Usana Health Sciences Inc – ‘DEF 14A’ for 5/18/98

As of:  Monday, 5/18/98   ·   For:  5/18/98   ·   Accession #:  1010924-98-34   ·   File #:  0-21116

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Definitive Proxy Solicitation Material   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Solicitation Material                18±    79K 

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DEF 14A
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SCHEDULE 14A INFORMATION  
  Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 

Filed by the registrant  X                                                      
---                             
Filed by a party other than the registrant ___                                  

Check the appropriate box:                                                      

__  Preliminary proxy statement                                                 
X  Definitive proxy statement                                                 
---                                                                             
__  Definitive additional materials                                             
__  Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12               

USANA, INC.     
(Name of Registrant as Specified in its Charter)

Payment of filing fee (Check the appropriate box):                              

X    No fee required.                                                 
--                                                                    
__   $125 per Exchange Act Rule 0-11(c)(1)(II), 14a-6(i)(1), or       
14a-6(j)(2).                                                
   __   $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).                                                
 __   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.                                                       

  (1)  Title of each class of securities to which transaction applies: N/A

(2)  Aggregate number of securities to which transaction applies:  N/A

(3)  Per unit price or other underlying value of transaction computed 
pursuant to Exchange Act Rule 0-11:  N/A                    

(4)  Proposed maximum aggregate value of transaction: N/A             

 ___  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:  N/A                                     
(2)  Form, schedule or registration statement no.:  N/A               
(3)  Filing party:  N/A                                               
(4)  Date filed:  N/A                                                 

DEF 14A
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[USANA LOGO]      

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS        
TO BE HELD JUNE 23, 1998    

To the Shareholders:                                                            

Notice is hereby given that the Annual Meeting of the Shareholders of USANA,    
Inc. ("the Company") will be held at the Hilton Hotel, 150 West 500 South,      
Salt Lake City, Utah on Tuesday, June 23, 1998, at 10:00 a.m., Mountain         
Daylight Time, for the purposes discussed in the following pages and which are  
made part of this Notice:                                                       

1.  To elect five directors to serve for one year each, until the next Annual   
Meeting of shareholders and until his or her successor is elected and shall     
qualify;                                                                        

2.  To approve the Board of Directors' selection of Grant Thornton LLP, as the  
Company's independent public accountants;                                       

3.  To approve amendments to the Company's 1995 Long-term Stock Investment and  
Incentive Plan coincident with the consolidation of the Director Stock Option   
Plan and the Long-term Stock Investment and Incentive Plan, without increasing  
the aggregate number of shares available for issuance under the combined        
plans; and                                                                      

4.  To consider and act upon any other matters that properly may come before    
the meeting or any adjournment thereof.                                         

The Company's Board of Directors has fixed the close of business on April 24,   
1998, as the record date for the determination of shareholders having the       
right to receive notice of, and to vote at, the Annual Meeting of Shareholders  
and any adjournment thereof.  A list of such shareholders will be available     
for examination by a shareholder for any purpose germane to the meeting during  
ordinary business hours at the offices of the Company at 3838 West Parkway      
Blvd., Salt Lake City, Utah, during the ten days prior to the meeting.          

You are requested to date, sign and return the enclosed proxy, which is         
solicited by the Board of Directors of the Company and will be voted as         
indicated in the accompanying proxy statement and proxy. Your vote is           
important.  Please sign and date the enclosed Proxy and return it promptly in   
the enclosed return envelope whether or not you expect to attend the meeting.   
The giving of your proxy as requested hereby will not affect your right to      
vote in person should you decide to attend the Annual Meeting.  The return      
envelope requires no postage if mailed in the United States.  If mailed         
elsewhere, appropriate postage must be affixed. Your proxy is revocable at any  
time before the meeting.                                                        

                         By Order of the Board of Directors,

                     Myron W. Wentz, Ph.D., Chairman

Salt Lake City, Utah                                                            
May 15, 1998                                                                    

[USANA LOGO]    

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

PROXY STATEMENT     

ANNUAL MEETING OF SHAREHOLDERS      

The enclosed proxy is solicited by the Board of Directors of USANA, Inc.        
("USANA" or the "Company") for use in voting at the Annual Meeting of           
Shareholders to be held at the Hilton Hotel, 150 West 500 South, Salt Lake      
City, Utah on Tuesday, June 23, 1998, at 10:00 a.m., Mountain Daylight Time,    
and at any postponement or adjournment thereof, for the purposes set forth in   
the attached notice.  When proxies are properly dated, executed and returned,   
the shares they represent will be voted at the Annual Meeting in accordance     
with the instructions of the shareholder completing the proxy.  If no specific  
instructions are given, the shares will be voted FOR: (i) the election of the   
nominees for directors set forth herein, (ii) ratification of the selection of  
Grant Thornton LLP as the independent auditors of the Company, and (iii)        
approval of certain amendments to the Company's 1995 Long-term Stock            
Investment and Incentive Plan resulting from the combination of this plan with  
the Director Stock Option Plan, without issuing or authorizing a net increase   
in the number of shares available for issuance under the combined plans.  A     
shareholder giving a proxy has the power to revoke it at any time prior to its  
exercise by voting in person at the Annual Meeting, by giving written notice    
to the Company's Secretary prior to the Annual Meeting or by giving a later     
dated proxy.                                                                    

