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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 24, 201723, 2018

Dear USANA Shareholders,

        We cordiallyare excited to invite you to attend the 2017first completely virtual Annual Meeting of Shareholders of USANA Health Sciences, Inc. to be held at 11 a.m. Mountain Daylight Time on Wednesday, May 3, 2017,2, 2018 at our offices at 3838 West Parkway Boulevard, Salt Lake City, Utah. Details regarding the meeting, the business to be conducted, and information about the Company that you should consider when you vote your shares are described in the following pages, which contain the formal Notice of Annual Meeting and the Proxy Statement.

        At11:00 a.m., Mountain Daylight Time. We will conduct the Annual Meeting you will be asked to elect our Board of Directors, ratify the selection of our independent registered public accounting firm, and vote on an advisory basis on executive compensation and the frequency of future advisory votes on executive compensation.

via a live webcast. You will receive or have access to a Notice of Annual Meeting and Proxy Statement. The Proxy Statement describes the business we will conduct at the Annual Meeting and provides information about the Company that you should consider when you vote your shares. The Proxy Statement includes a section highlighting the Company's corporate governance practices. The Company and its Board of Directors have a longstanding commitment to good governance, and the Board reviews its governance practices on an ongoing basis to ensure that they promote shareholder value.

        We hope 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 16-digit control number provided in your proxy materials. We are pleased to provide access to our proxy materials over the Internet under the U.S. Securities and Exchange 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 Meeting. You may voteReport.

        The notice contains instructions on how to access those documents over the Internet as well as by telephone. In addition, if you requestedhow to receive printeda 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 youelectronically. 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 completing, signing, dating and returning yourproxy 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 by mail. We urge you toor voting instruction card. Your vote promptly in accordance with the instructions set forth in the Notice of Internet Availability of Proxy Materials or onwill ensure your proxy card. Regardless of whether or not you can attendrepresentation at the Annual Meeting we encourageregardless of whether you participate virtually in the Annual Meeting.

        Your vote is important to us and I do hope you will vote by proxy so that your shares will be represented and voted at the meeting.

as soon as possible. Thank you for your continued support of USANA.

Sincerely,



GRAPHIC
Kevin Guest
Chief Executive Officer

Sincerely,

GRAPHIC

Kevin Guest
Chief Executive Officer


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LOGO

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

NOTICE OF 2018 VIRTUAL ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 2017AND PROXY STATEMENT

DATE:Wednesday, May 3, 2017

TIME:



11 a.m. Mountain Daylight Time

PLACE:



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

RECORD DATE:



March 1, 2017

PURPOSES:



1.


Elect the seven directors named in the Proxy Statement;




2.


Ratify the selection of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year 2017;




3.


Approve on an advisory basis the Company's executive compensation, commonly referred to as a "Say on Pay" proposal;




4.


Consider a non-binding advisory vote regarding the frequency of submission to shareholders of such advisory "Say on Pay" proposals; and




5.


Such other business as may properly come before the meeting or at any postponement or adjournment thereof.

LOGO

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

To the Shareholders of USANA Health Sciences, Inc.:

        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 electronically during the live webcast of the meeting by visitingwww.virtualshareholdermeeting.com/USNA and entering your 16-digit control number included in the notice containing instructions on how to access Annual Meeting materials, 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.

        On or about March 24, 2017, we began sending a Notice You are entitled to notice of, Internet Availability of Proxy Materials to all shareholders entitledand eligible to vote at, the Annual Meeting. All shareholders are cordially invited to attend thethis year's Annual Meeting in person. Your vote is important. We encourage you to vote by proxy even if you planwere a shareholder of record as of the close of business on March 7, 2018.

        In accordance with Securities and Exchange Commission rules, we 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 attendshareholders as of the meeting. You mayrecord date a notice with instructions on how to access our Annual Meeting materials and vote your proxy via the Internet, or by telephone by followingmail or telephone.

        Your vote is important to us. Whether or not you plan to participate in the instructions included on your Notice of Internet Availability or, ifAnnual Meeting, we encourage you received a printed copyto review the accompanying proxy statement for information relating to each of the proxy materials, on your proxy card. Voting now will not limit your rightproposals and to changecast your vote or to attend the Annual Meeting.promptly.

  By Order of the Board of Directors,

 

 

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

Salt Lake City, Utah
March 24, 201723, 2018


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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE SHAREHOLDER MEETING TO BE HELD ON MAY 3, 2017

This Proxy Statement and our annual report to shareholders for the fiscal year ended December 31, 2016, along with our proxy card, are available for viewing, printing, and downloading free of charge atwww.proxyvote.com. To view these materials please have your 12-digit control number available that appears on your Notice of Internet Availability of Proxy Materials 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 December 31, 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: Corporate 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—ELECTION OF DIRECTORS

3

—Director Nominees

4

RECOMMENDATION OF THE BOARD OF DIRECTORS

6 

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  76 

Independent Directors

6

—Communicating with the Board Leadership Structureof Directors

  7 

Principles of Corporate Governance

7

—Stock Ownership Requirements

7

—Lead Independent Director Independence

7

—Separation of Chairman and Chief Executive Officer Roles

8

—Term Limits and Mandatory Retirement Age

  8 

—Executive Sessions of Non-Management Directors

  8 

Communications with DirectorsProhibition Against Pledging USANA Securities and Hedging Transactions

  8

—Code of Ethics

9 

—Committees of the Board of Directors

  9 

Annual Assessment of Board Effectiveness

9

Risk Oversight and Management

9

—Audit Committee

  10 

—Compensation Committee

10

—Governance, Risk Analysis& Nominating Committee

10

—Composition and Meetings of the Board of Directors and its Committees

  11 

BoardAudit Committee Charters

  1211 

Corporate Governance, GuidelinesRisk & Nominating Committee

  1211 

Code of EthicsCompensation Committee

  12 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

  1213

DIRECTOR COMPENSATION

13

—Fiscal Year 2017 Board Compensation

13

—Cash Compensation

13

—Equity Compensation

13

—Director Compensation Table

14

PROPOSAL #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

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

17

RECOMMENDATION OF THE BOARD OF DIRECTORS

17

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

18

—Five-Percent Beneficial Owners of Common Stock

18

—Director and Executive Officer Beneficial Ownership

18 

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

  12

EXECUTIVE OFFICERS

13

PROPOSAL #1: ELECTION OF DIRECTORS

15

COMPENSATION OF DIRECTORS

18

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

19 

REPORT OF THE AUDIT COMMITTEECERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

  20 

Policy on Pre-Approval of AuditPolicies and Permissible Non-Audit ServicesProcedures Regarding Related Party Transactions

  20 

IndependenceRelated Party Transactions

  2120 

—ServicesEXECUTIVE OFFICERS

  21 

EXECUTIVE COMPENSATION

  2124 

—Compensation Discussion and Analysis

  2124

—Introduction

24

—Executive Summary and Overview

24

—Summary of 2017 Accomplishments

24 

—Compensation Philosophy and Objectives

  2325

—Overview of Components of Executive Compensation Program

25 

—Role of Compensation Committee

  2326 

—Role of Corporate LeadershipManagement in Assisting Compensation Committee

  2326 

—Compensation ConsultantsConsultant

  2426 

—Compensation DeterminationsRisk Assessment

  2527 

—Components of Compensation

  2528

—Base Salary

28

—Non-Equity Incentive Plan Compensation

28

—2017 Discretionary Cash Bonus

29

—Equity Compensation

29 

—Other Compensation

  2831 

Section 162(m) Treatment Regarding Performance-Based Equity AwardsAccounting Considerations and Tax Deductibility of Executive Compensation

  2932 

REPORT OF THE COMPENSATION COMMITTEE

  2933 

SUMMARY COMPENSATION TABLE

  3034

FISCAL YEAR 2017 CEO PAY RATIO

35 

GRANTS OF PLAN-BASED AWARDS FOR 2017

  3236

—Grants of Plan-Based Awards Table

36 

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

  3337

—Outstanding Equity Awards at Fiscal Year-End Table

37 

OPTION EXERCISES AND STOCK VESTED

  3438 

EQUITY COMPENSATION PLAN INFORMATION

  3438 

EMPLOYMENT CONTRACTS AND OTHER ARRANGEMENTS

  3439 

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

  3539 

PROPOSAL #4 FREQUENCYRECOMMENDATION OF ADVISORY VOTE ON EXECUTIVE COMPENSATIONTHE BOARD OF DIRECTORS

  3639 

SECURITY OWNERSHIPSHAREHOLDER PROPOSALS FOR 2019 ANNUAL MEETING OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

37

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSSHAREHOLDERS

  39 

OTHER MATTERSBUSINESS

  40 

ANNUAL REPORT ON FORM 10-K

  40 

FURTHER INFORMATIONELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS

  40 

HOUSEHOLDING OF ANNUAL MEETING MATERIALS

41

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LOGOPROXY STATEMENT

PROXY STATEMENT FOR Summary
THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 2017

        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 atfor our 2017 Annual Meeting of Shareholders (the "Annual Meeting") to be held virtually on Wednesday, May 3, 2017, at 11 a.m., Mountain Daylight Time, or at any adjournments thereof for the purposes set forth in this Proxy Statement and in the accompanying Notice of the meeting. This Proxy Statement is dated March 24, 2017 and on or about March 24, 2017, we began sending the Notice of Internet Availability of Proxy Materials, or Notice of Availability, to all shareholders entitled to vote at the Annual Meeting.


IMPORTANT INFORMATION ABOUT THE MEETING

        The Board of Directors of USANA is soliciting your proxy to vote at the Annual Meeting to be held at our offices, 3838 West Parkway Boulevard, Salt Lake City, Utah, on Wednesday, May 3, 2017,2, 2018, at 11:00 a.m. MDT(Mountain Daylight Time), and any adjournments of the meeting.adjournment or postponement thereof (the "Annual Meeting"). The Proxy Statement along with the accompanying Notice ofvirtual Annual Meeting of Shareholders summarizes the purposes ofcan be accessed by visitingwww.virtualshareholdermeeting.com/USNA, where you will be able to listen 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 Noticeare taking advantage of Availability because you owned shares of USANA common stock on the record date, which is March 1, 2017. We have also delivered printed versions of these materialsSecurities and Exchange Commission ("SEC") rules that allow us to certain shareholders by mail. The Company commenced distribution of the Notice of Availability and thedeliver proxy materials to our shareholders on or about March 24, 2017. Our Notice of Availability will instruct you on how to access and reviewthe Internet. Under these rules, we are sending our Proxy Statement for the Annual Meeting and our Annual Report for the fiscal year ended December 31, 2016 ("Annual Report"). It will instruct you on how you may vote your proxy via the Internet, or how you can requestshareholders a full set of printed proxy materials, including a proxy card to return by mail. If you would like to receive printed proxy materials, you should follow the instructions contained in our Notice of Availability. Unless requested, you will not receive printed proxy materials by mail.

