SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
ILX RESORTS INCORPORATED
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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ILX RESORTS INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 26, 1999
To the Shareholders of ILX Resorts Incorporated:
Notice is hereby given that the 1999 Annual Meeting of Shareholders of ILX
Resorts Incorporated, an Arizona corporation (the "Company"), will be held at
Los Abrigados Resort & Spa, at 160 Portal Lane, Sedona, Arizona 86336 on the
26th day of July, 1999 at 11:00 a.m., local time, to consider and act upon the
following proposals:
(a) To elect seven (7) directors to serve until the next annual meeting of
shareholders of the Company, or until their successors are duly
elected and qualified; and
(b) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing matters are more fully explained in the accompanying Proxy
Statement which is hereby made a part of this notice. All holders of record of
Common Stock at the close of business on June 11, 1999 will be entitled to vote
at the meeting.
All shareholders are cordially invited to attend the meeting in person. You
are urged to sign, date and otherwise complete the enclosed proxy card and
return it promptly in the enclosed envelope whether or not you plan to attend
the meeting. If you attend the meeting, you may vote your shares in person even
if you have signed and returned your proxy card.
By order of the Board of Directors,
/s/ Stephanie D. Castronova
-----------------------------------
Stephanie D. Castronova
Secretary
Phoenix, Arizona
April 23, 1999
<PAGE>
ILX RESORTS INCORPORATED
2111 East Highland Avenue, Suite 210
Phoenix, Arizona 85016
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on July 26, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of ILX Resorts Incorporated, an Arizona
corporation (the "Company"), for use at the Company's 1999 Annual Meeting of
Shareholders (the "Meeting"), to be held on July 26, 1999, at 11:00 a.m., local
time, and at any and all adjournments and postponements of the Meeting. The
Meeting will be held at Los Abrigados Resort & Spa at 160 Portal Lane, Sedona,
Arizona 86336. This Proxy Statement and the accompanying form of proxy (the
"Proxy") will be first mailed to shareholders on or about June 18, 1999.
Only holders of record of the Company's no par value common stock (the
"Common Stock") at the close of business on June 11, 1999 (the "Record Date")
are entitled to vote at the Meeting. The Proxy is enclosed for use at the
Meeting if you are unable to attend in person. The persons named therein as
proxies were selected by the Board of Directors of the Company. The Proxy is
solicited by the Board of Directors of the Company. If a Proxy in the
accompanying form is duly executed and returned, it will be voted as specified
therein. If no specification is made, it will be voted in accordance with
recommendations made by the Board of Directors. The Proxy may, nevertheless, be
revoked at any time prior to exercise by delivering written notice of revocation
to the Secretary of the Company or by attending the meeting and voting in
person.
The cost of preparing, assembling and mailing the Notice of Annual Meeting,
Proxy Statement and the Proxy and the cost of further solicitation hereinafter
referred to is to be borne by the Company and is estimated to be nominal. In
addition to the use of the mails, it may be necessary to conduct some
solicitation by telephone, telegraph or personal interview. Any such
solicitation will be done by the directors, officers and regular employees of
the Company; and, in addition, banks, brokerage houses and other custodians,
nominees or fiduciaries will be requested to forward proxy soliciting materials
to their principals to obtain authorization for the execution of proxies on
their behalf. The Company will not pay such persons any compensation for
soliciting proxies, but such persons will be reimbursed by the Company for their
out-of-pocket expenses incurred in connection therewith.
VOTING
At the close of business on February 28, 1999, the Company had issued and
outstanding 4,028,393 shares of Common Stock, each share being entitled to one
vote. No other voting class of stock was then or is now outstanding.
The holders of the majority of the shares of the Company's Common Stock
outstanding on the Record Date and entitled to be voted at the Meeting, whether
present in person or by proxy, will constitute a quorum for the transaction of
business at the Meeting and any adjournments and postponements thereof.
Shareholders have cumulative voting rights with respect to the election of
directors. Cumulative voting entitles each shareholder to cast a number of votes
equal to the number of shares of Common Stock held multiplied by the number of
directorships to be filled. A shareholder may cast all of its votes for one
candidate
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or distribute the votes among two or more candidates. Abstentions and broker
non-votes are counted for the purpose of determining the presence or absence of
a quorum for the transaction of business. Abstentions are counted in the
tabulation of the votes cast on proposals presented to shareholders, whereas
broker non-votes are not counted for purposes of determining whether a proposal
has been approved. The seven nominees receiving the most votes shall be deemed
elected to the Company's Board of Directors.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT
The following table sets forth, as of February 28, 1999, certain
information regarding the beneficial ownership of the Common Stock of the
Company by (i) each person known by the Company to have beneficial ownership of
5% or more of the outstanding Common Stock, (ii) each director, (iii) each Named
Executive Officer (hereinafter defined) and (iv) all executive officers and
directors as a group.
NAME AND ADDRESS OF NUMBER OF PERCENTAGE
BENEFICIAL OWNER (+) SHARES (1) OF CLASS
- -------------------- ---------- --------
Joseph P. Martori 950,744(2) 23.6%
Nancy J. Stone 110,417(3) 2.7%
Edward S. Zielinski 30,320(4) *
James W. Myers 9,800(6) *
Steven R. Chanen 5,000(6) *
Joseph A. Leonetti 5,000(5) *
Patrick J. McGroder III 39,768(5)(7) *
Edward J. Martori ("EJM") 936,561(8) 23.3%
Martori Enterprises Incorporated ("MEI") 901,100 22.4%
All Directors and Officers as a Group (10 persons) 1,178,500(9) 28.7%
- ----------
* Less than 1%.
(+) Unless otherwise indicated, each holder has the address: c/o ILX Resorts
Incorporated, 2111 E. Highland Ave., Suite 210, Phoenix, Arizona 85016.