The presence at the meeting, in person or by proxy, of shareholders holding in  
the aggregate a majority of the outstanding shares of the Company's common      
stock entitled to vote shall constitute a quorum for the transaction of         
business.  The Company does not have cumulative voting for directors; a         
plurality of the votes properly cast for the election of directors by the       
shareholders attending the meeting, in person or by proxy, will elect           
directors to office.  A majority of votes properly cast upon any question       
presented for consideration and shareholder action at the meeting, other than   
the election of directors, shall decide the question.  Abstentions and broker   
non-votes will be counted for purposes of establishing a quorum, but will not   
count as votes cast for the election of directors or any other questions and    
accordingly will have no effect.  Votes cast by shareholders who attend and     
vote in person or by proxy at the Annual Meeting will be counted by inspectors  
to be appointed by the Company.                                                 

The close of business on April 24, 1998 has been fixed as the record date for   
determining the shareholders entitled to notice of, and to vote at, the Annual  
Meeting.  Each share shall be entitled to one vote on all matters.  As of the   
record date there were 6,417,119 shares of the Company's common stock           
outstanding and entitled to vote.  For a description of the principal           
shareholders of the Company, see "Voting Securities and Principal Holders       
Thereof" below.                                                                 

This Proxy Statement and the enclosed Proxy are being furnished to              
shareholders on or about May 15, 1998.                                          

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PROPOSAL 1 -- ELECTION OF DIRECTORS       

The Company's Bylaws provide that the number of Directors shall be determined   
from time to time by the shareholders or the Board of Directors, but that       
there shall be no less than three.  Presently the Company's Board of Directors  
consists of five members, all of whom are nominees for reelection at the        
Annual Meeting.  Each director elected at the Annual Meeting will hold office   
until a successor is elected and qualified, or until the Director resigns, is   
removed or becomes disqualified. Unless marked otherwise, proxies received      
will be voted FOR the election of each of the nominees named below. If any      
such person is unable or unwilling to serve as a Director at the date of the    
Annual Meeting or any postponement or adjournment thereof, the proxies may be   
voted for a substitute nominee designated by the proxy holders or by the        
present Board of Directors to fill such vacancy, or for the balance of those    
nominees named without nomination of a substitute, or the size of the Board     
may be reduced accordingly. The Board of Directors has no reason to believe     
that any of the nominees for Director will be unwilling or unable to serve if   
elected.                                                                        

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE DIRECTOR    

Directors and Executive Officers                                                

The nominees for the Board of Directors in 1998 are Myron W. Wentz, Ph.D.,      
David A. Wentz, Ronald S. Poelman, Robert Anciaux and Ned M. Weinshenker,       
Ph.D.   The following information is furnished with respect to the nominees.    
Stock ownership information is shown under the heading "Voting Securities and   
Principal Holders Thereof" and is based upon information furnished by the       
respective individuals.                                                         

Myron W. Wentz, Ph.D., 57, has been the President, Chief Executive Officer and  
Chairman of the Board of Directors of the Company since its inception.  From    
1969 to 1973, Dr. Wentz served as Director of Microbiology for Methodist        
Medical Center, Proctor Community Hospital, and Pekin Memorial Hospital, all    
in Peoria, Illinois.  Dr. Wentz received a Ph.D. in Microbiology with an        
emphasis in Immunology from the University of Utah, an MS in Microbiology from  
the University of North Dakota, and a BS in Biology from North Central          
College, Naperville, Illinois.  Dr. Wentz founded Gull Laboratories, Inc.       
("Gull," AMEX:GUL), the former parent of USANA, in 1974, and retains the        
position of Chairman of the Board of that company. Gull develops, manufactures  
and sells medical diagnostic test kits and related products.                    

David A. Wentz, 27, Vice President of Strategic Development, received a BS      
degree in Bioengineering from the University of California, San Diego in        
1993.  Mr. Wentz served with the Company first on a part-time basis and then    
was employed by the Company full time in 1994.  He has served as a director of  
the Company since its spin-off from Gull in 1993.  From 1994 until 1995, he     
served as Vice President and Executive Vice President of the Company. David A.  
Wentz is the son of Dr. Myron Wentz.                                            

Ronald S. Poelman, 44, has been a member of the Company's Board of Directors    
since 1995.  He is a partner in the Salt Lake City, Utah law firm of Jones,     
Waldo, Holbrook & McDonough, where he is head of the Corporate Finance Group.   
Prior to joining Jones, Waldo, Holbrook & McDonough in 1993, Mr. Poelman was a  
shareholder at the Salt Lake City law firm of Parsons, Behle & Latimer from     
1989 to 1992. His specialty is corporate and securities law.  Mr. Poelman       
received a BA in English from Brigham Young University and a JD from the        
University of California, Berkeley.                                             

Robert Anciaux, 52, is a resident of Brussels, Belgium.  Mr. Anciaux joined     
the Board of Directors in July 1996.  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 Belgium and         
abroad.  Mr. Anciaux has been involved for a number of years as a shareholder   
of various companies that manage institutional or private investment funds.     
In some of these privately held companies, Mr. Anciaux has also served as a     
director.                                                                       

