee has ever been an officer or transactions between the Company andemployee of USANA or any of our subsidiaries. No member of the Compensation Committee had any relationship requiring disclosure hereunder.under "Transactions with Related Persons." During fiscal year 2017, none of our executive officers served as a director or member of the compensation committee (or other committee of the board of directors performing equivalent functions) of another entity that had an executive officer serving on our Board of Directors.


EXECUTIVE OFFICERSDIRECTOR COMPENSATION

        Our director compensation program is designed to attract and fairly compensate highly qualified, non-employee directors to represent our shareholders on the Board of Directors and to act in the shareholders' best interests. The director compensation program was recommended to and approved by our Board of Directors. The annual Board retainer paid by us to our non-employee directors consists of a quarterly cash retainer. Directors also generally receive an initial grant of equity in the form of deferred stock units ("DSUs"), followed by annual equity grants. Our executive officers do not play any role in determining or recommending the amount of USANA at January 2, 2016, and asnon-employee director compensation, except that Mr. Guest votes on the recommendations of the date of this Proxy Statement were:

Name
Position
David A. WentzCo-Chief Executive Officer
Kevin G. GuestCo-Chief Executive Officer
Paul A. JonesChief Financial Officer and Chief Leadership Development Officer
Deborah WooPresident of Asia
James H. BrambleChief Legal Officer and Corporate Secretary
Jim BrownChief Operating Officer
Daniel A. MacugaChief Communications Officer and Executive Vice President of Field Development for the Americas
Doug BraunChief Marketing Officer

        The following information is provided for each of our executive officers.

David A. Wentz, 45, Co-Chief Executive Officer. Mr. Wentz joined USANACompensation Committee in his capacity as a part-time employee in 1992. He has been a full-time employee since March 1994. From 1993 until April 2004, he was a member of the Company's Board of Directors.

        Our Board of Directors includes Mr. Wentz was appointed Chief Executive Officer in July 2008Guest, who is an executive officer of the Company, and served in this capacity until August 2015 when he was appointed Co-Chief Executive Officer. He served as President from July 2002 to July 2008 and previously served as the Company's Executive Vice President from October 2001 to July 2002. He served as the Company's Senior Vice President of Strategic Development from June 1999 to October 2001, and as the Company's Vice President of Strategic Development from August 1996 to June 1999. Mr. Wentz received a B.S. in Bioengineering from the University of California, San Diego. Mr. Wentz is the son of Dr. Wentz, who is our Founder. Dr. Wentz has elected not to receive compensation as a director. Mr. Guest does not receive any cash or other additional compensation for his service as a director. Information regarding the founderdetermination of Mr. Guest's compensation can be found in the "Compensation Discussion and Analysis" and the "Executive Compensation Tables" below.

Fiscal Year 2017 Board Compensation

        For the purpose of determining non-employee director compensation, the Compensation Committee considered recommendations from FW Cook, the Director Compensation Report published by the National Association of Corporate Directors, and other resources. The Compensation Committee also considered an overview of the Companycorporate governance environment as well as recent trends and Chairmandevelopments relating to director compensation. The Committee also specifically considered the amounts payable under and the various components of our director compensation program, as well as the aggregate director compensation cost, in comparison to the boards of directors of the Company'ssame group of peer companies that the Compensation Committee used in determining executive compensation.

        Cash Compensation.    In fiscal year 2017, our non-employee directors were paid an annual cash retainer of $91,400. Additional amounts were also paid in 2017 to our Senior Director ($13,600 per year), Audit Committee Chair ($18,200), Compensation Committee Chair ($11,200), and Governance, Risk & Nominating Committee Chair ($6,800). Under this program, our non-employee directors are not entitled to receive meeting attendance fees unless the Board, or any standing Board committee, is required to hold an unusually high number of Directors.meetings, in which case the Compensation Committee may, in its discretion, approve additional compensation for those directors affected by these additional meetings. We reimburse the directors for reasonable out-of-pocket expenses incurred in connection with attendance at Board and committee meetings. We pay the retainer fees set forth above in quarterly installments.

Kevin G. Guest,        Equity Compensation.    53, Co-Chief Executive Officer. Mr. Guest joined USANA on a part-time basisWe also have an equity compensation program for our non-employee directors. This program involves an initial grant of equity, usually in April 2003, as Executive Directorthe form of Media and Events. Following the Company's acquisition of FMG Productions, a media, video, and event productions company that was founded by Mr. Guest, he became a full-time employee of the Company and was promoted to Vice President of Media and EventsDSUs, in February 2004. In January 2006, he was appointed as the Company's Executive Vice President of Marketing and served in that role until July 2008, when he was appointed Chief Marketing Officer. Mr. Guest served in this role until May 2011, when he was appointed as President of North America. In October 2012, he was appointed as President of the Americas, Europe and South Pacific. In August 2014, Mr. Guest was appointed President of the Company and served in this role until August 2015, when he was appointed Co-Chief Executive Officer. Prior to joining USANA full-time, from 1992 to February 2004, Mr. Guest served as the Managing Partner of FMG Productions. Mr. Guest earned a B.A. in Communications from Brigham Young University.connection


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Paul A. Jones, 52, Chief Financial Officer and Chief Leadership Development Officer. Mr. Jones joined USANA in 2005 as Vice President of Human Resources and served in this role until June 2007, when he leftwith the initial election or appointment to complete a three year service mission. Mr. Jones returned to USANA as Vice President of Human Resources in July 2010 and served in this role until December 2012, when he was appointed Chief Financial Officer. In August 2015, Mr. Jones was also appointed Chief Leadership Development Officer. Prior to joining USANA, Mr. Jones was employed as Vice President of Human Resources and later as Vice President of Operations for Associated Food Stores, Inc. Mr. Jones received a B.S. in finance from Utah State University and a master of arts in organizational management from the University of Phoenix. Mr. Jones is also a Certified Management Accountant.

Deborah Woo, 62, President of Asia. Mrs. Woo joined USANA as General Manager of USANA Hong Kong in 1999 and served in that role until 2003. In 2003, she was promoted to Regional General Manager and became responsible for the Hong Kong, Taiwan, and Singapore markets. Mrs. Woo was subsequently promoted to Vice President of Greater China and East Asia in 2005. As a result of USANA's strategic regional alignment in 2007, Mrs. Woo was appointed as Vice President of Greater China and North Asia. In 2008, Mrs. Woo was promoted to Executive Vice President of Asia. In February 2010, Mrs. Woo was promoted to Executive Vice President of Sales and served in this role until May 2011, when she was appointed President of Asia Pacific. In October 2012, she was appointed President of Asia and Greater China and served in this capacity until she was appointed President of Asia in January 2016. Mrs. Woo entered the direct selling industry in 1990 as a Distributor Relations Manager for Amway Hong Kong. She later became Director of Sales for Caring International (Hong Kong) Limited in 1996 where she headed up multifunctional teams in operations, distributor relations, and marketing.

James H. Bramble, 46, Chief Legal Officer and Corporate Secretary. Mr. Bramble joined USANA in March 1998 to manage the Compliance and Legal Departments. In April 2006 he was appointed Vice President and General Counsel. In July 2008, Mr. Bramble was also appointed Corporate Secretary, and served in these roles until May 2011, when he was appointed Chief Legal Officer and Corporate Secretary. Prior to joining USANA, Mr. Bramble was employed with Novus Services. Mr. Bramble received a B.S. in political science with a minor in Spanish from the University of Utah in Salt Lake City, Utah. He received his J.D. from the S.J. Quinney College of Law at the University of Utah.

Jim Brown, 47, Chief Operating Officer. Mr. Brown joined USANA in 2006 as Vice President of Operations. In July 2011, he was appointed Vice President of Global Operations and served in that role until July 2012, when he was appointed Chief Production Officer. He served in that role until November 2013 when he was appointed Chief Operating Officer. Prior to joining USANA, Mr. Brown was previously employed at Sonoco as a plant manager where he was responsible for safety, quality, finance, production, and maintenance. Mr. Brown received a bachelor's degree with a double major in computer science and math as well as an M.B.A. from Francis Marion University in Florence, South Carolina.

Daniel A. Macuga, Jr., 46, Chief Communications Officer and Executive Vice President of Field Development for the Americas. Mr. Macuga joined USANA in 2007 as Vice President of Network Development and Public Relations. In July 2008, he was appointed as Vice President of Marketing, Public Relations and Social Media and served in that role until December 2011, when he was appointed Chief Communications Officer. He served in that role until February 2014 when he was appointed Chief Communications Officer and Executive Vice President of Field Development for the Americas. Prior to joining USANA, Mr. Macuga was employed at the Chrysler Corporation, where he spent 15 years working closely with independent dealership entrepreneurs to help them build their businesses, increase awareness for their products, and keep them focused on effective customer relationship management. Mr. Macuga received a B.A. in communications from the University of California, San Diego.


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Doug Braun, 54, Chief Marketing Officer. Mr. Braun joined USANA as Vice President of Marketing in December 2011. He served in this capacity until March 2012, when he was appointed as Vice President of Marketing and Recognition and served in that role until July 2012, when he was appointed Chief Marketing Officer. Mr. Braun brings 20 years of direct selling experience to USANA. Prior to joining USANA, Mr. Braun was self-employed in 2011 and served as temporary chief executive officer of GrowLife, Inc. from May 2011 to September 2011. Prior to that he was president of Nikken International, Inc. from December 2008 to January 2011, vice president of sales & marketing of Nikken International, Inc. from July 2007 to November 2008 and vice president of marketing of Nikken International, Inc. from July 2005 to June 2007. Prior to that, he served as vice president of marketing of Fionda, LLC, and senior vice president of global marketing at Herbalife International, Inc. where Mr. Braun spent ten years. He has a B.B.A. from the University of Cincinnati and an M.B.A. from Xavier University.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

        The following Compensation Discussion and Analysis describes the material elements of the compensation and benefit programs for our Co-Chief Executive Officers, Chief Financial Officer, and the three other most highly-compensated executive officers as of the end of fiscal year 2015. In this Proxy Statement, we refer to these officers as our "Named Executive Officers." Our Named Executive Officers are also referred to herein individually as an "Executive" and collectively as "Executives".

Executive Summary and Overview

        Summary of 2015 Accomplishments.    Fiscal 2015 was an exceptional year for USANA. From a financial perspective, we delivered our 13th consecutive year of record net sales, as well as our highest annual net earnings and earnings-per-share in the history of the Company. These results were driven by a number of accomplishments during the year, including our achievement of more than 20% growth in the number of Active Associates who use and sell our products around the world. We ended the 2015 fiscal year with a record 421,000 Active Associates and 89,000 Preferred Customers worldwide. Associate and customer growth is our highest priority as we continue to focus on improving the overall health and nutrition of individuals and families around the world.

        Our results for the year were driven by execution of our 2015 growth strategies, which included offering market-specific incentives to motivate our sales force, advancing our personalization initiative, and increasing our brand recognition to make it easier for our sales force to talk about USANA.

        During the year, we offered a variety of market specific incentives to our sales force. The most impactful was offered world-wide during late 2014, and during the first part of 2015 in China. This incentive, and its residual effect, was successful in accelerating our customer growth during much of 2015. During the second half of 2015, we offered additional incentives in many of our markets to continue driving customer growth. The short-term incentives we offered in many of our markets during 2015 contributed to our 20.6% Associate growth and 9.9% Preferred Customer growth year-over-year.


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        We also continued to advance our personalization strategy during the year. Over the last few years, we have added personalized aspects to our global brand, Associate compensation plan, and our Associates' e-business environment to make it easier and more enjoyable to do business with USANA. In 2015, we continued to personalize our product line by introducing our new "MySmartTMFoods" products. MySmartTMFoods are science-based, healthy nutrition shakes, bars, boosters and flavor optimizers that provide our customers with customized healthy food options. We made MySmartTMFoods available to our Associates for a limited time in 2015 as a pre-launch opportunity to purchase and try the products. During the first half of 2016, we will officially launch these products.

        We also increased our brand recognition in 2015 by expanding our relationship with Dr. Mehmet Oz, as a Trusted Partner and Sponsor ofThe Dr. Oz Show, and by continuing to advance our athlete sponsorship program around the world. Under our partnership with Dr. Oz, USANA products were regularly featured onThe Dr. Oz Show in 2015. This partnership has increased our brand recognition in North America and our other regions around the world.

        In 2015, we also continued to see our business grow in China. Specifically, annual net sales in China increased over 71% on a year-over-year basis and the number of Active Associates increased over 46%. We also made significant progress during the year on the construction of our new state-of-the-art production facility in Beijing, which is scheduled to become fully operational during the first half of 2016.

        Finally, in late 2015 we officially opened Indonesia, which marks our 20th market worldwide. Indonesia is a promising addition to our South East Asia Pacific Region, and we are optimistic about the potential growth opportunity there.

        Overview of Compensation Program.    We believe that our Executives and employees, as well as the compensation programs that incent them, are key factors in driving our strong financial and operational performance. Our executive compensation program is designed to provide a competitive and internally equitable compensation and benefits package. We also strive to ensure that our executive compensation program reflects a pay-for-performance philosophy and promotes Executive motivation and retention.

        Our executive compensation program includes base salary, short-term incentive compensation (in the form of a cash bonus), and long-term incentive compensation (in the form of equity awards). Short-term incentive compensation is performance-based and designed to motivate our Executives to achieve annual financial and non-financial performance objectives. To minimize potential risk, the potential for short-term incentive compensation is typically capped at 100% of an Executive's base salary. Long-term incentive compensation utilizes equity awards, which vest over several years. These awards reward the Executive for sustainable Company performance and align the financial interests of our Executives with those of our shareholders.

        Other than as described above, we typically do not provide benefits to our Executives that are different from, or in addition to, those that are provided to our general employees. Additionally, we typically do not enter into pre-arranged severance agreements or contracts with our Executives that contain post-termination or change-in-control payment provisions, or provide significant perquisites or personal benefits to our Executives.

Compensation Philosophy and Objectives

        The Company's compensation philosophy, as approved by the Compensation Committee, is to establish and maintain executive compensation programs that are designed to accomplish the following objectives:

    To attract and retain, through a fair and competitive compensation plan, Executives who have the intelligence, education, and experience that is required to effectively administer the affairs of the Company;

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    To motivate our Executives to achieve certain financial and non-financial performance objectives for the benefit of our shareholders by tying components of their total compensation to individual and Company performance; and

    To ensure that compensation practices do not impair USANA's financial strength or future success.

        The Compensation Committee intends to meet these objectives by utilizing and maintaining a balance among three major components of compensation: base salary, short-term incentive compensation (cash bonus), and long-term incentive compensation (in the form of equity awards). The Committee believes that these three components provide the appropriate framework to attract, retain and motivate our Executives, and align a significant portion of executive compensation with short-and long-term performance objectives that drive shareholder value. As shown in the compensation tables following this report, our Executives do not currently receive retirement benefits, pre-determined severance arrangements, deferred compensation opportunities, or other perquisites that are commonly provided to executives of similarly sized companies.

Role of Compensation Committee

        Our executive compensation philosophy and practice has been developed through a collaborative effort of the Compensation Committee, the CEO, and the CFO. With the appointment of Mr. Wentz and Mr. Guest as Co-CEO's in August 2015, the Compensation Committee began, and will continue to, seek input from each Co-CEO on the Company's executive compensation philosophy. While our Co-CEOs and CFO offer ideas, opinions, and proposals in Compensation Committee meetings, the Compensation Committee functions and votes independently from these officers. The Compensation Committee is responsible for all changes to the executive compensation philosophy and program. The Compensation Committee, as of the date of this Proxy Statement, consists of three members of USANA's Board of Directors, all of whom are "independent" under the rules of the NYSE. These members are appointed to the Compensation Committee by the Board of Directors. The Compensation Committee acts under a written charter, which outlines the committee's authority and responsibilities.

Role of Corporate Leadership in Assisting Compensation Committee

        The Compensation Committee has the primary authority to determine the Company's compensation philosophy and to establish compensation for the Company's Named Executive Officers. It is responsible for ensuring that executive compensation decisions are thoroughly researched and implemented. All of the Company's Executives and employees participate in an annual performance review with their immediate supervisor, during which the Executive or employee receives input about his or her performance and contributions to the Company's results for the period being assessed. The Compensation Committee seeks input from the Company's Co-CEOs and CFO to identify key factors and to obtain information that is related to executive compensation. These key factors and information generally involve the individual Executive's level of responsibility, his or her years of experience, his or her current overall compensation level in relation to external market studies and internal equity analysis between executives, the impact of current compensation practices on the Company's financial statements, and the relationship between executive compensation and performance of the Company.