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares of Common Stock which such person has
the right to acquire within 60 days after the date set forth in the
introductory paragraph above. However, for purposes of computing the
percentage of outstanding shares of Common Stock held by each person or
group of persons named above, any security which such person or group of
persons has or have the right to acquire from the Company within 60 days
from the date set forth in the introductory paragraph above is not deemed
to be outstanding for the purpose of computing the percentage ownership of
any other person or of All Directors and Officers as a Group.
(2) Includes 901,110 shares owned by MEI, of which Joseph P. Martori is a
director and owner of 40% of the voting capital stock; 9,802 shares owned
by a daughter of Joseph P. Martori, under trust dated February 20, 1978;
10,200 shares owned by Joseph P. Martori, as custodian for his other
daughter; and 212 shares held by a trust, of which Joseph P. Martori is
trustee.
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(3) Includes 5,000 shares issuable by the Company pursuant to options and
10,000 shares subject to options granted from MEI at $8.125 per share; and
2,000 shares and options to purchase 17,500 shares from the Company at
$8.125 per share held by her husband, Michael W. Stone.
(4) Includes 200 shares held by Edward S. Zielinski as custodian for his son,
Stefan Edward Zielinski; options to purchase 6,000 shares from the Company
at $8.125 per share; and 100 shares held by his wife, Nancy Zielinski.
(5) Includes options to purchase 5,000 shares from the Company at $3.25 per
share which were issued in March 1999.
(6) Includes 5,000 shares issuable by the Company pursuant to options at $6.25
per share.
(7) Includes 1,500 shares held by the Patrick J. McGroder and Susan McGroder
Revocable Trust; 6,700 shares held by the McGroder Family Limited
Partnership, in which Patrick J. McGroder and Susan McGroder have a 99%
interest; 5 shares held by Shamrock Consultants, which is wholly owned by
Patrick J. McGroder; 19 shares held by Patrick J. McGroder II, P.C., an
Arizona professional corporation, wholly owned by Patrick J. McGroder;
1,128 shares held by Patrick J. McGroder II, P.C. Profit Sharing Trust, of
which Patrick J. McGroder is the sole beneficiary; 20,000 shares held by
McMac, L.L.C., an Arizona limited liability company of which Patrick J.
McGroder is one-third owner; 2,650 shares held by Mr. McGroder's children's
irrevocable trusts as follows: 1,050 shares held by the Caroline E.
McGroder 1992 Trust; 1,050 shares held by the Elizabeth McGroder 1992
Trust; 50 shares held by the Patrick J. McGroder IV 1992 Trust; and 500
shares by the Patrick J. McGroder IV UTMA Arizona Trust.
(8) Includes 901,110 shares owned by MEI, 56% of the capital stock of which is
owned by Edward J. Martori; and 142 shares owned by the Estate of Edward
Joseph Martori, of which Edward J. Martori is beneficiary.
(9) Includes options to purchase 48,500 shares from the Company of which
options to purchase an aggregate of 10,000 shares were issued to two
directors in March 1999.
The management of the Company is not aware of any change in control of the
Company that has taken place since the beginning of the last fiscal year, nor of
any contractual arrangements or pledges of securities, the operation of the
terms of which may at a subsequent date result in a change in control of the
Company.
ELECTION OF DIRECTORS
The entire Board of Directors is elected annually, with each director to
hold office until the next annual meeting of shareholders or until his or her
successor is elected and qualified. The persons named as proxy holders in the
enclosed Proxy have been designated by the Board of Directors and they intend to
vote "FOR" the election to the Board of Directors of each of the persons named
below, except where authority is withheld by a shareholder. THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU CAST YOUR VOTE FOR ELECTION OF EACH OF THE
NOMINEES TO SERVE ON THE BOARD OF DIRECTORS.
Each of the nominees has consented to be named herein and to serve if
elected. However, if any nominee at the time of election is unable or unwilling
to serve as a director or is otherwise unavailable for election, the shares
represented by proxies will be voted for the election of such other person as
the Board of Directors may designate or, in the absence of such designation, for
a nominee selected by the proxy holders named in the enclosed Proxy.
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Certain information concerning the director nominees as of February 28,
1999 is set forth below. Except as set forth herein, none of the nominees are
officers or directors of any other publicly owned corporation or entity.
Director
Name Age Since
---- --- -----
Steven R. Chanen 45 1995
Joseph A. Leonetti 37 1998
Joseph P. Martori 57 1986
Patrick J. McGroder 53 1997
James W. Myers 64 1995
Nancy J. Stone 41 1989
Edward S. Zielinski 47 1996
DIRECTOR NOMINEES
STEVEN R. CHANEN has served as a director of the Company since July 1995.
Mr. Chanen has served as President and Chief Operating Officer of Chanen
Construction Company, Inc., Phoenix, Arizona, since 1989, as Chairman of the
Board of Media Technology Capital Corporation (doing business as S.R. Chanen &
Co., Inc.) since 1986, and as President of United Property Investments
Corporation, a subsidiary of United Properties, Ltd. of Vancouver, Canada since
1987. Prior thereto, Mr. Chanen served as Vice President of FMR Capital
Corporation from 1981 to 1986 and as a shareholder and director of Wentworth and
Lundin law firm from 1980 to 1986. Mr. Chanen received B.S. and J.D. degrees
from Arizona State University.
JOSEPH A. LEONETTI has served as a director of the Company since November
1998. Mr. Leonetti has been president of B & J Resort Marketing, a California
corporation which he founded, engaged in marketing and tour generation to the
vacation ownership industry since August 1993 and has worked in various
marketing capacities in the vacation ownership industry since 1984. Mr. Leonetti
received a B.S. degree from Cornell University.
JOSEPH P. MARTORI has served as a director of the Company since its
inception and as Chairman of the Board since 1991. Mr. Martori served as
President from November 1993 through 1995 and has served as Chief Executive
Officer since 1994. Prior thereto, Mr. Martori was engaged in the private
practice of law since 1967 with the New York City law firm of Sullivan &
Cromwell; the Phoenix law firms of Snell & Wilmer; Martori, Meyer, Hendricks &
Victor, P.A. (of which he was a founding member); and Brown & Bain, P.A. (of
which he was the Chairman of the Corporate, Real Estate and Banking Department).
