ATHLETE GUARANTEE ANNOUNCEMENT Presented by Dr. Tim Wood January 15, 2004 BC Hall of Fame, Vancouver, British Columbia, Canada

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1 ATHLETE GUARANTEE ANNOUNCEMENT Presented by Dr. Tim Wood January 15, 2004 BC Hall of Fame, Vancouver, British Columbia, Canada USANA Health Sciences is proud to respond to the growing concern surrounding nutritional supplementation in sport by offering what we believe is the world s first product guarantee of its kind. As of today, USANA will provide select Canadian athletes with a guarantee of up to $1 million as an assurance that our nutritional supplements are free of World Anti-doping Agency (WADA) banned substances. Let me give you some background on our involvement with this issue. In 1999, our company became a sponsor of the Canadian and US Speedskating teams. At that time, we worked with speedskating officials to review our products and manufacturing practices to assure them that our supplements were appropriate and safe for elite athletes. That was our introduction to the rules and regulations governing drug-free sport. But the supplements-in-sport issue really came to a head for us during the 2002 Winter Olympics, an event held on our doorstep in Salt Lake City, Utah. As you might remember, just prior to the start of these games, an American athlete tested positive for traces of a steroid and blame was placed on contaminated supplements. Once again, newspapers were filled with statements from Olympic officials decrying the situation. News reports declared that the supplement

2 industry was unregulated that the quality of all supplements was questionable at best. Blanket warnings were given to all athletes not to take any nutritional supplements for fear of consuming a prohibited substance and being barred from competition. USANA Health Sciences has had a longstanding commitment to quality. The tagline for our company is Nutritionals You Can Trust and one of the reasons our company was founded back in 1992 was to bring a pharmaceutical approach to supplement design and manufacture. So we had a real problem when, as a member of the supplement industry, we were labeled untrustworthy. Nevertheless, we understood the position that athletes were in so we turned our focus inward and asked, Have we done everything possible to ensure that no athlete is ever sent home from a competition as a result of taking a USANA product? With this question in mind, we re-evaluated our products and our manufacturing operations. It is important to note that we manufacture all of our supplements according to pharmaceutical Good Manufacturing Practices. With pharmaceutical GMP s in place, we already had multiple and redundant safeguards to prevent inadvertent contamination of our products. Nevertheless, we did implement additional procedures to broaden our margin of safety.

3 First, we again reviewed our product ingredient lists against the Prohibited Substances Lists issued by the International Olympic Committee, the World Anti-doping Agency, and the US Anti-doping Agency. We removed any and all ingredients from our products that might have been even remotely problematic. Second, we took a long hard look at our raw ingredient supply chain. We raised our surveillance of suppliers, increasing the frequency of on-site audits and inspections to further ensure that they follow acceptable quality and material handling procedures. Additionally, we have rewritten our raw ingredient specifications, putting our suppliers on explicit notice regarding our concerns over banned substances. Third, we had several of our products tested by an outside laboratory for the presence of banned substances. In all cases, we passed the third-party laboratory tests. And fourth, we continued to monitor the results of random drug tests conducted on elite athletes who were taking USANA nutritionals. Of particular importance, we found that none of our customers or sponsored athletes, to our knowledge, ever tested positive for a banned substance. With the above safeguards in place, we felt that we had done everything that was feasible, internally, to guarantee the safety and

4 purity of our products. Any residual risk was minimal, basically equal to or less than that which an athlete would face when consuming foods or snacks purchased at a health food store. We came to a point at which we felt we were in a position to look elite athletes in the eye and tell them that our products were free of banned substances that they would not test positive as a result of taking a USANA supplement. And we were doing just that when we were challenged, right here in Vancouver, by two of our Distributors, Mr. Lorne Rubinoff, a former co-owner of the Capers Health Food Stores, and Mr. Sanford Osler. Their view was If you re so sure your products are contaminant-free, why don t you put your money where your mouth is? Why don t you provide athletes with a guarantee that USANA will compensate them for lost income if they test positive and are barred from competition as a result of taking a USANA supplement? Why shouldn t USANA share the risk of a positive drug test with the athlete? This was a fair challenge. According to the rules, athletes are ultimately responsible for what they put in their bodies. If we provide them with nutritional supplements that are promoted to be of the highest quality, then why shouldn t we share that responsibility? Why shouldn t we share that risk?

5 Our Vancouver Challenge ultimately resulted in today s announcement the launch of our first of a kind Athlete Guarantee. Again, as of today, USANA Health Sciences will provide select Canadian athletes with a guarantee of up to $1 million as an assurance that our nutritional supplements are free from banned substances. Details of the program are as follows. At this time, the guarantee is being offered to Canadian athletes only. In most cases it will be offered to carded athletes, those receiving funds from the Canadian government, and those who have been recognized as being world-class, Olympic competitors. Athletes will receive a custom guarantee based on their level of international performance and their earning potential. The amount of compensation provided will be designed in each case to reimburse the athlete for income lost as the result of a positive doping test up to a maximum of $1 million dollars. However, we anticipate that in most cases the amount will be substantially less. There will be a pre-approval process. Each athlete must show evidence of full compliance with drug tests throughout his or her career. Moreover, they must have passed an official drug test within the past 180 days. Furthermore, the guarantee will apply only to USANA supplements purchased under the agreement. This is important because our

6 company will need to maintain detailed records of the lot numbers of all products sent to each athlete in the program. For additional information on our Guarantee Program, we invite interested athletes to contact us through our website or at our corporate headquarters. Now, before closing, I want to make two points. First, I want to stress that our athlete guarantee is an extension of our commitment to quality and second, part of our intent in launching this program is to raise the bar on quality within the supplement industry as a whole. Finally, I want to make it clear that the guarantee we have announced today is a beginning, not an end, of our efforts in the area of ethics in sports nutrition. We look forward to working with the Canadian Center for Ethics in Sport, with various anti-doping agencies, and with a variety of sports teams and organizations to bring a more comprehensive solution to the challenges associated with safe nutritional supplementation in sports. Thank you very much.