        The Company's CFO takes direction from and makes suggestions to the Chairman of the Compensation Committee in establishing the quarterly committee meeting agenda and in preparing the materials to be presented to the Compensation Committee. These materials contain minutes from prior meetings, key items to be addressed, and background information to help the Compensation Committee in its decision-making process.


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Compensation Consultant

        In late 2014, the Compensation Committee retained Frederic W. Cook & Co., or FWC, as its independent compensation consultant for 2015 to assist the committee in reviewing our executive compensation program, to provide compensation data and alternatives to the committee, and to provide advice to the committee as requested. FWC provided services to the Compensation Committee only in late 2014 and early 2015 and did not perform any work for the Company outside of the services it performed for the Compensation Committee. The Compensation Committee considered the compensation data and alternatives provided by FWC in analyzing and rendering compensation decisions in 2015, including setting annual base salary compensation, short-term incentive compensation and long-term incentive compensation for our Executives.

        As a basis for the market data provided to the Compensation Committee, FWC utilized compensation data from a group of 22 peer companies set out below. These companies are all within a reasonable range of the Company's revenue, operating income, and market capitalization. As of January 1, 2015, we were at or near the median of the peer group with respect to revenue, operating income and market capitalization. This information was gathered and analyzed for the 25th, 50th and 75th percentiles for annual salary, short-term incentive pay elements and long-term incentive pay elements. Where possible, our Executives were matched to appropriate proxy and survey positions based on job duties and level of responsibility. The peer group information and other data provided by FWC are among several factors that the Compensation Committee utilized in making compensation decisions in 2015. The following companies were included in the 2015 peer group.

Blyth, Inc.Nature's Sunshine Products, Incorporated
Coty, Inc.Nu Skin Enterprises, Inc.
Elizabeth Arden, Inc.Nutraceutical International Corporation
GNC Holdings, Inc.NutriSystem Inc.
The Hain Celestial Group, Inc.Perrigo Company plc
Herbalife, Ltd.Prestige Brands Holdings, Inc.
International Flavors and Fragrances Inc.Primerica, Inc.
Inter Parfums, Inc.Revlon, Inc.
LifeVantage CorporationTupperware Brands Corporation
Mannatech, IncorporatedVitamin Shoppe, Inc.
Natural Health Trends Corp.Weight Watchers International, Inc

        In addition to the FWC market data, the Compensation Committee utilized the following materials, along with other resources and tools, to render compensation decisions for 2015: (i) surveys and reports of executive compensation paid by public companies, with characteristics similar to USANA, on a national basis; and (ii) surveys from Mercer, ERI, U.S. Direct Selling Association, and Western Management Group of executive compensation paid by certain of the Company's direct competitors, consisting of both public and private companies, on a local and national basis. These materials and resources help provide solid benchmarks for each component of our executive compensation as well as a general understanding of the total compensation offered by companies in our industry who are competing for top talent.

Components of Compensation

Base Salary

        Base salary represents the fixed component of executive compensation. It is designed to compensate our Executives fairly and competitively at levels necessary to attract, retain and motivate qualified executives in our industry. Consistent with this philosophy, the Compensation Committee, on an annual basis, evaluates our Executives' base salaries. The Committee asks for input and


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recommendations from the Co-CEOs and CFO and then considers (i) the Executive's scope of responsibilities, maturity in role, demonstrated level of performance, accomplishments and contributions to the Company; (ii) the performance of USANA, both financially and operationally; (iii) current market data and salary levels for each Executive's particular position; and (iv) the total compensation paid to each Executive. The Committee then renders a decision for each Executive's base salary based on the total mix of the foregoing information.

        As part of its 2015 Executive compensation evaluation, the Compensation Committee, after reviewing the information outlined above, approved the Named Executive Officers' base salaries from July 2015 through June 2016 as follows:

Executive
 Appointed Office 2014 - 2015
Base Salary ($)*
 2015 - 2016
Base Salary ($)*
 

David A. Wentz

 Co-Chief Executive Officer $300,000 $618,000 

Kevin G. Guest

 Co-Chief Executive Officer. $600,000 $618,000 

Paul A. Jones

 Chief Financial Officer $340,000 $357,000 

Deborah Woo

 President of Asia $580,378 $598,769 

James H. Bramble

 Chief Legal Officer $382,673 $394,000 

Douglas Braun

 Chief Marketing Officer $330,000 $340,000 

*
From August 2014 through July 2015, Mr. Wentz, pursuant to approval from the Board of Directors, reduced his time inwith the office to spend more time with his family. During that time, he worked on several strategic initiativestarget delivered value prorated for the Company and attended several significant events with the Company's Associate sales force. In light of these factors, Mr. Wentz recommended, and the Compensation Committee approved, a reduction of his base salary to $300,000 for this period of time. The 2015-2016 base salary for Mr. Wentz reflects his return to the Company full-time and appointment to Co-Chief Executive Officer. The 2015-2016 base salary for Mr. Guest reflects his appointment to Co-Chief Executive Officer. With respect to Ms. Woo, Mr. Jones, Mr. Bramble, and Mr. Braun, the Compensation Committee set each Executive's base salary for 2015-2016 following its evaluation of all of the factors set out in (i) through (iv) in the paragraph above.

        The actual base salaries paid to our Named Executive Officers during thefiscal year ended January 2, 2016 are reflected in column (c) of the Summary Compensation Table of this Proxy Statement.

Non-Equity Incentive Plan Compensation

        We offer our Named Executive Officers non-equity incentive plan compensation in the form of a cash bonus that is based on USANA's achievement of certain financial performance objectives during the applicable year. Cash bonuses are based on a percentage of the Executive's base salary. Each year, the Compensation Committee sets the range of the cash bonus for which each Executive is eligible and sets the performance objectives on which cash bonuses for that year will be based.

2015 Non-Equity Incentive Plan

        For 2015, the Compensation Committee approved the 2015 Executive Bonus Plan (the "2015 Bonus Plan"), which was based on growth in net sales and profitability. The Compensation Committee approved this single financial performance objective to: (i) focus the Company's Executives on growing net sales in 2015 without sacrificing profitability; (ii) continue to align the bonus opportunity under the 2015 Bonus Plan for all Executives to promote internal equity; (iii) foster teamwork among markets and Executives; and (iv) align the 2015 Bonus Plan offered to Executives with the profit sharing plan offered to all other employees of the Company.

        Under the 2015 Bonus Plan, 9% of the Company's adjusted operating profits, which exceed 10% of net sales, were to be paid to Executives in the form of a cash bonus. For purposes of the 2015


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Bonus Plan, the term "adjusted operating profit" is calculated as (i) the Company's earnings from operations, plus (ii) positive adjustments to earnings from operations for Executive and employee bonus accruals and equity compensation expense. Payments under the 2015 Bonus Plan were distributed as an equal percent of the Executive's base salary.

        Under the 2015 Bonus Plan, Executives were eligible to receive a cash bonus of between zero and 100% of their base salary, depending on the performance of the Company under the criteria of the plan. Each Executive's target bonus percentage under the 2015 Bonus Plan was 50% of the Executive's base salary.

2015 Executive Bonus Plan Payout

        Shortly after the end of fiscal 2015, the Compensation Committee reviewed the foregoing performance objectives and evaluated the actual performance delivered by the Company under the 2015 Bonus Plan. The Compensation Committee determined that the Company delivered strong financial and operating performance in 2015 and, in particular, noted that the Company:

    Achieved 2015 net sales of $918.5 million, which is a 16.2% increase compared to fiscal 2015;

    Achieved 2015 adjusted operating profit of $169.2 million; and

    Achieved 2015 adjusted operating profit in excess of 10% of net sales of $77.3 million.

        Based on the Company's performance, and the criteria of the 2015 Bonus Plan, the Compensation Committee determined that each Executive had earned a cash bonus equal to 57.8% of the Executive's base salary under the 2015 Bonus Plan. Consequently, the committee awarded this bonus amount to each Executive. The actual cash bonuses paid to our Named Executive Officers under the 2015 Bonus Plan are reflected in column (g) of the Summary Compensation Table of this Proxy Statement.

2016 Executive Bonus Plan

        For 2016, the Compensation Committee approved the 2016 Executive Bonus Plan (the "2016 Bonus Plan"), which is based on the same performance objectives as the 2015 Bonus Plan: growthdate of election or appointment. Initial equity awards generally vest in net sales and profitability. As part of its determination to again utilize this bonus criteria and structure, the committee noted: (i) the strong operating results delivered by the Executives and the Company in 2015; (ii) the successful alignment of the Company's Executives under the 2015 Bonus Plan, and (iii) the internal equity among Executives that was created by the 2015 Bonus Plan.

        Under the 2016 Bonus Plan, 9% of the Company's adjusted operating profits, which exceed 10% of net sales, will again be paid to Executives in the form of a cash bonus. Payments under the 2016 Bonus Plan will be distributed as anfour equal percent of the Executive's base salary. Under the 2016 Bonus Plan, Executives will be eligible to receive a cash bonus of between zero and 100% of their base salary, dependingquarterly installments beginning on the performance ofquarter following the Company under the criteria of the plan. Each Executive's target bonus percentage under the 2016 Bonus Plan is 50% of the Executive's base salary. Future estimated payouts under the 2016 Bonus Plan are reflected in the Grants of Plan-Based Awards table of this Proxy Statement.

Equity Compensation

        Equity compensation is an integral part of USANA's compensation philosophy.grant date. We believe that equity grants that vest over a period of years tie a portion of our Executives' compensation to the Company's long-term performance and, thereby, align the interests of our Executives with the interests of our shareholders. Our equity compensation program delivers compensation to Executives only when the Company performs and the value of the Company's stock increases. USANA provides equity-based compensation primarily through the issuance of Stock-Settled Stock Appreciation Rights ("SSARs").


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Grants ofalso make annual equity awards are made for both Executives and other eligible employees at regular Compensation Committee meetings and at special meetings, as needed. To further align the interests of our Executives and shareholders, we have implemented stock ownership guidelines for our Executives. Pursuant to these guidelines, our Executives agree to hold ten percent (10%) of the shares of USANA common stock issued to them as a result of a SSAR exercise for a period of five years or until they are no longer employed by the Company.

        The Compensation Committee's philosophy has been to issue intermittent SSAReach director. These awards to Executives to drive long-term Company performance as well as individual Executive performance. In general SSAR awards are granted to Executives as they enter into a qualifying position and vest annually in equal installments over a five-year period. Additional grants are awarded to Executives as seen necessary by the Compensation Committee to maintain sufficient long term incentive to accomplish the objectives outlined above. These additional grants typically do notalso vest in four equal quarterly installments beginning on the first two years, but only atquarter following the end of years three, four and five, and such vestinggrant date. All vested DSUs are exchanged for a particular Executive commences when the vesting schedule of that Executive's particular SSAR award ends. The grant price for equity awards is the fair market value of the award as of the date of grant as determined by the closing priceshares of the Company's common stock onupon the datetermination of grant.

        In 2015,service of the Compensation Committee issued SSAR awards todirector. By delivering a portion of the Named Executive Officers as detailedannual director retainer in the Outstanding Equity Awards at Fiscal Year-Endform of equity-based compensation, the structure strengthens the alignment between the interests of our non-employee directors and our shareholders.

Director Compensation Table

        The following table sets forth the compensation awarded to, or earned by, each of our non-employee directors for the 2017 fiscal year. Dr. Wentz did not receive any compensation for his services as a director and Mr. Guest did not receive additional compensation for his services as a director. Accordingly, Mr. Guest's compensation is reported in the section of this Proxy Statement. The 2015 awards sequentially follow the Company's last broad SSAR award issuance in 2014. After the 2014 awards complete vesting, the 2015 awards will begin to vest.

Other Compensation

        Other than as described above, USANA does not at this time provide benefits to its Named Executive Officers that are different from or in addition to those that are provided to its general employees. Those benefits are described below.

        Retirement:    Executives may participate in Company sponsored 401(k) retirement plans on the same termsStatement captioned "Executive Compensation" and conditions, including Company matching provisions, as other employees. For the year ended January 2, 2016, we contributed matching funds totaling $1,457,912 to our 401(k) plan in which all eligible employee participants shared. During 2015, each of our eligible Executives participated in our 401(k) plan and shared matching funds totaling $72,800. Mrs. Woo is not eligible to participate in our 401(k) plan and the Company pays retirement compensation to her, as disclosedincluded in the Summary Compensation Table, pursuanttable below. In fiscal year 2017, equity awards to Hong Kong law. Exceptnon-employee directors were made using DSUs as disclosed in this paragraph, we provide no other retirement benefits to our Executives.

        Severance:    USANA has no pre-arranged severance agreements or contracts with any of our Executives that contain post-termination or change-in-control payment provisions. We have, however, provided severance benefits to Executives on a case-by-case basis.

        Perquisites:    It is our general practice not to provide significant perquisites or personal benefits to our Executives. The Compensation Committee, however, retains the discretion to consider and award reasonable perquisites or personal benefits to Executives as necessary to accomplish the objectives under our compensation philosophy. In this regard, it should be noted that we do not currently provide pension arrangements, post-retirement health coverage, or similar benefits for our Executives or employees. In 2015, we paid health, life, and disability insurance premiums on behalf of our Executives, all on the same terms as those that we provide to all of the Company's employees.

        Insurance Plans and Other Benefits:    We provide insurance plans and other benefits to our Executives that are similar to those plans and benefits that are customarily provided to general employees of the Company.


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        Indemnification:    Article VI of our Amended and Restated Articles of Incorporation and Article 5 of our Bylaws provide for indemnification of our directors, officers, employees, and other agents to the extent and under the circumstances permitted by the Utah Revised Business Corporation Act. We have entered into agreements with our directors and officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers to the fullest extent allowed. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"), may be permitted to directors, officers, or persons controlling us under the foregoing provisions, the SEC has stated that such indemnification is against public policy, as expressedindicated in the Securities Act, and, therefore, such indemnification provisions may be unenforceable.

Section 162(m) Treatment Regarding Performance-Based Equity Awards

        Under Section 162(m) of the Internal Revenue Code of 1986, as amended ("Section 162(m)"), a public company is generally denied deductions for compensation paid to the chief executive officer and the next four most highly compensated executive officers to the extent the compensation for any such individual exceeds $1,000,000 for the taxable year. The Company's executive compensation programs are designed to preserve the deductibility of compensation payable to executive officers, although deductibility is just one among a number of factors considered in determining appropriate levels or types of compensation.

Consideration of Shareholder Advisory Votes

        The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), required that we include in our proxy statement for the 2014 Annual Meeting of Shareholders (the "2014 Annual Meeting") a non-binding, advisory shareholder vote to approve the compensation of our Named Executive Officers. At the 2014 Annual Meeting, our shareholders voted for approval of the compensation of our Named Executive Officers (99% of votes cast). Historically, the Compensation Committee has recommended, and shareholders have approved (67% of votes cast) the Company's determination to include a shareholder advisory vote on executive compensation in its future proxy materials once every three years. The Compensation Committee has affirmed its recommendation to the Board that this advisory vote be held once every three years and the Board has approved the committee's recommendation. This will be the frequency of such advisory votes until the next required vote on the frequency of advisory votes on executive compensation, which will occur at the Company's Annual Meeting of shareholders in 2017, or until the Compensation Committee, or Board of Directors, otherwise determines a different frequency for such shareholder advisory votes.


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REPORT OF THE COMPENSATION COMMITTEEDirector Compensation Table

        The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

        Respectfully submitted by the members of the Compensation Committee:

Ronald S. Poelman (Chair)
Jerry G. McClain

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SUMMARY COMPENSATION TABLE

        The following table summarizes all compensation paid to our Named Executive Officers in each of the three most recently completed fiscal years.