Mr. Martori was a founder of Firstar Metropolitan Bank & Trust in Phoenix and
has served on its Board of Directors since 1983. Mr. Martori is also Chairman of
the Board of MEI, an investment company that holds 22.4% of the Company's
outstanding Common Stock. Mr. Martori is also a member of the Board of Trustees
of The Lawyers' Committee for Civil Rights under Law. Mr. Martori received a
B.S. degree and an M.B.A. degree in finance from New York University and a J.D.
degree from the University of Notre Dame Law School.
PATRICK J. MCGRODER III has served as a director of the Company since June
1997. Mr. McGroder has been a trial lawyer engaged in the practice of law since
1970, and has served since 1990 as a member of the law firm of Goldstein &
McGroder, Ltd. of Phoenix, Arizona (which he co-founded). Mr. McGroder received
a B.A. degree from the University of Notre Dame and a J.D. degree from the
University of Arizona School of Law. Mr. McGroder has also served as Chairman of
the Board of Sedona Worldwide Incorporated ("SWI"), a majority owned subsidiary
of the Company, since April 1998.
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JAMES W. MYERS has served as a director of the Company since July 1995. Mr.
Myers has served as President of Myers Management and Capital Group, Inc., a
management consulting firm he founded, since December 1995. From 1986 to 1995,
Mr. Myers was President and Chief Executive Officer of Myers Craig Vallone
Francois, Inc., an investment banking and management advisory firm he also
founded. Prior thereto, Mr. Myers held executive positions with a variety of
public and private companies from 1956 to 1986. Mr. Myers also serves as a
director of SWI (a majority owned subsidiary of the Company), Autom, BG
Associates, Chambers Belt, Inc., China Mist Tea, Distribution Architects
International, Landiscor, Inc., OmniMount, Poore Brothers, Inc., Solar Cells,
Inc. and Nanomics, Inc. Mr. Myers received a B.S. degree from Northwestern
University and an M.B.A. degree from the University of Chicago.
NANCY J. STONE has served as a director of the Company since April 1989,
and as President and Chief Operating Officer since January 1996. Ms. Stone
served as Chief Financial Officer of the Company from July 1993 to December
1997, as well as from January 1990 to April 1992, and as Executive Vice
President from July 1993 to December 1995. Ms. Stone served on the faculty of
North Central College, Naperville, Illinois from 1992 to 1993. Ms. Stone also
served as Vice President of Finance and Secretary of the Company from April 1987
to December 1989. Ms. Stone is a Certified Public Accountant in the States of
Arizona and Illinois. Ms. Stone received a B.A. degree in accounting and finance
from Michigan State University and an M.B.A. degree from Arizona State
University.
EDWARD S. ZIELINSKI has served as a director and Executive Vice President
of the Company since January 1996, and as President and Chief Operating Officer
of Varsity Clubs of America Incorporated since July 1997. Mr. Zielinski served
as Senior Vice President of the Company from January 1994 to December 1995 and
as General Manager of Los Abrigados Resort & Spa from December 1992 until
January 1994, and in various other executive positions with the Company since
November 1988. Mr. Zielinski has twenty years of resort management and marketing
experience in both the domestic and international markets. Prior to joining the
Company, Mr. Zielinski served as General Manager of Oceania Resorts, Ltd., a New
Zealand-Australian company, from August 1985 through October 1988, based in
Auckland, New Zealand. Prior thereto, Mr. Zielinski held senior management
positions with Hyatt International Hotels and Continental Airlines Hotel
Division.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS MEETINGS
The Board of Directors of the Company met two times during the fiscal year
ended December 31, 1998. All directors attended each of the meetings of the
Board of Directors, during the period they served as a director, and the
Committees of the Board of Directors, if any, upon which such director served
during the 1998 fiscal year, except for Steven R. Chanen, who missed one meeting
of the Board of Directors.
The Board of Directors maintains an audit committee ("Audit Committee"), a
stock option committee ("Stock Option Committee"), a compensation committee
("Compensation Committee") and an executive committee. There is no nominating
committee or any committee performing that function.
AUDIT COMMITTEE
The Audit Committee, which consists of Messrs. Myers and McGroder, met
twice during fiscal year 1998. The Audit Committee is responsible for
recommending the Company's independent auditors, reviewing with the independent
auditors the scope and results of the audit engagement, establishing and
monitoring the Company's financial policies and control procedures, and
reviewing and monitoring the provision of non-audit services by the Company's
auditors.
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STOCK OPTION COMMITTEE
The Stock Option Committee, which consists of Messrs. Myers and McGroder,
met once during fiscal year 1998. The function of the Stock Option Committee is
to provide recommendations to the Board of Directors regarding the granting of
stock options to key employees and directors of the Company.
COMPENSATION COMMITTEE
The Compensation Committee, which consists of Messrs. Myers and McGroder,
met once during fiscal year 1998. The function of the Committee is to provide
recommendations to the Board of Directors regarding the compensation of
executive officers of the Company and regarding the compensation policies and
practices of the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following is a summary of transactions to which the Company or its
subsidiaries is a party in which the amount involved since January 1, 1998
exceeded $60,000 and in which officers, directors, nominees and/or greater than
5% beneficial owners of the Company's Common Stock (or any immediate family
members of the foregoing) had, or will have, a direct or indirect material
interest.
In August 1992, Los Abrigados Partners Limited Partnership, a subsidiary of
the Company ("LAP") issued to MEI, as agent for Edward J. Martori ("EJM"), MEI,
Arthur J. Martori and Alan R. Mishkin ("Mishkin"), a $770,000 promissory note
bearing interest at 14%, collateralized by $810,630 in notes receivable. The
promissory note was issued to reduce Class A limited partners' capital
contributions by $500,000, Class A priority returns by $149,954, Class B accrued
interest by $73,772 and certain loan guarantee fees by $46,274. Principal
payments of $57,022 and interest payments of $2,681 were made during 1998 in
full satisfaction of the MEI note payable.