        Properly delivered proxies will be voted in accordance with the specifications made and where no specifications are given, such proxies will be voted FOR the proposal to elect the seven nominees to the Board of Directors of the Company to serve until their respective successors are elected and qualified, FOR the proposal to ratify the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 30, 2017, FOR approval of the compensation of our named executive officers, and FOR the recommendation that an advisory vote on executive compensation be held every year. In the discretion of the proxy holders, the proxies will also be voted FOR or AGAINST such other matters as may properly come before the Annual Meeting.

        Our management is not aware of any other matters that are to be presented for action at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in your proxies will vote in accordance with their best judgment. Although it is intended that


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the proxies will be voted for the nominees named herein, the holders of the proxies reserve discretion to cast votes for individuals other than such nominees in the event of the unavailability of any such nominee. We have no reason to believe that any of the nominees will become unavailable for election. The proxies may not be voted for a greater number of persons than the number of nominees named.

Why did I receive aone-page notice in the mail regarding the Internet availability of proxy materials instead of a full printed set of proxy materials?

        As permitted by the rules of the U.S. Securities and Exchange Commission, or the SEC, we have elected to furnish our proxy materials to our shareholders by providing access to such documents on the Internet, rather than mailing printed copies of these materials to each shareholder. Mostmaterials. 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 of Availability 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 of Availability. Instead,virtual annual meeting online, we encourage you to vote promptly. A person giving a proxy has the Notice of Availability 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.

        Only shareholders who owned USANAholders of records ("shareholders") of our common stock at the close of business on March 1, 2017, 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 24,504,41324,066,524 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.

        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.

        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:


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        Beneficial Owner.    If, on the Record Date, your shares were held in an account with a brokerage firm, bank, or other nominee, then you are the beneficial owner of the shares held in street name. As a beneficial owner, you have the right to direct your nominee on how to vote the shares held in your account, and your nominee has enclosed or provided voting instructions for you to use in directing it on how to vote your shares. However, the organization that holds your shares is considered the shareholder of record for purposes of voting at the meeting. IfAnnual Meeting. Because you attendare not the meeting,shareholder of record, you may delivernot vote your shares at the virtual Annual Meeting unless you request and obtain a completedvalid proxy cardfrom the organization that holds your shares giving you the right to vote the shares at the Annual Meeting.

        Quorum.    Each share of common stock is entitled to one vote on all matters on which Shareholders may vote. There is no cumulative voting in the election of directors. The presence, in person or you mayby proxy, of a majority of the voting power of the common stock outstanding and entitled to vote is necessary to constitute a quorum at the Annual Meeting. Shares of common stock represented by completing a ballot, whichproperly executed and returned proxy will be available at the meeting.

        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 Daylight Time on May 2, 2017.

        If your shares are held in "street name" (held in the name 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 shares are not registered in your own name and you plan to vote your shares in persontreated as present at the Annual Meeting you should contact yourfor purposes of determining the presence of a quorum without regard to whether the proxy is marked as casting a vote for or against, or withholding authority or abstaining with respect to a particular matter.

        Broker Non-Votes    occur when shares held by a broker for a beneficial owner are not voted because (i) the broker did not receive voting instructions from the beneficial owner, or agent(ii) the broker lacked discretionary authority to obtain a legal proxy or broker's proxy card and bring it tovote the shares. Abstentions occur when shares present at the Annual Meeting in orderare marked "abstain." A broker is entitled to vote.vote shares held for a beneficial owner on "routine" matters without instructions from the beneficial owner of those shares. On the other hand, absent instructions from the beneficial owner of such shares, a broker is not entitled to vote shares held for a beneficial owner on "non-routine" matters. Accordingly, we encourage you to provide voting instructions to your broker, whether or not you plan to attend the virtual Annual Meeting. All of the proposals presented at the Annual Meeting, other than the ratification of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 29, 2018, are non-routine matters. Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present.

        The Boardproposal is required for approval of Directors recommends that you vote as follows:

        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.

        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.


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        You may receive more than one Notice of Availability 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.

        If your shares are held in street name through a bank or broker and you do not provide voting instructions before the Annual Meeting, your bank or broker may vote your shares under certain circumstances in accordance with New York Stock Exchange ("NYSE") rules that govern banks and brokers. These circumstances include "routine matters," such as the ratification of the appointment of our independent registered public accounting firm described in this Proxy Statement. If you do not vote your shares with respect to these matters, your bank or broker may vote your shares on your behalf or leave your shares unvoted. "Broker non-votes" are shares represented by proxies, received from a bank or broker that are not voted oncast in favor of a matter because the bank or broker did not receive voting instructions from you. Broker non-votes will be treatedproposal, abstentions have the same as abstentions, which means they will be present at the Annual Meeting and counted toward the quorum, but they will not be countedeffect as votes cast.

        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 in the manner you desire.

Proposal
Vote RequiredVoting OptionsEffect of
Abstentions
Broker
Discretionary
Voting
Allowed?
Effect of
Broker
Non-Votes

Election of Directors (Proposal #1)

Plurality of the votes cast at the Annual Meeting.FOR, AGAINST or ABSTAINNo effect—not treated as a "vote cast"NoNo effect—not treated as a "vote cast"

Ratification of Auditor Appointment (Proposal 2)

Majority of shares with voting power present in person or represented by proxy

FOR, AGAINST or ABSTAIN

Treated as a vote AGAINST the proposal

Yes

Not applicable

Non-Binding Advisory Votetherefore, will have no effect on Executive Compensation (Say on Pay) (Proposal 3)

Majority of shares with voting power present in person or represented by proxy

FOR, AGAINST or ABSTAIN

No effect—not treated as a "vote cast

No

No effect—not entitled to vote

Non-Binding Advisory Vote on Frequency of Submission to Shareholders of "Say on Pay" Proposals (Proposal 4)

Majority of shares with voting power present in person or represented by proxy

ONE YEAR, TWO YEARS or THREE YEARS

No effect—not treated as a "vote cast"

No

No effect—not entitled to vote

        No cumulative voting rights are authorized, and dissenters' rights are not applicable to the matters being voted on.outcome of this proposal.


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        We will keep allAny proxy given pursuant to this solicitation may be revoked by the proxies, ballotsperson giving it at any time 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 tabulations private. We only let our Inspector of Elections examine these documents. Management, other thanat the Inspector of Elections,virtual Annual Meeting. Attendance at the virtual Annual Meeting will not, know howby itself, revoke a proxy. Please note, however, that if your shares are held of record 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 be voted onin accordance with the specifications and as directed. If a specificproxy is properly executed and returned and no voting specifications are indicated, the shares will be voted:

        With respect to such other matters as may properly come before the Annual Meeting, votes will be cast in the discretion of the appointed proxies. We will, however, forwardare not aware of any other matters that are to management any written comments you make, onbe presented for action at the proxy card or elsewhere.Annual Meeting.

        Broadridge Investor Communications ServicesWe are making this proxy solicitation both through the mail 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 tabulatepay the votes that are received priorcost of this solicitation, including the reasonable charges and expenses of brokerage firms and others who forward solicitation materials to beneficial owners of the Annual Meeting. Representatives of USANA will act as the Inspectors of Election and will tabulate the votes, if any, that are cast in person at the Annual Meeting.common stock.

        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 the time we file the Form 8-K, then we will file an amended report on Form 8-K to disclose the final voting results within four business days after the final voting results are known.

        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.

        The presence, in person or 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. For the purpose of determining whether the shareholders have approved matters other than the election of directors, abstentions are treated as shares present or represented and voting, so abstaining has the same effect as a negative vote. 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. As of the close of business on the record date, there were 24,504,413 shares of our common stock outstanding.

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 promulgated by the SEC and our Bylaws. Any shareholder who intends to submit a proposal for consideration at the 2018 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, 2017, 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").


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        If you have questions about the proposals or the Annual Meeting, you may call Joshua Foukas, USANA Executive Vice President of Legal, at (801) 954-7100. You may also send an e-mail toinvestor.relations@us.usana.com.

        The Annual Meeting will be held at 11:00 a.m. local time on Wednesday, May 3, 2017, at our offices at 3838 West Parkway Boulevard, Salt Lake City, Utah. Please note that attendance at the meeting is limited to our shareholders or their named representatives. Proof of ownership of our common stock as of the record date and photo identification will be required for admittance to the Annual Meeting. If you are a registered shareholder, the top portion of your proxy card may serve as proof of ownership. If you are attending on behalf of an entity that is a shareholder, evidence of your employment or association with that entity also will be required.

        To obtain directions to attend the Annual Meeting, please contact our Investor Relations Department at (801) 954-7100. When you arrive at our offices, our personnel will direct you to the appropriate meeting room. You need not attend the Annual Meeting in person to vote.

        SEC rules concerning the delivery of annual disclosure documents allow us or your broker to send a single Notice of Availability 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 of Availability 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 both of you would like to receive only a single Notice of Availability or, if applicable, set of proxy materials, follow these instructions:

        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 of Availability or proxy card or following the instructions provided when you vote over the Internet at www.proxyvote.com.


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BOARDPROPOSAL #1—ELECTION OF DIRECTORS AND CORPORATE GOVERNANCE

        The BoardIt is proposed to elect seven directors nominated in this statement to serve until the annual meeting of Directors is elected byshareholders in 2019, and is accountable to the shareholders of the Company. The Board establishes policy and provides strategic direction, oversight, and control of the Company. The Board met 12 times during fiscal year 2016 and each director attended at least 75% of all meetings of the Board of Directors and each committee on which he served.