(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) 
Name and Principal Position
 Year Salary
($)
 Bonus
($)(1)
 Stock
Awards
($)
 Option
Awards ($)(2)
 Non-Equity
Incentive
Plan
Compensation
($)(3)
 Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
 All Other
Compensation
($)(4)
 Total
($)
 

David A. Wentz

  2015 $428,423     $3,035,676 $246,686   $9,100 $3,719,885 

Co-Chief Executive

  2014 $469,231      1,018,958 $218,096   $9,100 $1,715,385 

Officer

  2013 $530,769       $289,360   $8,575 $828,704 

Kevin G. Guest(5)

  
2015
 
$

608,516
  
75,000
  
 
$

3,035,676
 
$

350,383
  
 
$

9,100
 
$

4,078,675
 

Co-Chief Executive

  2014 $589,843  25,000    1,036,679 $274,156   $9,100 $1,934,778 

Officer

  2013 $583,495       $318,104   $8,575 $910,174 

Paul A. Jones

  
2015
 
$

348,042
  
  
 
$

1,517,838
 
$

188,403
  
 
$

9,100
 
$

2,063,383
 

Chief Financial Officer &

  2014 $329,534       $148,666   $9,100 $487,300 

Chief Leadership

  2013 $317,688       $153,192   $8,575 $479,455 

Development Officer

                            

Douglas Braun

  
2015
 
$

334,731
  
  
 
$

2,441,470
 
$

192,738
  
 
$

9,100
 
$

2,978,039
 

Chief Marketing Officer

                            

Deborah Woo(6)

  
2015
 
$

592,305
  
  
 
$

1,517,838
 
$

341,049
  
 
$

84,031
 
$

2,535,223
 

President of Asia

  2014 $583,546      1,027,818 $271,229   $87,580 $1,970,173 

  2013 $575,052       $262,696   $83,513 $921,261 

James H. Bramble

  
2015
 
$

388,032
  
  
 
$

1,517,838
 
$

223,429
  
 
$

9,100
 
$

2,138,398
 

Chief Legal Officer &

  2014 $376,843      655,677 $175,155   $9,100 $1,216,775 

Corporate Secretary

  2013 $365,909       $199,483   $8,575 $573,967 
Name
 Fees earned
or paid in
cash ($)(1)
 Stock
awards
($)(2)
 All other
compensation
($)(3)
 Total ($) 

Myron W. Wentz

         

Robert Anciaux(4)

 $105,000 $52,444   $157,444 

Gilbert A. Fuller(5)

 $116,400 $52,444   $168,844 

J. Scott Nixon(6)

 $22,850 $52,442   $75,292 

D. Richard Williams(7)

 $102,600 $104,998   $207,598 

Feng Peng(8)

 $91,400 $104,998   $196,398 

Frederick J. Winssinger(9)

 $91,400 $104,998   $196,398 

(1)
ConsistsThis amount reflects the aggregate dollar amount of all cash compensation earned for service as a quarterly cash bonus of $25,000 paid to Mr. Guest as our President for additional servicesdirector, including the retainers and, responsibilities while the Company's CEO, Mr. Wentz, had reduced timeif applicable, meeting attendance fees described in the office from August 2014 through August 2015.paragraph captioned "Cash Compensation" above.

(2)
AmountsThese amounts set forth in thisthe "Stock Awards" column reflectrepresent the aggregate grant date fair value of stock-settled stock appreciation rights ("SSARs")the DSUs granted during fiscal year 2017, computed in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718. In computing these amounts,The aggregate grant date fair value is calculated using the Company ignoredclosing price of our common stock on the impactgrant date as if all of the forfeiture rate relating to service based vesting conditions. These amounts do not represent the actual amounts paid to or realized by the Executive forshares underlying these awards duringwere vested and delivered on the applicable fiscal year. Assumptions used in the calculationgrant date. Each of these amounts are included in the Equity Based Compensation footnote to the Company's consolidated financial statements that are included in the Company's Annual Report on Form 10-K for the year ended January 2, 2016.

(3)
Reflects amounts paid in fiscal 2016 for performance realized in fiscal year 2015, under the Company's short-term incentive plan (cash bonus) discussed in the Compensation Discussion and Analysis section of this Proxy Statement.

(4)
Reflects employer's matching contribution to the Executive's 401(k) plan, except in the case of the compensation paid to Mrs. Woo which is set out in (6) below.

(5)
Mr. Guestawards was named Co-Chief Executive Officer of the Company in August 2015.

(6)
Mrs. Woo is our President of Asia & Greater China and resides in Hong Kong. In connection with Mrs. Woo's overseas employment, column (i) reflects $84,031 paid by the Company to Mrs. Woo in 2015 as retirement compensation pursuant to local law.

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GRANTS OF PLAN-BASED AWARDS

        The following table contains information regarding equity awards granted to the Named Executive Officers during the fiscal year ended January 2, 2016 and the estimated or targeted payouts under the 2016 Bonus Plan described in the Compensation Discussion and Analysis section of this Proxy Statement.

 
  
 Estimated future payouts under
non-equity incentive plan
awards(1)
 Estimated future payouts
under equity incentive plan
awards
  
  
  
  
 
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) 
Name
 Grant
Date
 Threshold
($)(1)
 Target
($)
 Maximum
($)
 Threshold
($)
 Target
($)
 Maximum
($)
 All other
stock
awards:
Number of
shares of
stock or
units (#)
 All other
option
awards:
Number
of
securities
underlying
options
(#)(2)
 Exercise
or
base
price
of
option awards
($/Sh)(3)
 Grant
date
fair value
of stock
and
option
awards
($)
 

David A. Wentz

  1-Sep-15   $309,000 $618,000          60,000  141.49  3,035,676 

Kevin G. Guest

  1-Sep-15   $309,000 $618,000          60,000  141.49  3,035,676 

Paul A. Jones

  1-Sep-15   $178,500 $357,000          30,000  141.49  1,517,838 

Doug Braun

  1-Sep-15   $170,000 $340,000          50,000  141.49  2,441,470 

Deborah Woo

  1-Sep-15   $299,384 $598,769          30,000  141.49  1,517,838 

James H. Bramble

  1-Sep-15   $197,000 $394,000          30,000  141.49  1,517,838 

(1)
There is no guaranteed payment to our Named Executive Officers under the 2016 Executive Bonus Plan. If the minimum performance objectives are not achieved, they will receive no payout under the 2016 Executive Bonus Plan. The amounts shown in column (d) reflect the target payout, which is 50% of the Executive's base salary. The amounts shown in column (e) reflect 100% of the Executive's base salary, which is the maximum payout that can be obtained under the 2016 Executive Bonus Plan.

(2)
All equity awards granted to the Named Executive Officers were SSARs and granted under the 2015 Equity Incentive Award Plan.Plan of the Company.

(3)
All Equity Awards granted to the Named Executive Officers were granted at the closing stock price on the date of grant.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

        The following table includes certain information with respect to the value of all equity awards previously granted to the Named Executive Officers at the end of the fiscal year ended January 2, 2016.

 
 Option awards(1) Stock Awards 
(a)
Name
 (b)
Number of
securities
underlying
unexercised
options (#)
exercisable
 (c)
Number of
securities
underlying
unexercised
options (#)
unexercisable
 (d)
Equity
incentive plan
awards:
Number of
securities
underlying
unexercised
unearned
options (#)
 (e)
Option
exercise
price ($)
 (f)
Option
expiration
date
 (g)
Number of
shares or
units of
stock that
have not
vested (#)
 (h)
Market
value of
shares or
units of stock
that have not
vested ($)
 (i)
Equity
incentive
plan awards:
Number of
unearned shares,
units or other
rights that have
not vested (#)
 (j)
Equity
incentive
plan awards:
Market or
payout value of
unearned shares,
units or other
rights that have
not vested ($)
 

David A. Wentz(1)

    57,500   $57.62  15-Mar-18         

    60,000   $141.49  1-Mar-20             

Kevin G. Guest(1)

  
  
58,500
  
 
$

57.62
  
15-Mar-18
  
  
  
  
 

    60,000   $141.49  1-Mar-20             

Paul A. Jones(2)

  
7,000
  
14,000
  
 
$

38.23
  
17-Jun-18
  
  
  
  
 

    30,000   $141.49  1-Mar-20             

Douglas Braun(3)

  
  
14,100
  
 
$

29.59
  
14-Jun-17
  
  
  
  
 

    50,000   $141.49  1-Mar-20             

Deborah Woo(1)

  
  
58,000
  
 
$

57.62
  
15-Mar-18
  
  
  
  
 

    30,000   $141.49  1-Mar-20             

James H. Bramble(1)

  
  
37,000
  
 
$

57.62
  
15-Mar-18
  
  
  
  
 

    30,000   $141.49  1-Mar-20             

(1)
The SSAR grants to Mr. Wentz, Mr. Guest, Mrs. Woo, and Mr. Bramble which expire on March 15, 2018, vest 50% in August 2016 and 50% in August 2017. The SSAR grants to Mr. Wentz, Mr. Guest, Mrs. Woo, and Mr. Bramble which expire on March 1, 2020, vest 50% in September 2018 and 50% in September 2019.

(2)
The SSAR grant to Mr. Jones, which expires on June 16, 2018, vests 20% annually, beginning on the first anniversary of the date of grant. The SSAR grant to Mr. Jones, which expires on March 1, 2020, vests 50% in September 2018 and 50% in September 2019.

(3)
The SSAR grant to Mr. Braun, which expires on June 15, 2017, vests 20% annually, beginning on the first anniversary of the date of grant. The SSAR grant to Mr. Braun, which expires on March 1, 2020, vests 40% in September 2017 and 30% in September 2018, and 30% in September 2019.

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OPTION EXERCISES AND STOCK VESTED

        The following table summarizes certain information with respect to the awards exercised by the Named Executive Officers during the fiscal year ended January 2, 2016.

 
 Option awards Stock awards 
(a)
Name
 (b)
Number of
shares
acquired on
exercise (#)
 (c)
Value
realized on
exercise ($)
 (d)
Number of
shares
acquired on
vesting (#)
 (e)
Value
realized on
vesting ($)
 

David A. Wentz

  21,797  2,828,522     

Kevin G. Guest

  17,901  2,187,373     

Paul A. Jones

  12,660  1,892,910     

Douglas Braun

  10,907  1,425,406     

Deborah Woo

  23,031  2,925,203     

James H. Bramble

  10,644  1,301,426     

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COMPENSATION OF DIRECTORS

        The table below summarizes the compensation paid by the Company toNon-employee directors of the Company for the fiscal year ended January 2, 2016. Dr. Wentz, the Company's Chairman of the Board, received no compensation for his services as a director in 2015.

(a)
Name
 (b)
Fees earned
or paid in
cash ($)(1)
 (c)
Stock
awards ($)
 (d)
Option
awards ($)
 (e)
Non-equity
incentive plan
compensation ($)
 (f)
Change in
pension value and
nonqualified
compensation
earnings ($)
 (g)
All other
compensation ($)
 (h)
Total ($)
 

Myron W. Wentz, Ph.D

               

Robert Anciaux

 $90,150           $90,150 

Jerry G. McClain

 $108,250           $108,250 

Ronald S. Poelman

 $114,800           $114,800 

Gilbert A. Fuller

 $108,100           $108,100 

D. Richard Williams(2)

             $ 

(1)
Effective July 2015, each non-employee director, other than Dr. Myron Wentz, receives an annual cash retainer of $90,600. The chair of the Company's Audit Committee, which is currently Mr. McClain, receives an additional annual cash retainer of $18,200. The chair of the Compensation Committee, which is currently Mr. Poelman, receives an annual cash retainer of $11,200 and the chair of the Governance, Risk and Nominating Committee, which is currently Mr. Fuller, receives an annual cash retainer of $6,800. Mr. Poelman also received an additional cash retainer of $13,600 as Lead Director. The amounts in column (b) reflect a combination of the retainer fees for 2015. The Company also reimburses all directors for the out-of-pocket expenses that they incur in connection with their services as directors, which include travel, lodging, and related expenses from attending conferences to continue their education and expertise as directors, as well as participating in meetings of the shareholders, Board of Directors, and committees of the Board.

(2)
Mr. Williams was appointed to the Board effective March 1, 2016.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth certain information regarding the beneficial ownership of our common stock, as of March 1, 2016, by (1) each person known to be the beneficial owner of more than 5% of the issued and outstanding common stock based upon their most recent filings or correspondence with the SEC, (2) the Named Executive Officers and the directors of USANA individually, and (3) the Named Executive Officers and directors as a group. Except as indicated in the footnotes below, each of the persons listed below is believed to exercise sole voting and investment power over the shares of common stock that are listed for such individual or entity in this table.

Name and Address
 Number of
Shares(1)
 Percent of
Class(2)
 

Beneficial Owners of More Than 5%

       

Gull Global, Ltd. 

  
6,399,110
  
53.6

%

PO Box N-4899, 2/F Bahamas Financial Ctr.

       

Shirley & Charlotte Streets

       

Nassau, C5 BH1-1000

       

Renaissance Technologies LLC(3)

  
774,183
  
6.5

%

800 Third Avenue

       

New York, New York 10022

       

FMR LLC(4)

  
703,762
  
5.9

%

245 Summer Street

       

Boston, MA 02210

       

The Vanguard Group(3)

  
639,243
  
5.4

%

100 Vanguard Blvd.

       

Malvern, PA 19355

       

Directors and Executive Officers

  
 
  
 
 

Myron W. Wentz, Ph.D.(5)

  6,399,110  53.6%

Chairman of the Board

       

David A. Wentz(6)

  
399,937
  
3.3

%

Co-Chief Executive Officer

       

Kevin G. Guest(7)

  
644
  
*
 

Co-Chief Executive Officer

       

Paul A. Jones(8)

  
4,615
  
*
 

Chief Financial Officer & Chief Leadership Development Officer

       

Doug Braun

  
  
*
 

Chief Marketing Officer

       

Deborah Woo

  
  
*
 

President of Asia

       

James H. Bramble(9)

  
635
  
*
 

Chief Legal Officer

       

Robert Anciaux, Director(10)

  
4,614
  
*
 

Jerry G. McClain, Director(11)

  
7,433
  
*
 

Ronald S. Poelman, Director(12)

  
5,969
  
*
 

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Name and Address
 Number of
Shares(1)
 Percent of
Class(2)
 

Gilbert A. Fuller, Director(13)

  980  * 

D. Richard Williams

  
  
*
 

Directors and Officers as a group (12 persons)

  
6,823,937
  
57.0

%

*
Less than one percent.

(1)
All entries exclude beneficial ownership of shares that are issuable pursuant to options or SSARs that havedo not vested or that are not otherwise exercisable as of the date hereof and which will not become vested or exercisable within 60 days of March 1, 2016.

(2)
Percentages are rounded to nearest one—tenth of one percent. Percentages are based on 11,944,164 shares outstanding on March 1, 2016. Shares of common stock subjected to options and/or SSARs that are presently exercisable or exercisable within 60 days of March 1, 2016 are deemed to be beneficially owned by the person holding the options or SSARs for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage ofreceive any other person.

(3)
Reflects the numberperquisites or personal benefits or property as part of shares held at year-end, as reported on Form SC 13G/A filed on February 11, 2016.their compensation.

(4)
Reflects the numberStock award amount represents fair value on grant date of 822 DSUs granted to Mr. Anciaux on July 24, 2017. The shares held at year-end,vest in two equal amounts on December 31, 2017, and April 1, 2018. Mr. Anciaux currently serves as reported on Form SC 13G/A filed on February 12, 2016.Senior Director.

(5)
Includes 6,399,110Stock award amount represents fair value on grant date of 822 DSUs granted to Mr. Fuller on July 24, 2017. The shares held of record by Gull Global, Ltd., an Isle of Man company, which is 100% owned by Dr. Wentz. Because of his control of Gull Global, Ltd, Dr. Wentz is deemed to be the beneficial owner of the shares that are owned of record by Gull Global, Ltd.

(6)
Includes 389,515 shares that are held of recordvest in two equal amounts on December 31, 2017, and 10,422 shares that are held in the executive's 401(k) account.

(7)
Includes 644 shares that are held in the executive's 401(k) account.

(8)
Includes 4,615 shares that are issuable pursuant to SSARs, which are presently exercisable or which become exercisable within 60 days of MarchApril 1, 2016. This share count assumes settlement of this individual's SSARs at the closing market price on March 1, 2016.

(9)
Includes 635 shares that are held in the executive's 401(k) account.

(10)
Includes 1,460 shares that are issuable pursuant to SSARs, which are presently exercisable or which become exercisable within 60 days of March 1, 2016. This share count assumes settlement of this individual's SSARs at the closing market price on March 1, 2016. Also includes 3,154 shares that are issuable pursuant to Deferred Stock Units ("DSUs"), which are presently vested or which become vested within 60 days of March 1, 2016.

(11)
Includes 1,460 shares that are issuable pursuant to SSARs, which are presently exercisable or which become exercisable within 60 days of March 1, 2016. This share count assumes settlement of this individual's SSARs at the closing market price on March 1, 2016. Also includes 5,973 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 1, 2016.