Ned M. Weinshenker, Ph.D., 55, has served as the President and CEO of IOMED,    
Inc., in Salt Lake City, Utah, since 1992. IOMED develops, manufactures and     
commercializes controllable drug delivery systems using iontophoretic           
technology.  Dr. Weinshenker also currently serves as a director of CyDex,      
Inc., a drug delivery company headquartered in Kansas City, Missouri.  Between  
1986 and 1990, Dr. Weinshenker was a principal in MBW Management, a venture     
capital firm in Los Altos, California.  Dr. Weinshenker was President of        
Churchill Oaks Consulting, a consultant to pharmaceutical and biotechnology     
companies from 1983 to 1986.  Dr. Weinshenker received a BS degree in           
Chemistry from the Polytechnic Institute of Brooklyn and a Ph.D. in Organic     
Chemistry from the Massachusetts Institute of Technology.  Dr. Weinshenker      
also spent a year at Harvard University as a National Institutes of Health      
Postdoctoral Fellow.                                                            

Except for Dr. Wentz and his son David, there is no family relationship         
between any director or executive officer of the Company and any other          
director or executive officer.                                                  

Board of Directors Meetings, Committees and Compensation                        

The Company's Board of Directors took action at three duly noticed meetings     
during the fiscal year ended December 27, 1997 and acted on other occasions by  
unanimous written consent.  Each director attended at least 75% of the          
Company's special meetings of the Board of Directors.  The Board has an Audit   
Committee comprised of two outside directors of the Company, Mr. Poelman and    
Mr. Anciaux.  The Board also has an Executive Committee, the members of which   
are Dr. Wentz, Mr. Wentz and Mr. Poelman. The Executive Committee also serves   
as the Compensation Committee of the Board.  During fiscal 1997, the Audit      
Committee held one meeting, attended by both members of the Committee, and the  
Executive Committee held three meetings, attended by all members of that        
committee.  The Compensation Committee also met three times as a committee      
during fiscal 1997, with all members in attendance.                             

All Directors received an initial grant of options to purchase shares pursuant  
to the 1995 Directors' Stock Option Plan (the "Director Plan").  Except for     
the grant of options pursuant to the Director Plan, the Company's directors     
received no fees or other compensation for their service on the Board or        
otherwise participating in meetings of the Board or Committees of the Board,    
whether in person or by telephone, although the Company's policy is to          
reimburse Directors for their out-of-pocket expenses incurred in connection     
with their services as Directors.                                               

Executive Officers                                                              

The following information is furnished with respect to the executive officers   
of the Company:                                                                 

Myron W. Wentz, Ph.D., President and Chief Executive Officer (Biographical      
information is provided above.)                                                 

David A. Wentz, Vice President of Strategic Development (Biographical           
information is provided above.)                                                 

Gilbert A. Fuller, 57, is Vice President and Chief Financial Officer of the     
Company. He has been with the Company since June 1996.  Prior to joining the    
Company, Mr. Fuller was the Executive Vice President of Winder Dairy, Inc., a   
regional commercial dairy operation located in Utah. From May 1991 through      
October 1993, Mr. Fuller was Chief Administrative Officer and Treasurer of      
Melaleuca, Inc., a manufacturer and network-marketing distributor of personal   
care products located in Idaho.  From July 1984 through January 1991, Mr.       
Fuller was the Vice President and Treasurer of Norton Company of Worcester,     
Massachusetts, a multi-national manufacturer of ceramics and abrasives.  Mr.    
Fuller is a Certified Public Accountant and holds a BS in Accounting and an     
MBA from the University of Utah.                                                

Dallin A. Larsen, 38, is the Company's Vice President of Sales.  The Company    
has employed him since January 1993.  He has been actively involved in network  
marketing since 1989 and, for seven years, served as president of a             
corporation that owned weight-loss clinics in several states.  Mr. Larsen       
graduated from Brigham Young University with a BS in Finance in 1986.           

John B. ("Jeb") McCandless, 50, is Vice President and Chief Operating           
Officer.  He has been with the Company since October 1995.  Before joining the  
Company, he was a consultant with Apogee Strategic Services, of Sandy, Utah     
from January 1994.  From September 1987 to December 1993, Mr. McCandless was    
the President of Utah Biomedical Test Laboratory, located in Salt Lake City,    
Utah, where he supervised that company's business of contract research and      
scientific testing. He also served in Managerial positions in toxicology at     
both Atlantic Richfield Company in Los Angeles and at Biodynamics, Inc. in New  
Jersey.  Mr. McCandless received a BA in Zoology from the University of         
California, Santa Barbara, an MS in Pathology from the University of Utah, and  
MA and MBA degrees from The Claremont Graduate School in California.            

In addition to the directors and executive officers identified above, the       
following individuals also make significant contributions to the business of    
the Company in the capacities indicated:                                        

Timothy E. Wood, Ph.D., 49, is Director of Research and Development for         
USANA.  In this position, he coordinates the Company's activities in product    
development and technical product support.  Dr. Wood holds a Ph.D. in Biology   
from Yale University and an MBA in Technology Management from the Gore School   
of Business at Westminster College.                                             

John H. McDonald, Ph.D., 62, is Senior Scientist at the Company and is active   
in new product research and product formulation, as well as Technical           
Services.  He has been with the Company since its inception as a Gull division  
in 1990.  Dr. McDonald holds a Ph.D. from the University of Utah in             
Experimental Biology, and received his training from the Department of          
Pathology at the University of Utah Medical School.                             