        Mr. Williams was appointed to the Board of Directors in March 2016, and Messrs. Peng and Winssinger were elected to the Board of Directors in May 2016, at which time they also joined their respective committees.

        Our founder, Dr. Myron Wentz, is the Chairman of our Board of Directors and Kevin Guest is our CEO and reports directly to the Board. Historically, we have utilized a corporate governance structure where the Chairman of the Board and the CEOuntil successors shall have been separate offices held by separate individuals. Notwithstanding the foregoing, the board has not adopted a specific policy on whether the same person should serve as both the CEOduly elected and chairman of the Board or, if the roles are separate, whether the chairman shouldqualified. Proxies cannot be selected from the non-employee directors or should be an employee. The Board believes it is most appropriate to retain the discretion and flexibility to make these determinations at any given point in timevoted for more than seven persons. Unless otherwise specified 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 CEO and Chairman of the Board as a result of the demands of and differences between each role. Our CEO is responsible for setting the strategic direction for the Company, with guidance from the Board. The CEO is also responsible for the day-to-day leadership and performance of the Company, while the Chairman of the Board provides guidance to the CEO 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 is essential to the short-and-long-term success of the Company.

        The Board maintains a number of governance practices to ensure effective independent oversight of Board decisions, including (i) the appointment of strong, independent directors who constitute a majority of the Board and intimately understand the Company's business and industry; (ii) executive sessions of the independent directors in connection with every Board meeting; and (iii) annual evaluations of the performance of the Board, carried out by the independent directors. Because the Board also believes that strong, independent board leadership is an important aspect of corporate governance, the Board has historically utilized a Lead Director. The Lead Director is an independent director elected for a one year term by the independent directors. The Lead Director chairs 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. With the transition of Board members in 2016, the Board did not expressly appoint a Lead Director in 2016, but Mr. Fuller fulfilled the role of Lead Director during executive sessions and at other necessary times. For 2017, Mr. Fuller was appointed Lead Director and will serve in this capacity until the Board's initial meeting in 2018, after which the independent directors will again elect a Lead Director. Additional responsibilities of the Lead Director include:


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        NYSE listing standards relating to corporate governance matters (the NYSE Standards) generally require listed companies to have a board of directors with a majority of independent directors. The Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act) and rules of the SEC require that the Audit Committee be comprised solely of independent directors. The NYSE Standards further require that our Compensation Committee and Governance, Risk and Nominating Committee also be comprised solely of independent directors. Our Board of Directors has affirmatively determined that Gilbert A. Fuller, Feng Peng, D. Richard Williams and Frederic Winssinger had no material relationship with the Company other than their relationship as members of our Board of Directors and were independent within the meaning of the Sarbanes-Oxley Act and the NYSE Standards.

        To assist the Board in making its determination regarding director independence, the Board has adopted independence standards that conform to the independence requirements of the NYSE Standards. In addition to evaluating each director's independence, the Board considers all relevant facts and circumstances in making its independence determination. We assess director independence on an annual basis. In making these determinations, our Governance, Risk and Nominating Committee, with assistance from our Executive Vice President of Legal, evaluate responses to an independence and qualification questionnaire completed annually by each director and follow-up inquiries made to certain directors.

        In accordance with the NYSE Standards, our Board of Directors typically holds an executive session of non-management, independent directors as a part of every regularly scheduled meeting of our Board of Directors. These executive sessions are chaired by the Lead Director. In the event that the Lead Director cannot preside at an executive session, the session will be chaired by the chairs of the Audit, Compensation and Governance, Risk and Nominating Committees of our Board of Directors on a rotating basis.

        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, c/o James H. Bramble, General Counsel and 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 referred to the Board of Directors, the non-management directors, or individual directors as appropriate.

        Directors are encouraged by the Company to attend the Annual Meeting of Shareholders if their schedules permit. All directors who served in 2016 were present at the Company's Annual Meeting of the Shareholders that was held in May 2016.


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        The Board of Directors has three standing committees: the Governance, Risk and Nominating Committee, the Audit Committee, and the Compensation 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. The Governance Committee met eight times during 2016. Gilbert A. Fuller is the Chair and the other members are D. Richard Williams, Feng Peng, and Frederic Winssinger. Each member of the Governance Committee meets the definition of "independent" set forth in the NYSE Standards.

        The Governance Committee's responsibilities include:

        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 Governance Committee may from time to time consider qualified nominees who are recommended by shareholders. The Governance Committee does not have 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, as described under the heading "How do I submit a shareholder proposal for next year's annual meeting?" in the section of this Proxy Statement titled "Important Information About the Meeting."accompanying


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        Audit Committee.    The Audit Committee has been established as requiredproxy, the shares voted by Section 3(a)proxy will be voted FOR the election of the Exchange Act and the rulespersons listed for a term expiring in 2019.

        Each of the NYSE. Our Audit Committee provides assistancenominees listed below has agreed to our Boardserve as a director if elected. We know of Directors in fulfilling its responsibilities relatedno reason why the nominees would not be available for election or, if elected, would not be able to accounting, auditing and public reporting practicesserve. If any nominee is unable to serve or for good cause will not serve as a nominee at the time of the Company,Annual Meeting, the quality and integrity of our financial reports, and our internal controls over finance, accounting and financial reporting, legal compliance, risk management and ethics established by management and our Board of Directors. The Audit Committee also oversees and approves certain related party transactions and other matters thatpersons named as proxies may involve conflicts of interest. In fulfilling these functions, our Audit Committee reviews and makes recommendations to our Board of Directors with respect to certain financial and accounting matters. Our Audit Committee also engages and sets compensationvote for our independent auditors.

        The Audit Committee met five times during 2016. Members of the Audit Committee at the date of this Proxy Statement are Gilbert A. Fuller, Chair, D. Richard Williams, Feng Peng, and Frederic Winssinger, each of whom meets the independence standards set forth above. The Board has also determined that Mr. Williams, Mr. Fuller and Mr. Winssinger are "audit committee financial experts," as defineda substitute nominee designated by the applicable regulations promulgated byBoard to fill the SEC under the Exchange Act and that each member of the Audit Committee meets the NYSE composition requirements, including the requirements regarding financial literacy.

        Compensation Committee.    Members of the Compensation Committee at the date of this Proxy Statement are D. Richard Williams, Chairman, Feng Peng, and Frederic Winssinger, each of whom meets the definition of "independent" set forth in the rules of the NYSE. In addition, all members of the Compensation Committee are outside directors as defined by Rule 162(m) of the Internal Revenue Code and are non-employee directors as defined by the applicable regulations promulgated by the SEC under the Exchange Act. The Compensation Committee met five times during 2016. The Compensation Committee's responsibilities include: (i) reviewing and recommending to the Board of Directors the salaries, bonuses, and other forms of compensation and benefit plans for management and (ii) administering our 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.

        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. Effective risk oversight is a priority of our Board of Directors. Both the full Board of Directors and its committees oversee the various risks we face. Management is responsible for the day-to-day management of our risks and provides periodic reports to the Board of Directors and its committees relating to those risks and risk-mitigation efforts. All committees report on the risk categories they oversee to the full Board of Directors on an as needed basis.

        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 controls over financial reporting, and risks relating to liquidity, capital structure and investments, including land acquisition and development.


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        The Audit Committee, as well as the Board of Directors as a whole, reviews our long-term strategic plans, annual budget, capital commitments, cash needs and funding plans. As with other risks, management is responsible for the day-to-day management of the risks relating to liquidity and investments, as well as land acquisition and development, while our Board of Directors takes an oversight role with respect to those risks. Members of our management, including our Chief Financial Officer, Executive Vice President of Legal, and Director of Internal Audit, report to the Audit Committee on a quarterly basis regarding the on-going risk management activities. The Audit Committee also oversees the internal audit function and our independent auditors, and meets separately on at least a quarterly basis with the Chief Financial Officer, Director of Internal Audit and representatives of our independent registered public accounting firm and our in-house and outside legal counsel as part of this oversight responsibility.

        The Compensation Committee oversees our risks related to compensation programs and philosophy. The Compensation Committee ensures that our compensation programs, including those applicable to our executives, do not encourage excessive risk taking. The Compensation Committee works periodically with its independent compensation consultant to structure executive compensation plans that are appropriately balanced and incentivize management to act in the best interest of our shareholders. The Compensation Committee is responsible for the oversight of risk relating to the Company's compensation and benefits programs. To satisfy these oversight responsibilities, the Compensation Committee regularly meets with and receives reports from our Chief Executive Officer and Chief Financial Officer to understand the financial, human resources and shareholder implications of compensation and benefits decisions.vacancy.

        The Governance, Risk and Nominating Committee reviews, monitors and assesses our risks relating to governance matters and also oversees our ethics program, including implementation of our Code of Ethics, and compliance by directors and management with the corporate governance and ethics standards of the Company.

        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:


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        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.

        Our Board of Directors has adopted charters for our Audit, Compensation and Governance, Risk and Nominating Committees designed to comply with the NYSE Standards and applicable provisions of the Sarbanes-Oxley Act and the rules of the SEC. The current version of each of these charters has been posted and is available for public viewing on our web site 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.

        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.

        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 are in compliance with the code. A copy of the Code of Ethics for Directors and Employees is available on our web site atwww.usanahealthsciences.com under the "Corporate Governance" tab. In the event 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 intend 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 2016 was composed of D. Richard Williams, Chair, Feng Peng and Frederic Winssinger. All members of the Compensation Committee are independent directors. None of the members of our Compensation Committee has ever been an officer or employee of the Company or any of our subsidiaries. None of the members of our Compensation Committee had any relationship requiring disclosure under "Transactions with Related Persons." During fiscal year 2016, 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.


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 reports of ownership and changes in ownership with the SEC. These parties are also required by the SEC to furnish us with copies of all Section 16(a) forms that they file.

        Based solely upon a review of these forms that were furnished to us, 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 individuals and persons under Section 16(a) were filed on time in fiscal year 2016, except that one filing on Form 4 for Gilbert A. Fuller was filed late.