(12)
Includes 1,460 shares that are issuable pursuant to SSARs, which are presently exercisable or which become exercisable within 60 days of March 1, 2016. This share count assumes settlement of this individual's SSARs at the closing market price on March 1, 2016. Also includes 4,509 shares2018.

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    that are issuable pursuant

    (6)
    Stock award amount represents fair value on grant date of 859 DSUs granted to Mr. Nixon on October 23, 2017, upon his appointment to the Board. The shares vest in two equal amounts on December 30, 2017, and March 31, 2018.

    (7)
    Stock award amount represents fair value on grant date of 1,880 DSUs which are presently vested or which become vested within 60 daysgranted to Mr. Williams on May 1, 2017. The shares vest in four equal quarterly installments, commencing on the last day of Marchthe Company's second fiscal quarter of 2017.

    (8)
    Stock award amount represents fair value on grant date of 1,880 DSUs granted to Mr. Peng on May 1, 2016.

2017. The shares vest in four equal quarterly installments, commencing on the last day of the Company's second fiscal quarter of 2017.

(13)(9)
Includes 730Stock award amount represents fair value on grant date of 1,880 DSUs granted to Mr. Winssinger on May 1, 2017. The shares that are issuable pursuant to SSARs, which are presently exercisable or which become exercisable within 60 daysvest in four equal quarterly installments, commencing on the last day of March 1, 2016. This share count assumes settlementthe Company's second fiscal quarter of this individual's SSARs at the closing market price on March 1, 2016. Also includes 250 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 1, 20162017.

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EQUITY COMPENSATION PLAN INFORMATION

        The following table sets forth information regarding outstanding awards and shares reserved for future issuance under our equity compensation plans as of January 2, 2016.

Plan Category
 Number of securities
to be issued upon
exercise of
outstanding awards(1)
 Weighted-average
exercise price of
outstanding awards
 Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities
reflected in column (a))
 
 
 (a)
 (b)
 (c)
 

Equity compensation plans approved by security holders

  2,188,293(2)$94.68(3) 4,045,000 

Equity compensation plans not approved by security holders

  None  N/A  None 

Total

  2,188,293(2)$94.68(3) 4,045,000 

(1)
Consists of shares of common stock issuable under the USANA 2006 Equity Incentive Award Plan and the USANA 2015 Equity Incentive Award Plan.

(2)
Includes (i) 12,886 DSUs that will entitle each holder to the issuance of one share of common stock for each unit, and (ii) 2,175,407 SSARs. A SSAR is the right to receive the appreciation in fair market value of common stock between the exercise date and the date of grant in shares of common stock. Based on the closing stock price of $127.75 on the last trading day of fiscal 2015 and the exercise price of SSAR's that were in-the-money, 315,943 shares of common stock would be issued upon the exercise of these SSAR awards.

(3)
Calculated without taking into account 12,886 shares of common stock subject to outstanding DSU's, which are issuable without any cash consideration or other payment required for such shares.

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PROPOSAL #2—RATIFICATION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

        The Audit Committee of the Board of Directors has selectedappointed KPMG LLP ("KPMG") as theour independent registered public accounting firm to audit the financial statements of the Company and its subsidiaries for the fiscal year ending December 31, 2016 and internal control over financial reporting as of December 31, 2016.29, 2018. KPMG has served as our independent registered public accounting firm since September 16, 20132013. Services provided to the Company by KPMG in the fiscal year ended December 30, 2017, and auditedthe fiscal year ended December 31, 2016 are described below.

        We are asking our shareholders to ratify the selection of KPMG as our independent registered public accounting firm. Although ratification is not required by our bylaws or otherwise, the Board is submitting the selection of KPMG to our shareholders for ratification because we believe it is a sound corporate governance practice. If our shareholders do not ratify the selection, the Audit Committee will consider whether or not to retain KPMG but may retain them.

        The ratification of the appointment of the independent registered public accounting firm requires the affirmative vote of a majority of the votes cast at the Annual Meeting. Representatives of KPMG will be present at the Annual Meeting and will have an opportunity to make a statement and/or to respond to appropriate questions from shareholders.

Independence

        KPMG has advised us that it has no direct or indirect financial interest in the Company or in any of its subsidiaries and that during 2017, it had no connection with the Company or any of its subsidiaries, other than as its independent registered public accounting firm or in connection with certain other services, as described below.

Audit Fees

        During fiscal year 2017, we entered into an engagement agreement with KPMG, which set forth the terms by which KPMG agreed to perform audit services for the Company. Those services consisted of the audit of the annual consolidated financial statements of the Company, and the effectiveness of our internal control over financial reporting, review of the quarterly financial statements, stand-alone audits of subsidiaries, and accounting consultations, consents, other services related to SEC filings by the Company and its subsidiaries, tax compliance services and transfer pricing services. KPMG did not perform any financial information systems design and implementation services for the Company for fiscal year 2017.


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        During fiscal year 2016, KPMG performed services consisting of the audit of the annual consolidated financial statements of the Company, and the effectiveness of our internal control over financial reporting, review of the quarterly financial statements, stand-alone audits of subsidiaries, and accounting consultations, consents, other services related to SEC filings by the Company and its subsidiaries, tax compliance services and transfer pricing services. KPMG did not perform any financial information systems design and implementation services for the Company for fiscal year 2016.

        The following table summarizes the fees paid by us to KPMG during fiscal years 2016 and 2017.

Type of Service and Fee
 Fiscal Year 2016 Fiscal Year 2017 

Audit Fees

 $1,958,641 $2,074,116 

Audit Related Fees

     

Tax Fees

 $64,650 $111,300 

All Other Fees

     

Total Fees

 $2,023,291 $2,185,416 


REPORT OF THE AUDIT COMMITTEE

        The Audit Committee is composed of five directors, all of whom meet the independence standards contained in the NYSE Listed Company rules, SEC rules, and USANA's Corporate Governance Principles, and operates under a written charter adopted by the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the Company's system of internal control over financial reporting.

        The Audit Committee selects, subject to shareholder ratification, the Company's independent registered public accounting firm, and oversees and monitors the Company's financial reporting process on behalf of the Board of Directors. The Audit Committee selected KPMG as the Company's independent registered public accounting firm for fiscal year 2017. KPMG is responsible for performing independent audits of the Company's consolidated financial statements and internal control over financial reporting and issuing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States of America and on the effectiveness of the Company's internal control over financial reporting KPMG is also responsible for communicating its judgments as to the quality and the acceptability of the Company's financial reporting, and such other matters as are required to be discussed with the Committee under the standards of the Public Company Accounting Oversight Board (PCAOB).

        The Committee discussed with KPMG its independence from management and the Company, including the impact of any non-audit-related services provided to the Company, the matters in KPMG's written disclosures, and the letter from KPMG to the Committee pursuant to the applicable requirements of the PCAOB regarding the firm's communications with the Audit Committee concerning its independence. The Committee also discussed with KPMG the matters required to be discussed by PCAOB Auditing Standard No. 1301,Communications with Audit Committees.

        Further, the Committee discussed with the Company's internal audit executive and KPMG the overall scope and plans for their respective audits. The Committee meets periodically with the internal audit executive and representatives of the independent registered public accounting firm, with and without management present, to discuss the results of the examinations, their evaluations of the Company's internal controls (including internal control over financial reporting), and the overall quality of the Company's financial reporting.

        In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors that the audited financial statements be included in USANA's Annual Report on Form 10-K for the fiscal year ended January 2, 2016.December 30, 2017 filed with the Securities and Exchange


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Commission. The Committee also evaluated and reappointed KPMG as the Company's independent registered public accounting firm for fiscal 2018.

        Respectfully submitted by the members of the Audit Committee:



Gilbert A. Fuller, Chairman
J. Scott Nixon
Feng Peng
D. Richard Williams
Frederic Winssinger

Policy on Pre-Approval of Audit and Permissible Non-Audit Services

        It is the policy of the Audit Committee, as set forth in the Audit Committee's Charter, to pre-approve, consistent with the requirements of the federal securities laws, all auditing services and permissible non-audit services provided to the Company by its independent registered public accounting firm. The Audit Committee pre-approves any engagement of KPMG and has the ultimate authority and responsibility to select, evaluate, and where appropriate, replace the independent registered public accounting firm and nominate an independent registered public accounting firm for shareholder approval. While ratification of the selection of auditors by the shareholders is not required and is not binding upon the Audit Committee or the Company, in the event of a negative vote on such ratification, the Audit Committee might choose to reconsider its selection.

        Prior to the performance of any services, the Audit Committee approves all audit and non-audit services to be provided by the Company's independent registered public accounting firm and the fees to be paid therefor. Although the Sarbanes-Oxley Act of 2002 permits the Audit Committee to pre-approve some types or categories of services to be provided by the independent registered public accounting firm, it is the current practice of the Audit Committee to specifically approve all services provided by the independent registered public accounting firm in advance, rather than to pre-approve any type of service. In connection with this practice, the Audit Committee has considered whether the provision of non-audit services is compatible with maintaining KPMG's independence.

Independence

        KPMG has advised us that it has no direct or indirect financial interest inindependence established policies and procedures for the pre-approval of audit, audit related, tax and permissible other services to be provided to the Company or in any of its subsidiaries and that during 2015 it had no connection with the Company or any of its subsidiaries, other than asby its independent registered public accounting firm orfirm. All fees listed in connection with certain other activities, as described below.the table above were pre-approved by the Audit Committee.

Financial Statements and Reports RECOMMENDATION OF THE BOARD OF DIRECTORS

        The financial statements of the Company as of and for the year ended January 2, 2016, and the report of the independent registered public accounting firm will be presented at the Annual Meeting. KPMG will have a representative present at the meeting who will have an opportunity to make a statement, if he or she so desires, and to respond to appropriate questions from shareholders.

Services

        During the fiscal year 2015, KPMG performed services consisting of the audit of the annual consolidated financial statements of the Company, the audit of the effectiveness of our internal control over financial reporting, review of the quarterly financial statements for the quarters ended April 4, 2015, July 4, 2015 and October 3, 2015, stand-alone audits of subsidiaries, and accounting consultations, consents, other services related to SEC filings by the Company and its subsidiaries, tax compliance services and transfer pricing services. KPMG did not perform any financial information systems design and implementation services for the Company for the fiscal year 2015.

        During the fiscal year 2014, KPMG performed services consisting of the audit of the annual consolidated financial statements of the Company, the audit of the effectiveness of our internal control


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over financial reporting, review of the quarterly financial statements for the quarters ended March 29, 2014, June 28, 2014 and September 27, 2014, stand-alone audits of subsidiaries, and accounting consultations, consents, other services related to SEC filings by the Company and its subsidiaries, tax compliance services and transfer pricing services. KPMG did not perform any financial information systems design and implementation services for the Company for the fiscal year 2014.

        The following table summarizes the fees that were paid to KPMG by the Company during fiscal years 2015 and 2014.

Type of Service and Fee Fiscal Year
2014
 Fiscal Year
2015
 

Audit Fees

 $1,423,415 $1,634,529 

Audit Related Fees

     

Tax Fees

 $43,050 $57,050 

All Other Fees

     

Total Fees

 $1,466,465 $1,691,579 

RECOMMENDATION

        The Board of Directors unanimously recommends a voteFOR ratification of the appointment of KPMG LLP, as the Company's independent registered public accounting firm for fiscal year 2016.2018.


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REPORTSECURITY OWNERSHIP OF THE AUDIT COMMITTEE
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The Audit Committee is responsible for monitoringfollowing table sets forth certain information regarding the Company's financial accountingbeneficial ownership of our common stock, as of March 7, 2018, by (1) each person known by us to be the beneficial owner of more than 5% of the issued and financial reporting processesoutstanding common stock based upon their most recent filings or correspondence with the SEC, (2) our Named Executive Officers and the Company's system of internal controls, selectingdirectors individually, and (3) the independent registered public accounting firm on behalfNamed Executive Officers and directors as a group. Except as indicated in the footnotes below, each of the Boardpersons listed below is believed to exercise sole voting and investment power over the shares of Directors, and monitoring the audit results. Management has the primary responsibilitycommon stock that are listed for the financial statements and the reporting process, including the systems of internal controls. The independent registered public accounting firm, KPMG LLP, is responsible for performing an independent audit of the Company's consolidated financial statements and the effectiveness of internal control over financial reportingsuch individual or entity in accordance with standards of the Public Company Accounting Oversight Board (United States) and issuing their opinion thereon. In this context, the Audit Committee met regularly and held discussions with management, the internal audit department and KPMG LLP. Management represented to the Audit Committee that the consolidated financial statements for the fiscal year 2015 were prepared in accordance with U.S. generally accepted accounting principles and internal control over financial reporting was effective as of January 2, 2016.

        The Audit Committee hereby reports as follows:

    The Audit Committee has reviewed and discussed the audited consolidated financial statements and internal controls over financial reporting with management and KPMG LLP. This discussion included KPMG LLP's judgments about the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

    The Audit Committee also discussed with KPMG LLP the matters required to be discussed by Auditing Standard No. 16, as adopted by the Public Company Accounting Oversight Board in Rule 3200T.

    KPMG LLP also provided to the Audit Committee the written disclosures and the letter required by the applicable requirements of the Public Accounting Oversight Board regarding KPMG LLP's communications with the Audit Committee concerning independence, and the Audit Committee has discussed with KPMG LLP the accounting firm's independence. The Audit Committee also considered whether non-audit services provided by KPMG LLP during the last fiscal year were compatible with maintaining the accounting firm's independence.

        Based on the review and discussions referred to above, the Audit Committee has recommended to the Board of Directors that the audited consolidated financial statements of the Company be included in the Company's Annual Report on Form 10-K for the year ended January 2, 2016, for filing with the Securities and Exchange Commission.

        Respectfully submitted by the members of the Audit Committee:

table.

Name and Address
 Number of
Shares(1)
 Percent of
Class(2)
 

Beneficial Owners of More Than 5%

       

Gull Global, Ltd. 

  
11,522,053
  
47.9

%

PO Box N-4899, 2/F Bahamas Financial Ctr.

       

Shirley & Charlotte Streets

       

Nassau, C5 BH1-1000

       

Renaissance Technologies LLC(3)

  
1,930,966
  
8.0

%

800 Third Avenue

       

New York, New York 10022

       

FMR LLC(4)

  
1,549,638
  
6.4

%

245 Summer Street

       

Boston, MA 02210

       

Directors and Executive Officers

       

Myron W. Wentz, Ph.D.(5)

  11,522,053  47.9%

Chairman of the Board

       

Kevin G. Guest(6)

  
2,169
  
*
 

Chief Executive Officer

       

Jim Brown(7)

  
2,971
  
*
 

President & COO

       

G. Douglas Hekking(8)

  
2,289
  
*
 

Chief Financial Officer

       

Paul A. Jones(9)

  
10,702
  
*
 

Chief Leadership Development Officer

       

David Mulham(10)

  
6,000
  
*
 

Chief Field Development Officer

       

Dan Macuga(11)

  
1,941
  
*
 

Chief Communications and Marketing Officer

       

Robert Anciaux, Director(12)

  
10,630
  
*
 

Gilbert A. Fuller, Director(13)

  
4,822
  
*
 

Feng Peng(14)

  
3,660
  
*
 

Frederic Winssinger(15)

  
3,660
  
*
 

J. Scott Nixon(16)

  
859
  
*
 

Directors and Officers as a group (12 persons)

  
11,571,756
  
48.0

%

Jerry G. McClain (Chair)
Gilbert A. Fuller
Ronald S. Poelman
*
Less than one percent.

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(1)
All entries exclude beneficial ownership of shares that are issuable pursuant to SSARs that have not vested or that are not otherwise exercisable as of the date hereof and which will not become vested or exercisable within 60 days of March 7, 2018.
EMPLOYMENT CONTRACTS AND OTHER ARRANGEMENTS

        The Company has no employment agreements with

(2)
Percentages are rounded to nearest one—tenth of one percent. Percentages are based on 24,066,524 shares outstanding on March 7, 2018. Shares of common stock subjected to SSARs that are presently exercisable or exercisable within 60 days of March 7, 2018 are deemed to be beneficially owned by the person holding the SSARs for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage of any other person.

(3)
Reflects the number of its executive officers.

shares held at year-end, as reported on Form SC 13G/A filed on February 14, 2018.

(4)
Reflects the number of shares held at year-end, as reported on Form SC 13G/A filed on February 13, 2018.

(5)
Includes 11,522,053 shares held of record by Gull Global, Ltd., a Bahamas company, which is 100% owned by Dr. Wentz. Because of his control of Gull Global, Ltd, Dr. Wentz is deemed to be the beneficial owner of the shares that are owned of record by Gull Global, Ltd.