In December 1995, LAP issued 10% promissory notes to EJM and Joseph P.
Martori, a trustee for the Cynthia J. Polich Irrevocable Trust ("Polich") (not
an affiliate of the Company), in the original principal amounts of $550,000 and
$350,000, respectively. In 1997, 36,800 shares of the Company's Common Stock
were issued in satisfaction of the remaining $230,000 principal amount of the
note payable to EJM. In 1998, LAP paid $150,000 in principal and $4,375 in
interest, in full satisfaction of the note payable for the benefit of Polich.
In August 1997, the Company acquired the Class B Limited Partnership
Interests in LAP from MEI and Mishkin for (i) $820,000 cash, consisting of
$720,000 to Mishkin (no longer a related party) and $100,000 to MEI, (ii) the
issuance to Mishkin of 20,000 shares of Common Stock, with a value of $125,000
at the time of issuance, and (iii) the issuance of 8% promissory notes in the
original principal amounts of $1.3 million payable to MEI and $675,000 payable
to Mishkin. In 1998 principal payments of $53,989 and interest of $46,011 were
paid on the Mishkin note. In 1998, prior to September, principal payments of
$200,000 and interest payments of $45,484 were made on the MEI note. Also in
September 1998, the Company received the benefit of a $200,000 principal
discount on the MEI note, upon principal payment of $800,000 and interest
payment of $11,479 in full satisfaction of the then remaining outstanding
principal balance of $1,000,000 and interest of $11,479. The Mishkin note
matures in 2002, and its repayment is secured by an interest in LAP.
During 1998, the Company made payments of $15,000 principal and $72,726
interest to EJM on an 8% promissory note with a principal balance of $894,078 at
December 31, 1998. The note was issued by the Company as consideration for all
of the Class A Limited Partnership Interests in LAP, which the Company acquired
in 1994. The note matures on December 31, 1999.
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Effective as of January 1, 1998, the Company entered into four-year
employment agreements with each of Messrs. Martori and Zielinski and Ms. Stone.
Pursuant to these agreements, the Company shall provide an annual base salary of
$200,000 to Mr. Martori, $150,000 to Ms. Stone and $130,000 to Mr. Zielinski, in
addition to bonus or other compensation payable at the discretion of the Board
of Directors. Ms. Stone and Mr. Zielinski are entitled to receive 15,000 and
7,000 restricted shares of Common Stock on January 1st of each year during their
respective terms of employment.
Joseph P. Martori, Chairman of the Board and Chief Executive Officer of the
Company, is also the Chairman of the Board of MEI, which owned 22.4% of the
Common Stock outstanding as of February 28, 1999. The voting stock of MEI is
controlled by EJM, who is a cousin of Joseph P. Martori. EJM served as a
director of the Company from December 1993 to November 1997.
The above-described transactions are believed to be on terms no less
favorable to the Company than those available in arms' length transactions with
unaffiliated third parties. Each transaction has been approved by independent
directors of the Company who are not parties to the transaction.
EXECUTIVE MANAGEMENT
The following table sets forth certain information concerning the Company's
executive officers and certain key employees. Except as otherwise noted, none of
the executive officers are directors or officers of any other publicly owned
corporation or entity.
NAME AGE POSITION
- ---- --- --------
Joseph P. Martori 57 Chairman of the Board and Chief Executive
Officer
Nancy J. Stone 41 President, Chief Operating Officer and Director
Edward S. Zielinski 47 Executive Vice President, President and Chief
Operating Officer of Varsity Clubs of America
Incorporated and Director
Stephen W. Morgan 52 Senior Vice President and Chief Financial Officer
Donald D. Denton 38 Executive Vice President of Sales
Alan J. Tucker 52 Executive Vice President of Marketing
EXECUTIVE OFFICERS
JOSEPH P. MARTORI has served as a director of the Company since its
inception and as Chairman of the Board since 1991. Mr. Martori served as
President from November 1993 through 1995 and has served as Chief Executive
Officer since 1994. Prior thereto, Mr. Martori was engaged in the private
practice of law since 1967 with the New York City law firm of Sullivan &
Cromwell; the Phoenix law firms of Snell & Wilmer; Martori, Meyer, Hendricks &
Victor, P.A. (of which he was a founding member); and Brown & Bain, P.A. (of
which he was the Chairman of the Corporate, Real Estate and Banking Department).
Mr. Martori was a founder of Firstar Metropolitan Bank & Trust in Phoenix and
has served on its Board of Directors since 1983. Mr. Martori is also Chairman of
the Board of MEI, an investment company that holds 22.4% of the Company's
outstanding Common Stock. Mr. Martori is also a member of the Board of Trustees
of The Lawyers' Committee for Civil Rights under Law. Mr. Martori received a
B.S. degree and an M.B.A. degree in finance from New York University and a J.D.
degree from the University of Notre Dame Law School.
NANCY J. STONE has served as a director of the Company since April 1989 and
as President and Chief Operating Officer since January 1996. Ms. Stone served as
Chief Financial Officer of the Company from July
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1993 to December 1997, as well as from January 1990 to April 1992, and as
Executive Vice President from July 1993 to December 1995. Ms. Stone served on
the faculty of North Central College, Naperville, Illinois from 1992 to 1993.
Ms. Stone also served as Vice President of Finance and Secretary of the Company
from April 1987 to December 1989. Ms. Stone is a Certified Public Accountant in
the States of Arizona and Illinois. Ms. Stone received a B.A. degree in
accounting and finance from Michigan State University and an M.B.A. degree from
Arizona State University.