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EXECUTIVE OFFICERS

        The executive officers of USANA at December 31, 2016, and as of the date of this Proxy Statement were:

Name
Position
Kevin G. GuestChief Executive Officer
Jim BrownPresident and Chief Operating Officer
Paul A. JonesChief Financial Officer and Chief Leadership Development Officer
James H. BrambleChief Legal Officer and Corporate Secretary
Daniel A. MacugaChief Communications 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, 54, Chief Executive Officer. Mr. Guest joined USANA on a part-time basis in April 2003, as Executive Director 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 Events 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. He served in this role until November 2016 when he was appointed 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.

Jim Brown, 48, 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.

Paul A. Jones, 53, 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 left 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.

James H. Bramble, 47, 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


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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., 46, Chief Communications 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.

Robert A. Sinnott, M.N.S., Ph.D., 52, 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-CEO 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 of the Council of Responsible Nutrition's (the "CRN"), the leading trade association representing ingredient suppliers and manufacturers of dietary supplements. From 2009 to 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, 51, joined USANA as Chief Information Officer in December 2016. Mr. Noot has more than two decades of executive leadership experience and has worked 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 role 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


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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 joining USANA, Mr. Mulham had extensive experience in the Direct Selling Industry having worked for Amway, Mary Kay, Nutri Metics and Dorling Kindersley Family Learning. He subsequently worked in property development as Director of both Hunter Valley Gardens and Tempus Two Winery. Mr. Mulham has a post graduate diploma from Macquarie Graduate School of Management, Sydney, and received the Silver Stevie Award in 2015, for Executive of the Year—Health Products & Services and Pharmaceuticals.

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 seven persons for election to the Board of Directors. Six incumbent directors will stand for re-election: Myron W. Wentz, Ph.D., Gilbert A. Fuller, Robert Anciaux, D. Richard Williams, Frederic Winssinger and Feng Peng. In addition, the Governance, Risk and Nominating Committee has nominated our Chief Executive Officer, Kevin Guest, to stand for election to the Board.

        The Governance, Risk and Nominating Committee believesdetermined 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.

        Each director who is elected at the Annual Meeting will hold office until our annual meeting in 2018, 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 a 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 each nominee meets 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 nominee 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

        You will be asked to elect seven directors at the Annual Meeting. The nominees to the Board of Directors in 2017for director are Robert Anciaux, Gilbert A. Fuller, Kevin Guest, J. Scott Nixon, Feng Peng, Myron W. Wentz, Ph.D., D. Richard Williams, and Frederic Winssinger. Messrs. Fuller, Peng, Williams and Winssinger are independent directors under NYSE Standards.


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        The following information was furnished to us by the nominees:

        Robert Anciaux, 71,72. 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 financial expertise and experience in providing consulting and strategic advisory services to complex organizations, and his extensive experience and familiarity with the business of the Company qualify him to serve on our Board.

        Gilbert A. Fuller, 76,77, 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 more 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 qualify Mr. Fuller to serve on our Board of Directors.

        Kevin Guest.Guest, Mr. Guest is our55, Chief Executive Officer. Biographical information for Mr. Guest is set out abovejoined USANA on page 11 under "Executive Officers".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, 43,44, Independent Director, Audit Committee, Compensation Committee and Governance, Risk & Nominating Committee member. Mr. Peng was elected to the Board in May 2016. From March 2013 to December 2016, Mr. Peng 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 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.

        Myron W. Wentz, Ph.D., 76,77, Founder and Chairman of the Board. Dr. Wentz founded USANA in 1992 and served as the Chief Executive Officer and Chairman of the Board from 1992 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


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former parent corporation of USANA. Dr. Wentz was Chairman of Gull from 1974 until 1998. In 1998, Dr. Wentz founded Sanoviv, S.A. de C.V. ("Sanoviv"), a holistic integrative medical center and hospital 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 is our largest shareholder, and as our founder, and the visionary force behind the science and mission of USANA, hisUSANA. 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 Chairman and former Chief Executive Officer, uniquely qualify him to serve as a member of our Board and as our Chairman.

        D. Richard Williams, 60, 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 Directors of Crawford & Company. Additionally, he 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. Mr. Williams received his B.S. degree and 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.

Frederic J. Winssinger, 48,49, Independent Director, Audit Committee, Compensation Committee and Governance, Risk & Nominating Committee member. Mr. Winssinger became a director 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's general investment operations and in 2014, he co-founded PlanninCore 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 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 UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH DIRECTOR NOMINEE.

        The Board of Directors unanimously recommends a voteFOR each director 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 responsible for coordinating the activities of the other independent directors. The Lead Independent Director has the authority to preside at all executive sessions of the independent directors and at 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 independently of the Chairman. Mr. Fuller was Lead Independent Director during fiscal year 2017.


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COMPENSATION OF DIRECTORS 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 and Kevin Guest is our Chief Executive Officer and reports directly to the 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 Chief Executive Officer and Chairman of the Board as a result of the demands of and differences between each role. Our Chief Executive Officer is responsible for setting the strategic direction for the Company, with guidance from the Board. The 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 Chief 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 are essential to the short-and-long-term success of the Company.

Term Limits and Mandatory Retirement Age

        The Board of Directors does not believe it should establish a maximum length of service 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 maintain a balance of directors with varying lengths of service and ages. While the Board recognizes that term limits and/or a mandatory retirement age could assist in this regard, they may have the unintended consequence of forcing the Board and the Company to lose the contribution of directors who over time have developed increased judgment, knowledge, and valuable insight into the Company and its operations. The Board also believes that 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 directors on the Board of Directors and on its standing committees regularly meet in executive session without employee directors or other executive officers present as part of every regularly scheduled meeting. The Lead Independent Director chairs these executive sessions. In the event that the Lead Director cannot preside at an executive session, the committee chairs of the 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:

        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 following risks:

        The Compensation Committee ensures that our compensation programs, including those applicable to our executives, do not encourage excessive risk taking. The Compensation Committee works periodically with its independent compensation consultant to structure executive compensation plans that are appropriately balanced and that incentivize management to act in the best interest of our shareholders.

Governance, Risk & Nominating Committee

        The Governance, Risk & Nominating Committee oversees management of the following risks:

        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 table below summarizesshareholders elect our Board of Directors annually for one-year terms. Currently we have eight directors, with seven directors standing for re-election at the compensation paid by us2018 Annual Meeting of Shareholders. In connection with pursuing other business endeavors, Mr. Williams is not standing for re-election to our directors for the Board in 2018. The Board establishes policy and provides strategic direction, oversight, and control of the Company. The Board of Directors met four times during fiscal year ended December 31, 2016. Note that shares2017 and per-share amounts reflect a 2-for-1 spliteach director attended at least 75% in the aggregate of the Company's common shares,total number of meetings of the Board of Directors and the committees on which became effective November 22, 2016.

Name
 Fees Earned
or Paid
in Cash
($)(1)
 Stock
Awards
($)(2)
 Total
($)
 

Myron W. Wentz, Ph.D.(3)

       

Robert Anciaux

 $100,950 $249,740 $350,690 

Jerry G. McClain(4)

 $26,650 $238,033 $264,683 

Ronald S. Poelman(5)

 $28,250 $238,033 $266,283 

Gilbert A. Fuller(6)

 $111,150 $249,740 $360,890 

D. Richard Williams(7)

 $99,150 $105,180 $204,330 

Feng Peng(8)

 $68,550 $105,180 $173,730 

Frederic Winssinger(8)

 $68,550 $105,180 $173,730 

David A. Wentz(9)

       

(1)
Duringhe served during fiscal year 2016, each non-insider (non-management) director was paid a cash retainer2017. We encourage, but do not require, members of $22,200 for the first quarterBoard of 2016Directors to attend our Annual Meeting of Shareholders, and then $22,850 per quarter thereafter,five of our (then) seven directors attended last year's Annual Meeting.

Audit Committee

        The Audit Committee has been formed to comply with the Chairrequirements of the definition of "audit committee" under Section 3(a)(58)(A) of the Exchange Act. Members of the Audit Committee paid an additional $4,550 per quarter, the Chairas of the Compensation Committee paid an additional $2,800 per quarter,December 30, 2017 include its chair, Mr. Fuller, and the Chair of the Governance, Riskdirectors Nixon, Peng, Williams, and Nominating Committee paid an additional $1,700 per quarter. In addition, in February 2016, the Board created the position of Senior Director, designating Mr. Anciaux as such, and the Compensation Committee authorized payment of an additional $3,400 per quarter cash compensation for this position. No director compensation is paid to Company executives for their service on the Board.Winssinger. The Company 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 committeeshas determined that each member of the Board.

(2)
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 financially literate, as interpreted by the Board in its business judgment. The Board has also determined that each member of the committee, 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 audit committee members is defined in the NYSE listing standards. The Audit Committee met 17 times during fiscal 2017.

        The Audit Committee appoints and establishes the compensation for our independent registered public accounting firm, approves in advance all engagements with the independent 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 adequacy of our internal control over financial reporting and, where it determines to do so, makes recommendations to the Board of Directors with respect to rotation of the lead 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 may involve conflicts of interest. In February 2016, the Compensationfulfilling 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 Governance, Risk & Nominating Committee of the Board of Directors (Messrs. Poelman, Anciauxreviews, develops and McClain)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 times during fiscal 2017. Members of the Governance, Risk & Nominating Committee as of December 30, 2017, were its chair, Mr. Fuller, and directors


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Nixon, Peng, Williams, and Winssinger. Each member of the Governance Committee meets the definition of "independent" set forth in the NYSE standards.

        The Governance, Risk & Nominating Committee may from time to time consider qualified nominees who are recommended by shareholders. The Governance, Risk & Nominating Committee does not use 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 "Shareholder Proposals for 2019 Annual Meeting" below.

Compensation Committee

        The Compensation Committee has responsibility, authority, and oversight relating to the development of 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 as of December 30, 2017, were its Chair, Mr. Williams, and directors Nixon, Peng, and Winssinger. Each member of the Compensation Committee qualifies as an "outside director," within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), as a "non-employee director" within the meaning of Rule 16b-3 under the Exchange 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 Board of Directors the salaries, bonuses, and other forms of compensation and benefit plans for management and (ii) administering our 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. The Compensation Committee determines the compensation of our named executive officers.