(6)
Includes 791 shares that are held of record and 1,378 shares that are held in the executive's 401(k) account.

(7)
Includes 791 shares that are held of record and 2,180 shares that are held in the executive's 401(k) account.

(8)
Includes 1,403 shares that are held in the executive's 401(k) account and 886 shares that are issuable pursuant to RSUs, which vest within 60 days of March 7, 2018.

(9)
Includes 10,702 shares that are issuable pursuant to SSARs, which are presently exercisable or which become exercisable within 60 days of March 7, 2018. This share count assumes settlement of this individual's SSARs at the closing market price on March 7, 2018.

(10)
Includes 873 shares that are held of record and 5,127 shares that are issuable pursuant to SSARs, which are presently exercisable or which become exercisable within 60 days of March 7, 2018. This share count assumes settlement of this individual's SSARs at the closing market price on March 7, 2018.

(11)
Includes 503 shares that are held of record and 1,438 shares that are held in the executive's 401(k) account.

(12)
Includes 10,630 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 7, 2018.

(13)
Includes 4,822 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 7, 2018.

(14)
Includes 3,660 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 7, 2018.

(15)
Includes 3,660 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 7, 2018.

(16)
Includes 859 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 7, 2018.


SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Exchange Act requires our officers, directors, and persons who beneficially own more than 10% of our common stock to file reportsstatements reporting their initial beneficial ownership of ownershipcommon stock and any subsequent changes in beneficial ownership, with the SEC, and with the NYSE. Officers, directors, and greater-than-ten-percent shareholders are also requiredby specified due dates that have been established by the SEC to furnish us with copies of all Section 16(a) forms that they file.SEC.

        Based solely upon aour review of (a) Section 16(a) statements filed on behalf of these formspersons for their respective transactions during our 2017 fiscal year and (b) representations received from these


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persons that no other Section 16(a) statements were furnished to the Company, and based on representations made by certain persons who were subject to this obligation that such filings were not required to be made, the Company believes that all reports that are required to be filed by these individualsthem for their respective transactions during fiscal year 2017, we believe that all Section 16(a) filing requirements applicable to our directors and executive officers and persons under Section 16(a)beneficially holding more than 10% of our outstanding common stock were filed on time in fiscal year 2015, except that two filings for Gull Global, Ltd. were reported late on Form 4.complied with by these individuals.


CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Policies and Procedures Regarding Related Party Transactions

        In the ordinary course of business, we may engage in transactions which have the potential to create actual or perceived conflicts of interest between USANA and our directors and officers or their immediate family members. The Audit Committee charter requires that the Audit Committee review and approve any related party transaction or, in the alternative, that it notify and request action on the related party transaction by the full Board of Directors. While we have not adopted formal written procedures for reviewing such transactions, in deciding whether to approve a related party transaction, the Audit Committee may consider, among other things, the following factors:

    information regarding the goods or services that are proposed to be provided, or that are being provided, by or to the related party;

    the nature of the transaction and the costs to be incurred by the Company;

    an analysis of the costs and benefits that are associated with the transaction and a comparison of alternative goods or services that are available to the Company from unrelated parties;

    an analysis of the significance of the transaction to the Company;

    whether the transaction would be in the ordinary course of our business;

    whether the transaction is on terms that are comparable to those that could be obtained in an arm's-length dealing with an unrelated third party; and

    whether the transaction could result in an independent director no longer being considered to be independent under the NYSE rules.

        After considering these and other relevant factors, the Audit Committee either (1) approves or disapproves the related party transaction, or (2) requests that the full Board of Directors consider the matter. The Audit Committee will not approve any related party transaction which is not on terms that it believes are both fair and reasonable to USANA.


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Related Party TransactionTransactions

        The Company's Founder and Chairman of the Board, Myron W. Wentz, PhD is the sole beneficial owner of Gull Global, Ltd., which is the largest shareholder of the Company.Company, Gull Global, Ltd. As of March 7, 2018, Gull Global, Ltd. owned 51.4%47.9% of ourthe Company's issued and outstanding shares as of January 2, 2016.shares. Dr. Wentz devotes much of his personal time, expertise, and resources to a number of business and professional activities outside of USANA. The most significant of these is the Sanoviv Medical Institute, which is a unique, fully integrated health and wellness center located near Rosarito, Mexico that Dr. Wentz founded in 1998. Dr. Wentz's private entity, Sanoviv S.A. DEde C.V. ("Sanoviv"), contracts with Amarevita S DE RL DE CV (formerly Medicis, S.C.) ("Medicis"Amarevita"), an entity that is owned and operated independently of Dr. Wentz, to conduct the operations of the Sanoviv Medical Institute. Sanoviv leases the medical building to MedicisAmarevita and MedicisAmarevita carries out all of the operations of the medical institute, which include employing all of the medical and healthcare professionals who provide services at the medical institute. The MedicisAmarevita medical and healthcare professionals possess expertise in the fields of human health, digestive health, nutritional medicine, lifestyle medicine and other medical fields that are important to USANA.


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        In 2015, Medicis performed a variety of contract research services on behalf of USANA, which included: (i)Amarevita performs research and development of novel product formulations for future development and production by USANA;USANA, and (ii)they also perform research and development of improvements in existing USANA product formulations. Also, in 2015, Medicis performedIn addition to providing contract research services, Amarevita provides physicians and other medical staff to speak at USANA Associate events. Finally, Amarevita performs health assessments and physical examinations for certain of our executives.the Company's Executives. In exchangeconsideration for these services, USANA paid Medicis approximatelyAmarevita $383,000, during 2015.$322,000, and $337,000 in 2015, 2016, and 2017, respectively. The Company's agreements with MedicisAmarevita were approved by the Audit Committee in advance of the Company's entry into the agreements. OurUSANA's collaboration with MedicisAmarevita is terminable at will by usUSANA at anytime,any time, without any continuing commitment by USANA.

        The Company has had a long-standing relationship with Drive Marketing, a promotional product distributor located in Sandy, Utah. Drive Marketing provides the Company with customized products for Associate recognition. The Company paid Drive Marketing $420,000, $523,000. and $781,000, in 2015, 2016 and 2017, respectively. During 2016, Drive Marketing hired Nathan Guest as a sales representative for its various network marketing accounts, including the Company's account. Nathan Guest is the son of Kevin Guest, our Chief Executive Officer. Drive Marketing is one of many promotional product distributors utilized by the Company. The Company's relationship with Drive Marketing is terminable at will by the Company at any time without any continuing commitment.

        The Company has had a long standing contractual relationship with Shane Farmer, the sole owner of Dark Horse Rowing, LLC located in San Diego, California. Mr. Farmer provides consulting and other advisory services to the Company related to its development of nutritional products. The Company paid Dark Horse Rowing, LLC $129,000, $136,000, and $135,000, in 2015, 2016 and 2017, respectively. During 2017, Shane Farmer became the stepson of Dr. Wentz, the Company's founder and Chairman of the Board. Mr. Farmer is one of many consultants and experts utilized by the Company to advise on nutrition. The Company's relationship with Dark Horse Rowing is terminable at will by the Company at any time without any continuing commitment.


OTHER MATTERSEXECUTIVE OFFICERS

Shareholder Proposals.    As        Our executive officers at December 30, 2017 and as of the date of this Proxy Statement were:

Name
Position
Kevin G. GuestChief Executive Officer and Director
Jim BrownPresident and Chief Operating Officer
G. Douglas HekkingChief Financial Officer
Paul A. JonesChief Leadership Development Officer
James H. BrambleChief Legal Officer and Corporate Secretary
Daniel A. MacugaChief Communications and Marketing Officer
Robert SinnottChief Scientific Officer
Walter NootChief Information Officer
David MulhamChief Field Development Officer

        The following information is provided to us by our executive officers.

Kevin G. Guest, 55, Chief Executive Officer. Mr. Guest's biographical and business background information are provided for you in the section above titled "Director Nominees," where he is listed as a nominee for director.


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Jim Brown, 49, President and Chief Operating Officer. Mr. Brown joined USANA in 2006 as Vice President of Operations. In July 2011, he was appointed Vice President of Global Operations and served in that role until July 2012, when he was appointed Chief Production Officer. He served in that role until November 2013 when he was appointed Chief Operating Officer. He served in that role until November 2016 when he was appointed President and Chief Operating Officer. Prior to joining USANA, Mr. Brown was employed at Sonoco as a plant manager where he was responsible for safety, quality, finance, production, and maintenance. Mr. Brown received a bachelor's degree with a double major in computer science and math as well as an M.B.A. from Francis Marion University in Florence, South Carolina.

G. Douglas Hekking, 48, was promoted from Executive Vice President of Finance, a position that he has held since May 2016, to Chief Financial Officer in May 2017. Mr. Hekking joined USANA in 1992 and served in several management positions until March 1996, when he was appointed as Controller. Mr. Hekking served as Controller from March 1996 until February 2005, when he was appointed as Vice President of Finance. He served as Vice President of Finance until July 2007, when he transitioned to our operations group and was appointed as Executive Director of Special Projects. He served in this position until May 2011, when he was promoted to Chief Financial Officer. Mr. Hekking served in this role until December 2012, when he stepped aside to attend to certain family health matters. In December 2012, Mr. Hekking was appointed as Vice President of Finance until May 2016, when he was appointed as Executive Vice President of Finance. Mr. Hekking received a B.S. in accounting from the University of Utah and an M.B.A. from Brigham Young University.

Paul A. Jones, 54, Chief Leadership Development Officer. Mr. Jones joined USANA in 2005 as Vice President of Human Resources and served in this role until June 2007, when he left to complete a three-year service mission. Mr. Jones returned as Vice President of Human Resources in July 2010, and served in this role until December 2012, when he was appointed Chief Financial Officer. In August 2015, Mr. Jones was also appointed Chief Leadership Development Officer. Prior to joining USANA, Mr. Jones was Vice President of Human Resources and later Vice President of Operations for Associated Food Stores, Inc. Mr. Jones received a B.S. in finance from Utah State University and M.A. in organizational management from the University of Phoenix. Mr. Jones is also a Certified Management Accountant.

James H. Bramble, 48, Chief Legal Officer and Corporate Secretary. Mr. Bramble joined USANA in March 1998 to manage the Compliance and Legal Departments. In April 2006, he was appointed Vice President and General Counsel. In July 2008, Mr. Bramble was also appointed Corporate Secretary, and served in these roles until May 2011, when he was appointed Chief Legal Officer and Corporate Secretary. Prior to joining USANA, Mr. Bramble was employed with Novus Services. Mr. Bramble received a B.S. in political science with a minor in Spanish from the University of Utah in Salt Lake City, Utah. He received his J.D. from the S.J. Quinney College of Law at the University of Utah.

Daniel A. Macuga, Jr., 48, Chief Communications and Marketing Officer. Mr. Macuga joined USANA in 2007 as Vice President of Network Development and Public Relations. In July 2008, he was appointed as Vice President of Marketing, Public Relations and Social Media and served in that role until December 2011, when he was appointed Chief Communications Officer. He served in that role until February 2014 when he was appointed Chief Communications Officer and Executive Vice President of Field Development for the Americas. He served in that role until November 2016 when he was appointed Chief Communications Officer. Prior to joining USANA, Mr. Macuga was employed at the Chrysler Corporation, where he spent 15 years working closely with independent dealership entrepreneurs to help them build their businesses, increase awareness for their products, and keep them focused on effective customer relationship management. Mr. Macuga received a B.A. in communications from the University of California, San Diego.


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Robert A. Sinnott, M.N.S., Ph.D., 53, joined USANA as our Chief Scientific Officer in August 2016. From 2005 to 2016, he was Chief Science officer of Mannatech, Inc. From 2009 to 2012, he also served as Co-Chief Executive Officer and from 2012 to 2016 as CEO of Mannatech. During his tenure at Mannatech, Dr. Sinnott has served to further the company's proprietary science, research and development, and initiated independent clinical trials, was responsible for oversight of quality assurance/quality control, global regulatory affairs, legal department, human resources, and global supply chain. Dr. Sinnott has held scientific and business positions in both industry and government over the past 25 years with experience in life sciences, chemistry, biotechnology and nutrition. For the past 18 years, he has worked directly in the dietary supplement industry both in the United States and internationally. From 2006 to 2011, Dr. Sinnott held a seat on the Board of Directors does not intendof the Council of Responsible Nutrition's (the "CRN"), the leading trade association representing ingredient suppliers and manufacturers of dietary supplements. From 2009 to present,2011, Dr. Sinnott also served as chair of the Senior Scientific Advisory Committee (SSAC) for the CRN. The SSAC is comprised of the highest-ranking scientific officers of member companies. Its role is to assist the CRN with development and implementation of scientific strategy relating to scientific publications, scientific policies and programs by government agencies. Dr. Sinnott holds a B.S. degree in Biological Sciences, a Masters in Natural Science, and a Ph.D. in Plant Sciences from Arizona State University, in Tempe, Arizona. His focus was on applied biological sciences, including biotechnology and plant medicinal chemistry.

Walter Noot, 52, joined USANA as Chief Information Officer in December 2016. Mr. Noot has more than two decades of executive leadership experience and has not been informedworked with a wide range of businesses in many industries, from start-ups to multibillion-dollar companies. From 2014 until 2016, he was an executive officer of Young Living Essential Oils, LC, where he served as Chief Information Officer and Senior Vice President of Operations before joining USANA. While at Young Living he oversaw improvements to the supply chain, implementation of a new ERP, and a software systems rebuild. Prior to joining Young Living, Mr. Noot was COO of MonaVie, another direct sales company from 2012 to 2014 and has held leadership positions with Computer Associates, Canon (Oce), and Onyx Graphics. He holds a B.S. degree in mechanical engineering from Brigham Young University.

David Mulham, 57, Chief Field Development Officer. Mr. Mulham joined USANA in 2009 as Field Development, Marketing and Customer Service Manager for Australia and New Zealand. In February 2011, he was appointed General Manager, for Australia and New Zealand and served in that any other person intendsrole until June 2011, when he was appointed Vice President, Pacific Region (Australia, New Zealand and Philippines). In February 2014 he was appointed Executive Vice President of Field Development, Pacific Region and then in May 2015 he was appointed Executive Vice President, Pacific Region. He served in that role until January 2016 when he was appointed Executive Vice President, Pacific and Europe and then in September 2016, he was appointed Executive Vice President, the Americas, Pacific and Europe. He served in that role until February 2017, when he was appointed Chief Field Development Officer. Prior to present, any matter for action at the Annual Meeting, other than as set forth herein andjoining USANA, Mr. Mulham had extensive experience in the NoticeDirect Selling Industry having worked for Amway, Mary Kay, Nutri Metics and Dorling Kindersley Family Learning. He subsequently worked in property development as Director of Annual Meeting. If any other matter properly comes beforeboth Hunter Valley Gardens and Tempus Two Winery. Mr. Mulham has a post graduate diploma from Macquarie Graduate School of Management, Sydney, and received the meeting, it is intended that the holders of proxies will actSilver Stevie Award in accordance with their best judgment on these matters. Shareholders who intend to present proposals at the 2017 Annual Meeting under SEC Rule 14a-8 must ensure that such proposals are received by the Secretary2015, for Executive of the Company not later than November 26, 2016. Such proposals must meet the requirements of the SEC to be eligible for inclusion in our 2017 proxy materials.


ANNUAL REPORT

        A copy of the our Annual Report on Form 10-K for the fiscal year ended January 2, 2016, as filed with the SEC, will be made available on our websiteYear—Health Products & Services and to each shareholder of record at March 1, 2016 who requests such materials, mailed concurrently with, this Proxy Statement. The Annual Report on Form 10-K is not deemed a part of the proxy soliciting material for the Annual Meeting.

        Notwithstanding any general language that may be to the contrary in any document filed with the SEC, the information in this Proxy Statement under the captions "Audit Committee Report" and "Compensation Committee Report" shall not be incorporated by reference into any document filed with the SEC.Pharmaceuticals.


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FURTHEREXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction and Executive Summary

        The following Compensation Discussion and Analysis describes our executive compensation philosophy, the structure of our executive compensation programs, the factors that we consider when making decisions regarding the compensation for the executive officers named in the Summary Compensation Table (referred to in this Proxy Statement as our "Named Executive Officers" and included in the group referenced below by the terms "executive" and "executives" in the Compensation Discussion and Analysis), and certain changes we made to our executive compensation program during 2017.

