SIGNATURE RESORTS INC, PRE 14A, 1998-03-20

SIGNATURE RESORTS INC
PRE 14A, 1998-03-20
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGING PLACES

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<PAGE> 1
As filed with the Securities and Exchange Commission on March 20, 1998

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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Rule
14a-12

SIGNATURE RESORTS, INC.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.
[ ] 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:
[ ] Fee paid previously with preliminary materials.
[ ] 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:
<PAGE> 2

LOGO

SIGNATURE RESORTS, INC.

NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS

The 1998 Annual Meeting of Stockholders of Signature Resorts, Inc. (the
"Company") will be held at the Embassy Suites Hotel, San Francisco Airport, 150
Anza Boulevard, Burlingame, California, 94010 on Friday, May 15, 1998, at 10:00
a.m. to:

1. Elect six directors of the Company consisting of (i) four Class II
directors (three of which are nominated for re-election and one of which
has been newly nominated), (ii) one Class III director (newly nominated
for election) and (iii) one Class I director (newly nominated for
election);

2. Consider and vote upon an amendment to the Company's Articles of
Incorporation, as amended (the "Articles") to change the Company's
corporate name to "Sunterra Corporation;"

3. Consider and vote upon an amendment to increase from 3,750,000 to
5,380,000 the number of shares authorized for issuance under the
Company's 1996 Equity Participation Plan, as amended;

4. Consider and vote upon an amendment to the Company's Articles to
increase the Company's authorized share capital from 75,000,000 shares
(consisting of 50,000,000 shares of Common Stock and 25,000,000 shares
of Preferred Stock) to 125,000,000 shares (consisting of 100,000,000
shares of Common Stock and 25,000,000 shares of Preferred Stock);

5. Ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending December 31,
1998; and

6. Transact such other business as may properly be brought before the 1998
Annual Meeting or any adjournments thereof.

Only stockholders of record at the close of business on April 1, 1998 are
entitled to notice of and to vote at the 1998 Annual Meeting. All stockholders
are cordially invited to attend the 1998 Annual Meeting.

PLEASE COMPLETE THE ACCOMPANYING PROXY AND RETURN IT IN THE ENCLOSED
ADDRESSED ENVELOPE.

By Order of the Board of Directors

/s/ ANDREW D. HUTTON
--------------------------------------
Andrew D. Hutton,
Vice President, General Counsel and
Secretary

San Mateo, California
April , 1998
<PAGE> 3

PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Signature Resorts, Inc. ("Signature" or the
"Company") for use at the Annual Meeting of Stockholders to be held on May 15,
1998 (the "1998 Annual Meeting").

The Company's principal executive offices are located at 1875 South Grant
Street, Suite 650, San Mateo, California 94402. A copy of the Company's 1997
Annual Report to Stockholders and this Proxy Statement and accompanying proxy
card will be first mailed to stockholders on or about April 6, 1998.

VOTING PROCEDURES

A proxy card is enclosed for your use. You are solicited on behalf of the
Board of Directors to sign, date and return the proxy card in the accompanying
envelope, which is postage prepaid if mailed in the United States.

You have three choices on each of the matters to be voted upon at the 1998
Annual Meeting. Such matters are as follows:

2. Consider and vote upon an amendment to the Company's Articles to change
the Company's corporate name to "Sunterra Corporation;"

3. Consider and vote upon an amendment to increase from 3,750,000 to
5,380,000 the number of shares authorized for issuance under the
Company's 1996 Equity Participation Plan, as amended;

5. Ratify the appointment of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending December 31,
1998.

Concerning Item 1, the election of Class I, Class II and Class III
directors, by checking the appropriate box on your proxy card you may: (a)
vote for all of the director nominees as a group; (b) withhold authority to
vote for all director nominees as a group; or (c) vote for all director
nominees as a group except those nominees you identify on the appropriate
line.

Concerning Item 2, the amendment of the Company's Articles to change
the Company's corporate name, Item 3, the amendment to increase from
3,750,000 to 5,380,000 the number of shares authorized for issuance under
the Company's 1996 Equity Participation Plan, as amended (the "1996 Equity
Participation Plan"), Item 4, the amendment of the Company's Articles to
increase the Company's authorized share capital and Item 5, the
ratification of Arthur Andersen LLP as the Company's independent public
accountants, by checking the appropriate box you may: (a) vote "For" the
item; (b) vote "Against" the item; or (c) "Abstain" from voting on the
item. As discussed below, if a quorum is present and you "Abstain" from
voting on any matter it will have no effect on Items 1, 3 and 5 and the
effect of a vote "Against" Items 2 and 4.

Stockholders may vote by either completing and returning the enclosed proxy
card prior to the 1998 Annual Meeting, voting in person at the 1998 Annual
Meeting, or submitting a signed proxy card at the 1998 Annual Meeting.

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<PAGE> 4

YOUR VOTE IS IMPORTANT. ACCORDINGLY, YOU ARE URGED TO SIGN AND RETURN THE
ACCOMPANYING PROXY CARD WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.

You may revoke your proxy at any time before it is actually voted at the
1998 Annual Meeting by delivering written notice of revocation to the Secretary
of the Company at 1875 South Grant Street, Suite 650, San Mateo, California,
94402, by submitting a later dated proxy, or by attending the 1998 Annual
Meeting and voting in person. Attendance at the 1998 Annual Meeting will not, by
itself, constitute revocation of the proxy. You may also be represented by
another person present at the 1998 Annual Meeting by executing a form of proxy
designating such person to act on your behalf.

Each unrevoked proxy card properly signed and received prior to the close
of the 1998 Annual Meeting will be voted as indicated. Unless otherwise
specified on the proxy, the shares represented by a signed proxy card will be
voted FOR Items 1, 2, 3, 4 and 5 on the proxy card and will be voted in the
discretion of the persons named as proxies on the other business that may
properly come before the 1998 Annual Meeting.

If a proxy card indicates an abstention or a broker non-vote on a
particular matter, then the shares represented by such proxy will be counted for
quorum purposes. If a quorum is present, an abstention or a broker non-vote will
have no effect on Items 1, 3 and 5 and will have the effect of a vote "Against"
Items 2 and 4.

The presence at the 1998 Annual Meeting, in person or by proxy, of a
majority of the shares of the Company's Common Stock ("Common Stock") issued and
outstanding on April 1, 1998, will constitute a quorum.

Votes cast at the 1998 Annual Meeting will be tabulated by the persons
appointed by the Company to act as inspectors of election for the 1998 Annual
Meeting.

SHARES ENTITLED TO VOTE AND REQUIRED VOTE

Stockholders of record at the close of business on April 1, 1998 are
entitled to vote at the 1998 Annual Meeting. At that date, 35,880,507 shares of
Common Stock were outstanding. A majority of the votes cast at a meeting of
stockholders, duly called and at which a quorum is present, shall be sufficient
to take or authorize action upon Proposals 1, 3 and 5. The affirmative vote of
at least two thirds of the outstanding shares of Common Stock entitled to vote
at the 1998 Annual Meeting is required for approval of Proposals 2 and 4. Each
share of Common Stock is entitled to one vote. Except as indicated to the
contrary, all information contained in this report has been restated to reflect
the Company's three-for-two stock split in the form of a Common Stock dividend
paid on October 27, 1997 to stockholders of record on October 10, 1997 (the
"Stock Split").

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<PAGE> 5

SHARE OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

Set forth in the following table is the beneficial ownership of the
Company's Common Stock as of March 31, 1998, for all current directors, the five
executive officers of the Company named under the table titled "Executive
Compensation" and all directors and executive officers as a group. Pursuant to
the rules of the Securities Exchange Commission, in calculating percentage
ownership, each person is deemed to beneficially own his own shares subject to
options exercisable within 60 days, but options owned by others (even if
exercisable within 60 days) are deemed not to be outstanding shares. Percentage
ownership is based on 35,880,507 shares of Common Stock outstanding on March 31,
1998 in addition to shares acquirable pursuant to options which will become
exercisable within 60 days of March 31, 1998.

<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OF
NAME OF BENEFICIAL OWNER(A) POSITION OWNED CLASS
--------------------------- -------- ------------ --------
<S> <C> <C> <C>
Osamu Kaneko(b).................... Chairman of the Board 3,487,855(c) 9.7%
Andrew J. Gessow(d)................ Director and Chief Executive 3,606,306(c) 10.1%
Officer
Steven C. Kenninger(b)............. Director and President 1,092,867(c)(e) 3.1%
Michael A. Depatie................. Director, Executive Vice President 237,682(f) *
and Chief Financial Officer
James E. Noyes..................... Director and Chief Operating 318,750(g) *
Officer
Adam M. Aron....................... Director -- *
Sanford R. Climan.................. Director 12,375(h) *
J. Taylor Crandall................. Director -- *
Joshua S. Friedman(i).............. Director 7,500(j) *
W. Leo Kiely, III.................. Director 7,500(j) *
All directors and executive
officers as a
group (19 persons)............... 9,149,529(k) 25.5%
</TABLE>

- ---------------
* Less than 1%.

(a) Except as otherwise indicated, each beneficial owner has the sole power to
vote and to dispose of all shares of Common Stock owned by such beneficial
owner.

(b) The address of such person is 5933 West Century Blvd., Suite 210, Los
Angeles, California 90045.

(d) The address of such person is 2934 Woodside Road, Woodside, California
94062.