Executive Compensation                                                          

The following table summarizes the fiscal year 1997 compensation of the Chief   
Executive Officer of the Company and the Company's four most highly paid        
executive officers (other than the Chief Executive Officer), collectively the   
"Named Executive Officers," and the amounts earned by each of them during the   
past three fiscal years:                                                        

                                                        [Enlarge/Download Table]

                                SUMMARY COMPENSATION TABLE                                           

                                                                            Long Term Compensation   
                                                      Annual                                         
                                                      Compensation                     Awards        
                                                                     Other             Securities    
Name and                                                             Annual            Underlying    
Principal                                                            Compensation      Options/SARs  
Position                        Year      Salary ($)    Bonus        ($)(1)            (#) (2)       
------------------------------  -----     ----------    -----------  -------------     --------------
                                                                                                     
Myron W. Wentz                  1995      $      0      $         0  $         0               0     
CEO/President                   1996      $      0      $         0  $         0               0     
                                1997      $      0      $         0  $         0               0     

Gilbert A. Fuller (3)           1995            --               --           --              --     
V.P./CFO                        1996      $ 50,192      $     3,032  $     3,147          80,000     
                                1997      $117,885      $         0  $     5,447          80,000(4)  

Dallin A. Larsen                1995      $131,834      $     9,849  $     8,604         140,000     
V.P. Sales                      1996      $134,615      $     8,678  $   468,883                     
                                1997      $150,031      $         0  $   212,168                     

John B. McCandless(5)           1995      $ 20,542      $     2,636  $         0         100,000     
V.P./COO                        1996      $ 87,688      $     5,606  $     5,125                     
                                1997      $108,669      $         0  $     4,873                     

David A. Wentz (6)              1995      $ 88,769      $         0  $     1,323          62,500(7)  
V.P. Strategic Development      1996      $ 28,846      $     1,617  $   279,807                     
                                1997      $ 85,769      $         0  $   135,553                     


(1)     Includes the approximate value of executive's use of a Company-owned    
car, the Company's matching contribution to executive's 401(k) plan, and the    
exercise of stock options.                                                      

(2)     Shares subject to issuance upon exercise of options granted under a     
compensation plan.                                                              

(3)     Mr. Fuller became an employee of the Company in June 1996.              

(4)     Represents repricing of options granted in the prior year.              

(5)     Mr. McCandless became an employee of the Company in October 1995.       

(6)     Mr. Wentz was not employed by the Company from 12/8/95 through 8/15/96. 

These options were received under the Director Stock Option Plan in Mr.         
Wentz's capacity as a director of the Company.                                  

Stock Option Grants in Fiscal 1997                                              

The Company did not grant any stock options or stock appreciation rights        
("SAR's") to any of the Named Executive Officers in fiscal 1997.                

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Exercises of Stock Options in Fiscal 1997                                       

The following table sets forth certain information concerning the exercise of   
options and options held by the Named Executive Officers during fiscal year     
1997.                                                                           

                                                        [Enlarge/Download Table]

                   Aggregated Option Exercises in Last Fiscal Year                         
                        And Fiscal Year-end Option Values                                  

                                                        Number of                          
                                                        Securities        Value            
                                                        Underlying        Unexercised      
                                                        Unexercised       In-the-Money     
                                                        Options/SARs      Options/SARs     
                        Shares                          at 12/27/1997     at 12/27/1997    
                        Acquired on      Value          Exercisable/      Exercisable/     
Name                    Exercised (#)    Realized ($)   Unexercisable     Unexercisable    
----------------------  -------------    ------------   ----------------  --------------   
                                                                                           
Myron W. Wentz                   0       N/A            N/A               N/A              
Gilbert A. Fuller                0       N/A            16,000/64,000      31,400/125,760  
Dallin A. Larsen            20,000       204,000             0/100,000          0/1,457,500
John B. McCandless               0       N/A            40,000/60,000     317,000/475,000  
David A. Wentz              12,500       127,500             0/37,500           0/546,563  


Long-term Incentive Plans ("LTIPs")                                             

The Company did not make any awards under any LTIP during the fiscal year       
ended December 27, 1997.                                                        

Compensation Plans                                                              

At the Annual Meeting of shareholders in 1995, the Company's shareholders       
approved the Company's 1995 Long-term Stock Investment and Incentive Plan (the  
"Stock Option Plan") and the Director's Stock Option Plan (the "Director        
Plan").  Upon recommendation of the Compensation Committee, the Board of        
Directors of the Company has adopted an Amended and Restated Plan without       
increasing the aggregate number of shares available for issuance pursuant to    
grants of awards made under the plan and intended to permit awards to be made   
to Directors of the Company under the plan.  The Director Plan will be          
terminated and the options previously granted under that plan will become       
subject to the Stock Option Plan.  Future grants to Directors will be made      
under the Stock Option Plan at the discretion of the Plan Committee and         
subject to the terms of the plan.  These changes will not materially alter the  
terms of any outstanding option agreement or award. The provisions of the       
Amended and Restated Plan, as amended, are discussed below under "Proposal 3 -  
Amendments to Stock Option Plan."                                               

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Employment Contracts and Other Arrangements                                     

The Company has an employment agreement with Gilbert A. Fuller, its Vice        
President of Finance and Chief Financial Officer.  The term of the agreement    
runs through May 31, 2000.  The agreement provides for payment of a base        
salary, with annual increases through the term of the agreement.  In addition,  
the agreement requires adoption of a cash bonus program for executive officers  
commencing in 1998 and Mr. Fuller's participation in such program, subject to   
the terms and conditions thereof.  The agreement also contains covenants        
concerning non-competition and confidentiality, termination with or without     
cause and, in the case of the latter, payment of a severance based on the       
remaining term of the agreement.  Mr. Fuller is also entitled to receive the    
benefits customarily afforded to executives of the Company, including           
participating in retirement and other plans.                                    