        To assist 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, but not less than annually, considers the independence of its compensation consultant and determines whether any related conflicts of interest require disclosure.


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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

        The Compensation Committee at December 30, 2017, was comprised of D. Richard Williams, Chair, J. Scott Nixon, Feng Peng, and Frederic J. Winssinger. All members of the Compensation Committee are independent directors. None of the members of our Compensation Committee has ever been an officer or employee of USANA or any of our subsidiaries. No member of the Compensation Committee had any relationship requiring disclosure 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.


DIRECTOR 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 theby 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 DSUs to Robert Anciaux, Gil Fuller, Jerry McClain, and Ronald Poelman on the following termsequity in accordance with the form of deferred stock units ("DSUs") grant agreement generally used, followed by annual equity grants. Our executive officers do not play any role in determining or recommending the amount of non-employee director compensation, except that Mr. Guest votes on the recommendations of the Compensation Committee in his capacity as a member of the Board of Directors.

        Our Board of Directors includes Mr. Guest, who is an executive officer of the Company, and 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 determination 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 Company: (i) 4,000National Association of Corporate Directors, and other resources. The Compensation Committee also considered an overview of the corporate governance environment as well as recent trends and developments 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 same 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 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.

        Equity Compensation.    We also have an equity compensation program for our non-employee directors. This program involves an initial grant of equity, usually in the form of DSUs, in connection


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with the initial election or appointment to each such director; (ii)the Board of Directors, with the target delivered value prorated for the fiscal year based on the date of grant of February 8, 2016; (iii) vestingelection or appointment. Initial equity awards generally vest in eightfour equal quarterly installments of 500 DSUs each, commencingbeginning on the last day ofquarter following the Company's first fiscalgrant date. We also make annual equity awards to each director. These awards also vest in four equal quarterly installments beginning on the quarter of 2016; and (iv) allfollowing the grant date. All vested DSUs to beare exchanged for shares of the Company's common stock upon the termination of service of the directors.director. By delivering a portion of the annual director retainer in the form 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 captioned "Executive Compensation" and is not included in the table below. In May 2016,fiscal year 2017, equity awards to non-employee directors were made using DSUs as indicated in the table below.


Director Compensation Committee (Messrs. Williams, PengTable

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)
This amount reflects the aggregate dollar amount of all cash compensation earned for service as a director, including the retainers and, Winssinger) approvedif applicable, meeting attendance fees described in the paragraph captioned "Cash Compensation" above.

(2)
These amounts set forth in the "Stock Awards" column represent the aggregate grant date fair value of the DSUs granted during fiscal year 2017, computed in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718. The aggregate grant date fair value is calculated using the closing price of our common stock on the grant ofDSUs to eachdate as if all of directors Williams, Pengthe shares underlying these awards were vested and Winssinger,delivered on the following terms: (i) 1,780 DSUs to each such director; (ii)grant date. Each of these awards was granted under the 2015 Equity Incentive Plan of the Company.

(3)
Non-employee directors do not receive any other perquisites or personal benefits or property as part of their compensation.

(4)
Stock award amount represents fair value on grant date of 822 DSUs granted to Mr. Anciaux on July 24, 2017. The shares vest in two equal amounts on December 31, 2017, and April 1, 2018. Mr. Anciaux currently serves as Senior Director.

(5)
Stock award amount represents fair value on grant date of 822 DSUs granted to Mr. Fuller on July 24, 2017. The shares vest in two equal amounts on December 31, 2017, and April 1, 2018.

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(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 granted to Mr. Williams on May 2, 2016; (iii) vesting1, 2017. The shares vest in four equal quarterly installments, commencing on the last day of the Company's second fiscal quarter of 2016; and (iv) all vested2017.

(8)
Stock award amount represents fair value on grant date of 1,880 DSUs granted to be exchanged forMr. Peng on May 1, 2017. The shares vest in four equal quarterly installments, commencing on the last day of the Company's stock upon the terminationsecond fiscal quarter of service of the director, or, at the election of the director, upon vesting. In addition, in May 2016, the Compensation Committee approved the acceleration of the vesting of the DSUs granted in February 2016 to Messrs. Poelman and McClain to vest in full as of May 2, 2016 upon their separation from the Board of Directors.

(3)
Dr. Wentz is our founder. He was not paid any fee for service as a member of our Board of Directors in 2016.

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(4)
Mr. McClain served until May 2016. During his service on the Board, Mr. McClain was Chair of the Audit Committee.

(5)
Mr. Poelman served until May 2016. During his service on the Board, Mr. Poelman was designated as the Lead Director.

(6)
Mr. Fuller currently serves as Chair of the Audit Committee and as Chair of the Governance, Risk and Nominating Committee.

(7)
Mr. Williams was appointed to the Board March 1, 2016. Mr. Williams currently serves as the Chair of the Compensation Committee.

(8)
Messrs. Peng and Winssinger were elected to the Board in May 2016.2017.

(9)
Stock award amount represents fair value on grant date of 1,880 DSUs granted to Mr. Wentz resigned fromWinssinger on May 1, 2017. The shares vest in four equal quarterly installments, commencing on the Board and as Co-Chief Executive Officer of the Company in November 2016. As an employee and executive officer of the Company, he was not paid any additional compensation for service as a member of the Board of Directors.

        When determining director compensation in 2016, the Compensation Committee considered recommendationslast day of the Company's CFO and a numbersecond fiscal quarter of other factors, including director compensation data available regarding members of the Company's industry peer group, as well as the 2015-2016 Director Compensation Report published by the National Association of Corporate Directors and other resources.

2017.


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 30, 2017 and internal control over financial reporting at December 30, 2017.29, 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 audited our financial statements for the fiscal year ended December 31, 2016 and internal control over financial reporting at December 31, 2016.are described below.

        Shareholder ratificationWe are asking our shareholders to ratify the selection of the appointment of theKPMG as our independent registered public accounting firmfirm. Although ratification is not required. We are askingrequired by our bylaws or otherwise, the Board is submitting the selection of KPMG to our shareholders to ratify the appointmentfor 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 still 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,Annual Meeting and will have an opportunity to make a statement if they desire to do so and will be availableand/or to respond to appropriate questions from shareholders.

RECOMMENDATIONIndependence

        THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" RATIFICATION OF THE APPOINTMENT OF KPMG LLP, AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEARhas 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 overseesis composed of five directors, all of whom meet the independence standards contained in the NYSE Listed Company rules, SEC rules, and monitors the Company's financial reporting process on behalf ofUSANA'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. In fulfilling its oversight responsibilities, the Committee reviewed and discussed with management the audited financial statements to be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, including a discussion of the quality and the acceptability of the Company's financial reporting practices and the internal control over financial reporting.

        The Audit Committee reviewed with KPMG LLP,selects, subject to shareholder ratification, the Company's independent registered public accounting firm, whichand 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 expressing opinionsperforming 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 (United States)(PCAOB). In addition, the

        The Committee discussed with KPMG LLP its independence from management and the Company, including the impact of any non-audit-related services provided to the Company, the matters in that firm'sKPMG's written disclosures, and the letter from KPMG LLP to the Committee pursuant to the applicable requirements of the Public Company Accounting Oversight Board (PCAOB)PCAOB regarding the independent registered public accounting firm's communications with the Audit Committee concerning its independence. The Committee also discussed with the independent registered public accounting firmKPMG the matters required to be discussed by the statement on Auditing Standards No. 1301, as adopted by the PCAOB (which replaced PCAOB Auditing Standard No. 61).1301,Communications with Audit Committees.

        Further, the Committee discussed with the Company's internal audit executive and KPMG LLP 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 the Company'sUSANA's Annual Report on Form 10-K for the fiscal year ended December 31, 201630, 2017 filed with the Securities and Exchange


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Commission. The Committee also evaluated and reappointed KPMG LLP as the Company's independent registered public accounting firm for fiscal 2017.2018.

        Respectfully submitted by the members of the Audit Committee:



  Gilbert A. Fuller, (Chair)Chairman
J. Scott Nixon
Feng Peng
D. Richard Williams
Feng Peng
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 accountants 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.


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        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 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 established policies and procedures for the pre-approval of audit, audit related, tax and permissible other services to be provided to the Company by its independent registered public accounting firm. All fees listed in the table above were pre-approved by the Audit Committee.

IndependenceRECOMMENDATION OF THE BOARD OF DIRECTORS

        The Board of Directors unanimously recommends a voteFOR ratification of the appointment of KPMG has advised us that it has no direct or indirect financial interest inLLP, as the Company or in any of its subsidiaries and that during 2016 it had no connection with the Company or any of its subsidiaries, other than as itsCompany's independent registered public accounting firm or in connection with certain other services, as described below.

Services

        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 for the quarters ended April 2, 2016, July 2, 2016 and October 1, 2016, 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.

        During fiscal year 2015, 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 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 fiscal year 2015.

        The following table summarizes the fees paid by us to KPMG during fiscal years 2015 and 2016.

Type of Service and Fee
 Fiscal Year 2015 Fiscal Year 2016 

Audit Fees

 $1,634,529 $1,958,641 

Audit Related Fees

     

Tax Fees

 $57,050 $64,650 

All Other Fees

     

Total Fees

 $1,691,579 $2,023,291 


2018.
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 Chief Executive Officer, Chief Financial Officer, and the three other most highly-compensated executive officers as of the end of fiscal year 2016. In this Proxy Statement, we refer to these officers as our "Named Executive Officers." Our Named Executive


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Officers are also included in the group referred to by the terms "Executive" and "Executives" in the Compensation Discussion and Analysis.

Executive Summary and Overview

        Summary of 2016 Accomplishments.    In fiscal year 2016, we surpassed the $1 billion mark in net sales for the first time in our history, generating our 14th consecutive year of record sales. We also reported the highest earnings per share in the history of the Company and finished the year with a record number of active Associates and Preferred Customers. Customer growth remains our highest priority as we strive to improve the health and nutrition of individuals and families around the world. In November 2016, we effected a two-for-one forward split of our common stock.

        Our results for the year were driven by execution of our 2016 strategies, which included (i) advancing our personalization strategy through new product launches and offerings; (ii) continuing to invest in China, largely by completing and shifting production to our new manufacturing facility; and (iii) investing in information technology systems and infrastructure to support our growing customer base that further enhances the experience of doing business with USANA around the world.