EDWARD S. ZIELINSKI has served as a director and Executive Vice President
of the Company since January 1996, and as President and Chief Operating Officer
of Varsity Clubs of America Incorporated since July 1997. Mr. Zielinski served
as Senior Vice President of the Company from January 1994 to December 1995 and
as General Manager of Los Abrigados Resort & Spa from December 1992 until
January 1994, and in various other executive positions with the Company since
November 1988. Mr. Zielinski has twenty years of resort management and marketing
experience in both the domestic and international markets. Prior to joining the
Company, Mr. Zielinski served as General Manager of Oceania Resorts, Ltd., a New
Zealand-Australian company, from August 1985 through October 1988, based in
Auckland, New Zealand. Prior thereto, Mr. Zielinski held senior management
positions with Hyatt International Hotels and Continental Airlines Hotel
Division.
STEPHEN W. MORGAN has served as Senior Vice President and Chief Financial
Officer of the Company since July 1998. Prior thereto, Mr. Morgan served as
General Manager of A-1 Precision Metal Products from September 1997 to June 1998
and as Vice President and Chief Financial Officer of Aquapore Moisture Systems
from July 1989 to September 1997. Mr. Morgan received B.S. and M.B.A. degrees
from Brigham Young University.
DONALD D. DENTON has served as Executive Vice President of Sales and
General Sales Manager at Los Abrigados Resort & Spa since March 1999. Mr. Denton
had served as Senior Vice President from January 1996 to September 1997 and
General Sales Manager at Los Abrigados Resort & Spa from February 1993 to
September 1997. From December 1998 through February 1999, Mr. Denton was
president of Denton Marketing Group, a company which he founded, engaged in
providing sales and marketing services to the vacation ownership industry in the
Palm Springs area of California.
ALAN J. TUCKER has served as Executive Vice President of Marketing since
March 1999. Mr. Tucker provided consulting services to the Company from July
through December 1998, and was employed by the Company on January 1, 1999 as
Marketing Manager. Prior thereto, Mr. Tucker served as a director of the Company
from February 1992 to October 1995; as Executive Vice President from September
1991 to October 1995; as Vice President from January 1990 until August 1991; and
as Project Director at Los Abrigados Resort & Spa from March 1989 to October
1995. From November 1995 to January 1997, Mr. Tucker provided timeshare sales
and sales management services to companies in the vacation ownership industry,
including services to the Company on a consulting basis, and from February 1997
to June 1998 Mr. Tucker was employed in a sales capacity with a Phoenix, Arizona
operation of Sunterra Corporation.
COMPENSATION OF EXECUTIVE OFFICERS
The following table shows, for each of the fiscal years ended December 31,
1998, 1997 and 1996, the cash compensation paid by the Company, as well as
certain other compensation paid or accrued for those years, to each of the
Company's Chief Executive Officer and other most highly compensated executive
officers (collectively, the "Named Executive Officers") receiving compensation
in excess of $100,000 in all capacities in which they served during the last
completed fiscal year.
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SUMMARY COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION (2) COMPENSATION AWARDS
------------------------------------------ ---------------------------------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND TITLE YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS/SARS COMPENSATION
- -------------- ---- ------ ----- ------------ ------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Joseph P. Martori (l) 1998 $207,692 $15,000 -- -- -- $--
Chairman and Chief 1997 149,606 50,000 -- -- -- --
Executive Officer 1996 136,500 20,000 -- -- -- --
Nancy J. Stone (l) 1998 155,769 98,786(3) -- -- -- --
President and Chief 1997 129,659 102,896(4) -- -- -- --
Operating Officer 1996 115,193 17,500 -- -- -- --
Edward S. Zielinski (l) 1998 134,792 49,021(5) -- -- -- --
Executive Vice President 1997 115,012 34,689(6) -- -- -- --
1996 110,388 19,968(7) -- -- -- --
John P. Brooks 1998 25,615 82,115(8) -- -- -- --
Senior Vice President 1997 36,000 117,832(8) -- -- -- --
1996 36,000 95,518(8) -- -- -- --
</TABLE>
- ----------
(1) Effective as of January 1, 1998, each of Mr. Martori, Ms. Stone and Mr.
Zielinski entered into an employment agreement with the Company which
establishes the rates of annual base and incentive compensation to be
received by him or her commencing on such date. See "Certain Relationships
and Related Transactions."
(2) Excludes Profit Sharing Plan contributions on behalf of the respective
Named Executive Officer. During 1994, the Company adopted a Profit Sharing
Plan and has since declared annual contributions. None of the Named
Executive Officers was allocated more than $4,100 for the 1996 and 1997
plan years nor are they expected to be allocated more than $4,500 for the
1998 plan year.
(3) Includes 15,000 shares of restricted Common Stock at $2.89 per share.
(4) Includes 7,500 shares of unrestricted Common Stock at $5.625 per share and
7,500 shares of restricted Common Stock at $2.8125 per share.
(5) Includes 7,000 shares of restricted Common Stock at $2.89 per share.
(6) Includes 3,500 shares of unrestricted Common Stock at $5.625 per share.
(7) Includes 1,000 shares of restricted Common Stock at $3.75 per share.
(8) Includes commissions on sales of vacation ownership interests. Mr. Brooks'
employment with the Company was terminated on September 3, 1998.
OPTION GRANTS IN THE LAST FISCAL YEAR
No stock options or stock appreciation rights were granted to Named
Executive Officers or to other employees in 1998.
10
<PAGE>
OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END
OPTION VALUES
The following table sets forth information regarding option exercises by
the Named Executive Officers during 1998 and unexercised options held by Named
Executive Officers at December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END
ACQUIRED ON VALUE --------------------------- ----------------------------
NAME EXERCISE (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Martori 0 $0 0 0 $0 $0
Nancy J. Stone 0 0 5,000 0 0 0
Edward S. Zielinski 0 0 6,000 0 0 0
</TABLE>
DIRECTOR COMPENSATION
The Company's policy is to pay a fee for each Board of Directors' meeting
attended by directors who are not employees of the Company, and reimburse all
directors for actual expenses incurred in connection with attending meetings of
the Board of Directors. The fee for each Board of Directors' meeting attended by
a non-employee director is $1,000. In addition, all non-employee directors
receive a grant of options to purchase 5,000 shares of Common Stock following
their election to the Board of Directors. The options are fully exercisable on
the first anniversary of the date of grant.