(e) With the exception of presently exercisable options to purchase 75,000
shares of Common Stock, the shares indicated are held by Mr. Kenninger
through a trust under which Mr. Kenninger may be deemed presently to share
beneficial ownership with his co-trustee spouse.

(f) Includes (i) presently exercisable options to acquire 225,000 shares of
Common Stock and (ii) 12,682 shares of Common Stock which Mr. Depatie
presently may be deemed to have, or to share, beneficial ownership with an
affiliated corporation he controls.

(g) Represents presently exercisable options to purchase shares of Common Stock
and options which will become exercisable within 60 days of March 31, 1998.

(h) Includes presently exercisable options to purchase 7,500 shares of Common
Stock.

(i) Canpartners Incorporated ("Canyon") holds 65,507 shares and is the sole
general partner of CPI Securities L.P. ("CPI"), which holds 426,643 shares.
Mr. Friedman, Mitchell R. Julis and R. Christian B. Evensen are the sole
shareholders and directors of Canyon and may be deemed to share beneficial
ownership of the shares held by Canyon and CPI. Such persons disclaim
beneficial ownership of the shares. The 492,150 shares held by Canyon and
CPI do not include 154,035 shares held by Mr. Friedman's wife, 154,035
shares held by Mr. Julis, 154,035 shares held by Mr. Evensen's wife, 10,771
shares held by an irrevocable trust for the benefit of Mr. Evensen's
children, 10,771 shares held by an

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<PAGE> 6

irrevocable trust for the benefit of Mr. Friedman's children and 10,771
shares held by Mr. Julis' son. The beneficial ownership of such shares is
disclaimed by Canyon. Taken as a group, the entities and persons named in
this note hold an aggregate of 1,018,361 shares, or 2.8% of the Common Stock
outstanding.

(j) Represents presently exercisable options to purchase shares of Common Stock.

(k) Includes 842,570 shares which may be acquired upon the exercise of presently
exercisable options or options which will become exercisable within 60 days
of March 31, 1998.

COMPLIANCE WITH SECTION 16(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and officers, and persons who
own more than 10% of a registered class of the Company's equity securities
("Insiders"), to file with the Securities and Exchange Commission (the
"Commission") initial reports of ownership and reports of changes in ownership
of Common Stock. Insiders are required by the Commission's regulations to
furnish the Company with copies of all Section 16(a) reports filed by such
persons.

To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company and written representations from the
Insiders that no other reports were required, during the year ended December 31,
1997, all Section 16(a) filing requirements applicable to Insiders were complied
with.

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<PAGE> 7

PROPOSAL NO. 1:

ELECTION OF DIRECTORS

GENERAL INFORMATION -- ELECTION OF DIRECTORS

Pursuant to the Company's Articles, the Bylaws, as amended (the "Bylaws"),
and resolutions adopted by the Company's Board of Directors, the Company
currently has ten directors. The Company's Articles provide for its Board of
Directors to be divided into three classes, each serving a staggered term so
that directors' terms currently will expire either at the 1998, 1999 or 2000
annual meeting of stockholders. Messrs. Gessow, Friedman and Kiely have been
classified as Class II directors of the Company whose current terms will expire
at the 1998 Annual Meeting. If re-elected, such directors term will expire at
the 2001 annual meeting of stockholders. Messrs. Kaneko and Climan have been
classified as Class III directors whose current terms will expire at the 1999
annual meeting of stockholders. Messrs. Kenninger and Noyes have been classified
as Class I directors whose current terms will expire at the 2000 annual meeting
of stockholders. In addition, of the Company's ten directors, three directors
(Messrs. Aron, Crandall and Depatie) were elected by a vote of the Company's
Board of Directors on October 24, 1997. Pursuant to the Company's Articles and
Bylaws, such three newly elected directors must be considered for election by
the Company's stockholders at the 1998 Annual Meeting. If elected, Messrs. Aron,
Crandall and Depatie's terms will expire at the 1999, 2000 and 2001 annual
meeting of stockholders, respectively. Directors elected at each annual meeting
will serve until each respective successor shall have been elected or appointed.

In the absence of instructions to the contrary, votes will be cast for the
election of the following as directors pursuant to the proxies solicited hereby.
In the event any nominee is unable or declines to serve as a director at the
time of the 1998 Annual Meeting, the proxy will be voted for any substitute
nominee selected by the current Board of Directors. However, the proxy cannot be
voted for a greater number of persons than the number of nominees designated by
the Board of Directors. Management has no reason to believe, at this time, that
the persons named will be unable or will decline to serve if elected, and each
nominee has informed the Company that he will serve if elected.

Six directors have been nominated for re-election at the 1998 Annual
Meeting: The Company's three current Class II directors, Messrs. Gessow,
Friedman and Kiely; Mr. Depatie, who has been nominated for election as a Class
II director; Mr. Aron, who has been nominated for election as a Class III
director; and Mr. Crandall, who has been nominated for election as a Class I
director. The following table sets forth the name of, and certain information
with respect to, the six persons nominated by the Company for election as
directors at the 1998 Annual Meeting:

<TABLE>
<CAPTION>
DIRECTOR
NOMINEES FOR DIRECTOR AGE SINCE POSITIONS CURRENTLY HELD WITH THE COMPANY
--------------------- --- -------- -----------------------------------------
<S> <C> <C> <C>
CLASS II DIRECTORS:
Andrew J. Gessow(1)............... 40 1996 Director and Chief Executive Officer
Joshua S. Friedman(1)(2).......... 42 1996 Director
W. Leo Kiely III(3)............... 51 1996 Director
Michael A. Depatie(4)............. 41 1997 Director, Executive Vice President and
Chief Financial Officer

CLASS III DIRECTOR:
Adam M. Aron (3)(4)............... 43 1997 Director

CLASS I DIRECTOR:
J. Taylor Crandall(2)(4).......... 43 1997 Director
</TABLE>

- ---------------
(1) Member of Executive Committee.

(2) Member of Audit Committee.

(3) Member of Compensation Committee.

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<PAGE> 8

(4) Messrs. Depatie, Aron and Crandall were elected by a vote of the Company's
Board of Directors on October 24, 1997 and, pursuant to the Company's
Articles and Bylaws, must be considered for election by the Company's
stockholders at the 1998 Annual Meeting.

For biographical information about the other current Class III and Class I
directors, Messrs. Kaneko and Climan and Messrs. Kenninger and Noyes,
respectively, see "Directors and Executive Officers."

ANDREW J. GESSOW has served as a Director of the Company since its
inception in May 1996 and as Chief Executive Officer since February 1998,
previously serving as Co-Chief Executive Officer since July 1997 and as
President since June 1996. Mr. Gessow founded Argosy Group Inc. ("Argosy")(a
real estate acquisition and development company and one of the Company's
predecessor entities) in 1990 and served as its President from 1990 through
August 1996. Prior thereto, Mr. Gessow served as a Partner with Trammell Crow
Company (a real estate development, management and investment company) and was
President of Trammell Crow Residential Services, Florida and West Coast from
1987 to 1990. From 1981 through 1987, Mr. Gessow was Founder and President of
Travel, Inc., and Home Search, Inc. which he co-founded with Citicorp Venture
Capital. Mr. Gessow received a B.B.A. degree in Finance from Emory University in
1978 and a M.B.A. degree from Harvard Business School in 1980.

JOSHUA S. FRIEDMAN has served as a Director of the Company since August
1996. Mr. Friedman is a founder of Canyon Partners Incorporated, a private
merchant banking firm and an affiliate of Canpartners Incorporated, and has been
a Managing Partner of Canyon Partners Incorporated since its inception in 1990.
From 1984 through 1990, Mr. Friedman served with Drexel Burnham Lambert
Incorporated (an investment banking firm), most recently as Executive Vice
President and Co-Director, Capital Markets. Mr. Friedman also serves as a
director of First Aviation Services, Inc. (an aircraft services supplier) and
several privately held companies and charitable organizations. Mr. Friedman
received a B.A. degree from Harvard College in 1976, a M.A. degree from Oxford
University in 1978, a J.D. degree from Harvard Law School in 1982 and a M.B.A.
degree from Harvard Business School in 1982.

W. LEO KIELY III has served as a Director of the Company since August 1996.
Mr. Kiely has been President and Chief Operating Officer of Coors Brewing
Company since 1993. From 1982 through 1993, Mr. Kiely held various executive
positions with Frito-Lay Inc., a subsidiary of PepsiCo, most recently serving as
President of Frito-Lay's Central Division. Prior to joining Frito-Lay, Mr. Kiely
was President of Ventura Coastal Corporation, a division of Seven-Up
Corporation, from 1979 through 1982. Mr. Kiely also serves as a director of Bell
Sports, Inc. (a bicycle helmet manufacture). He is also on the advisory boards
of the National Association of Manufacturers and several educational and
charitable organizations. Mr. Kiely received a B.A. degree from Harvard College
in 1969 and a M.B.A. degree from the Wharton School of Business at the
University of Pennsylvania in 1971.

MICHAEL A. DEPATIE has served as a Director of the Company since October
1997 and as Executive Vice President and Chief Financial Officer of the Company
since November 1996. Prior to joining the Company, Mr. Depatie was Senior Vice
President of Finance and Chief Financing Officer of La Quinta Inns, Inc. (a
hotel operating company) from July 1992 to August 1996. From April 1989 through
June 1992, Mr. Depatie was co-founder and Senior Vice President of Finance of
Summerfield Hotel Corporation (a hotel operating company). From April 1988
through April 1989, Mr. Depatie was founder and Managing General Partner of
Pacwest Capital Partners. From June 1984 through April 1988, Mr. Depatie served
as Senior Vice President of Finance and Development of The Residence Inn
Company. Mr. Depatie received a B.A. degree from Michigan State University in
1979 and a M.B.A. degree from Harvard Business School in 1983.