Report on Repricing of Options                                                  

In March 1997, the Board of Directors adjusted the exercise price of options    
previously granted under the Stock Option Plan and the Director Plan to         
certain individuals, including one of the Named Executive Officers. The         
Compensation Committee of the Board recommended the changes to bring the        
exercise prices closer to the market price for the Company's Common Stock at    
the time of the repricing such that the options continued to provide incentive  
for the persons who held them.  The new exercise price was based on the         
average daily trading price for the five trading days preceding the date on     
which the repricing was adopted. The following table summarizes information     
concerning the adjustments made to the exercise price of options held by all    
executive officers of the Company during the past five fiscal years.            

                                                        [Enlarge/Download Table]

                                       Option Repricings (1)                             

                                            Market                                       
                            Number of       Price         Exercise          Length of    
                            Securities    of Stock at     Price at           Original    
                            Underlying     Time of         Time of           Option Term 
                            Options/      Repricing       Repricing         Remaining at 
                              SARs            or              or      New     Date of    
                            Repriced or   Amendment       Amendment  Price  Repricing or 
Name                 Date   Amended (#)     ($)              ($)      ($)    Amendment   
------------------  ------  -----------   -----------    ----------  -----  -------------
                                                                                         
Myron W. Wentz      N/A              0    N/A            N/A         N/A    N/A          
Gilbert A. Fuller   3/3/97      30,000                   21.04       15.66  9 yrs. 9 mos.
                                50,000                   17.93       15.66  9 yrs. 4 mos.
Dallin A. Larsen    N/A              0    N/A            N/A         N/A    N/A          
John B. McCandless  N/A              0    N/A            N/A         N/A    N/A          
David A. Wentz      N/A              0    N/A            N/A         N/A    N/A          


(1)     Item 402(I) of Regulation S-K under the Securities Act of 1933          
requires such information to be provided for each of the last ten completed     
fiscal years.  The Company has only been in existence since 1993.               

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Compensation Committee Report on Executive Compensation                         

Preliminary Note: Notwithstanding anything to the contrary set forth in any of  
the previous filings made by the Company under the Securities Act or the 1934   
Act that might incorporate future filings, including, but not limited to, this  
Annual Report on Form 10-K, in whole or in part, the following Executive        
Compensation Report and the Stock Performance Graph appearing herein shall not  
be deemed to be incorporated by reference into any such future filings.         

This Compensation Report discusses the Company's compensation policies and the  
basis for the compensation paid to its executive officers (including the Named  
Executive Officers), during the year ended December 27, 1997.                   

Compensation Policy.  The Committee's policy with respect to executive          
compensation has been designed to:                                              

Adequately and fairly compensate executive officers in relation to their        
responsibilities, capabilities and contributions to the Company and in a        
manner that is commensurate with compensation paid by companies of comparable   
size or within the Company's industry;                                          

Reward executive officers for the achievement of key operating objectives and   
for the enhancement of the long-term value of the Company; and                  

Align the interests of the executive officers with those of the Company's       
shareholders.                                                                   

The components of compensation paid to executive officers consist of:  (a)      
base salary, (b) incentive compensation in the form of stock options awarded    
by the Company under the Company's Stock Option Plan and (c) certain other      
benefits.  In 1998, the Committee will adopt a cash bonus program as an         
additional component of executive compensation.  The Executive Committee of     
the Board of Directors functions as the Compensation Committee and is           
responsible for reviewing and approving all compensation paid by the Company    
to its executive officers and members of the Company's senior management        
team.                                                                           

Components of Compensation.  The primary components of compensation paid by     
the Company to its executive officers and senior management personnel, and the  
relationship of such components of compensation to the Company's performance,   
are discussed below:                                                            

Base Salary. The Compensation Committee periodically reviews and approves the   
base salary paid by the Company to its executive officers and members of the    
senior management team. Adjustments to base salaries are determined based upon  
a number of factors, including the Company's performance (to the extent such    
performance can fairly be attributed or related to each executive's             
performance), as well as the nature of each executive's responsibilities,       
capabilities and contributions. In addition, the Compensation Committee         
periodically reviews the base salaries of its senior management personnel in    
an attempt to ascertain whether those salaries fairly reflect job               
responsibilities and prevailing market conditions and rates of pay. The         
Compensation Committee believes that base salaries for the Company's executive  
officers have historically been reasonable in relation to the Company's size    
and performance in comparison with the compensation paid by similarly sized     
companies or companies within the Company's industry.                           

Incentive Compensation.  As discussed above, a substantial portion of           
each executive officer's compensation package is in the form of incentive       
compensation designed to reward the achievement of key operating objectives     
and long-term increases in shareholder value. The Compensation Committee        
believes that the stock options granted under the Stock Option Plan reward      
executive officers only to the extent that shareholders have benefited from     
increases in the value of the Company's Common Stock.                           