Executive Summary

        We believe that our executives and employees, as well as the compensation programs that incent them, are key factors in driving strong financial and operational performance and creating shareholder value. With that in mind, our executive compensation program is designed to, among other things, (i) provide a competitive and equitable compensation and benefits package for our executives; (ii) promote a pay-for-performance philosophy, and (iii) motivate and retain effective executives. Proposal Number 3 of this Proxy Statement provides you the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our Named Executive Officers as set forth in this Proxy Statement. At our 2017 Annual Meeting of Shareholders held on May 3, 2017, shareholders had the opportunity to provide an advisory vote on the compensation paid to our Named Executive Officers. Over 82% of the votes cast by our shareholders were in favor of the non-binding resolution approving executive compensation paid in fiscal year 2016 to our Named Executive Officers. The Compensation Committee believes that those results generally affirm shareholder support of our approach to executive compensation. Indeed, none of the changes made to our compensation structure in 2017 were in response to the vote, but are part of continuous efforts to evaluate and improve our compensation programs.

        During 2017, the Compensation Committee evaluated the financial and non-financial performance delivered by the Company and the executives, as well as each component of our executive compensation program. As noted below, the Compensation Committee utilized the services of a compensation consultant to help facilitate this evaluation. The Compensation Committee's objective in conducting this evaluation was to determine whether the Company's executive compensation program is successful in accomplishing the objectives of the program (as noted below in the paragraph titled "Compensation Philosophy and Objectives"). In particular, the Compensation Committee continued the review it began in 2016 of the equity component of our executive compensation program. In light of this review, and the recommendations by the Committee's Compensation Consultant, the Committee made certain changes to our equity compensation program in 2017 as described below.

Summary of 2017 Accomplishments

        In fiscal 2017, we generated our 15th consecutive year of record sales and concluded the year with a record number of active Customers. Customer growth is our highest priority as we strive to improve the health and nutrition of individuals and families around the world. During the year, we:

    Introduced Celavive®, our innovative skincare system formulated with the USANA InCelligence Technology®. Celavive® offers a comprehensive skin care regimen benefiting multiple skin care types and ethnicities, with upgraded science and more noticeable user benefit;

    Announced our planned entry into four new European markets; Germany, Spain, Italy, and Romania, by mid-2018.

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    Utilized a variety of product promotions in specific markets around the world, which were successful in generating demand for our products from our existing customer base and incremental customer growth;

    Expanded our international brand ambassador and athlete sponsorship program known as "Team USANA" with additional athlete sponsorships around the world. Under this program, USANA is designated as the exclusive supplement provider for over 1,000 elite athletes around the world. These athletes represent the USANA brand as they compete at the highest levels of their sport; and

    Continued to improve our information technology systems and infrastructure to support our growing customer base and improve the online and social media interaction of our customers with the Company.

Compensation Philosophy and Objectives

        Our compensation philosophy, as approved by the Compensation Committee, is to establish and maintain executive compensation programs that are designed to accomplish the following objectives:

    To attract and retain, through a fair and competitive compensation plan, executives who have the intelligence, education, and experience that is required to effectively administer the affairs of the Company;

    To motivate our executives to achieve certain financial and non-financial performance objectives for the benefit of our shareholders by tying components of their total compensation to individual and Company performance; and

    To ensure that compensation practices do not impair our financial strength or future success.

        The Compensation Committee acts to meet these objectives by utilizing and maintaining a balance among three major components of compensation: base salary, short-term incentive compensation (cash bonus), and long-term incentive compensation (in the form of equity awards). The Compensation Committee believes that these three components provide an appropriate framework to attract, retain and motivate our executives, and align a significant portion of executive compensation with short-and long-term performance objectives that drive shareholder value.

Overview of Components of Executive Compensation Program

        Our executive compensation program includes base salary, short-term incentive compensation (in the form of a cash bonus), and long-term incentive compensation (in the form of equity awards). Short-term incentive compensation is performance-based and designed to motivate our Executives to achieve annual financial and non-financial performance objectives. To minimize potential risk, the potential for short-term incentive compensation has historically been capped at 100% of an Executive's base salary. Long-term incentive compensation utilizes equity awards, which vest over several years. These awards reward the executive for sustainable corporate performance and are intended to align the financial interests of our executives with those of our shareholders.

        Other than as described in this Compensation Discussion and Analysis, we typically do not provide benefits to our executives that are different from, or in addition to, those that are provided to our general employees. As shown in the compensation tables included in this Proxy Statement, our executives do not currently receive retirement benefits, pre-determined severance arrangements, deferred compensation opportunities, or other perquisites that are commonly provided to executives of similarly sized companies.


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Role of Compensation Committee

        Our executive compensation philosophy and practice has been developed through a collaborative effort of the Compensation Committee, the Chief Executive Officer, and the Chief Leadership Development Officer. In addition, the Compensation Committee has engaged the services of an independent, outside compensation consulting firm Frederic W. Cook & Co. (the "Compensation Consultant" or "FW Cook"). The Compensation Committee regularly seeks input in its meetings from these officers and, in its discretion, the Compensation Consultant, including their ideas, opinions, and proposals regarding executive compensation; however, the Compensation Committee functions and votes independently and is responsible for all changes to the executive compensation philosophy and program.

Role of Corporate Management in Assisting Compensation Committee

        The Compensation Committee has the primary authority to determine the Company's compensation philosophy and to establish compensation for our Named Executive Officers. It is responsible for ensuring that executive compensation decisions are thoroughly researched and implemented. All of our executives and employees participate in an annual performance review with their immediate supervisor, during which the executive or employee receives input about his or her performance and contributions to our results for the period being assessed. The Compensation Committee seeks input from the Chief Executive Officer and the Chief Leadership Development Officer to identify key factors and to obtain information related to executive compensation. These key factors and information generally involve an executive's level of responsibility, years of experience, current overall compensation level in relation to external market studies and internal equity analysis between executives, the impact of current compensation practices on our financial statements and condition, the relationship between executive compensation and performance of the Company, and other relevant data.

        Our Chief Leadership Development Officer takes direction from and makes suggestions to the Chairman of the Compensation Committee in establishing the quarterly committee meeting agenda and preparing the materials to be presented to the Compensation Committee. These materials contain minutes from prior meetings, key items to be addressed, and background information to help the Compensation Committee in its decision-making process.

Compensation Consultant

        The Compensation Committee has historically retained and utilized FW Cook to assess the Company's executive compensation program. In late 2016 and early 2017, the Compensation Committee again engaged FW Cook to advise it regarding executive compensation, including total compensation benchmarking, aggregate equity compensation, and various other incentive practices. Prior to engaging FW Cook, the Compensation Committee considered and assessed FW Cook's independence. To ensure FW Cook's continued independence and to avoid any actual or apparent conflict of interest, the Compensation Committee does not permit FW Cook to be engaged to perform any services for the Company beyond those services provided to the Compensation Committee. To that end, in 2017 FW Cook did not perform any work for the Company outside of the services it performed for the Compensation Committee. The Compensation Committee has sole authority to retain or terminate FW Cook as its executive compensation consultant and to approve its fees and other terms of engagement. The Compensation Committee regularly considers the independence of the Compensation Consultant and determines whether any related conflicts of interest require disclosure.

        Representatives of the Compensation Consultant delivered a report (the "2017 Report") to the Compensation Committee at its February 2017 meeting and discussed the report with the Committee. In its 2017 Report, FW Cook presented the practices of a peer group of 20 publicly-traded multi-level


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marketing, nutritional, or personal product companies to benchmark the Company's position in its use of cash and equity compensation for executives. These companies were all within a reasonable range of our revenue, operating income, and market capitalization. This information was gathered and analyzed for the 25th, 50th, and 75th percentiles for annual salary, short-term incentive and long-term incentive pay elements. Where possible, the Compensation Committee matched our executives to appropriate proxy and survey positions based on job duties and level of responsibility to their counterparts in this peer group. The peer group in the 2017 Report included:

Coty, Inc.Nu Skin Enterprises, Inc.
GNC Holdings, Inc.Nutraceutical International Corporation
The Hain Celestial Group, Inc.NutriSystem Inc.
Herbalife, Ltd.Prestige Brands Holdings, Inc.
International Flavors and Fragrances Inc.Primerica, Inc.
Inter Parfums, Inc.Revlon, Inc.
LifeVantage CorporationTupperware Brands Corporation
Mannatech, IncorporatedVitamin Shoppe, Inc.
MedifastWeight Watchers International, Inc
Natural Health Trends Corp.
Nature's Sunshine Products, Incorporated

Compensation Risk Assessment

        Our Compensation Committee considers the risk to the Company associated with each component of our executive compensation program, namely base salary, executive bonuses, and short-and-long term incentive compensation. In considering these risks, the Compensation Committee believes that the following factors, among others, reduce the likelihood of excessive risk taking in connection with executive compensation at USANA:

    Our compensation components provide a balanced mix of (i) cash and equity compensation, (ii) short-term and long-term incentive compensation, and (iii) financial performance metrics;

    Our executives generally all participate in the same short-term incentive program with similar performance metrics;

    Maximum pay-out levels for short-term incentive compensation are generally capped at 100% of an executive's base salary;

    Our equity awards generally vest over several years and generate incremental value (over the value at the grant date, if any) only if the Company performs well financially and our stock price increases over time;

    We maintain strict internal controls over the determination and payout of each component of executive compensation;

    We do not typically enter into employment or other management agreements with any of our executive officers that contain post-termination or change-in-control payments; and

    We generally do not provide significant perquisites or personal benefits to our executive officers.

        Based on the Compensation Committee's review of these factors and on the results of the risk assessment, the Committee determined that our executive compensation is designed according to its stated philosophy and does not create risks that are reasonably likely to have a material adverse effect on the Company.


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Components of Compensation

Base Salary

        Base salary represents the fixed component of executive compensation and is intended to compensate executives for their qualifications and the value of their job in the competitive market. Our goal is to target the market median as our strategic target for base salary. We review each executive's salary and performance every year to determine whether base salary should be adjusted. Along with individual performance, we also consider movement of salary in the market, as well as our financial results from the prior year to determine appropriate salary adjustments. While the Compensation Committee applies general compensation concepts when determining the competitiveness of our executives' salaries, the Compensation Committee generally considers base salaries as being competitive when they are within approximately 10% of the stated market target (in this case, the market 50th percentile).

        Fiscal Year 2017 Review.    The 2017 Report provided by the Compensation Consultant indicated that USANA's base salaries and total target cash opportunities (base salary plus target short-term cash incentive) fall between the competitive 25th percentile and median of the peer compensation group. Our Compensation Consultant recommended that individual adjustments should be considered for executives positioned well outside of the competitive ranges. As a result, the Compensation Committee adjusted the base salary of our Named Executive Officers and other executive officers' compensation to bring it to a level that is approximately equal to 50th percentile of the peer group for fiscal year 2017. Adjustments to the base salary of certain Named Executive Officers in 2017 were also reflective of promotions in title and responsibility for the respective executive (as reflected in the Summary Compensation Table).

Short-Term Cash Incentive (Non-Equity Incentive Plan Compensation)

        We offer our Named Executive Officers non-equity incentive plan compensation in the form of a cash bonus that is based on our achievement of certain financial performance objectives during the fiscal year. Cash bonuses are based on a percentage of the executive's base salary. Each year, the Compensation Committee sets the range of the cash bonus for which each executive is eligible and sets the performance objectives on which cash bonuses for that year will be based.

        2017 Executive Bonus Plan.    For fiscal year 2017, the Compensation Committee approved the 2017 Executive Bonus Plan (the "2017 Bonus Plan"), based on the following performance objectives: growth in net sales and profitability. As part of its determination to utilize this bonus criteria and structure, the Compensation Committee noted that the Company has used this bonus structure for several years and, under this structure, the Company has generated strong operating results and internal equity has been achieved amongst executives.

        Under the 2017 Bonus Plan, a cash bonus based on 9% of the Company's adjusted operating profits in excess of 10% of net sales is paid to executives in the form of a cash bonus. Payments are equal to a percentage of the executive's base salary, between zero and 100% of base salary, depending on the performance of the Company under the criteria of the plan. Each executive's target bonus percentage under the 2017 Bonus Plan was 50% of the executive's base salary, with the exception that the target bonus percentages for Mr. Guest, our Chief Executive Officer, and Mr. Brown, our President and Chief Operating Officer, were 75% of their respective base salaries. The Compensation Committee set the bonus targets under the 2017 Bonus Plan pursuant to recommendations of the Compensation Consultant and other market resources.


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        Shortly after the end of fiscal year 2017, the Compensation Committee reviewed the performance objectives established under the 2017 Bonus Plan and evaluated the actual performance delivered by the Company during fiscal year 2017. The Compensation Committee noted the following:

    We achieved fiscal 2017 net sales of $1.047 billion, which is a 4.1% increase compared to fiscal year 2016;

    Our fiscal year 2017 adjusted operating profit was $162.1 million; and

    We had 2017 adjusted operating profit in excess of 10% of net sales of $57.3 million.

        Based on the Company's performance, and the criteria of the 2017 Bonus Plan, the Compensation Committee determined that each Executive had earned a cash bonus equal to 35.2% of the Executive's base salary under the 2017 Bonus Plan. Consequently, the Compensation Committee awarded this bonus amount to each Executive. The actual cash bonuses paid to our Named Executive Officers under the 2017 Bonus Plan are reflected in column (g) of the Summary Compensation Table of this Proxy Statement.

        2018 Executive Bonus Plan.    In February 2018, the Compensation Committee approved the 2018 Executive Bonus Plan and again designated growth in net sales and profitability as the performance objectives under the plan. The 2018 Executive Bonus Plan, however, will utilize 9.5% of the Company's operating profits in excess of 10% of consolidated net sales as the basis for the cash bonus in 2018. The change to 9.5% from 9% is to bring the results of the short-term incentive plan closer to the target for executive bonuses at 50% of base salary. Additionally, as a pilot program for potential structural adjustments to the executive bonus plan in the future, in 2018 the Compensation Committee will perform a parallel executive bonus calculation (for hypothetical purposes only), which includes certain individual executive performance objectives established by the Committee. Estimated payouts for the 2018 Bonus Plan are included in the section below in the table titled "Grants of Plan-Based Awards."

2017 Discretionary Cash Bonus

        As part of the Compensation Committee's review of the financial and non-financial performance delivered by the Company and executives during 2017, the Committee noted several areas of extraordinary non-financial performance delivered by executives during 2017 that was not adequately recognized by, and rewarded under, the Company's 2017 Bonus Plan. The areas of extraordinary non-financial performance included: (i) the introduction of Celavive®, the Company's new skincare line, (ii) the Company's announcement and preparation to enter four new markets in Europe by mid-2018; (iii) implementation of key information technology and social media enhancements during the year, (iv) the restructuring of executive leadership in many of the Company's major functions during the year, and (iv) the implementation of strategies by executives to effectively address regulatory and operating challenges domestically and internationally during the year. In light of the foregoing non-financial performance delivered by the Company and executives, the Compensation Committee approved a one-time, discretionary cash bonus for fiscal year 2017, in the total amount of $1.75 million for executives and employees. The actual discretionary cash bonuses paid to our Named Executive Officers in 2017 are reflected in column (d) of the Summary Compensation Table of this Proxy Statement.

Equity Compensation

        Overview and Historical Practice.    Equity compensation has been an integral part of USANA's compensation philosophy. We believe that equity grants that vest over a period of years tie a portion of our Executives' compensation to the Company's long-term performance and, thereby, align the interest of our Executives with the interests of our shareholders. Our historical practice has been to make periodic grants of long-term incentive awards to executives in the form of stock settled appreciation


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rights or SSARs. These awards typically vest over a period of years and tie a significant portion of our executives' compensation to the Company's long-term performance, aligning the interests of our executives with the interests of our shareholders. This practice delivers additional compensation to executives when the Company performs and the value of our stock increases. The Compensation Committee awards equity compensation to supplement our executives' cash compensation to ensure that total compensation is competitive in the marketplace and to align compensation with our long-term goals and objectives.

        The Compensation Committee's philosophy has been to issue intermittent SSAR awards to executives to drive long-term Company performance as well as individual executive performance. In general, SSAR awards are granted to executives as they enter into a qualifying position and vest annually in equal installments over a five-year period. Additional grants have been awarded periodically to executives as seen necessary by the Compensation Committee to maintain sufficient long-term incentive to accomplish the objectives outlined above. These additional grants typically do not vest in the first two years, but only at the end of years three, four and five, and such vesting for a particular Executive commences when the vesting schedule of that executive's particular SSAR award ends. The grant price for equity awards is the fair market value of the award as of the date of grant as determined by the closing price of the Company's common stock on the date of grant.