ADAM M. ARON has served as Director of the Company since October 1997. Mr.
Aron has served as Chairman of the Board and Chief Executive Officer of Vail
Resorts, Inc. since July 1996. Prior to joining Vail Resorts, Mr. Aron served as
President and Chief Executive Officer of Norwegian Cruise Line Ltd. from July
1993 to July 1996, as Senior Vice President of Marketing for United Airlines
from November 1990 to July 1993 and as Senior Vice President of Marketing for
Hyatt Hotels Corporation from 1987 to 1990. Mr. Aron also serves as a director
of Florsheim Group, Inc. Mr. Aron holds a B.A. degree from Harvard College and a
M.B.A. degree from Harvard Business School.

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<PAGE> 9

J. TAYLOR CRANDALL has served as a Director of the Company since October
1997. Mr. Crandall has served as Vice President and Chief Financial Officer of
Keystone, Inc., the principal investment vehicle of Robert M. Bass of Fort
Worth, Texas since October 1996 and as President, Director and sole stockholder
of Acadia MGP, Inc. (managing general partner of Acadia Investment Partners,
L.P., the sole general partner of Acadia Partners, L.P. (an investment
partnership)) since 1992. Mr. Crandall also serves as a director of Bell &
Howell Company, Quaker State, Specialty Foods Corporation and Washington Mutual.
Mr. Crandall holds a B.A. degree from Bowdoin College, where he has served as a
trustee.

COMPENSATION OF DIRECTORS

The Company pays its directors who are not officers of the Company
("Independent Directors") a fee of $1,000 per meeting of the Board of Directors
and any committee thereof (including telephonic meetings) for their services as
directors. In addition, the Company grants options to purchase 15,000 shares of
Common Stock (subject to adjustment) at a price equal to fair market value on
the date of grant to each such Independent Director to vest in equal portions
over a term of three years from the date of election as an Independent Director.
Each Independent Director who is still a member of the Board of Directors at the
end of the three year vesting period of the initial grant of options will
receive a grant of additional options to purchase 15,000 shares of Common Stock
at the fair market value of the Common Stock on the date of the grant, with such
options to vest over an additional three year period. In addition to such option
grants, the Independent Directors will be reimbursed for expenses of attending
each meeting of the Board of Directors. Officers of the Company who are
directors will not be paid any director fees but will be reimbursed for expenses
of attending meetings of the Board of Directors.

BOARD OF DIRECTORS AND COMMITTEE MEETINGS

Board of Directors

The Board of Directors met eight times during the year ended December 31,
1997. During 1997, attendance at Board of Directors meetings averaged 85%. There
were two meetings of the Audit Committee, two meetings of the Compensation
Committee and six meetings of the Executive Committee (each as defined below) of
the Board of Directors during 1997.

Audit Committee

The Board of Directors has established an audit committee (the "Audit
Committee"), which consists of Messrs. Friedman and Crandall. The Audit
Committee makes recommendations concerning the engagement of independent public
accountants, reviews with the independent public accountants the plans and
results of the audit engagement, approves professional services provided by the
independent public accountants, reviews the independence of the independent
public accountants, considers the range of audit and non-audit fees and reviews
the adequacy of the Company's internal accounting controls.

Compensation Committee

The Board of Directors has established a compensation committee (the
"Compensation Committee"), which consists of Messrs. Climan, Kiely and Aron, to
determine compensation for the Company's senior executive officers, determine
awards under the Company's 1996 Equity Participation Plan and administer the
Company's Employee Stock Purchase Plan, as amended (the "Employee Stock Purchase
Plan").

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<PAGE> 10

Executive Committee

The Board of Directors has established an executive committee (the
"Executive Committee"), which will be granted such authority as may be
determined from time to time by a majority of the Board of Directors. The
Executive Committee consists of Messrs. Gessow, Kenninger and Friedman. All
actions by the Executive Committee require the unanimous vote of all of its
members.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
EACH OF THE DIRECTORS NOMINATED IN PROPOSAL 1

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<PAGE> 11

PROPOSAL NO. 2:

CORPORATE NAME CHANGE

On February 27, 1998, the Company's Board of Directors approved a
resolution authorizing an amendment to the Company's Articles to change the
Company's corporate name to "Sunterra Corporation." The proposed amendment is
subject to approval by the Company's stockholders. The Company's Board of
Directors and management are in favor of and fully support the name change
proposal and believe that the proposed corporate name change is desirable
primarily to create a corporate and product identity between the Company and its
"Sunterra Resorts" brand name, which it introduced in September 1997 and
currently consists of 29 flagged resorts. Additionally, the proposed corporate
name change will create a corporate and product identity between the Company and
its worldwide "Club Sunterra" points-based vacation exchange club currently
under development and scheduled for introduction during the second half of 1998.
The Board of Directors also believes that it is in the best interests of the
Company to change its corporate name to "Sunterra Corporation" in order to avoid
any potential confusion between the "Signature Resorts, Inc." and "Signature
Inns, Inc." corporate names. Signature Inns, Inc. is an Indianapolis-based
owner, operator and franchisor of mid-priced, limited service motels located in
the Midwestern United States. Signature Inns, Inc. consummated its initial
public offering in December 1996 and currently trades on the Nasdaq Stock Market
under the symbol "SGNS." In order to avoid such confusion, the Company entered
into an agreement with "Signature Inns, Inc." whereby it agreed to support a
name change proposal and to discontinue use of the name "Signature Resorts,
Inc." by August 1, 1998. In light of the agreement and because Signature Inns,
Inc. owns a registered federal service mark for the "Signature Inns" name, as
well as certain registered design marks, the Company may face restrictions
should it desire to introduce any product or brand based on the "Signature
Resorts" name after August 1, 1998.

The corporate name change will not affect in any way the validity or
transferability of stock certificates currently outstanding, and the Company's
stockholders will not be required to surrender for exchange any certificates now
held by them. In addition, the corporate name change will not affect in any way
the capital structure of the Company or the listing of the Company's Common
Stock on the New York Stock Exchange.

The affirmative vote of at least two thirds of the outstanding shares of
Common Stock entitled to vote at the 1998 Annual Meeting is required for
approval of the proposal to change the Company's corporate name.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE
ARTICLES OF INCORPORATION OF THE COMPANY TO CHANGE THE COMPANY'S CORPORATE NAME
AS DESCRIBED IN PROPOSAL 2

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<PAGE> 12

PROPOSAL NO. 3:

AMENDMENT TO INCREASE FROM 3,750,000 TO 5,380,000
THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER
THE COMPANY'S 1996 EQUITY PARTICIPATION PLAN

GENERAL

Currently not more than 3,750,000 shares of Common Stock are authorized for
issuance under the 1996 Equity Participation Plan upon exercise of qualified
stock options, incentive stock options, stock appreciation rights, restricted
stock awards, performance awards, dividend equivalents, deferred stock awards
and stock payments. Subject to stockholder approval of this Proposal 3, the
number of shares of Common Stock authorized for issuance under the 1996 Equity
Participation Plan will be increased to 5,380,000 shares. Furthermore, the
maximum number of shares which may be subject to options or stock appreciation
rights granted under the 1996 Equity Participation Plan to any individual in any
fiscal year cannot exceed 450,000 (subject to certain adjustments).

The 1996 Equity Participation Plan is administered by the Compensation
Committee, which is authorized to select from among the eligible participants
the individuals to whom options, restricted stock purchase rights and
performance awards are to be granted and to determine the number of shares to be
subject thereto and the terms and conditions thereof. The members of the
Compensation Committee, each of which is an Independent Director, select from
among the eligible participants the individuals to whom nonqualified stock
options are to be granted, determine the number of shares to be subject thereto
and the terms and conditions thereof and make all other determinations and take
all other actions necessary or advisable for the administration of the 1996
Equity Participation Plan. The Compensation Committee is also authorized to
adopt, amend and rescind rules relating to the administration of the 1996 Equity
Participation Plan.

Options, stock appreciation rights, restricted stock and other awards under
the 1996 Equity Participation Plan may be granted to individuals who are then
officers or employees of the Company or any of its present or future
subsidiaries or Independent Directors or consultants of the Company selected by
the Compensation Committee for participation in the 1996 Equity Participation
Plan.

Nonqualified stock options provide for the right to purchase Common Stock
at a specified price which may be less than fair market value on the date of
grant (but not less than par value), and usually will become exercisable in
installments after the grant date. Nonqualified stock options may be granted for
any reasonable term. Independent Directors shall be automatically granted
options to purchase 15,000 shares of Common Stock on the date of initial
election and options to purchase an additional 15,000 shares of Common Stock on
the third anniversary of such date, provided that he continues to serve on the
Board of Directors at such time.

Incentive stock options are designed to comply with the provisions of the
Internal Revenue Code of 1986, as amended (the "Code") and will be subject to
restrictions contained in the Code, including exercise prices equal to at least
100% of fair market value of Common Stock on the grant date and a ten year
restriction on their term, but may be subsequently modified to disqualify them
from treatment as an incentive stock option.