Other Benefits. The Company maintains certain other plans and arrangements for  
the benefit of its executive officers and members of senior management. The     
Company believes these benefits are reasonable in relation to the executive     
compensation practices of other similarly sized companies or companies within   
the Company's industry.                                                         

Compensation of the Chief Executive Officer.  Dr. Wentz has served as the       
Chief Executive Officer of the Company since its inception.  Dr. Wentz does     
not receive any compensation from the Company for his services and he has in    
the past declined to accept any options or other awards under any stock option  
or stock incentive plan that he might otherwise have been entitled to receive   
as an executive officer or director of the Company.                             

Conclusion.  The Compensation Committee believes that its policies further the  
shareholders' interests because a significant part of executive compensation    
is based upon the Company achieving its financial and other goals and           
objectives.  At the same time, the Compensation Committee believes that its     
policies encourage responsible management of the Company in the short-term.     
The Compensation Committee regularly considers executive compensation issues    
so that its practices are as effective as possible in furthering shareholder    
interests.                                                                      

The Compensation Committee bases its review on the experience of its own        
members, on information requested from management personnel, and on             
discussions with and information compiled by various independent consultants    
retained by the Company.                                                        

             Respectfully submitted,
             Compensation Committee:

           Myron W. Wentz, Ph.D.
       Ronald S. Poelman
    David A. Wentz

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Stock Performance Graph         

The following graph compares the yearly cumulative total returns from the       
Company's Common Stock, the Nasdaq Total Return Index, and ten companies        
selected in good faith by the Company from the Company's industry (the "Peer    
Group").  Each of the companies included in the Peer Group markets or           
manufactures products similar to the Company's products or markets its          
products through a similar marketing channel.  The Peer Group is comprised of   
the following companies:  NBTY, Inc., Nature's Sunshine Products, Inc., Avon    
Products, Inc., Herbalife International, Inc., General Nutrition Companies,     
Inc., Perrigo Company, BeautiControl Cosmetics, Inc., Worthington Foods, Inc.,  
Whole Foods Market, Inc., and Reliv International, Inc.                         

The Company's shares commenced trading in May 1993.  The graph assumes an       
investment on May 31, 1993 of $100 and reinvestment of all dividends into       
additional shares of the same class of equity, if applicable to the stock or    
index.  The period begins with the commencement of trading for USANA in May     
1993 and ends December 31, 1997.                                                

[PERFORMANCE GRAPH APPEARS HERE]      

                                                                [Download Table]
   COMPARISON OF FIVE YEAR CUMULATIVE RETURN AMONG USANA, INC., NASDAQ TOTAL    
                            RETURN INDEX AND PEER GROUP                         

Measurement period          USANA, Inc.          NASDAQ Index         Peer Group
------------------          ------------         ------------         ----------
                                                                                
Measurement pt.                                                                 
5/31/1993                   $  100               $100                 $100      
FYE 12/1993                 $  125               $111                 $123      
FYE 12/1994                 $  400               $109                 $ 99      
FYE 12/1995                 $3,800               $154                 $124      
FYE 12/1996                 $7,200               $189                 $180      
FYE 12/1997                 $7,250               $232                 $229      


    PROPOSAL 2  - APPROVAL OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors of the Company has selected Grant Thornton LLP, as the   
independent public accountant to audit the financial statements of the Company  
and its subsidiaries for the fiscal year ending January 2, 1999.  Grant         
Thornton LLP has served as the Company's independent public accountant since    
the fiscal year ended December 31, 1995.                                        

At the Annual Meeting, shareholders will be asked to ratify the selection by    
the Board of Directors of Grant Thornton LLP as the Company's independent       
accountant.                                                                     

THE BOARD RECOMMENDS SHAREHOLDER APPROVAL OF THE SELECTION OF AUDITORS  

Representatives of Grant Thornton LLP, are expected to attend the 1998 Annual   
Meeting and will have an opportunity to make a statement if they desire to do   
so, and they will be available to answer appropriate questions from             
shareholders.                                                                   

PROPOSAL 3 - AMENDMENTS TO STOCK OPTION PLAN    

In 1998, the Compensation Committee recommended, and the Board of Directors     
approved the consolidation of the Company's two stock option plans by           
combining the Director Stock Option Plan with the Long-term Stock Investment    
and Incentive Plan.  The combination of the plans terminates the Director Plan  
and brings all outstanding stock options under the provisions of one plan.      
The combined plans will be referred to below as the "Amended and Restated       
Plan."  Under the Amended and Restated Plan the total number of shares that     
may be issued upon exercise of awards granted under the plan will be 2,000,000  
shares, the sum of the shares previously available under the Long-term Stock    
Investment and Incentive Plan (1,400,000 shares) and the Director Plan          
(600,000 shares).  No additional shares will be allocated to the Amended and    
Restated Plan.  As of December 27, 1997, a total of 885,500 shares were         
available for issuance under both plans.  No presently outstanding options or   
awards will be materially altered by the Amended and Restated Plan.  The        
principal new terms adopted as part of the Amended and Restated Plan are the    
following:                                                                      

The definition of persons eligible to participate in the Amended and Restated   
Plan includes employees, officers and directors of the Company and its          
subsidiaries, as well as consultants and other persons who contribute to the    
business of the Company as selected at the discretion of the committee          
administering the plan ("Committee").                                           