        2016 and 2017 Review.    In fiscal year 2016, the Compensation Committee made no equity grants to the Named Executive Officers as it reviewed potential changes to the long-term incentive component of executive compensation with the advice of the Compensation Consultant. As the Compensation Committee and the Compensation Consultant reviewed our program in 2016, they made the following observations:

    Most of the peer group companies make regular annual grants in comparison to our practice of infrequent, periodic grants vesting over a long period of time.

    Within the peer group companies, the mix of equity awards includes time-vested Restricted Stock Units (RSUs) and other awards in addition to SSARs and options.

    Annualizing the grant value of SSARs used by us over the last three years for competitive comparisons, the annualized grant date value of long-term incentive ("LTI") awards made to our executives has been on the high end of the competitive range, above the peer 75th percentile.

    Both our (i) share usage rate (the aggregate LTI shares granted as a percentage of common shares outstanding) and (ii) shareholder value transfer rate (the cost of LTI shares granted each year as a percentage of our market cap) have been on the high end of the competitive range, above the peer 75th percentile.

    When there are significant declines in the price of our common stock, there is substantial risk that a significant portion of our executives' compensation (that portion represented by the LTI awards) will be underwater, as was the situation for example in October 2016 when, at the Company's then-current stock price, the SSAR awards previously granted to nearly all executives were underwater.

        2017 Changes to Equity Compensation Program.    In light of the foregoing information, and based on the recommendations of the Compensation Consultant, in 2017 the Compensation Committee adopted changes to the equity component of our executive compensation program as follows:

    The Compensation Committee will now make smaller, annual equity awards to exeutives in lieu of larger intermittent equity awards to, among other things, help ensure each award has potential value if the Company performs;

    Awards will vest and become exercisable in four equal annual installments of twenty-five percent (25%) of the total award on each of the first through fourth anniversary of the grant date;

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    The value of the annual equity award to an executive will be (i) in-line with the market for each executive's title and position, and (ii) calculated to generate total compensation for the respective executive at approximately the 50th percentile of the peer group;

    The Compensation Committee will utilize awards of RSU's in addition to SSARs to diversify the mix of equity granted to executives; and

    Each of the grant value, share usage rate and shareholder value transfer rate associated with annual grants to executives will be managed to be in-line with the market and, more specifially, between the 50th and 75th percentile of the peer group.

        The grant price for equity awards will continue to be the fair market value of the award as of the date of grant as determined by the closing price of the Company's common stock on the date of grant.

        Excutive Stock Ownersip Policy.    In 2017, the Compensation Committee also adopted a formal executive stock ownership policy. Under this policy, executive officers identified by the Compensation Committee are required to hold a percentage of their annual base salary in USANA common stock as follows: (i) The Chief Executive Officer is required to hold a minimum of 1.5 times the value of his annual base salary; and (ii) all other officers are required to hold a minimum of 1 times the value of their annual base salary. Unexercised SSAR's, whether or not vested, unvested RSU's, and unearned and unvested DSU's will also be considered as held in satisfaction of this policy. The amount of an officer's personal stock holdings will be reviewed by the Compensation Committee annually and each officer will be allowed two years from the implementation date of the policy to achieve compliance with the policy.

Other Compensation

        Other than as described above, we do not provide benefits to our Named Executive Officers that are different from or in addition to those that we provide to our general employees. Those benefits are described below.

        Retirement:    Executives may participate in our company-sponsored 401(k) retirement plan on the same terms and conditions, including employer-matching provisions, as other employees. For the year ended December 30, 2017, we contributed matching funds totaling $1,794,411 to our 401(k) plan in which all eligible employee participants shared. During 2017, each of our eligible executives participated in our 401(k) plan and shared matching funds totaling $140,525. Except as disclosed in this paragraph, we provide no other retirement benefits to our executives.

        Severance:    We do not have any pre-arranged severance agreements or contracts with any of our executives that contain post-termination or change-in-control payment provisions. From time to time, we have provided severance benefits to executives on a case-by-case basis.

        Perquisites:    It is our general practice not to provide significant perquisites or personal benefits to our executives. The Compensation Committee, however, retains the discretion to consider and award reasonable perquisites or personal benefits to executives as necessary to accomplish the objectives under our compensation philosophy. In this regard, please note that we do not currently provide pension arrangements, post-retirement health coverage, or similar benefits for our executives or employees. In 2017, we paid health, life, and disability insurance premiums on behalf of our executives, all on the same terms as those that we provide to all of our employees.

        Insurance Plans and Other Benefits:    We provide insurance plans and other benefits to our executives that are similar to those plans and benefits that we customarily provide to our general employees.


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        Indemnification:    Article VI of our Amended and Restated Articles of Incorporation and Article 5 of our Bylaws provide for indemnification of our directors, officers, employees, and other agents to the extent and under the circumstances permitted by the Utah Revised Business Corporation Act. We have entered into agreements with our directors and officers that require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers to the fullest extent allowed. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or control persons under the foregoing provisions, the SEC has stated that such indemnification is against public policy, as expressed in the Securities Act, and, therefore, such indemnification provisions may be unenforceable.

Accounting Considerations and Tax Deductibility of Executive Compensation

        In designing compensation programs, we consider the effects that accounting and taxation may have on us, the Named Executive Officers, or other employees as a group. We account for compensation arrangements in accordance with FASB ASC Topic 718. All share-based payments to employees are measured at fair value on the date of grant and recognized in the statement of operations as compensation expense over their requisite service periods.

        Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), generally imposes a $1 million limit on the amount of compensation paid to certain executive officers that a public corporation may deduct for federal income tax purposes in any year. During 2017, the Code provided an exception to the Section 162(m) deduction limitation for compensation qualifying as "performance-based compensation" within the meaning of the Code and the applicable Treasury Regulations.

        The "Tax Cuts and Jobs Act," enacted in December 2017, repealed the performance-based compensation exception to the Section 162(m) deduction limitation for tax years beginning after December 31, 2017. While we will continue to monitor our compensation programs in light of the deduction limitation imposed by Section 162(m) of the Code, our Compensation Committee considers it important to retain the flexibility to design compensation programs that are in the best long-term interests of the Company and our shareholders. As a result, we have not adopted a policy requiring that all compensation be deductible. The Compensation Committee may conclude that paying compensation at levels that are subject to limits under Section 162(m) of the Code is nevertheless in the best interests of the Company and our shareholders. Given changes made to Section 162(m) by the Tax Cuts and Jobs Act, it is likely that the Company will not be able to deduct for federal income tax purposes a portion of the compensation paid to our Named Executive Officers in 2018.

        Many other Code provisions and accounting rules affect the payment of executive compensation and are generally taken into consideration as our compensation arrangements are developed. Our goal is to create and maintain compensation arrangements that are efficient, effective and in full compliance with these requirements.


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REPORT OF THE COMPENSATION COMMITTEE

The material in this report is not "soliciting material," is not deemed "filed" with the SEC, and is not to be incorporated by reference into any filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in such filing.

        The Compensation Committee of the Board of Directors of USANA Health Sciences, Inc. has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management of the Company and, based on such review and discussion in this proxy statement, has recommended to the Board of Directors that it be included in this proxy statement and incorporated into USANA's Annual Report on Form 10-K for the year ended December 30, 2017 by reference from this proxy statement.

        Submitted by the members of the Compensation Committee

D. Richard Williams (Chair)
J. Scott Nixon
Feng Peng
Frederic Winssinger


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SUMMARY COMPENSATION TABLE

        The following table summarizes, with respect to our Named Executive Officers, information relating to the compensation earned for services rendered in all capacities during the fiscal years 2017, 2016 and 2015.

Name and principal position Year Salary
($)
 Bonus
($)(1)
 Equity awards
($)(2)
 Non-equity
incentive
plan
compensation
($)(3)
 All other
compensation
($)(4)
 Total
($)
 
(a)
 (b)
 (c)
 (d)
 (e)
 (f)
 (g)
 (h)
 

Kevin G. Guest,

  2017 $811,317 $58,613 $754,769 $428,542 $9,450 $2,062,691 

Chief Executive Officer

  2016 $626,628     $306,923 $9,275 $942,826 

  2015 $608,516 $75,000 $3,035,676 $350,383 $9,100 $4,078,675 

Jim Brown,

  
2017
 
$

523,335
 
$

62,808
 
$

552,205
 
$

294,113
 
$

9,450
 
$

1,424,227
 

President and Chief

  2016 $401,122 $83,333   $196,469 $9,275 $690,199 

Operating Officer

  2015             

G. Douglas Hekking

  
2017
 
$

372,981
 
$

17,964
 
$

362,274
 
$

111,496
 
$

9,450
 
$

894,009
 

Chief Financial Officer(5)

  2016             

  2015             

Paul A. Jones,

  
2017
 
$

357,000
 
$

17,194
 
$

134,188
 
$

119,943
 
$

9,450
 
$

638,545
 

Chief Leadership

  2016 $357,000     $174,859 $9,275 $541,134 

Development Officer(6)

  2015 $348,042   $1,517,838 $188,403 $9,100 $2,063,383 

Dan Macuga,

  
2017
 
$

416,170
 
$

20,044
 
$

351,011
 
$

149,399
 
$

9,450
 
$

943,224
 

Chief Communications &

  2016 $371,110     $181,770 $9,275 $562,155 

Marketing Officer

  2015             

David Mulham,

  
2017
 
$

411,718
 
$

20,124
 
$

351,011
 
$

148,990
 
$

64,924
 
$

996,688
 

Chief Field Development

  2016             

Officer(7)

  2015             

(1)
Amounts in this column reflect a discretionary cash bonus paid to our Named Executive Officers for fiscal year 2017, and approved by the Compensation Committee as noted in the section above under the caption "2017 Discretionary Cash Bonus." Additionally, the amount reflected for Jim Brown includes a $25,000 bonus for a period when he assumed additional responsibilities for the Company's China operations.

(2)
Amounts in this column reflect the grant date fair value of stock-settled stock appreciation rights ("SSARs") and restricted stock units (RSUs) computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. These amounts do not represent the actual amounts paid to or realized by the Executive for these awards during the applicable fiscal year. Assumptions used in the calculation of these amounts are included in the Equity Based Compensation footnote to the Company's consolidated financial statements that are included in the Company's Annual Report on Form 10-K for the year ended December 30, 2017.

(3)
Amounts paid as cash bonus in subsequent fiscal year for performance realized in prior fiscal year (e.g., results of 2017 executive bonus paid out in first quarter of 2018), under the Company's short-term incentive plan discussed in the Compensation Discussion and Analysis section of this Proxy Statement.

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(4)
Amounts in this column reflect employer's matching contributions to the Executive's 401(k) plan, except in the case of the compensation paid to Mr. Mulham, which is retirement compensation paid pursuant to local law in his country of residence.

(5)
Mr. Hekking was appointed Chief Financial Officer in May 2017. Prior to his appointment, he was Executive Vice President of Finance.

(6)
Mr. Jones was appointed Chief Leadership Development Officer in August 2015, in addition to his position as Chief Financial Officer. He transitioned solely to Chief Leadership Development Officer in May 2017.

(7)
Mr. Mulham, who resides in Australia, was appointed Chief Field Development Officer in February 2017.


FISCAL YEAR 2017 CEO PAY RATIO

        As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual compensation of our employees and the annual total compensation of Kevin G. Guest, our Chief Executive Officer ("CEO") for the fiscal year 2017. The Compensation Committee reviewed a comparison of our CEO annual total compensation in fiscal year 2017 to that of all other Company employees for the same period. This is the first year we are disclosing the ratio of the pay of our CEO to the annual pay of our "median employee"(the "pay ratio") under the rule.

        We identified the median employee by examining the 2017 total compensation for all full-time and part-time employees, excluding our CEO, who were employed by us on December 30, 2017. We calculated annual total compensation using the same methodology we use for our Named Executive Officers as set forth in the 2017 Summary Compensation Table above. We adjusted estimates with respect to total compensation by annualizing the compensation for any newly-hired, full-time employees who were not employed by us for all of 2017. We have a global workforce, with employees in 21 countries. Compensation paid in foreign currencies was converted to U.S. dollars based on average exchange rates in effect on December 30, 2017.

        The annual total compensation for fiscal year 2017 for our CEO was $2,062,691 as noted in the table above and annual total compensation for our median employee was $41,349. The pay ratio of our Chief Executive Officer's pay to the pay of our median employee for fiscal year 2017 is 50 to 1.

        Under the SEC's rules and guidance, there are numerous ways to determine the compensation of a company's median employee, including the employee population sampled, the elements of pay and benefits used, any assumptions made and the use of statistical sampling. In addition, no two companies have identical employee populations or compensation programs, and pay, benefits and retirement plans differ by country even within the same company. As a result of our methodology for determining the pay ratio, which is described above, our pay ratio may not be comparable to the pay ratios of other companies in our industry or in other industries because other companies may rely on different methodologies or assumptions, or may make adjustments that we do not make.


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GRANTS OF PLAN-BASED AWARDS

        The table below summarizes estimated or targeted payouts to the Named Executive Officers under the 2018 Bonus Plan described in the Compensation Discussion and Analysis section of this Proxy Statement.

 
  
 Estimated future payouts under
non-equity incentive plan
awards
 Estimated future payouts
under
equity incentive plan awards
 All Other
Stock Awards;
Number of
Shares of
Stock or
Units (#)(2)
  
 
 
  
 Grant Date
Fair Value
of Stock
Awards
($)(3)
 
Name
 Grant
date
 Threshold
($)(1)
 Target
($)(1)
 Maximum
($)(1)
 Threshold
($)
 Target
($)
 Maximum
($)
 
(a)
 (b)
 (c)
 (d)
 (e)
 (f)
 (g)
 (h)
 (i)
 (j)
 

Kevin G. Guest,

 N/A   $618,000 $824,000           

Chief Executive

 05-01-17              5,493 $306,784 

Officer

 10-23-17              7,338 $447,985 

Jim Brown,

 

N/A

  
 
$

401,700
 
$

535,600
  
  
  
  
  
 

President and Chief

 05-01-17              5,493 $306,784 

Operating Officer

 10-23-17              4,020 $245,421 

G. Douglas Hekking,

 

N/A

  
  
215,800
 
$

431,600
  
  
  
  
  
 

Chief Financial Officer

 05-01-17              3,545 $197,988 

 10-23-17              2,691 $164,286 

Paul A. Jones,

 

N/A

  
 
$

185,600
 
$

371,200
  
  
  
  
  
 

Chief Leadership

 10-23-17              2,198 $134,188 

Development Officer

                           

Dan Macuga,

 

N/A

  
 
$

213,725
 
$

427,450
  
  
  
  
  
 

Chief Communications

 05-01-17              3,492 $195,028 

and Marketing Officer

 10-23-17              2,555 $155,983 

David Mulham,

 

N/A

  
 
$

213,725
 
$

427,450
  
  
  
  
  
 

Chief Field

 05-01-17              3,492 $195,028 

Development Officer

 10-23-17              2,555 $155,983 

(1)
There is no guaranteed payment to our Named Executive Officers under the 2018 Executive Bonus Plan. If the minimum performance objectives are not achieved, they will receive no payout under the 2018 Executive Bonus Plan. The amounts shown in column (d) reflect the target payout, which is 75% of base salary for Mr. Guest and Mr. Brown and 50% of base salary for each of the other Executives. The amounts shown in column (e) reflect 100% of the Executive's base salary, which is the maximum payout that can be obtained under the 2018 Executive Bonus Plan.

(2)
All equity awards granted to the Named Executive Officers were RSUs and granted under the 2015 Equity Incentive Award Plan.

(3)
All Equity Awards granted to the Named Executive Officers were granted at the closing stock price on the date of grant.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

        The following table includes certain information with respect to the value of all equity awards previously granted to the Named Executive Officers outstanding as of December 30, 2017.