Restricted stock may be sold to participants at various prices (but not
below par value) and made subject to such restrictions as may be determined by
the Compensation Committee. Restricted stock typically may be repurchased by the
Company at the original purchase price if the conditions or restrictions are not
met. In
11
<PAGE> 13

general, restricted stock may not be sold, or otherwise transferred or
hypothecated, until restrictions are removed or expire. Purchasers of restricted
stock, unlike recipients of options, will have voting rights and will receive
dividends prior to the time when the restrictions lapse.

Performance awards may be granted by the Compensation Committee on an
individual or group basis. Generally, these awards will be based upon specific
agreements and may be paid in cash or in Common Stock or in a combination of
cash and Common Stock. Performance awards may include "phantom" stock awards
that provide for payments based upon increases in the price of the Company's
Common Stock over a predetermined period. Performance awards may also include
bonuses which may be granted by the Compensation Committee on an individual or
group basis and which may be payable in cash or in Common Stock or in a
combination of cash and Common Stock.

Dividend Equivalents represent the value of the dividends per share paid by
the Company, calculated with reference to the number of shares covered by the
stock options, stock appreciation rights or other awards held by the
participant.

Deferred Stock may be awarded to participants, typically without payment of
consideration, but subject to vesting conditions based on continued employment
or on performance criteria established by the Compensation Committee. Like
restricted stock, deferred stock may not be sold, or otherwise transferred or
hypothecated, until vesting conditions are removed or expire. Unlike restricted
stock, deferred stock will not be issued until the deferred stock award has
vested, and recipients of deferred stock generally will have no voting or
dividend rights prior to the time when vesting conditions are satisfied.

Stock Payments may be authorized by the Compensation Committee in the form
of shares of Common Stock or an option or other right to purchase Common Stock
as part of a deferred compensation arrangement in lieu of all or any part of
compensation, including bonuses, that would otherwise be payable in cash to the
key employee, officer, Independent Director or consultant.

Stock Appreciation Rights may be granted in connection with stock options
or other awards, or separately. Stock Appreciation Rights ("SARs") granted by
the Compensation Committee in connection with stock options or other awards
typically will provide for payments to the holder based upon increases in the
price of the Company's Common Stock over the exercise price of the related
option or other awards, but alternatively may be based upon criteria such as
book value. Except as required by Section 162(m) of the Code with respect to a
SAR intended to qualify as performance-based compensation as described in
Section 162(m) of the Code, there are no restrictions specified in the 1996
Equity Participation Plan on the exercise of SARs or the amount of gain
realizable therefrom, although restrictions may be imposed by the Compensation
Committee in the SAR agreements. The Compensation Committee may elect to pay
SARs in cash or in Common Stock or in a combination of both.

SECURITIES LAWS AND FEDERAL INCOME TAXES

Securities Laws. The 1996 Equity Participation Plan is intended to conform
to the extent necessary with all provisions of the Securities Act of 1933 (the
"Securities Act") and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, including
without limitation Rule 16b-3. The 1996 Equity Participation Plan will be
administered, and options will be granted and may be exercised, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the 1996 Equity Participation Plan and options
granted thereunder shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

General Federal Tax Consequences. Under current federal laws, in general,
recipients of awards and grants of nonqualified stock options, stock
appreciation rights, restricted stock, deferred stock, dividend equivalents,
performance awards, and stock payments under the 1996 Equity Participation Plan
are taxable under Section 83 of the Code upon their receipt of Common Stock or
cash with respect to such awards or grants and, subject to Section 162(m) of the
Code, the Company will be entitled to an income tax deduction with respect to
the amounts taxable to such recipients. Under Sections 421 and 422 of the Code,
recipients of incentive stock options are generally not taxable on their receipt
of Common Stock upon their exercises of

12
<PAGE> 14

incentive stock options if the incentive stock options and option stock are held
for certain minimum holding periods and, in such event, the Company is not
entitled to income tax deductions with respect to such exercises. Participants
in the 1996 Equity Participation Plan will be provided with detailed information
regarding the tax consequences relating to the various types of awards and
grants under the plan.

Section 162(m) Limitation. In general, under Section 162(m) of the Code,
income tax deductions of publicly-held corporations may be limited to the extent
total compensation (including base salary, annual bonus, stock option exercises
and non-qualified benefits paid) for certain executive officers exceeds
$1,000,000 (less the amount of any "excess parachute payments" as defined in
Section 280G of the Code) in any one year. However, under Section 162(m), the
deduction limit does not apply to certain "performance-based compensation"
established by an independent compensation committee which is adequately
disclosed to, and approved by, stockholders. In particular, stock options and
SARs will satisfy the "performance-based compensation" exception if the awards
are made by a qualifying compensation committee, the plan sets the maximum
number of shares that can be granted to any person within a specified period and
the compensation is based solely on an increase in the stock price after the
grant date (i.e. the option exercise price is equal to or greater than the fair
market value of the stock subject to the award on the grant date). Rights or
awards granted under the 1996 Equity Participation Plan, other than options and
SARs, will not qualify as "performance-based compensation" for purposes of
Section 162(m) unless such rights or awards are granted or vest upon
preestablished objective performance goals, the material terms of which are
disclosed to and approved by the stockholders of the Company.

The Company has attempted to structure the 1996 Equity Participation Plan
in such a manner that the remuneration attributable to stock options and SARs
which meet the other requirements of Section 162(m) will not be subject to the
$1,000,000 limitation.

AMENDMENT TO THE 1996 EQUITY PARTICIPATION PLAN

On February 27, 1998, the Board of Directors approved, subject to
stockholder approval, an amendment to the Company's 1996 Equity Participation
Plan to increase the number of shares of Common Stock reserved for issuance
thereunder from 3,750,000 shares to 5,380,000 shares. The Company's stockholders
are asked to approve the adoption of the amendment to the 1996 Equity
Participation Plan at the 1998 Annual Meeting.

Under the Company's current 1996 Equity Participation Plan, the aggregate
number of shares of Common Stock that may be issued pursuant to incentive awards
cannot exceed 3,750,000 shares of Common Stock. Due to the Company's acquisition
efforts and its need to attract, retain and reward its key employees, the number
of shares issuable pursuant to options granted under the 1996 Equity
Participation Plan has reached the 3,750,000 share limit. The Company's Board of
Directors believes that, in order to continue its acquisition efforts and to
retain, motivate, and attract key personnel essential to the continued success
of the Company it is necessary to maintain its current practice of providing
meaningful incentive awards. The Board of Directors believes that incentive
awards have played a critical role in enabling them to create a motivated
management team and to build a growing, highly competitive business. The Board
of Directors also believes that the Company's 1996 Equity Participation Plan has
helped to stimulate a deeper commitment to the Company, minimize management
turnover and reward continuous improvement in financial performance.

The Board of Directors believes that the expansion of the Company's 1996
Equity Participation Plan will promote the interests of the Company and its
stockholders by strengthening the Company's ability to structure acquisitions
and to attract, motivate and retain employees and by providing a means to
encourage stock ownership and proprietary interest in the Company to valued
employees upon whose judgment, initiative, and efforts the continued financial
success and growth of the business of the Company largely depend.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE AMENDMENT TO INCREASE FROM 3,750,000 TO 5,380,000
THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER
THE COMPANY'S 1996 EQUITY PARTICIPATION PLAN,
AS DESCRIBED IN PROPOSAL 3

13
<PAGE> 15

PROPOSAL NO. 4:

PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION OF THE COMPANY
TO INCREASE THE COMPANY'S AUTHORIZED SHARE CAPITAL FROM
75,000,000 SHARES TO 125,000,000 SHARES

The Board of Directors has adopted a resolution authorizing an amendment to
the Company's Articles to increase the Company's authorized share capital from
75,000,000 shares to 125,000,000 shares, of which 100,000,000 shares would be
designated as Common Stock and 25,000,000 shares would be designated as
Preferred Stock. The proposed amendment is subject to approval by the Company's
stockholders. The Common Stock, including the additional shares proposed for
authorization do not have preemptive or similar rights.

The Company is currently authorized to issue 75,000,000 shares of capital
stock, of which 50,000,000 shares are designated as Common Stock and 25,000,000
shares are designated as Preferred Stock. As of March 31, 1998, 35,880,507
shares of Common Stock were issued and outstanding, and 8,823,170 additional
shares of Common Stock were reserved for issuance upon exercise or conversion of
outstanding stock options, warrants and convertible notes and issuance of shares
under the Company's Employee Stock Purchase Plan, as amended. As of March 31,
1998, no shares of Preferred Stock were issued and outstanding and the proposed
amendment would not change the authorized number of shares of Preferred Stock.

The Board of Directors of the Company believes that it is advisable and in
the best interests of the Company to have available additional authorized but
unissued shares of Common Stock in an amount adequate to provide for the future
needs of the Company. The increase in authorized Common Stock will not have any
immediate effect on the rights of existing stockholders. However, the additional
shares will be available for issuance from time to time by the Company in the
discretion of the Board of Directors, subject to stockholder approval, as may be
required under applicable law or exchange regulations. These shares may be
issued for any proper corporate purpose including, without limitation: acquiring
other businesses in exchange for shares of the Company's Common Stock; entering
into joint venture arrangements with other companies in which Common Stock or
the right to acquire Common Stock are part of the consideration; facilitation of
broader ownership of the Company's Common Stock by effecting a stock split or
issuing a stock dividend; raising capital through the sale of Common Stock; and
attracting and retaining valuable employees by the issuance of additional stock
options.