The Committee will be comprised of two or more directors of the Company,        
selected by the Board of Directors.  The Committee has broad authority to       
select persons to receive awards under the plan and to establish the terms and  
conditions applicable to the exercise of such awards and the duration of the    
awards.                                                                         

There is no change in the type of awards that may be granted under the plan     
from the nature and type of awards that were available under the separate       
plans.                                                                          

The Board of Directors believes that the combination of the plans will provide  
the Compensation Committee with the broadest degree of flexibility in           
compensating persons who contribute to the successful operation and growth of   
the Company.                                                                    

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE PLAN       
AMENDMENTS.                                                                     

Voting Securities and Principal Holders Thereof                                 

The following table sets forth, as of April 10, 1998, the number of shares of   
the Company's Common Stock, no par value, of each person known to the Company   
to be the beneficial owner of more than five percent of the Company's Common    
Stock and by the executive officers and directors of the Company (including     
Dr. Weinshenker, a nominee to the Board) individually and as a group.  Except   
as indicated in the footnotes below, each of the persons listed exercises sole  
voting and investment power over the shares of the Company's Common Stock       
listed for such person in the table.  Unless otherwise indicated, the mailing   
address of the shareholder is the address of the Company, 3838 West Parkway     
Blvd., Salt Lake City, Utah 84120.                                              

                                                        [Enlarge/Download Table]


Name/Address                                   Number of Shares  Percent of Class (1)
-------------------------------                ----------------  --------------      
                                                                                     
5% Beneficial Owners                                                                 

Gull Holdings, Ltd.                             3,893,116        60.7%               
4 Finch Road                                                                         
Douglas, Isle of Man                                                                 

Directors and Executive Officers                                                     

Myron W. Wentz, Ph.D.                           3,893,116 (2)    60.7%               
President and Chief Executive Officer                                                
Chairman of the Board                                                                

Ronald S. Poelman, Director                        25,000 (3)       *                
170 South Main Street, Suite 1500                                                    
Salt Lake City, Utah 84101                                                           

Robert Anciaux, Director                           12,500 (3)       *                
Societe d'Etude et D'Inestissement                                                   
Av Du Manoir 30                                                                      
1410 Waterloo, Belgium                                                               

David A. Wentz,  Director and                      25,438 (4)       *                
Vice President of Strategic Development                                              

Ned M. Weinshenker, Ph.D., Nominee                      0           -                

John B. ("Jeb") McCandless                         40,221 (5)       *                
Vice President and Chief Operating Officer                                           

Gilbert A. Fuller                                  16,697 (6)       *                
Vice President and Chief Financial Officer                                           

Dallin Larsen                                      25,719 (7)       *                
Vice President of Sales                                                              

Officers and Directors as a group (9 persons)   4,051,191(3)     62.3%               

--------------------------                                                      

*     Less than one percent.  Officer and Director group total does not         
include duplicate entries.  All entries exclude beneficial ownership of shares  
issuable pursuant to options 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 the date of this Proxy Statement.                 

(1)     Percentages rounded to nearest one-tenth of one percent.                

(2)     All shares held of record by Gull Holdings, Ltd. ("Holdings"), an Isle  
of Man company owned 100% by Dr. Wentz. Because of his control of Holdings,     
Dr. Wentz is deemed to be the beneficial owner of the shares owned of record    
by Holdings.                                                                    

(3)     Includes shares issuable pursuant to options which are presently        
exercisable or which become exercisable within 60 days of the date of this      
proxy statement.                                                                

(4)     Includes 12,500 shares issuable pursuant to options which are           
presently exercisable or which become exercisable within 60 days of the date    
of this proxy statement, 12,500 shares held of record and 438 shares held in    
the executive's 401(k) account.                                                 

(5)     Includes 40,000 shares issuable pursuant to options which are           
presently exercisable or which become exercisable within 60 days of the date    
of this proxy statement and 221 shares held in the executive's 401(k) account.  

(6)     Includes 16,000 shares issuable pursuant to options which are           
presently exercisable or which become exercisable within 60 days of the date    
of this proxy statement, 400 shares held of record and 297 shares held in the   
executive's 401(k) account.                                                     

(7)     Includes 20,000 shares issuable pursuant to options which are           
presently exercisable or which become exercisable within 60 days of the date    
of this proxy statement, 5,000 shares held of record and 719 shares held in     
the executive's 401(k) account.                                                 

The Company is not aware of any arrangements, including any pledge of the       
Company's securities, the operation of which may at a subsequent date result    
in a change in control of the Company.                                          

Compliance with Section 16(A) of the Exchange Act 

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's     
officers and directors, and persons who beneficially own more than ten percent  
of the Company's common stock to file reports of ownership and changes in       
ownership with the Securities and Exchange Commission.  Officers, directors     
and greater than ten percent shareholders are also required by regulation of    
the Securities and Exchange Commission to furnish the Company with copies of    
all Section 16(a) forms which they file.                                        

Based solely upon a review of the forms and amendments thereto furnished to     
the Company under Rule 16a-3(e) during the fiscal year ended December 27,       
1997, and with respect to such year, as well as certain representations of the  
officers and directors specified by such rule, the Company believes that all    
reports required to be filed pursuant to Section 16(a) were filed.              