STOCK OPTION PLANS
The Company's stock option plans are administered by the Compensation
Committee of the Board of Directors, which selects the persons to whom stock
options are granted and determines the terms and conditions of each grant,
including the number of shares of Common Stock covered by the option, its
exercise price or purchase price, and its expiration date.
1995 STOCK OPTION PLAN. The Company's 1995 Stock Option Plan was adopted by
the Board of Directors in July 1995 (the "1995 Stock Option Plan"). The 1995
Stock Option Plan authorizes the Board of Directors of the Company to grant
options to purchase the Company's authorized but unissued or reacquired Common
Stock to the key employees of the Company or its subsidiaries. The aggregate
number of shares of Common Stock which may be issued under the Stock Option Plan
is 100,000 shares, of which 46,800 were available for future grants as of
December 31, 1998. The Company has agreed to issue options for 5,000 shares to
each of two members of its Board of Directors, Patrick J. McGroder III and
Joseph A. Leonetti. Such options were issued in March 1999 and may be exercised
at a price of $3.25 per share. Stock options entitle the optionee to purchase
Common Stock from the Company for a specified exercise price as determined by
the Board of Directors, during a period specified in the applicable option
agreement.
Under the 1995 Stock Option Plan, the Company may grant options that are
intended to qualify as incentive stock options within the meaning of Section 422
of the Code ("Incentive Stock Options"), or options not intended to qualify as
Incentive Stock Options ("Nonstatutory Options"). The options are granted for
investment purposes only and are not transferable except by the laws of descent
and devise.
Incentive Stock Options may only be granted to employees of the Company.
They are exercisable one year after the grant of the options and expire on the
earlier of (i) five years after the date of grant as to any
11
<PAGE>
optionee who immediately before the granting of the options owned more than ten
percent of the total combined voting power of all classes of stock of the
Company or any of its subsidiaries or (ii) ten years after the date of grant of
the option as to any optionee whose stock ownership represented less than ten
percent of the Company or any of its subsidiaries' combined voting power
immediately before the date of grant. Nonstatutory Stock Options are exercisable
at any time after they are granted and their durations are determined by the
Board of Directors. All options granted pursuant to the 1995 Stock Option Plan
are subject to earlier termination in the event of the termination of the
optionee's employment with the Company.
1992 STOCK OPTION PLAN. The Company's 1992 Stock Option Plan was adopted by
the Board of Directors in May 1992 (the "1992 Stock Option Plan"). The 1992
Stock Option Plan authorizes the Board of Directors of the Company to grant
options to purchase the Company's authorized but unissued or reacquired Common
Stock to the key employees of the Company or its subsidiaries. The aggregate
number of shares of Common Stock which may be issued under the 1992 Stock Option
Plan is 100,000 shares, all of which had been granted at December 31, 1998.
Stock options entitle the optionee to purchase Common Stock from the Company for
a specified exercise price as determined by the Board of Directors, during a
period specified in the applicable option agreement.
Under the 1992 Stock Option Plan, the Company may grant Incentive Stock
Options or Nonstatutory Options. All options granted pursuant to the 1992 Stock
Option Plan are granted for investment purposes only and are not transferable
except by laws of descent and devise.
Incentive Stock Options may only be granted to employees of the Company.
They are exercisable one year after the grant of the options and expire on the
earlier of (i) five years after the grant of the options for any optionee who
immediately before the granting of the options owned more than ten percent of
the total combined voting power of all classes of stock of the Corporation or
any of its subsidiaries or (ii) ten years after the grant of the options for any
optionee whose stock ownership represented less than ten percent of the Company
or any of its subsidiaries' combined voting power immediately before the
granting of the options. Nonstatutory Stock Options are exercisable at any time
after they are granted and their durations are determined by the Board of
Directors. However, both types of options are subject to earlier termination in
the event of the termination of the optionee's employment with the Company.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on executive compensation during the year ended December 31,
1998:
It is the Company's policy to compensate its executives in a manner that
aligns their interests with the long-term interests of the Company and its
shareholders. Through its compensation policies the Company also seeks to
attract and retain senior executives and reward executives for their
collective and individual contribution to the leadership and short-term and
long-term growth and profitability of the Company. The Company compensates
its executives through a mixture of base salary, discretionary bonuses, and
discretionary stock and stock option grants. The principal component of
executive compensation to date has been base salary and, in the case of the
executive responsible for the Company's vacation ownership interest sales,
commission.
Effective January 1, 1998, the Company entered into employment agreements
with each of Mr. Joseph Martori, Ms. Nancy Stone and Mr. Edward Zielinski
to serve as Chairman and Chief Executive Officer of the Company; President
of the Company; and Executive Vice President of the Company and President
of the Company's wholly-owned subsidiary, Varsity Clubs of America
Incorporated, respectively. Each of these agreements has a four-year term
which
12
<PAGE>
expires in December 2001. These agreements provide for an annual base
salary of $200,000 to Mr. Martori, $150,000 to Ms. Stone and $130,000 to
Mr. Zielinski. In addition, each employee may receive certain incentive
compensation at the discretion of the Board of Directors. Ms. Stone and Mr.
Zielinski are also entitled to receive awards of 15,000 and 7,000 shares of
restricted Common Stock, respectively, on January 1, 1998 and each
anniversary thereof provided that she or he is employed by the Company on
the date of grant.
Under each employment agreement, the respective employee's employment may
be terminated prior to its expiration (i) by the Company for Good Cause
(defined as his or her willful breach or habitual neglect of his or her
duties under the employment agreement, willful violation of reasonable and
substantial rules governing employee performance, willful refusal to obey
reasonable orders in a manner amounting to gross insubordination or
commission of dishonest acts), (ii) upon the employee's disability or death
or (iii) upon thirty days notice of either party. If the employee is
terminated without "Good Cause" prior to the expiration of the term of the
employment agreement, they are entitled to receive their base salary for
the twelve-month period following such termination. The employment
agreements generally prohibit each employee from competing with the Company
during his or her respective term of employment by the Company and for a
period of twelve months following the respective employee's termination for
Good Cause. In addition, each employment agreement contains customary
confidentiality provisions in favor of the Company.