The issuance of the additional shares of Common Stock could have the effect
of diluting earnings per share and book value per share, which could adversely
affect the Company's existing stockholders. Issuing additional shares of Common
Stock may also have the effect of delaying or preventing a change of control of
the Company. The Company's authorized but unissued Common Stock could be issued
in one or more transactions that would make more difficult or costly, and less
likely, a takeover of the Company. The proposed amendment to the Company's
Articles is not being recommended in response to any specific effort of which
the Company is aware to obtain control of the Company and the Board of Directors
has no current intention to use the additional shares of Common Stock in order
to impede a takeover attempt.

The affirmative vote of at least two thirds of the outstanding shares of
Common Stock entitled to vote at the 1998 Annual Meeting is required for
approval of the proposal to increase the Company's authorized share capital.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE
ARTICLES OF INCORPORATION OF THE COMPANY TO INCREASE THE COMPANY'S AUTHORIZED
SHARE CAPITAL FROM 75,000,000 TO 125,000,000 SHARES AS DESCRIBED IN PROPOSAL 4

14
<PAGE> 16

PROPOSAL NO. 5:

RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS

GENERAL

On September 17, 1996, the Company retained the accounting firm of Arthur
Andersen LLP as auditors for the year ending December 31, 1996 following Board
of Directors approval, which was obtained on September 16, 1996. The decision to
retain Arthur Andersen LLP was based upon the prior relationship with a
predecessor of the Company as auditors for the year ending December 31, 1994 and
Arthur Andersen LLP's experience in the Company's industry, and was not
motivated by any disagreements between the Company and Ernst & Young LLP (the
Company's public accountants prior to September 12, 1996) concerning any
accounting principles and/or policy matters. From the Company's inception to
September 17, 1996, the Company did not consult with Arthur Andersen LLP with
respect to the matters described in Item 304(a)(2) of Regulation S-K under the
Securities Act.

The Board of Directors, upon recommendation of the Audit Committee, has
appointed Arthur Andersen LLP as the Company's independent public accountants
for the year ending December 31, 1998. A representative of Arthur Andersen LLP
will be present at the 1998 Annual Meeting and will be given an opportunity to
make a statement and answer appropriate questions. This appointment is being
submitted for ratification at the 1998 Annual Meeting. If the appointment is not
ratified, the appointment will be reconsidered by the Board of Directors,
although the Board of Directors will not be required to appoint different
independent auditors for the Company.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

On September 12, 1996, Ernst & Young LLP (the Company's public accountants
at that time) advised the Company that it was resigning as independent auditors
for the Company. Ernst & Young LLP had been retained since the Company's
inception and there have been no disagreements between the Company and Ernst &
Young LLP with respect to accounting principles or practices, financial
statement disclosure, auditing scope or procedures, which if not resolved to
Ernst & Young LLP's satisfaction, would have resulted in a reference to the
subject matters of the disagreement in its audit report. Since the Company's
inception, Ernst & Young LLP's report on the Company's financial statements did
not contain an adverse opinion or a disclaimer of opinion, nor were the opinions
qualified or modified as to uncertainty, audit scope, or accounting principles,
nor were there any events of the type requiring disclosure under Item
304(a)(l)(v) of Regulation S-K under the Securities Act.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP
AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR
THE YEAR ENDING DECEMBER 31, 1998
AS DESCRIBED IN PROPOSAL 5

15
<PAGE> 17

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information, as of March 31, 1998,
concerning each person who is a director or executive officer of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Osamu Kaneko......................... 50 Chairman of the Board
Andrew J. Gessow..................... 40 Director and Chief Executive Officer
Steven C. Kenninger.................. 45 Director and President
Michael A. Depatie................... 41 Director, Executive Vice President and Chief
Financial Officer
James E. Noyes....................... 51 Director and Chief Operating Officer
Charles C. Frey...................... 43 Senior Vice President, Accounting and Administration
Genevieve Giannoni................... 34 Senior Vice President, Operations
Michael V. Paulin.................... 56 Senior Vice President, Hospitality Management
Andrew D. Hutton..................... 33 Vice President, General Counsel and Secretary
Timothy D. Levin..................... 41 Vice President, Architecture
Dewey W. Chambers.................... 40 Vice President and Treasurer
David D. Philp....................... 36 Vice President, Acquisitions
Peter J. Shoobridge.................. 32 Vice President, Business Development
James D. Wheat....................... 40 Vice President and Corporate Controller
Adam M. Aron......................... 43 Director
Sanford R. Climan.................... 42 Director
J. Taylor Crandall................... 43 Director
Joshua S. Friedman................... 42 Director
W. Leo Kiely III..................... 51 Director
</TABLE>

For biographical information about Messrs. Gessow, Depatie, Aron, Crandall,
Friedman and Kiely, see "Proposal No. 1: Election of Directors -- General
Information -- Election of Directors" above.

OSAMU KANEKO has served as a Chairman of the Board of the Company since
June 1996, previously serving as Chief Executive Officer of the Company from
June 1996 to July 1997 and as Co-Chief Executive Officer from July 1997 to
February 1998. Mr. Kaneko, a Japanese national, received a B.A. degree from
Indiana State University in 1971. From 1974 to 1986, Mr. Kaneko was the
Executive Vice President of Hasegawa Komuten (USA) Inc., the American subsidiary
of Hasegawa Komuten Ltd., a Japanese real estate development company. In this
capacity, Mr. Kaneko was responsible for the development of income producing
properties in Hawaii, including resort condominiums and hotels. In 1985, Mr.
Kaneko co-founded KOAR Group, Inc. ("KOAR") (a real estate acquisition and
development company) with Mr. Kenninger and since that time has served as its
Chief Executive Officer.

STEVEN C. KENNINGER has served as a Director of the Company since its
inception and as President of the Company since February 1998. Previously, Mr.
Kenninger served as Chief Operating Officer and Secretary of the Company from
June 1996 to February 1998. Mr. Kenninger co-founded KOAR with Mr. Kaneko in
1985 and most recently served as its President. Mr. Kenninger was a practicing
attorney at the law firm of Paul, Hastings, Janofsky & Walker, located in Los
Angeles, California from 1977 through 1981 and at the law firm of Riordan &
McKinzie, located in Los Angeles, California from 1981 through 1985, where he
was a partner. Mr. Kenninger received a B.S. degree in Mechanical Engineering
from Purdue University in 1974 and received a J.D. degree from Stanford Law
School in 1977. Mr. Kenninger is a member of the Board of Visitors of the
Stanford Law School and has been a member of the State Bar of California since
1977.

JAMES E. NOYES has served as a Director of the Company since July 1996 and
as Chief Operating Officer since February 1998. Previously, Mr. Noyes served as
Executive Vice President of the Company since July 1996. Prior to joining the
Company, from 1989 through June 1996 Mr. Noyes served as President of The Trase
Miller Group (a travel technology services company), the parent company of MTI
Vacations, Inc., with

16
<PAGE> 18

interests in vacation packaging, travel technology and specialized teleservices,
and previously served as its Vice President of Marketing and Sales since 1980.
Mr. Noyes served in various management positions for Wilson Sporting Goods from
1976 to 1980. Mr. Noyes is a director of Premier Yachts, Ltd. (a shipbuilding
and repairing company), Preview Travel, Inc. and Ball Horticultural, Inc. (a
horticultural supply company). Mr. Noyes received a B.A. degree in 1970 from
Dartmouth College and received a M.B.A. degree in 1974 from Stanford Business
School.

CHARLES C. FREY has served as Senior Vice President, Accounting and
Administration of the Company since January 1997. Previously, he served as
Senior Vice President and Treasurer of the Company since July 1996. Prior
thereto, Mr. Frey had served as Senior Vice President of Administration and
Treasurer of Argosy (one of the Company's predecessor entities) since 1992.
Prior thereto, Mr. Frey was Vice President and Chief Financial Officer of
Trammell Crow Residential Services-Florida from 1986 to 1992. Mr. Frey is a
Certified Public Accountant and a licensed real estate broker in Florida. He
received a B.S. degree in Accounting and Economics from the Indiana University
of Pennsylvania in 1977.

GENEVIEVE GIANNONI has served as Senior Vice President, Operations of the
Company since July 1996. Ms. Giannoni joined Argosy (one of the Company's
predecessor entities) in May 1992 as Director of Marketing, became a Vice
President in 1993, and Senior Vice President, Operations in 1994. Prior to
joining Argosy, Ms. Giannoni was a marketing director at Trammell Crow
Residential Services-Florida from 1987 to 1992. Ms. Giannoni is a licensed real
estate agent in Florida. She received a B.A. degree from Rollins College in 1985
and graduated from the Crummer Management Program at Rollins College in 1990.

MICHAEL V. PAULIN has served as Senior Vice President, Hospitality
Management of the Company since January 1998. Mr. Paulin also serves as
President of the Company's Marc Hotels & Resorts subsidiary which he founded in
1987 and the Company acquired in October 1997. Prior to forming Marc Hotels &
Resorts, Mr. Paulin served as Senior Vice President of Aston Hotels & Resorts
form 1978 to 1987 and Vice President of Colony Hotels from 1970 to 1978. From
1964 to 1970, Mr. Paulin was President and Founder of World Wide Living, Inc.,
tourist apartment, home, and yacht rentals provider. Mr. Paulin has served as
Chairman of the Hawaii Hotel Association and Chairman of the Pacific Asia Travel
Association. Mr. Paulin received a B.S. degree in Business Economics and
International Trade from the University of Southern California in 1963.