        Our introduction and launch of InCelligence™ was perhaps our most significant accomplishment in 2016. InCelligence™ is our proprietary, patent-pending, technology that is designed to support the body's natural ability to nourish, protect and renew its cells. The science behind InCelligence™ reflects a significant shift in nutritional supplementation and Dr. Wentz, with our team of exceptional scientists, has positioned USANA as a leader in this technology. We also introduced our new core product, CellSentials™ (which fully incorporates the InCelligence™ technology), at our 2016 international convention in August. This product, and others, were received by our customers with tremendous excitement. The InCelligence™ platform represents the future of our various product lines and is intended to keep USANA at the forefront of nutritional supplementation.

        During the year we also continued to make investments to improve our infrastructure in China. Our most significant accomplishment was the successful completion of, and transition to, our new China production facility in the fourth quarter. This accomplishment was the result of a significant undertaking by our U.S. and China operations/regulatory teams, and extensive cooperation with the Chinese government. Adding 350,000 square feet of production capacity to our manufacturing operations, this facility is now fully operational and will provide the production capacity we need in China for the foreseeable future.

        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 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 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


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contain post-termination or change-in-control payment provisions, or provide significant perquisites or personal benefits to our Executives.

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:

        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 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. As shown in the compensation tables following 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.

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. During most of fiscal year 2016, we were led by Co-CEO's. Since November 2016, we have a single CEO. The Committee seeks input in meetings of the Compensation Committee from the CEO (or, historically, the Co-CEO's), 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. The Compensation Committee consists of three members of our 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 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 the Company's results for the period being assessed. The Compensation Committee seeks input from the CEO 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


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between executives, the impact of current compensation practices on our financial statements and condition, and the relationship between executive compensation and performance of the Company.

        Our CFO 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

        In late 2014, the Compensation Committee retained Frederic W. Cook & Co. (the "Compensation Consultant"), who the Compensation Committee determined to be independent, to assess the competitiveness of compensation levels for certain of our officers, including our Named Executive Officers, relative to survey market data. The Compensation Consultant 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. In 2015, the Compensation Committee made certain decisions regarding Named Executive Officer (i) salaries, (ii) the mix between base salary, short-term incentive compensation, and long-term incentive compensation, and (iii) the amount of target long-term equity incentive awards for the Named Executive Officers after considering the input of the Compensation Consultant, survey market data, Company performance, and other relevant factors.

        As a basis for the market data provided to the Compensation Committee, the Compensation Consultant utilized compensation data from a group of 22 peer companies set out below. These companies were 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 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 late 2016 and early 2017, the Compensation Committee again engaged the Compensation Consultant to advise the Compensation Committee on Executive compensation, including total compensation benchmarking and aggregate equity compensation and incentive practices. Representatives of the Compensation Consultant delivered a report to the Compensation Committee at its February 2017 meeting and discussed the same with the committee. Going forward, the Compensation Committee has requested that our CFO work with the Compensation Consultant to prepare a plan to implement an updated long-term incentive program for Executives. While the


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Compensation Committee has been undertaking this study during 2016, no additional equity grants were made to Executives other than to new hires.

2016 Compensation Determinations

        In 2016, the Compensation Committee referenced updated data from the above sources in considering the appropriate levels of base salary, bonus and long-term incentive compensation for our Executives, as discussed below. In addition to the Compensation Consultant's market data, the Compensation Committee utilized the following materials, along with other resources and tools, to render compensation decisions for 2016: (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, and the U.S. Direct Selling Association 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 recommendations from the CEO 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 2016 Executive compensation evaluation, the Compensation Committee, after reviewing the information outlined above, approved the Named Executive Officers' base salaries from July 2016 through June 2017 as set out in the table below. At the time of these base salary determinations, Mr. Guest was serving as Co-CEO, Mr. Brown was serving as Chief Operating Officer and Mr. Macuga was serving as Chief Communications Officer and Executive Vice President of Field Development for the Americas. In November 2016, Mr. Wentz resigned as Co-CEO and Mr. Guest was promoted to CEO. In December 2016, Mr. Brown was promoted to President and Chief Operating Officer and Mr. Macuga was appointed Chief Communications Officer. While these Executives were promoted in late 2016, the Compensation Committee decided to make compensation determinations relative to the promotions at its February 2017 meeting.

Executive
 Appointed Office 2015 - 2016
Base Salary($)
 2016 - 2017
Base Salary($)
 

Kevin Guest

 Chief Executive Officer $618,000 $636,000 

Jim Brown

 President and Chief Operating Officer $411,600 $411,600 

Paul A. Jones

 CFO and Chief Leadership Development Officer $357,000 $357,000 

James H. Bramble

 Chief Legal Officer $394,000 $405,820 

Dan Macuga

 Chief Communications Officer $376,980 $376,980 

David A. Wentz

 Former Co-Chief Executive Officer $618,000 $636,000 

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        The Compensation Committee, at its February 2017 meeting, approved the following base salary increases for the Executives below in connection with their 2016 promotions: (i) Mr. Guest's base salary was increased to $800,000; (ii) Mr. Brown's base salary was increased to $520,000; and (iii) Mr. Macuga's base salary was increased to $415,000. The Compensation Committee utilized 2017 information and data provided by the Compensation Consultant in making the foregoing base salary determinations. In particular, the Compensation Committee, acting on the recommendations of the Compensation Consultant and other market resources and information available to it, determined it would target the cash component (base salary and short-term incentive) compensation of the Company's Named Executive Officers to a level that is approximately equal to the median of our peer group compensation for fiscal year 2017.

        The actual cash compensation paid to our Named Executive Officers during the year ended December 31, 2016 is reflected in column (c) of the Summary Compensation Table on page 25 of this Proxy Statement.

2016 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.

        For 2016, the Compensation Committee approved the 2016 Executive Bonus Plan (the "2016 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 2016 without sacrificing profitability; (ii) continue to align the bonus opportunity under the 2016 Bonus Plan for all Executives to promote internal equity; (iii) foster teamwork among markets and Executives; and (iv) align the 2016 Bonus Plan offered to Executives with the profit sharing plan offered to all other employees of the Company.

        Under the 2016 Bonus Plan, 9% of the Company's adjusted operating profits in excess of 10% of net sales, were to be used to create a bonus pool for payment of cash bonuses to Executives. For purposes of the 2016 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 2016 Bonus Plan were distributed as an equal percent of the Executive's base salary.

        Under the 2016 Bonus Plan, eligible Executives had the potential 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 2016 Bonus Plan was 50% of the Executive's base salary.

2016 Executive Bonus Plan Payout

        Shortly after the end of fiscal 2016, the Compensation Committee reviewed the foregoing performance objectives and evaluated the actual performance delivered by the Company under the 2016 Bonus Plan. The Compensation Committee determined that the Company delivered strong financial and operating performance in 2016 and, in particular, noted that the Company:


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        Based on the Company's performance, and the criteria of the 2016 Bonus Plan, the Compensation Committee determined that each Executive had earned a cash bonus equal to 49.0% of the Executive's base salary under the 2016 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 2016 Bonus Plan are reflected in column (g) of the Summary Compensation Table of this Proxy Statement.

2017 Executive Bonus Plan

        For fiscal year 2017, the Compensation Committee approved the 2017 Executive Bonus Plan (the "2017 Bonus Plan"), which is based on the same performance objectives as the 2016 Bonus Plan: growth 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 2016; (ii) the successful alignment of the Company's Executives under the 2016 Bonus Plan, and (iii) the internal equity among Executives that was created by the 2016 Bonus Plan.

        Under the 2017 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 2017 Bonus Plan will be distributed as an equal percent of the Executive's base salary. Under the 2017 Bonus Plan, Executives will have the potential 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 2017 Bonus Plan is 50% of the Executive's base salary, with the exception that the target bonus percentages for Mr. Guest, our CEO, and Mr. Brown, our President and COO, are now 75% of each respective Executive's base salary. The Compensation Committee set the target bonus under the 2017 Bonus Plan for these Executives pursuant to recommendations of the Compensation Consultant and other market resources. Future estimated payouts under the 2017 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. 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 additional compensation to Executives when the Company performs and the value of the Company's stock increases. Historically, we have provided equity-based compensation primarily through the issuance of stock-settled stock appreciation rights ("SSARs"). In recent years, the Compensation Committee has also granted deferred stock units ("DSUs") to outside directors. The Compensation Committee awards equity compensation to supplement our Executives' compensation to ensure that total compensation is competitive in the marketplace and to align compensation with our long term goals and objectives.

        Grants of 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 voluntarily 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 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 to


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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.

        In 2016, the Compensation Committee made no equity award grants to the Named Executive Officers as it continues to review potential changes to the long-term incentive component of Executive compensation. As indicated above, in December 2016, the Compensation Committee engaged the Compensation Consultant to provide the Committee with updated data and recommendations related to benchmarking, aggregate equity usage and incentive practices for the Company. The Compensation Committee will consider further recommendations of the Compensation Consultant and the CFO at a future meeting regarding a plan for new equity grants for executives.

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 terms and conditions, including Company matching provisions, as other employees. For the year ended December 31, 2016, we contributed matching funds totaling $1,593,674 to our 401(k) plan in which all eligible employee participants shared. During 2016, each of our eligible Executives participated in our 401(k) plan and shared matching funds totaling $58,996. Except 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 2016, 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.

        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 expressed in the Securities Act, and, therefore, such indemnification provisions may be unenforceable.


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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 $1.0 million for the taxable year. There is an exception to the limit on deductibility for performance-based compensation that meets certain requirements. We intend that compensation paid under our incentive plans be generally fully deductible for federal income tax purposes. However, deductibility is just one among a number of factors considered in determining appropriate levels or types of compensation and the Compensation Committee may approve compensation that exceeds the limitation in order to ensure competitive levels of total compensation for our executive officers.


REPORT OF THE COMPENSATION COMMITTEE

        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:

D. Richard Williams (Chair)

Feng Peng

Frederic Winssinger

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SUMMARY COMPENSATION TABLE

        The following table sets forth all compensation paid to each of the Named Executive Officers for the fiscal years 2016, 2015 and 2014, who were serving as executive officers at December 31, 2016.