BASE SALARY. Each executive of the Company receives a base salary which is
intended to be competitive with similarly situated executives in companies
of a similar size and nature. In setting base salaries for 1998, the
Compensation Committee considered the executive's position relative to
other executives, overall responsibility, the achievement of past
performance objectives, and compensation information gathered informally
from publicly available information with respect to similar companies.
DISCRETIONARY OPTIONS. From time to time, the Company has granted stock
options to executives to recognize significant performance and to encourage
them to take an equity stake in the Company. In making past option awards,
the Compensation Committee has reviewed the overall performance of the
executives and the Company has awarded options on a discretionary basis,
based upon a largely subjective determination. No stock options were
granted to executive officers during 1998.
BONUSES. From time to time, the Company has granted bonuses, either in
cash, stock, or a combination of both, to executive officers who, in the
discretion of the Company's Compensation Committee, have performed in a
manner meriting recognition above and beyond their base salary.
The Company has established a program for its President (Ms. Stone) and
certain other executive officers whereby they will be granted shares of
Common Stock as a component of their total compensation. In 1999, 15,000
and 7,000 shares of unregistered Common Stock have been issued under the
program to Ms. Stone and Mr. Zielinski, respectively, for 1998 performance.
In addition, 5,000 shares of unregistered Common Stock were issued as
discretionary bonuses to each of Mr. Martori, Mr. Zielinski and Ms. Stone
in early 1999.
PROFIT SHARING PLAN. In 1994, the Company adopted a Profit Sharing Plan for
the benefit of all employees, including executive officers. A contribution
of $100,000 was declared for the 1998 fiscal year and was funded in early
1999. Allocation among the participants of the amount to be
13
<PAGE>
contributed has not yet occurred. The allocation is not expected to exceed
$4,500 for any executive officer. Allocations are determined based on
participant earnings and the formulas defined in the plan, which are
intended to comply with Internal Revenue Service regulations.
STOCK OPTION PLANS. The Company has adopted 1992 and 1995 Stock Option
Plans pursuant to which options (which terms as used herein includes both
incentive stock options and non-statutory stock options) may be granted to
key employees, including executive officers, directors and consultants, who
are determined by the Stock Option Committee to have contributed in the
past, or who may be expected to contribute materially in the future, to the
success of the Company. The exercise price of the options granted pursuant
to the Plan shall be not less than the fair market value of the Common
Stock on the date of grant and employee and director holders must serve as
employees or directors of the Company for at least one year before
exercising the option. Options are exercisable over a five-year period from
date of grant if the optionee is a ten- percent or more shareholder
immediately prior to the granting of the option and over a ten-year period
if the optionee is not a ten- percent shareholder. No options were granted
to executive officers or other employees during fiscal year 1998.
COMPLIANCE WITH SECTION 162(m) OF INTERNAL REVENUE CODE. Section 162(m) of
the Internal Revenue Code of 1986, as amended ("Tax Code"), limits the
corporate deduction for aggregate compensation paid to the Named Executive
Officers identified herein to $1,000,000 per year, unless certain
requirements are met. The Compensation Committee has reviewed the impact of
the Tax Code provision on the current compensation package for its Named
Executive Officers. None of the Named Executive Officers will exceed the
applicable limit. The Compensation Committee will continue to review the
impact of this Tax Code Section and make appropriate recommendations to
shareholders in the future.
Phoenix, Arizona Patrick J. McGroder III
April 23, 1999 James W. Myers
14
<PAGE>
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG THE COMPANY, NASDAQ MARKET
INDEX AND SIC CODE INDEX
The data below compares the cumulative total return, assuming reinvestment
of dividends, of the Company's Common Stock with the Nasdaq National Market
Index and the SIC Code 701 Index (hotels and motels) from January 1, 1994 to
December 31, 1998. The Company has selected SIC Code 701 based on its belief
that it is the most applicable comparison available, based upon the absence of
5-year historical data regarding publicly owned timeshare companies which derive
substantial revenues from hotel/motel operations.
Comparison of Five Year Cumulative Total Return
among investments in the Company's Common Stock, the
Nasdaq National Market Index and the SIC Code 701 Index
Company 1994 1995 1996 1997 1998
------- ------- ------- ------- ------- -------
ILX Resorts Incorporated 73.74 93.87 65.30 71.43 26.94
Industry Index 87.75 91.14 110.50 119.46 89.91
Broad Market 104.94 136.18 169.23 207.00 291.96
Assumes $100 invested on January 1, 1994 in the Company's common stock, the
Nasdaq National Market Index, and the SIC Code 701 index, with dividends being
reinvested through December 31, 1998.
INDEPENDENT PUBLIC ACCOUNTANTS
At the determination of the Board of Directors, the accounting firm of
Hansen, Barnett & Maxwell, a professional corporation, was engaged as the
Company's principal accountants for the year ended December 31, 1998.
Representatives of Hansen, Barnett & Maxwell are expected to be present at the
Annual Meeting. Such representatives will have an opportunity to make a
statement if they desire to do so, and are expected to be available to respond
to appropriate questions. The Board of Directors has not yet selected
independent accountants for the fiscal year ending December 31, 1999.
For each of the fiscal years ended December 31, 1990 through December 31,
1997, the accounting firm of Deloitte & Touche LLP served as the Company's
principal accountants.
On November 20, 1998, Deloitte & Touche LLP ("D&T") resigned as the
principal independent accountants for the Company. D&T delivered its resignation
at a meeting held with the Audit Committee of the Company's Board of Directors.
Prior to such meeting, the Audit Committee had determined to terminate D&T as a
result of issues relating to the Company's evaluation of the quality of service
provided by D&T.
D&T advised the Audit Committee that it was resigning due to a disagreement
over the proper treatment of the extinguishment by the Company of certain debt.