ANDREW D. HUTTON has served as Vice President and General Counsel of the
Company since October 1996 and as Secretary of the Company since February 1998.
Prior to joining the Company, from 1991 through October 1996, Mr. Hutton
practiced corporate securities and finance law with the law firm of Latham &
Watkins, located in Los Angeles, California. Mr. Hutton received a J.D. degree
from the University of Minnesota Law School in 1991 and received B.S. and B.A.
degrees from the University of Kansas in 1988. Mr. Hutton has been a member of
the State Bar of California since 1991.

TIMOTHY D. LEVIN has served as Vice President, Architecture of the Company
since July 1996. Prior thereto, Mr. Levin was Vice President, Architecture, of
KOAR since December 1995. From 1989 through December 1995, Mr. Levin was
President of Sevelex Consultants, Inc., a project management and design
consulting firm affiliated with Messrs. Kaneko and Kenninger. Mr. Levin was the
senior design and production manager at Carl Wahlquist AIA Architects, Inc. from
1983 through 1988. Mr. Levin is a member of the American Institute of Architects
and has been a licensed General Contractor in the State of California since
1980. Mr. Levin received his Bachelor of Architecture degree from Southern
California Institute of Architecture in 1986.

DEWEY W. CHAMBERS has served as Vice President and Treasurer of the Company
since January 1997. Prior to joining the Company, Mr. Chambers served as Vice
President -- Treasurer of La Quinta Inns, Inc. from 1992 through December 1996.
Prior thereto, Mr. Chambers served with the accounting firm of KPMG Peat
Marwick, L.L.P. from 1983 to 1992, most recently as Senior Manager. Mr. Chambers
is a Certified Public Accountant. Mr. Chambers received a B.B.A. degree in
Finance from the University of Oklahoma in 1980 and a B.B.A. degree in
Accounting from the University of Texas at San Antonio in 1983.

17
<PAGE> 19

DAVID D. PHILP has served as Vice President, Acquisitions of the Company
since September 1997, previously serving as Senior Director of Acquisitions
since February 1996. Prior to joining the Company, Mr. Philp was a Director of
Development for Doubletree Hotels Corporation from October 1994 through August
1995 and from 1991 through September 1994 was a Director of the Hospitality
Consulting Group for Kenneth Leventhal & Company. Prior thereto, Mr. Philp was a
Manager of Development for IDG Development (a real estate development company)
from 1990 to 1991, was a Senior Consultant for the accounting firm of Pannell
Kerr Forster from 1987 to 1990 and held operations management positions with
Hyatt Hotels Corporation from 1984 to 1987. He received a B.A. degree from the
Cornell University School of Hotel Administration in 1984.

PETER J. SHOOBRIDGE has served as Vice President of Business Development of
the Company since September 1997. From January 1994 to September 1997 he served
as Chief Financial Officer and from July 1996 to September 1997, as Director of
Business Development of LSI Group Holdings Plc, which was acquired by the
Company in August 1997. Prior to joining LSI, Mr. Shoobridge served with the
accounting firm of BDO Sloy Hayward in London, England from January 1984 to
August 1987, most recently as manager in the Corporate Finance department. Mr.
Shoobridge holds a degree in music from the Royal Northern College of Music in
Manchester, England, and is a member of the Institute of Chartered Accountants
in England and Wales.

JAMES D. WHEAT has served as Vice President and Corporate Controller of the
Company since November 1997. Prior to joining the Company, Mr. Wheat served with
Raychem Corporation (a materials science manufacturing company) from 1991 to
November 1997 as internal auditor and Division Controller. Mr. Wheat is a
Certified Public Accountant, Certified Management Accountant, Certified Internal
Auditor and is a licensed real estate broker in California. He received a B.B.A.
degree from the University of Michigan in 1980 and a M.B.A. degree from The
Wharton School at the University of Pennsylvania in 1985.

SANFORD R. CLIMAN has served as a Director of the Company since August
1996. In June 1997, Mr. Climan returned to Creative Artists Agency, Inc.
("CAA"), a leading literary and talent agency, as a member of its senior
executive team. Mr. Climan was formerly a member of CAA's senior executive team
from June 1986 to September 1995. From October 1995 through May 1997, Mr. Climan
was Executive Vice President and President Worldwide Business Development of
Universal Studios, Inc. From 1979 to 1986, Mr. Climan held various positions in
the entertainment industry. Mr. Climan also serves as a director of PointCast,
Inc. (an internet computer software company). Mr. Climan received a B.A. degree
from Harvard College in 1977, a M.B.A. degree from Harvard Business School in
1979 and a Master of Science in Health Policy and Management from the Harvard
School of Public Health in 1979.

On August 5, 1996, an action was filed in California state court against
KEN/KOAR LAX Partners, L.P., which was affiliated with Messrs. Kaneko and
Kenninger (the "LAX Partnership"), the owner of the Embassy Suites hotel located
at Los Angeles International Airport, by the secured lender on the hotel. The
complaint sought judicial foreclosure of the loan, appointment of a receiver and
certain other relief. The LAX Partnership subsequently sold its interest in the
Embassy Suites hotel, and the Chapter 11 proceeding was dismissed concurrently
with the closing of such transaction. The Company has no interest in the hotel
or the LAX Partnership. Following the consummation of the sale, neither Mr.
Kaneko nor Mr. Kenninger holds any interest in or obligation related to the
hotel.

18
<PAGE> 20

EXECUTIVE COMPENSATION

The Summary Compensation Table below sets forth the annual base salary and
other annual compensation which the Company paid in 1997 and would have paid in
1996 on an annualized basis to the Company's Chief Executive Officer and each of
the other four most highly compensated executive officers whose cash
compensation exceeded $100,000 in salary and bonus (the "Named Executive
Officers").

<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
----------------------------------------------------- COMPENSATION
FISCAL OTHER ANNUAL SECURITIES UNDERLYING
NAME AND CURRENT PRINCIPAL POSITION(1) YEAR SALARY($) BONUS($)(2) COMPENSATION($)(3) OPTIONS/SARS(#)(4)
- -------------------------------------- ------ --------- ----------- ------------------ ---------------------
<S> <C> <C> <C> <C> <C>
Osamu Kaneko, Chairman of the Board... 1997 $280,000 $280,000 $ 2,500 --
1996 $280,000 $ 0 $ 2,500 225,000
Andrew J. Gessow, Director and Chief
Executive Officer................ 1997 $280,000 $280,000 $ 2,500 --
1996 $280,000 $ 0 $ 2,500 225,000
Steven C. Kenninger, Director and
President........................ 1997 $280,000 $280,000 $ 2,500 --
1996 $280,000 $ 0 $ 2,500 225,000
James E. Noyes, Director and Chief
Operating Officer................ 1997 $289,000 $271,000 $14,500 --
1996 $280,000 $120,000 $14,500 562,500
Michael A. Depatie, Director,
Executive Vice President and Chief
Financial Officer................ 1997 $280,000 $200,000 $ 2,500 --
1996 $280,000 $ 0 $ 2,500 562,500
</TABLE>

- ---------------
(1) Certain Named Executive Officers served the Company in different capacities
during 1996 and 1997. For a description of the various positions held by
Messrs. Kaneko, Kenninger and Noyes, see "Directors and Executive Officers."
For a description of positions held by Mr. Gessow, see "Proposal No. 1
Election of Directors -- General Information -- Election of Directors."

(2) Amounts stated include bonus amounts earned in 1997 by the Named Executive
Officers and paid in 1998. See "Employment Agreements" and "Compensation
Committee Report" below for a discussion of annual performance bonuses
payable to key employees and executive officers.

(3) Represents automobile lease payments ($12,000 with respect to Mr. Noyes) and
insurance premiums for customary life and health benefits ($2,500 with
respect to each of Messrs. Kaneko, Gessow, Kenninger, Noyes and Depatie).

(4) The indicated options to purchase 1,800,000 shares of Common Stock were
granted to the Named Executive Officers in 1996. No options were granted to
any of the Named Executive Officers in 1997.

19
<PAGE> 21

The following table contains information concerning the value of stock
options issued under the Company's 1996 Equity Participation Plan and held by
the Named Executive Officers as of December 31, 1997. No stock options were
granted to or exercised by any of the Named Executive Officers during 1997.

DECEMBER 31, 1997 OPTION YEAR-END VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)
NAME AND PRINCIPAL OCCUPATION EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
----------------------------- ------------------------- -------------------------
<S> <C> <C>
Osamu Kaneko, Chairman of the Board.... 75,000/150,000 $940,875/$1,881,750
Andrew J. Gessow, Director and Chief
Executive Officer.................... 75,000/150,000 $940,875/$1,881,750
Steven C. Kenninger, Director and
President............................ 75,000/150,000 $940,875/$1,881,750
James E. Noyes, Director and
Chief Operating Officer.............. 281,250/281,250 $3,902,344/$3,902,344
Michael A. Depatie, Director, Executive
Vice President and
Chief Financial Officer.............. 225,000/337,500 $1,567,875/$2,351,813
</TABLE>

EMPLOYMENT AGREEMENTS AND COVENANTS NOT TO COMPETE

In 1996, each of Messrs. Kaneko, Gessow, Kenninger, Noyes and Depatie
entered into an employment agreement with the Company for a term of two years,
subject to extension. The employment agreement for each of such executives
provides for an annual salary of $280,000 per year for the first year and at
such salary as may be determined by the Compensation Committee thereafter, with
annual performance bonuses determined by the Compensation Committee in
connection with the achievement of performance criteria to be determined (except
with respect to Mr. Noyes, who will receive a guaranteed quarterly bonus of
$30,000 for each quarter he is employed by the Company). In 1996, pursuant to
their employment agreement each of Messrs. Kaneko, Gessow, Kenninger, Noyes and
Depatie received options to purchase 225,000, 225,000, 225,000, 562,500 and
562,500 shares of Common Stock, respectively. In addition, pursuant to their
employment agreement each of Messrs. Kaneko, Gessow, Kenninger, Noyes and
Depatie shall receive severance payments equal to base compensation and bonus at
the most recent annual amount for the longer of the balance of the employment
term or two years upon the death, disability, termination or resignation of such
executive, unless such executive resigns without "good cause" or unless the
Company terminates such executive as a result of gross negligence, willful
misconduct, fraud or a material breach of the employment agreement. Each such
executive will have "good cause" to terminate his employment with the Company in
the event of any reduction in his compensation or benefits, material breach or
material default by the Company under his employment agreement or following the
merger or change in control of the Company.