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OTHER MATTERS       

As of the date of this Proxy Statement, the Board of Directors of the Company   
does not intend to present and has not been informed that any other person      
intends to present a matter for action at the 1998 Annual Meeting other than    
as set forth herein and in the Notice of Annual Meeting.  If any other matter   
properly comes before the meeting, it is intended that the holders of proxies   
will act in accordance with their best judgment.                                

The accompanying proxy is being solicited on behalf of the Board of Directors   
of the Company.  In addition to the solicitation of proxies by mail, certain    
of the officers and employees of the Company, without extra compensation, may   
solicit proxies personally or by telephone, and, if deemed necessary, third     
party solicitation agents may be engaged by the Company to solicit proxies by   
means of telephone, facsimile or telegram, although no such third party has     
been engaged by the Company as of the date hereof.  The Company will also       
request brokerage houses, nominees, custodians and fiduciaries to forward       
soliciting materials to the beneficial owners of Common Stock held of record    
and will reimburse such persons for forwarding such material.  The cost of      
this solicitation of proxies will be borne by the Company.                      

ANNUAL REPORT           

Copies of the Company's Annual Report on Form 10-K (including financial         
statements and financial statements schedules) filed with the Securities and    
Exchange Commission may be obtained without charge by writing to the Company -  
Attention: Investor Relations, 3838 West Parkway Blvd., Salt Lake City, Utah    
84120-6336.                                                                     

A copy of the Company's 1997 Annual Report to Shareholders is being mailed      
with this Proxy Statement, but is not deemed a part of the proxy soliciting     
material.                                                                       

SHAREHOLDER PROPOSALS           

The Company must receive any shareholder proposal intended to be considered     
for inclusion in the proxy statement for presentation in connection with the    
1999 Annual Meeting of Shareholders by December 31, 1998.  The proposal must    
be in accordance with the provisions of Rule 14a-8 promulgated by the           
Securities and Exchange Commission under the Securities Exchange Act of 1934.   
The Company suggests that any such request be submitted by certified mail -     
return receipt requested.  The Board of Directors will review any proposal      
received by December 31, 1998, and determine whether it is a proper proposal    
to present to the 1999 Annual Meeting.                                          

The enclosed Proxy is furnished for you to specify your choices with respect    
to the matters referred to in the accompanying notice and described in this     
Proxy Statement.  If you wish to vote in accordance with the Board's            
recommendations, merely sign, date and return the Proxy in the enclosed         
envelope which requires no postage if mailed in the United States.  A prompt    
return of your Proxy will be appreciated.                                       

               By Order of the Board of Directors,

           Myron W. Wentz, Ph.D., Chairman

Salt Lake City, Utah                                                            
May 15, 1998                                                                    

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PROXY           

[USANA LOGO]            
a Utah corporation          

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS         

The undersigned hereby appoints Myron W. Wentz, Ph.D. and Gilbert A. Fuller     
and each of them as Proxies, with full power of substitution, and hereby        
authorizes them to represent and vote, as designated below, all shares of       
Common Stock of the Company held of record by the undersigned as of April 24,   
1998, at the Annual Meeting of Shareholders to be held at the Hilton Hotel,     
150 West 500 South, Salt Lake City, Utah on Tuesday, June 23, 1998, at 10:00    
a.m., Mountain Daylight Time or at any adjournment thereof.                     

1.     Election of Directors.                                                   

FOR           WITHHOLD AS TO ALL        FOR ALL EXCEPT                
/ /                 / /                     / /                       

(INSTRUCTIONS:  IF YOU MARK THE "FOR ALL EXCEPT" CATEGORY ABOVE, INDICATE THE   
NOMINEE(S) AS TO WHICH YOU DESIRE TO WITHHOLD AUTHORITY BY STRIKING A LINE      
THROUGH SUCH NOMINEE(S) NAME IN THE LIST BELOW:)                                

Myron W. Wentz, Ph.D.     David A. Wentz               Ronald S. Poelman        
Robert Anciaux            Ned M. Weinshenker, Ph.D.                             

2.     To approve and ratify the selection of Grant Thornton LLP as the         
Company's independent accountants.                                              

FOR                AGAINST                 ABSTAIN                              
/ /                / /                      / /                                 

3.     To approve and ratify the combination of the Company's Long-term Stock   
Investment and Incentive Plan and Director Stock Option Plan as the Amended     
and Restated Plan, without issuing or authorizing a net increase in the shares  
issuable pursuant to the plan as amended.                                       

FOR                AGAINST                 ABSTAIN                              
/ /                / /                     / /                                  

4.     In their discretion, the Proxies are authorized to vote upon such other  
business as may properly come before the Annual Meeting.                        

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN   
BY THE UNDERSIGNED SHAREHOLDER.  IF NO DIRECTION IS MADE, THIS PROXY WILL BE    
VOTED FOR PROPOSALS 1, 2 AND 3.                                                 

DATE: ____________          ______________________________________________      
Signature               

                      ______________________________________________
             Signature of co-tenant holder, if any

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.     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
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		12/31/98		8
		6/23/98		2		9
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		5/15/98		2		8
		4/24/98		2		9			10-K/A
		4/10/98		7
		12/31/97		7					10-K405
		12/27/97		3		7			10-K/A,  10-K405/A,  NT 10-K
		12/31/95		7					DEF 14A
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