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

Kevin G. Guest,

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

CEO(4)

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

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

Jim Brown,

  
2016
 
$

401,122
 
$

83,333
  
 
$

196,469
 
$

9,275
 
$

690,199
 

President and Chief

  2015             

Operating Officer(5)

  2014             

Paul A. Jones,

  
2016
 
$

357,000
  
  
 
$

174,859
 
$

9,275
 
$

541,134
 

CFO and Chief Leadership

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

Development Officer(6)

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

James H. Bramble,

  
2016
 
$

399,501
  
  
 
$

195,676
 
$

9,275
 
$

604,452
 

Chief Legal Officer and

  2015 $388,032   $1,517,838 $223,429 $9,100 $2,138,398 

General Counsel

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

Dan Macuga,

  
2016
 
$

371,110
  
  
 
$

181,770
 
$

9,275
 
$

562,155
 

Chief Communications

  2015             

Officer

  2014             

David A. Wentz,

  
2016
 
$

624,180
  
  
  
 
$

68,186
 
$

692,366
 

Former Co-CEO(7)

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

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

(1)
Amounts in this column reflect the grant date fair value of stock-settled stock appreciation rights ("SSARs") 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 31, 2016.

(2)
Amounts paid as cash bonus in subsequent fiscal year for performance realized in prior fiscal year (e.g., results of 2016 bonus pool paid out in first quarter of 2017), under the Company's short-term incentive plan discussed in the Compensation Discussion and Analysis section of this Proxy Statement.

(3)
Amounts in this column reflect employer's matching contributions to the Executive's 401(k) plan.

(4)
Mr. Guest was President—Americas, Europe and South Pacific until August 2014, President of USANA from August 2014 to August 2015, and Co-CEO from August 2015 to November 2016 when he was named Chief Executive Officer of the Company.

(5)
Jim Brown was Chief Operating Officer from November 2013 until November 2016, when he was appointed as President and Chief Operating Officer. The cash bonus reflected in Column D was

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    paid as a quarterly bonus to Mr. Brown during a period when he assumed responsibility for the Information Technology department while the Company searched for a Chief Information Officer.

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

(7)
Dave Wentz was Chief Executive Officer of USANA from July 2008 until August 2015 when he was appointed Co-Chief Executive Officer. He resigned from all positions with the Company in November 2016. Column (i) reflects the following compensation paid to Mr. Wentz: (1) $9,275 in employer's matching contribution to his 401(k) plan; and (2) $58,911 in accrued vacation payout.

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GRANTS OF PLAN-BASED AWARDS

        No grants of equity awards were made to our Named Executive Officers during the fiscal year ended December 31, 2016. The table below summarizes estimated or targeted payouts to the Named Executive Officers under the 2017 Bonus Plan described in the Compensation Discussion and Analysis section of this Proxy Statement.

 
  
 Estimated future payouts under
non-equity incentive plan awards
 
Name
 Grant date Threshold
($)(1)
 Target
($)(1)
 Maximum
($)(1)
 
(a)
 (b)
 (c)
 (d)
 (e)
 

Kevin G. Guest,

 N/A   $600,000 $800,000 

CEO

            

Jim Brown,

 

N/A

  
 
$

390,000
 
$

520,000
 

President and Chief Operating Officer

            

Paul A. Jones,

 

N/A

  
 
$

178,500
 
$

357,000
 

CFO and Chief Leadership Development Officer

            

James H. Bramble,

 

N/A

  
 
$

202,910
 
$

405,820
 

Chief Legal Officer and General Counsel

            

Dan Macuga,

 

N/A

  
 
$

207,500
 
$

415,000
 

Chief Communications Officer

            

(1)
There is no guaranteed payment to our Named Executive Officers under the 2017 Executive Bonus Plan. If the minimum performance objectives are not achieved, they will receive no payout under the 2017 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 2017 Executive Bonus Plan.

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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 31, 2016.


Outstanding Equity Awards at Fiscal Year-End

 
 Option awards(1) 
Name
 Number of
securities
underlying
unexercised
options
(#) exercisable
 Number of
securities
underlying
unexercised
options
(#)
unexercisable
 Equity
incentive plan
awards:
number of
securities
underlying
unexercised
unearned
options (#)
 Option exercise price ($) Option
expiration date
 
(a)
 (b)
 (c)
 (d)
 (e)
 (f)
 

Kevin G. Guest,

    58,500   $28.81  15 March 2018 

CEO(2)

     120,000    $70.75  1 March 2020 

Jim Brown,

  
  
32,500
  
 
$

28.81
  
15 March 2018
 

President and Chief Operating

     60,000    $70.75  1 March 2020 

Officer(2)

                

Paul A. Jones,

  
14,000
  
14,000
  
 
$

19.12
  
17 June 2018
 

CFO and Chief Leadership

     60,000    $70.75  1 March 2020 

Development Officer(3)

                

James H. Bramble,

  
  
37,000
  
 
$

28.81
  
15 March 2018
 

Chief Legal Officer and General

     60,000    $70.75  1 March 2020 

Counsel(2)

                

Dan Macuga,

  
  
34,500
  
 
$

28.81
  
15 March 2018
 

Chief Communications Officer(2)

     60,000    $70.75  1 March 2020 

David W. Wentz,

  
  
  
  
  
 

former Co-CEO(4)

                

(1)
All amounts adjusted to reflect our two-for-one forward stock split effective November 22, 2016.

(2)
The SSAR grants to Mr. Guest, Mr. Brown, Mr. Bramble, and Mr. Macuga which expire on March 15, 2018, vest 50% in August 2016 and 50% in August 2017. The SSAR grants to Mr. Guest, Mr. Brown, Mr. Bramble and Mr. Macuga which expire on March 1, 2020, vest 50% in September 2018 and 50% in September 2019.

(3)
The SSAR grant to Mr. Jones, which expires on June 17, 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.

(4)
Mr. Wentz resigned as a member of the Board of Directors and Co-CEO in November 2016 and all of his outstanding equity awards were cancelled at that time.

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OPTION EXERCISES AND STOCK VESTED

        The following table summarizes information regarding the exercise of SSARs and each vesting of SSARs, for each of the Named Executive Officers on an aggregated basis during the fiscal year ended December 31, 2016. All amounts adjusted to reflect our two-for-one forward stock split effective November 22, 2016.

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

Kevin G. Guest

  32,570 $2,117,115     

Jim Brown

  18,208 $1,193,326     

Paul A. Jones

  10,134 $701,890     

James H. Bramble

  20,754 $1,361,935     

Dan Macuga

  19,238 $1,253,053     

David A. Wentz

  32,208 $2,109,675     


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 31, 2016. All amounts adjusted to reflect our two-for-one forward stock split effective November 22, 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

  3,404,485(2)$54.69(3) 7,839,260 

Equity compensation plans not approved by security holders

  None  N/A  None 

Total

  3,404,485(2)$54.69(3) 7,839,260 

(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) 13,813 DSUs that will entitle each holder to the issuance of one share of common stock for each unit, and (ii) 3,390,672 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 $61.20 on the last trading day of fiscal 2016 and the exercise price of SSARs that were in-the-money, 590,999 shares of common stock would be issued upon the exercise of these SSAR awards.

(3)
Calculated without taking into account 13,813 shares of common stock subject to outstanding DSUs, which are issuable without any cash consideration or other payment required for such shares.


EMPLOYMENT CONTRACTS AND OTHER ARRANGEMENTS

        The Company has no employment agreements with any of its executive officers.


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PROPOSAL #3—ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR

NAMED EXECUTIVE OFFICERS (THE SAY-ON-PAY PROPOSAL)

        Under Section 14A of the Exchange Act, enacted pursuant to The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), we are required to conduct a non-binding shareholder advisory vote at least every three years to approve our executive officer compensation (commonly referred to as a "say-on-pay proposal"). Our shareholders supported a three-year frequency for this shareholder advisory vote at our 2011 annual meeting (65% of the votes cast at the meeting). Consequently, the Compensation Committee of the Board previously recommended and the Board determined that we would provide shareholders with the opportunity to cast an advisory vote on executive compensation every three years. Going forward, as noted in Proposal #4, we will provide shareholders with the opportunity to cast an advisory vote on executive compensation every year. This vote is on whether to approve the compensation of the Named Executive Officers as disclosed in the "Executive Compensation" section of this Proxy Statement, including the Compensation Discussion and Analysis, the compensation tables and the related narrative.

        At our 2014 Annual Meeting of Shareholders, approximately 91% of the votes cast on the "say on pay" proposal voted in favor of our executive compensation. The Compensation Committee believes the results of the 2014 "say on pay" vote in 2014 demonstrated that shareholders generally agreed with our compensation program and policies and the compensation of our named executive officers.

        While this advisory vote to approve executive compensation is non-binding, the Board and the Compensation Committee will review the voting results and seek to determine the cause or causes of any significant negative voting result. Voting results provide little detail by themselves, and we may consult directly with shareholders to better understand issues and concerns not previously presented. The Board and management understand that it is useful and appropriate to seek the views of shareholders when considering the design and implementation of executive compensation programs.

        The Board of Directors asks you to consider the following statement: Do you approve our executive compensation as described in the "Executive Compensation" section of this Proxy Statement, including the Compensation Discussion and Analysis, the compensation tables and other narrative executive compensation disclosures? The approval of our executive compensation as described in the "Executive Compensation" section of this Proxy Statement, including the Compensation Discussion and Analysis, the compensation tables and other narrative executive compensation disclosures, requires the affirmative vote of a majority of the votes cast at the Annual Meeting.

RECOMMENDATION

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL OF OUR EXECUTIVE COMPENSATION.


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PROPOSAL #4—NON-BINDING ADVISORY VOTE TO APPROVE
THE FREQUENCY OF NON-BINDING VOTE
TO APPROVE EXECUTIVE COMPENSATION

        Under Section 14A of the Exchange Act, enacted pursuant to the Dodd-Frank Act, and as implemented by SEC Rule 14a-21(b), we must conduct a separate non-binding shareholder advisory vote at least every six years to determine whether the non-binding shareholder advisory vote to approve our company's named executive officer compensation will occur every one, two or three years, in any proxy or consent or authorization for an annual or other meeting of our shareholders. Our shareholders previously supported a three-year frequency for this shareholder advisory vote at our 2011 Annual Meeting.