Each of Messrs. Gessow, Kenninger, Noyes and Depatie have agreed to devote
substantially full time to the business of the Company and not engage in any
competitive businesses. In particular, the foregoing individuals are prohibited
from managing, consulting or participating in any way in any vacation ownership
business or from acquiring any property with the intent to convert the property
to a vacation ownership operation, unless the Independent Directors of the
Company determine that such investment is in the best interest of the Company.
Such noncompetition provisions shall survive for two years following any
termination of employment. Such individuals are not, however, prohibited from
investing in residential or commercial real estate with no prospect to be
converted to vacation ownership or resort related use or, acquiring hotels,
including hotels which may compete directly with properties of the Company.

In March 1998, in connection with Mr. Kaneko's new status as non-executive
Chairman of the Board, the Company amended its employment agreement with Mr.
Kaneko to provide that he shall devote at least 50% of his time to the Company's
business. Correspondingly, Mr. Kaneko's annual salary was reduced to $140,000
per year. Mr. Kaneko is allowed to devote the remainder of his time to acquire,
develop or manage other
20
<PAGE> 22

investments in non-resort residential or commercial real estate that do not
present a prospect for conversion to vacation ownership or resort-related use.

COMPENSATION COMMITTEE REPORT

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors has established the Compensation Committee, which
consists of Messrs. Aron, Kiely and Climan, to determine compensation for the
Company's senior executive officers, determine awards under the Company's 1996
Equity Participation Plan and administer the Company's Employee Stock Purchase
Plan. Messrs. Aron, Kiely and Climan were not officers or employees of the
Company at any time nor did any such person engage in any insider transactions
with the Company that is required to be disclosed pursuant to the Exchange Act.

REPORT ON ANNUAL COMPENSATION OF EXECUTIVE OFFICERS

The report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that the Company specifically incorporates this information
by reference, and shall not otherwise be deemed filed under such Acts.

The Compensation Committee's policy is to establish compensation levels for
the Company's executive officers, including its Chief Executive Officer Andrew
J. Gessow (the "CEO"), which reflect the Company's overall performance and the
individual executive's performance, responsibilities and contributions to the
long-term growth and profitability of the Company. The Compensation Committee's
policy is to determine the appropriate executive compensation levels which will
enable the Company to attract and retain qualified executives.

The Compensation Committee determines the compensation of the Company's
executive officers based on its evaluation of the Company's overall performance,
primarily based on the Company's revenues and earnings performance compared with
the Company's operating and growth plan, as well as various qualitative factors
such as the extent to which the executive officer has contributed to forming a
strong management team and other factors which the Compensation Committee
believes are indicative of the Company's ongoing ability to achieve its
long-term sales growth and profit objectives. With respect to each executive,
the Compensation Committee focuses on that individual executive's areas of
responsibility and his contribution toward achieving corporate objectives.

Total compensation of each executive officer of the Company consists of
four components: base salary, annual incentive in the form of a cash bonus,
long-term incentive in the form of equity based stock compensation alternatives
and miscellaneous benefits and perquisites. Each component is discussed below.

The principal component of the compensation of each executive officer is
the executive's base salary. As described above under "Employment Agreements and
Covenants Not To Compete," the base salaries for each of the CEO and Messrs.
Kaneko, Kenninger, Depatie and Noyes are based on his rights under an employment
agreement with the Company. Each employment agreement established a minimum
annual salary that was established based on negotiations with the Board of
Directors and the relevant executive. In setting these initial base salaries,
the Board of Directors reviewed the corporate and individual performance factors
described above and the practices of a peer group of other public
growth-oriented vacation ownership, lodging and hospitality companies. This
comparison peer group is not identical to the peer group included in the
performance comparison graph under "Stock Performance Graph" below. The Board of
Directors attempted to set the Company's base executive compensation levels at
levels that generally approximate or are less than the executive base
compensation levels at the companies in its peer group. The base salary of the
CEO for the year ended December 31, 1997 was $280,000. Since each executive has
completed his first full year of service under his employment agreement, the
Compensation Committee can adjust such executive's

21
<PAGE> 23

salary either upwards or downwards and any such adjustments will be made based
on the factors discussed above.

The Company has established an incentive compensation plan for executive
officers of the Company. This plan provides for payment of a cash bonus to
participating executive officers and key employees if certain performance
objectives established for each individual are achieved. Such objectives include
the formation of new strategic relationships and ventures and the consummation
of strategic acquisitions that are accretive to the earnings of the Company.
Pursuant to such plan and the employment agreements discussed above, each of the
CEO and Messrs. Kaneko, Kenninger, Noyes and Depatie are entitled to receive a
cash bonus of up to 100% of their respective base compensation, respectively,
upon the achievement by the Company of specified targets of growth in revenues,
earnings per share and other key operating factors as determined by the
Compensation Committee. The Company has elected to pay a cash bonus to each of
the CEO and Messrs. Kaneko, Kenninger, Noyes and Depatie for the year ended
December 31, 1997 in the amount of $280,000, $280,000, $280,000, $271,000 and
$200,000, respectively.

The Company established the 1996 Equity Participation Plan to enable
executive officers, other key employees, Independent Directors and consultants
of the Company to participate in the ownership of the Company. The 1996 Equity
Participation Plan is administered by the Compensation Committee and is designed
to attract and retain executive officers, other key employees, Independent
Directors and consultants of the Company and to provide incentives to such
persons to maximize the Company's performance. The 1996 Equity Participation
Plan provides for the award to executive officers, other key employees,
Independent Directors and consultants of the Company of a broad variety of
stock-based compensation alternatives such as nonqualified stock options,
incentive stock options, restricted stock and performance awards ("Equity-Based
Compensation"). The Compensation Committee annually considers grants of
Equity-Based Compensation for each of the executive officers, including the CEO.
The Compensation Committee determines the amount of Equity-Based Compensation
for executives based on the responsibility of the executive, the historic levels
of Equity-Based Compensation granted to other executives and the Compensation
Committee's judgment as to the appropriate incentive level for purposes of
achieving the objectives of the 1996 Equity Participation Plan. The Compensation
Committee also determines the amount of Equity-Based Compensation based upon its
review of overall corporate performance and individual performance. In light of
the grants in 1996, no Equity-Based Compensation was granted to the CEO or the
other Named Executive Officers in 1997.

The last component of total compensation is Company benefits and
perquisites generally consisting of car allowances for certain executives and
customary life and health benefits.

During 1993, the Internal Revenue Code of 1986 was amended to include
Section 162(m) which denies a deduction to any publicly held corporation for
compensation paid to any "covered employee" (which is defined as the CEO and the
Company's other four most highly compensated officers, as of the end of a
taxable year) to the extent that the compensation exceeds $1,000,000 in any
taxable year of the corporation beginning after 1993. Compensation which
constitutes "performance based compensation" is excludable in applying the
$1,000,000 limit. It is the Company's policy to qualify compensation paid to its
top executives for deductibility under Section 162(m) in order to maximize the
Company's income tax deductions wherever, in the judgment of the Compensation
Committee, to do so would be consistent with the objectives of the Company's
compensation policies.

By the Compensation Committee

Adam M. Aron
W. Leo Kiely III
Sanford R. Climan

22
<PAGE> 24

STOCK PERFORMANCE GRAPH

Set forth below is a line graph comparing the total cumulative return of
the Company's Common Stock commencing on the initiation of trading of the
Company's Common Stock on August 16, 1996 and ending on December 31, 1997 to (a)
a group of peer issuers with similar vacation ownership, lodging or leisure
businesses, and (b) the Nasdaq Composite Index. The information contained in the
performance graph shall not be deemed "soliciting material" or to be "filed"
with the Securities and Exchange Commission, nor shall such information be
incorporated by reference into any future filing under the Securities Act or
Exchange Act, except to the extent that the Company specifically incorporates it
by reference into such filing. The stock price performance on the following
graph is not necessarily indicative of future stock price performance.

COMPARISON OF SIXTEEN MONTH CUMULATIVE TOTAL RETURN(1)
FOR SIGNATURE RESORTS, INC., A PEER GROUP(2) AND THE NASDAQ
COMPOSITE INDEX(3)

<TABLE>
<CAPTION>
MEASUREMENT PERIOD SIGNATURE RESORTS NASDAQ STOCK
(FISCAL YEAR COVERED) INC. PEER GROUP MARKET (U.S.)
<S> <C> <C> <C>
8/15/96 100 100 100
12/31/96 254.05 104.49 113.5
12/31/97 236.49 148.55 139.28
</TABLE>

- ---------------
(1) Assumes $100 was invested on August 16, 1996 in stock or index and assumes
dividends are reinvested.