Outstanding Equity Awards at Fiscal Year-End

 
 Option awards Restricted Stock Unit awards 
 
  
 Number Of Securities
Underlying Unexercised
Options (#)
  
  
 Number of
shares or units
of stock that
have not vested
(#)
 Market value
of shares or
units that
have not vested
($)(1)
 
 
 Grant
Date
 Option
exercise price ($)
 Option
expiration
date
 
Name
 Exercisable Unexercisable 

Kevin G. Guest,

  09-01-15    120,000 $70.75  03-01-2020     

Chief Executive Officer(2)(3)(4)

  05-01-17          5,493 $406,757 

  10-23-17          7,338 $543,379 

Jim Brown,

  
09-01-15
  
  
60,000
 
$

70.75
  
03-01-2020
  
  
 

President and Chief

  05-01-17          5,493 $406,757 

Operating Officer(2)(3)(4)

  10-23-17          4,020 $297,681 

G. Douglas Hekking,

  
09-01-15
  
20,000
  
30,000
 
$

70.75
  
03-01-2020
  
  
 

Chief Financial

  05-01-17          3,545 $262,507 

Officer(4)(5)(6)

  10-23-17          2,691 $199,269 

Paul A. Jones,

  
12-17-12
  
14,000
  
 
$

19.12
  
06-17-2018
  
  
 

Chief Leadership Development

  09-01-15    60,000 $70.75  03-01-2020     

Officer(2)(4)(7)

  10-23-17          2,198 $162,762 

Dan Macuga,

  
09-01-15
  
  
60,000
 
$

70.75
  
03-01-2020
  
  
 

Chief Communications and

  05-01-17          3,492 $258,583 

Marketing Officer(2)(3)(4)

  10-23-17          2,555 $189,198 

David Mulham,

  
09-01-15
  
40,000
  
60,000
 
$

70.75
  
03-01-2020
  
  
 

Chief Field Development

  05-01-17          3,492 $258,583 

Officer(3)(4)(5)

  10-23-17          2,555 $189,198 

(1)
The market value of the RSUs that have not vested is calculated by multiplying the number of units shown in the table by $74.05, the closing stock price on December 30, 2017.

(2)
The SSAR grants to Mr. Guest, Mr. Brown, Mr. Jones, and Mr. Macuga which expire on March 1, 2020, vest 50% in September 2018 and 50% in September 2019.

(3)
The RSU grants to Mr. Guest, Mr. Brown, Mr. Mulham and Mr. Macuga on May 1, 2017, vest 25% annually beginning on February 6, 2018.

(4)
The RSU grants that Mr. Guest, Mr. Brown, Mr. Hekking, Mr. Jones, and Mr. Mulham, received on October 23, 2017, vest 25% annually, beginning on the first anniversary of the date of grant.

(5)
The SSAR grants to Mr. Mulham and Mr. Hekking which expire on March 1, 2020, vest 40% in September 2017, 30% in September 2018 and 30% in September 2019.

(6)
The RSU grant that Mr. Hekking, received on May 1, 2017, vests 25% annually, beginning on the first anniversary of the date of grant.

(7)
The SSAR grant to Mr. Jones, which expires on June 16, 2018, vests 20% annually, beginning on the first anniversary of the date of grant.

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OPTION EXERCISES AND STOCK VESTED

        The following table summarizes information regarding the exercise of SSARs and each vesting of RSUs, for each of the Named Executive Officers on an aggregated basis during the fiscal year ended December 30, 2017.

 
 Option awards Restricted stock
unit awards
 
(a)
Name
 (b)
Number of
shares
acquired on
exercise
(#)
 (c)
Value
realized on
exercise ($)
 (d)
Number of
shares
acquired on
vesting
(#)
 (e)
Value
realized on
vesting ($)
 

Kevin G. Guest

  58,500 $1,766,115     

Jim Brown

  32,500 $974,635     

G. Douglas Hekking

         

Paul A. Jones

  14,000 $635,390     

Dan Macuga

  34,500 $1,052,619     

David Mulham

         


EQUITY COMPENSATION PLAN INFORMATION

        The following table sets forth information regarding outstanding awards and shares reserved for future issuance under our equity compensation plans as of December 30, 2017.

Plan Category
 Number of securities to
be issued upon exercise
of outstanding awards(1)
 Weighted-average
exercise price of
outstanding awards
 Number of securities
remaining available for
future issuance under equity
compensation plans
(excluding securities reflected
in column (a))
 
 
 (a)
 (b)
 (c)
 

Equity compensation plans approved by security holders

  2,408,907(2)$62.49(3) 7,980,479 

Equity compensation plans not approved by security holders

  N/A  N/A  N/A 

Total

  2,428,907(2)$62.49(3) 7,980,479 

(1)
Consists of shares of common stock issuable under the USANA 2015 Equity Incentive Award Plan.

(2)
Includes (i) 91,938 RSUs and 27,291 DSUs that will entitle each holder to the issuance of one share of common stock for each unit, and (ii) 2,289,678 SSARs. A SSAR is the right to receive the appreciation in fair market value of common stock between the exercise date and the date of grant in shares of common stock. Based on the closing stock price of $74.05 on the last trading day of fiscal 2017 and the exercise price of SSARs that were in-the-money, 360,607 shares of common stock would be issued upon the exercise of these SSAR awards.

(3)
Calculated without taking into account 119,229 shares of common stock subject to outstanding RSUs & DSUs, which are issuable without any cash consideration or other payment required for such shares.

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EMPLOYMENT CONTRACTS AND OTHER ARRANGEMENTS

        We do not have written employment agreements with any of our Named Executive Officers.


PROPOSAL #3—ANNUAL ADVISORY "SAY ON PAY" VOTE TO APPROVE OUR
NAMED EXECUTIVE OFFICERS' COMPENSATION

        We are required under Section 14A of the Exchange Act, enacted pursuant to The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules promulgated by the SEC, to conduct a non-binding advisory vote of our shareholders to approve the compensation paid to our Named Executive Officers as disclosed in this Proxy Statement. This is sometimes referred to as a "say-on-pay proposal."

        We ask that you indicate your support for our executive compensation policies and practices as described in the Compensation Discussion and Analysis and in the accompanying "Executive Compensation Tables" and related disclosures in this Proxy Statement for a more detailed discussion of our compensation programs and policies, the compensation governance measures undertaken and implemented by our Board of Directors, and the compensation awarded to our Named Executive Officers during fiscal year 2017.

        This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers, and the policies and practices described in this Proxy Statement. Your vote is advisory and will not be binding on the Compensation Committee or the Board. However, the Board will review the voting results and take them into consideration when structuring future executive compensation arrangements. The affirmative vote of the holders of a majority of the shares of common stock represented at the Annual Meeting and entitled to vote on the proposal will be required for approval of the resolution.

        Our Board of Directors believes that our compensation philosophy and program design are essential elements of our culture. Executive compensation is important in providing us with a competitive advantage in successfully attracting talent in a highly competitive industry. Our Compensation Committee has carefully considered the elements of executive compensation as it looks to appropriately incentivize our executive management and align their interests with shareholder value creation.

RECOMMENDATION OF THE BOARD OF DIRECTORS

        Additional copiesThe Board of Directors recommends that you voteFOR the approval of the following resolution:

    "RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the Company's Named Executive Officers, as disclosed in this Proxy Statement, including the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative discussion."


SHAREHOLDER PROPOSALS FOR 2019 ANNUAL MEETING OF SHAREHOLDERS

        Shareholder proposals must be received by our Corporate Secretary at USANA Health Sciences, Inc., Attention: Corporate Secretary, 3838 West Parkway Blvd., Salt Lake City, Utah 84120-6336, no later than November 15, 2018 to be eligible for inclusion in our form of proxy, notice of meeting and proxy statement relating to the 2019 Annual Meeting of Shareholders. We are not be required to include in our proxy materials a shareholder proposal that is received after that date or that otherwise fails to meet the requirements for shareholder proposals established by applicable SEC rules. The SEC has promulgated rules relating to the exercise of discretionary voting authority pursuant to proxies solicited by the Board. If a shareholder intends to present a proposal at the 2019 Annual Meeting without including that proposal in our proxy materials and written notice of the


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proposal is not received by us as described above, or if we meet other requirements of the applicable SEC rules, then the proxies solicited by the Board for use at the 2019 Annual Meeting will confer discretionary authority to the individuals acting under the proxies to vote on the proposal at the 2019 Annual Meeting. Our 2019 Annual Meeting is currently scheduled to be held on May 1, 2019.


OTHER BUSINESS

        As of the date of this Proxy Statement, the Board of Directors knows of no matter that will be properly presented for action at the Annual Meeting other than those matters discussed in this Proxy Statement. However, if any other matter requiring a vote of the shareholders properly comes before the Annual Meeting, the individuals acting under the proxies solicited by the Board will vote and act according to their best judgment in light of the conditions then prevailing, to the extent permitted under applicable law.


ANNUAL REPORT ON FORM 10-K

        Audited consolidated financial statements for the Company and its subsidiaries for the fiscal year ended December 30, 2017, are included in our Annual Report on Form 10-K filed with the SEC. Copies of the Annual Report on Form 10-K for the 2017 fiscal year ended January 2, 2016 (including financial statements and financial statement schedules) that has(excluding exhibits, unless such exhibits have been filed with the SECspecifically incorporated by reference therein) may be obtained without charge by writing to USANA Health Sciences, Inc., Attention: Investor Relations, 3838 West Parkway Blvd., Salt Lake City, Utah 84120-6336. Our reports and other public filings, including this Proxy Statement, also may be obtained from the SEC's on-line database, located atwww.sec.gov.

        Our Annual Report on Form 10-K for the 2017 fiscal and other SEC filings are also available on the Investor page of our website atwww.usana.com and can be viewed the SEC's Public Reference Room at 100 F Street N.E., Washington, D.C. 20549. Notwithstanding any general language that may be to the contrary in any document filed with the SEC, the information in this Proxy Statement under the captions "Audit Committee Report" and "Compensation Committee Report" shall not be incorporated by reference into any document filed with the SEC. The Annual Report on Form 10-K is not deemed a part of the proxy soliciting material for the Annual Meeting.


ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS

        Registered shareholders can further save us expense by consenting to receive all future proxy statements, forms of proxy and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please access the websitewww.proxyvote.com when transmitting your voting instructions and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. Your choice will remain in effect unless and until you revoke it.

        To revoke your decision to receive or access shareholder communications electronically, access the website www.proxyvote.com, enter your current PIN, select "Cancel my Enrollment," and click on the Submit button. After submitting your entry, the Cancel Enrollment Confirmation screen will be displayed. This screen will show your current Enrollment Number. To confirm your enrollment cancellation, click on the Submit button. Otherwise, click on the Back button to return to the Enrollment Maintenance screen. After submitting your entry, the Cancel Enrollment Complete screen will be displayed. This screen will indicate that your enrollment has been cancelled. You may be asked to complete a brief survey to help us understand why you opted out of electronic delivery. You will be sent an e-mail message confirming the cancellation of your enrollment. No further electronic communications will be conducted for your account and your Enrollment Number will be marked as "Inactive." You may reactivate your enrollment at any time. You will be responsible for any fees or charges that you would typically pay for access to the Internet.


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HOUSEHOLDING OF ANNUAL MEETING MATERIALS

        The SEC has implemented rules regarding the delivery of proxy materials (i.e., annual reports to shareholders, proxy statements, and Notices of Internet Availability of Proxy Materials) to households. This method of delivery, often referred to as "householding," permits us to send: (a) a single annual report and/or a single proxy statement or (b) a single Notice of Internet Availability of Proxy Materials to multiple registered shareholders who share an address. In each case, each registered shareholder at the shared address must consent to the householding process in accordance with applicable SEC rules. Each registered shareholder would continue to receive a separate proxy card with proxy materials delivered by mail or e-mail.

        Only one copy of this Proxy Statement and our 2017 Annual Report or one copy of the Notice of Internet Availability of Proxy Materials is being delivered to multiple registered shareholders at a shared address, who have affirmatively consented, in writing, to the householding process, unless we have subsequently received contrary instructions from one or more of such registered shareholders. A separate proxy card is being included for each account at the shared address to which paper copies of this Proxy Statement and our 2017 Annual Report have been delivered. We will promptly deliver, upon written or oral request, a separate copy of this Proxy Statement and the 2017 Annual Report or a separate copy of the Notice of Internet Availability of Proxy Materials to a registered shareholder at a shared address to which a single copy of these documents was delivered. A registered shareholder at a shared address may contact us by mail addressed to USANA Health Sciences, Inc., Attention: Investor Relations, 3838 West Parkway Blvd., Salt Lake City, Utah 84120-6336, or by phone at (801) 954-7100, to: (a) request additional copies of this Proxy Statement and our 2017 Annual Report or the Notice of Internet Availability of Proxy Materials; or (b) notify us that the registered shareholder wishes to receive a separate annual report to shareholders, proxy statement or Notice of Internet Availability of Proxy Materials, as applicable, in the future.

        Registered shareholders who share an address may request delivery of a single copy of annual reports to shareholders, proxy statements, or Notices of Internet Availability of Proxy Materials, as applicable, in the future, if they are currently receiving multiple copies, by contacting us as described in the preceding paragraph. Many brokerage firms and other holders of record have also instituted householding. If your family or others with a shared address have one or more "street name" accounts under which you beneficially own common stock, you may have received householding information from your broker/dealer, financial institution or other nominee in the past. Please contact the holder of record directly if you have questions, require additional copies of this Proxy Statement and our Annual Report or the Notice of Internet Availability of Proxy Materials, or wish to revoke your decision to household and thereby receive multiple copies. You should also contact the holder of record if you wish to institute householding.

 By Order of the Board of Directors,

 

 


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 James H. Bramble,Corporate Secretary

Date: March 23, 20162018


 

VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M.p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. USANA HEALTH SCIENCES, INC. ATTN: Joshua FoukasJOSHUA FOUKAS 3838 W. PARKWAY BLVD. Salt Lake City,SALT LAKE CITY, UT 84120 Electronic Delivery of Future PROXY MATERIALS If you would likeDuring The Meeting - Go to reducewww.virtualshareholdermeeting.com/USNA You may attend the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronicallymeeting via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and when prompted, indicatevote during the meeting. Have the information that you agree to receive or access proxy materials electronicallyis printed in future years.the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M.p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E39136-P04226 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. USANA HEALTH SCIENCES, INC. The Board of Directors recommends you vote FOR the following: For Withhold For All ExceptAllAllExcept To withhold authority to vote for any individual nominee(s), mark “For"For All Except”Except" and write the number(s) of the AllAllnominee(s) on the line below. ! ! ! 1. Election of Directors Nominees: 01) Myron W. Wentz, Ph.D. 02) Robert Anciaux 03) Gilbert A. Fuller 04) Kevin G. Guest 05) Feng Peng 06) J. Scott Nixon 07) Frederic Winssinger For Against Abstain The Board of Directors recommends you vote FOR the following: nominee(s) on the line below. 0 0 0 1. Election of Directors Nominees 01 Myron W. Wentz, Ph.D. 06 Frederic Winssinger 02 Gilbert A. Fuller 07 Feng Peng 03 Robert Anciaux 04 David A. Wentz 05 D. Richard Williams The Board of Directors recommends you vote FOR the following proposal: 2To ratifyproposals 2 and 3. ! ! ! ! ! ! 2. Ratify the selection of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year 2016.2018. 3. Approve on an advisory basis the Company's executive compensation, commonly referred to as a "Say on Pay" proposal. NOTE: To consider and act upon such other business as may properly come before the meeting or at any postponement or adjournment thereof. ForAgainst Abstain 0 0 0 Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 0000278270_1 R1.0.1.25

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice &and Proxy Statement is/and Annual Report are available at www.proxyvote.comwww.proxyvote.com. E39137-P04226 USANA HEALTH SCIENCES, INC. Annual Meeting of Shareholders May 2, 2016 9:302018 11:00 AM MDT This proxy is solicited by the Board of Directors The shareholder executing and delivering this Proxy hereby appoints David A. WentzKevin G. Guest and Paul A. JonesG. Douglas Hekking and each of them as Proxies, with full power of substitution, and hereby authorizes them to represent and vote, as designated below,on the reverse side, all shares of common stock of the Company held of record by the undersigned as of March 1, 2016,7, 2018, at the Annual Meeting of Shareholders of USANA Health Sciences, Inc., to be held at the Corporate headquarters, 3838 West Parkway Blvd., Salt Lake City, Utah 84120,www.virtualshareholdermeeting.com/USNA, on Wednesday, May 2, 2016,2018, at 9:3011:00 a.m., Mountain Daylight Time, or at any adjournment thereof. This Proxy is given in accordance with the instructions indicated and carries discretionary authority related to any and all other matters that may come before the meeting and any adjournments thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. PLEASE SIGN EXACTLY AS THE SHARES ARE ISSUED. WHEN CO-TENANTS HOLD SHARES, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON. PLEASE DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. Continued and to be signed on reverse side 0000278270_2 R1.0.1.25

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