        Our Board of Directors is providing our shareholders with the opportunity to cast a non-binding advisory vote on the frequency of the non-binding shareholder advisory vote to approve executive compensation at our 2017 Annual Meeting. This vote will not be binding on or overrule any decisions made by our Board of Directors and will not create or imply any additional fiduciary duty on the part of the Board. This vote is not to approve or disapprove the Board's recommendation. However, our Board will take into account the outcome of the vote when considering the frequency of the non-binding shareholder advisory vote to approve our Company's Named Executive Officers' compensation.

        After consideration of this proposal, the Compensation Committee and the Board of Directors have determined that a vote on the compensation of our Named Executive Officers every year is the best alternative for the Company. The Board of Directors historically has emphasized long-term strategic planning for the Company and the Compensation Committee has fashioned executive compensation programs that place a greater emphasis on the attainment of long-term growth objectives than on short-term success. An advisory vote every year is consistent with this long-term growth strategy.

        The selection of "one year", "two years" or "three years" that receives the greatest number of votes cast on this proposal at the Annual Meeting, in person or by properly executed proxy, subject to quorum requirements, will indicate the shareholders' preference for the frequency of future votes on the compensation of our Named Executive Officers and the Board of Directors encourages this input from the shareholders. However, since this vote is not binding on the Board of Directors, the Compensation Committee or the Company, the Board of Directors may decide that it is in the best interest of the Company and the shareholders to hold future advisory votes on the compensation of our Named Executive Officers less frequently than as indicated by the shareholder vote on this Proposal #4.

RECOMMENDATION

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR "ONE YEAR" AS THE FREQUENCY FOR FUTURE NON-BINDING ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.


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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, 2017,7, 2018, by (1) each person known by us 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) our Named Executive Officers and the directors 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)
  Number of
Shares(1)
 Percent of
Class(2)
 

Beneficial Owners of More Than 5%

          

Gull Global, Ltd.

 
12,558,220
 
51.2

%
 
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)

 
1,632,900
 
6.7

%
 
1,930,966
 
8.0

%

800 Third Avenue

          

New York, New York 10022

          

FMR LLC(4)

 
1,436,122
 
5.9

%
 
1,549,638
 
6.4

%

245 Summer Street

          

Boston, MA 02210

          

Directors and Executive Officers

 
 
 
 
      

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

 12,558,220 51.2% 11,522,053 47.9%

Chairman of the Board

          

Kevin G. Guest(6)

 
673
 
*
  
2,169
 
*
 

Chief Executive Officer

          

Paul A. Jones(7)

 
9,522
 
*
 

CFO & Chief Leadership Development Officer

     

Jim Brown(8)

 
1,090
 
*
 

Jim Brown(7)

 
2,971
 
*
 

President & COO

          

James H. Bramble(9)

 
2,722
 
*
 

Chief Legal Officer

     

Dan Macuga(10)

 
697
 
*
 

Chief Communications Officer

     

David A. Wentz(11)

 
432,936
 
1.8

%

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)

 
13,487
 
*
  
10,630
 
*
 

Gilbert A. Fuller, Director(13)

 
7,161
 
*
  
4,822
 
*
 

D. Richard Williams(14)

 
1,780
 
*
 

Feng Peng(15)

 
1,780
 
*
 

Frederic Winssinger(16)

 
1,780
 
*
 

Feng Peng(14)

 
3,660
 
*
 

Frederic Winssinger(15)

 
3,660
 
*
 

J. Scott Nixon(16)

 
859
 
*
 

Directors and Officers as a group (12 persons)

 
13,031,848
 
53.2

%
 
11,571,756
 
48.0

%

*
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 1, 2017.7, 2018.


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(2)
Percentages are rounded to nearest one—tenth of one percent. Percentages are based on 24,504,41324,066,524 shares outstanding on March 1, 2017.7, 2018. Shares of common stock subjected to SSARs that are presently exercisable or exercisable within 60 days of March 1, 20177, 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 shares held at year-end, as reported on Form SC 13G/A filed on February 14, 2017.2018.

(4)
Reflects the number of shares held at year-end, as reported on Form SC 13G/A filed on February 13, 2017.2018.

(5)
Includes 12,558,22011,522,053 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 673791 shares that are held of record and 1,378 shares that are held in the executive's 401(k) account.

(7)
Includes 9,522791 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 1, 2017.7, 2018. This share count assumes settlement of this individual's SSARs at the closing market price on March 1, 2017.

(8)
Includes 1,090 shares that are held in the executive's 401(k) account.

(9)
Includes 2,076 shares held of record and 646 shares that are held in the executive's 401(k) account.7, 2018.

(10)
Includes 697 shares that are held in the executive's 401(k) account.

(11)
Includes 432,936873 shares that are held of record.

(12)
Includes 5,179record and 5,127 shares that are issuable pursuant to SSARs, which are presently exercisable or which become exercisable within 60 days of March 1, 2017.7, 2018. This share count assumes settlement of this individual's SSARs at the closing market price on March 1, 2017. Also includes 8,3087, 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 1, 2017.7, 2018.

(13)
Includes 4,661 shares that are issuable pursuant to SSARs, which are presently exercisable or which become exercisable within 60 days of March 1, 2017. This share count assumes settlement of this individual's SSARs at the closing market price on March 1, 2017. Also includes 2,5004,822 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 1, 2017.7, 2018.

(14)
Includes 1,7803,660 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 1, 2017.7, 2018.

(15)
Includes 1,7803,660 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 1, 2017.7, 2018.

(16)
Includes 1,780859 shares that are issuable pursuant to DSUs, which are presently vested or which become vested within 60 days of March 1, 2017.7, 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 statements reporting their initial beneficial ownership of common stock and any subsequent changes in beneficial ownership, with the SEC, by specified due dates that have been established by the SEC.

        Based solely upon our review of (a) Section 16(a) statements filed on behalf of these persons 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 required to be filed by them 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 beneficially holding more than 10% of our outstanding common stock were 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:

        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.

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 51.45%47.9% of ourthe Company's issued and outstanding shares as of December 31, 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 holistic integrative medicalunique, fully integrated health and wellness center and hospital 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 2016, 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 2016, 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, $322,000, during 2016.and $337,000 in 2015, 2016, and 2017, respectively. The Company's agreements with MedicisAmarevita were approved by the Audit Committee


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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 $523,000$420,000, $523,000. and $781,000, in 2016.2015, 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, the Company's CEO.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.


EXECUTIVE OFFICERS

        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 of the Council of Responsible Nutrition's (the "CRN"), the leading trade association representing ingredient suppliers and manufacturers of dietary supplements. From 2009 to 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 worked 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 role 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 joining USANA, Mr. Mulham had extensive experience in the Direct Selling Industry having worked for Amway, Mary Kay, Nutri Metics and Dorling Kindersley Family Learning. He subsequently worked in property development as Director of both Hunter Valley Gardens and Tempus Two Winery. Mr. Mulham has a post graduate diploma from Macquarie Graduate School of Management, Sydney, and received the Silver Stevie Award in 2015, for Executive of the Year—Health Products & Services and Pharmaceuticals.


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EXECUTIVE 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:


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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:

        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:

        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:

        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:

        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:


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        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

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


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 MATTERSBUSINESS

        Shareholder Proposals.        As of the date of this Proxy Statement, the Board of Directors does not intend to present, and has not been informedknows of no matter that any other person intends to present, any matterwill be properly presented for action at the Annual Meeting other than as set forth herein andthose matters discussed in the Notice of Annual Meeting. Ifthis Proxy Statement. However, if any other matter requiring a vote of the shareholders properly comes before the meeting, it is intended thatAnnual Meeting, the holders ofindividuals acting under the proxies solicited by the Board will vote and act in accordance withaccording to their best judgment on these matters. Shareholders who intend to present proposals at the 2018 Annual Meeting under SEC Rule 14a-8 must ensure that such proposals are received by the Secretaryin light of the Company not later than November 24, 2017. Such proposals must meetconditions then prevailing, to the requirements of the SEC to be eligible for inclusion in our 2018 proxy materials.extent permitted under applicable law.


ANNUAL REPORT ON FORM 10-K

        A copy of        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 for the fiscal year ended December 31, 2016, as filed with the SEC, will be made available on our website and, to each shareholder of record at March 1, 2017 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.


FURTHER INFORMATION

        Additional copies Copies of the Annual Report on Form 10-K for the 2017 fiscal year ended December 31, 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.


Table of Contents


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,

 

 

GRAPHICGRAPHIC

 James H. Bramble,Corporate Secretary

Date: March 24, 201723, 2018


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 AllAll The Board of Directors recommends you vote FOR the following: nominee(s) on the line below. 0 0 0! ! ! 1. Election of Directors Nominees 01Nominees: 01) Myron W. Wentz, Ph.D. 06 D. Richard Williams 0202) Robert Anciaux 07 Frederic Winssinger 0303) Gilbert A. Fuller 0404) Kevin G. Guest 0505) Feng Peng 06) J. Scott Nixon 07) Frederic Winssinger For Against Abstain The Board of Directors recommends you vote FOR proposals 2 and 3. 2Ratify! ! ! ! ! ! 2. Ratify the selection of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year 2017. 3Approve2018. 3. Approve on an advisory basis the Company's executive compensation, commonly referred to as a "Say on Pay" proposal. For 0 0 1 year 2 years Against 0 0 3 years 0 Abstain 0 0 Abstain 0 The Board of Directors recommends you vote 1 YEAR on the following proposal: 4Non-binding advisory vote to approve the frequency of non-binding vote to approve executive compensation. 0 0 NOTE: To consider and act upon such other business as may properly come before the meeting or at any postponement or adjournment thereof. 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 0000321363_1 R1.0.1.15

 


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 3, 20172, 2018 11:00 AM MDT This proxy is solicited by the Board of Directors The shareholder executing and delivering this Proxy hereby appoints Kevin 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, 2017,7, 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 3, 2017,2, 2018, at 11:00 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 0000321363_2 R1.0.1.15