(2) The Peer Group companies consist of Ambassadors International, Inc., Bristol
Hotel Company, Carnival Corporation, Fairfield Communities, Inc., Hilton
Hotels Corporation, Marriott International, Inc., and Prime Hospitality
Corporation.

(3) Prior to February 6, 1998, the Company's Common Stock was quoted on the
Nasdaq National Market.

CERTAIN TRANSACTIONS

Affiliates of Messrs. Kaneko and Kenninger currently have managing general
partner or similar interests in entities which own investment properties which
the Company does not consider to be competitive with its

23
<PAGE> 25

timeshare business (the "KOAR Interests"). These properties include a 225-unit
condominium project in Long Beach, California which is being marketed for whole
share unit sales or long-term residential use rather than vacation use (and with
respect to which the KOAR Interests currently own 74 of the total 225 units, the
balance having been sold to third parties); and several retail centers and a
proposed office development project. Messrs. Kaneko and Kenninger are also
currently the constituent general partners of a number of partnerships in which
they owe fiduciary duties to limited partners who invested over $80 million of
equity therein (which partnerships include certain Embassy Suites hotels which
are still owned by partnerships controlled by Affiliates of Messrs. Kaneko and
Kenninger (the "Prior Partnerships")). Messrs. Kaneko and Kenninger are
authorized by the Company to meet their duties and responsibilities to the Prior
Partnerships pursuant to the terms thereof, including the sale, refinancing,
restructuring and packaging of the Prior Partnerships, and including with
respect to the formation of public or private entities for such purpose,
including a public real estate investment trust ("REIT") for one or all of the
Embassy Suites hotels in the Prior Partnerships (provided, that Messrs. Kaneko
and Kenninger agree not to serve as an officer or employee of such REIT).
Messrs. Kaneko and Kenninger agree to continue to retain third party management
companies to manage these properties (e.g., Promus Hotels manages all such
Embassy Suites hotels), and to employ personnel not employed by the Company to
carry out the day-to-day responsibilities of managing and overseeing these
properties. However, Messrs. Kaneko and Kenninger reserve the right to do what
is reasonably necessary within these constraints to carry out their duties and
responsibilities to the Prior Partnerships pursuant to the terms thereof. The
Company does not believe that such activities detract materially from Messrs.
Kaneko's and Kenninger's services to the Company. See "Employment Agreements and
Covenants Not To Compete" for additional information regarding such persons'
obligations to the Company.

OTHER INFORMATION

CERTAIN STOCKHOLDERS

The table below sets forth certain information regarding the beneficial
owners of more than 5% of the Company's Common Stock as of March 31, 1998, other
than directors and executive officers.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
-----------------------
NAME AND ADDRESS OF BENEFICIAL OWNER(S) SHARES PERCENTAGE
--------------------------------------- --------- ----------
<S> <C> <C>
Putnam Investments, Inc.(1)........................... 4,161,207 11.6%
One Post Office Square
Boston, Massachusetts 02109
Pilgram Baxter & Associates, Ltd.(2).................. 3,219,680 9.0%
825 Duportail Road
Wayne, Pennsylvania 19087
</TABLE>

- ---------------
(1) Information based solely on a Schedule 13G filed with the Commission on
January 27, 1998 by, among others, Putnam Investments, Inc. ("PI"). Of the
shares beneficially owned by PI, Putnam Investment Management, Inc. ("PIM")
beneficially owns 3,730,005 (or 10.4%) of the outstanding shares of Common
Stock and The Putnam Advisory Company, Inc. ("PAC") beneficially owns
431,202 (or 1.2%) of the outstanding shares of Common Stock. The shares of
Common Stock reported as being beneficially owned by PI consist of
securities beneficially owned by subsidiaries of PI which are registered
investment advisers, which in turn include securities beneficially owned by
clients of such investment advisers, which clients may include investment
companies registered under the Investment Company Act and/or employee
benefit plans, pension funds, endowment funds or other institutional
clients. PI, which is a wholly-owned subsidiary of Marsch & McLennan
Companies, Inc. ("M&MC"), wholly owns two registered investment advisers:
PIM, which is the investment adviser to the Putnam family of mutual funds
and PAC, which is the investment adviser to Putnam's institutional clients.
Both subsidiaries have dispository power over the shares as investment
managers, but each of the mutual fund's trustees have voting power over the
shares held by each fund, and PAC has shared voting power over the shares
held by the institutional clients. M&MC and PI disclaim beneficial ownership
of the shares of Common Stock reported as being beneficially owned by PI.

24
<PAGE> 26

(2) Information based solely on a Schedule 13G filed with the Commission on
February 13, 1998 by Pilgram Baxter & Associates, Ltd.

OTHER MATTERS AT THE MEETING

The Board of Directors does not know of any matters to be presented at the
1998 Annual Meeting of Stockholders other than those mentioned in this Proxy
Statement. If any other matters are properly brought before the 1998 Annual
Meeting of Stockholders, it is intended that the proxies will be voted in
accordance with the best judgment of the person or persons voting such proxies.

COST OF SOLICITATION

The expense of soliciting proxies and the cost of preparing, assembling and
mailing material in connection with the solicitation of proxies will be paid by
the Company. In addition to the use of mails, certain directors, officers or
employees of the Company and its subsidiaries, who receive no compensation for
their services other than their regular salaries, may solicit and tabulate
proxies. The Company has retained D.F. King & Co., Inc. to assist in the
solicitation of proxies with respect to shares of Common Stock held of record by
brokers, nominees and institutions. The estimated cost of the services of D.F.
King & Co., Inc. is $4,000, plus expenses.

STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING

Any stockholder who meets the requirements of the proxy rules under the
Exchange Act may submit to the Board of Directors proposals to be considered for
submission to the stockholders at the 1999 Annual Meeting of Stockholders. Any
such proposal must comply with the requirements of Rule 14a-8 under the Exchange
Act and be submitted in writing by notice delivered or mailed by firstclass
United States mail, postage prepaid, to the Corporate Secretary, Signature
Resorts, Inc., 1875 South Grant Street, Suite 650, San Mateo, California 94402,
and must be received no later than December , 1998. Any such notice shall set
forth: (a) the name and address of the stockholder and the text of the proposal
to be introduced; (b) the number of shares of stock held of record, owned
beneficially and represented by proxy by such stockholder as of the date of such
notice; and (c) a representation that the stockholder intends to appear in
person or by proxy at the meeting to introduce the proposal specified in the
notice. The chairman of the meeting may refuse to acknowledge the introduction
of any stockholder proposal not made in compliance with the foregoing
procedures. In addition, the Company's Bylaws provide for notice procedures to
recommend a person for nomination as a director and to propose business to be
considered by stockholders at a meeting.

By Order of the Board of Directors

/s/ ANDREW D. HUTTON
--------------------------------------
Andrew D. Hutton
Vice President, General Counsel
and Secretary
San Mateo, California
April , 1998

25
<PAGE> 27
PROXY

SIGNATURE RESORTS, INC.

PROXY FOR THE 1998 ANNUAL MEETING OF STOCKHOLDERS

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned stockholder of Signature Resorts, Inc., a Maryland
corporation, hereby acknowledges receipt of the Notice of 1998 Annual Meeting
of Stockholders and Proxy Statement and hereby appoints Andrew J. Gessow,
Michael A. Depatie, Dewey W. Chambers and Andrew D. Hutton as proxies, each
with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the shares of the Common Stock
of Signature Resorts, Inc. held of record by the undersigned on April 1, 1998
at the 1998 Annual Meeting of Stockholders to be held May 15, 1998 or any
adjournment or postponement thereof.

This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR Proposals, 1,2,3,4 and 5 and in accordance with the recommendations
of the Board of Directors on any other matters that may properly come before the
meeting.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)

- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE> 28
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4 AND 5.

Please mark [X]
your vote as
indicated in
this example.

FOR WITHHOLD
all nominees listed AUTHORITY
below (except as marked to vote for all
to the contrary below) nominees listed below

1. ELECTION OF CLASS I, II [ ] [ ]
AND III DIRECTORS

Nominees: Andrew J. Gessow Joshua S. Friedman
W. Leo Kiely III Michael A. Depatie
Adam M. Aron J. Taylor Crandall

(Instruction: To withhold authority to vote for any nominee, strike a line
through that nominee's name in the list above)

2. Amendment of the Company's Articles FOR AGAINST ABSTAIN
of Incorporation to change the [ ] [ ] [ ]
Company's corporate name.

3. Amendment of the Company's 1996 Equity FOR AGAINST ABSTAIN
Participation Plan, as amended, to [ ] [ ] [ ]
increase the number of shares issuable
thereunder.

4. Amendment of the Company's Articles of FOR AGAINST ABSTAIN
Incorporation to increase the Company's [ ] [ ] [ ]
authorized share capital.

5. Ratification of the appointment of FOR AGAINST ABSTAIN
Arthur Andersen L.L.P. as the [ ] [ ] [ ]
independent accountants of the
corporation.

6. The Proxies are authorized to vote upon such other business as may properly
come before the meeting.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE

Signature(s) Dated , 1998
-------------------------------------- -------------
Please sign exactly as name appears hereon. When shares are held by joint
tenants, 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.
- --------------------------------------------------------------------------------
- FOLD AND ATTACH HERE -