In September 1998, the Company prepaid a promissory note to an affiliated party
in exchange for the forgiveness of $200,000 of the principal amount of such
note. See "Certain Relationships and Related Transactions." This transaction was
reflected as approximately $200,000 of income in the Company's income statement
for the fiscal quarter ended September 30, 1998. The nature of this transaction
was also disclosed in Note 3 to the Company's financial statements for such
period. D&T indicated that its view was that, because this transaction was with
a related party, it should have been treated as a capital transaction under APB
26. Although the Company believes that its treatment of this extinguishment of
debt is consistent with Paragraph 20 of APB 26, on December 31, 1998, the
Company amended its report on
15
<PAGE>
Form 10-Q for the period ended September 30, 1998 to reflect the treatment of
this transaction as a capital transaction.
Neither of D&T's reports on the Company's financial statements for the last
two years contained an adverse opinion or a disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting principles.
In addition, during such periods and the period from December 31, 1997 until the
date of D&T's resignation, except for the disagreement discussed in the
preceding paragraph, there were no disagreements or "reportable events", as
contemplated by Item 304(a)(1) (iv) and (v), respectively, under Regulation S-K.
On December 11, 1998, the Company filed an Amendment No. 1 to its Report on
Form 8-K dated November 20, 1998 for the purpose of filing a letter from D&T in
which D&T indicated that it disagreed with certain portions of the foregoing
description of the events related to its resignation. Copies of the Form 8-K and
the Amendment thereto are publicly available.
On February 8, 1999, the Company engaged Hansen, Barnett & Maxwell, a
professional corporation, as its principal accountant to audit the Company's
financial statements for the year ended December 31, 1998. Prior to its
engagement, the Company had not consulted Hansen, Barnett & Maxwell with respect
to the application of accounting principles to a specified transaction or any
matter that was the subject of a disagreement or a reportable event (as
described in Item 301(a)(1)(v) of Regulation S-K). The Company has authorized
D&T to respond fully to inquiries of the successor accountant concerning the
subject matter of the disagreement discussed above.
Additional information concerning the resignation of D&T and the engagement
of Hansen, Barnett & Maxwell has been included in the Company's Report on Form
8-K filed with the SEC on November 30, 1998, Amendment No. 1 thereto filed on
December 11, 1998 and in Item 9 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1998.
FINANCIAL INFORMATION
The Company's financial statements and "Management's Discussion and
Analysis of Financial Condition and Results of Operation" are set forth in the
Company's Annual Report, which is hereby incorporated by reference. An Annual
Report will be mailed to all shareholders of Common Stock of record at the close
of business on June 11, 1999, concurrently with the mailing of this Proxy
Statement. UPON THE WRITTEN REQUEST OF ANY SHAREHOLDER, THE COMPANY WILL PROVIDE
TO SUCH SHAREHOLDER, WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT FOR
THE YEAR ENDED DECEMBER 31, 1998, WITHOUT EXHIBITS, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION. SUCH REQUESTS SHOULD BE DIRECTED IN WRITING TO THE
COMPANY AT 2111 EAST HIGHLAND AVENUE, SUITE 210, PHOENIX, ARIZONA 85016,
ATTENTION: SECRETARY, TELEPHONE: 602.957.2777.
STOCKHOLDER PROPOSALS
In order for proposals to be considered for inclusion in the Proxy
Statement and Proxy for the 2000 Annual Meeting of Shareholders, such proposals
must be received by the Secretary of the Company no later than January 21, 2000,
and must comply with certain rules and regulations promulgated by the Securities
and Exchange Commission.
16
<PAGE>
OTHER MATTERS
The Company knows of no other matters to be submitted to shareholders for
their consideration at the Meeting. If any other matters properly come before
the Meeting, it is the intention of the persons named on the enclosed Proxy to
vote the shares they represent as the Board of Directors may recommend.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than ten percent
of the Company's Common Stock are required to report their initial ownership of
the Company's Common Stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Based solely upon the written
representations of the Company's directors, executive officers and ten percent
holders and review of Forms 3, 4, and 5 and amendments thereto furnished to the
Company, the Company is aware of the following late filings for the year ended
December 31, 1998:
NUMBER OF TOTAL TRANSACTIONS
INDIVIDUAL OR COMPANY LATE REPORTS COVERED
- --------------------- ------------ -------
Edward J. Martori 1 5
The above individual has made his appropriate Form 3, Form 4 or Form 5
filings at the time of the mailing of this Proxy Statement.
17
<PAGE>
ILX Resorts Incorporated
2111 East Highland Avenue, Suite 210
Phoenix, Arizona 85016
PROXY
This Proxy is solicited on Behalf of the Board of Directors
The undersigned hereby appoints Joseph P. Martori and Nancy J.
Stone as proxies, each with the power to appoint his or her substitute, and
hereby authorizes each of them to represent and to vote, as designated below,
all the shares of Common Stock of ILX Resorts Incorporated held of record by the
undersigned on June 11, 1999, at the Annual Meeting of Shareholders to be held
July 26, 1999, or any adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below equally among all such nominees, or as
indicated below
Steven R. Chanen shares
-----------------
Joseph A. Leonetti shares
-----------------
Joseph P. Martori shares
-----------------
Patrick J. McGroder III shares
-----------------
James W. Myers shares
-----------------
Nancy J. Stone shares
-----------------
Edward S. Zielinski shares
-----------------
[ ] WITHHOLD AUTHORITY to vote for all nominees
IN THE EVENT THE SHAREHOLDER DOES NOT INDICATE A PREFERENCE ON PROPOSAL NO. 1,
MANAGEMENT INTENDS TO VOTE FOR PROPOSAL NO. 1.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH
THE SHAREHOLDER'S SPECIFICATION ABOVE. THIS PROXY CONFERS DISCRETIONARY
AUTHORITY IN RESPECT TO MATTERS FOR WHICH THE SHAREHOLDER HAS NOT INDICATED A
PREFERENCE OR IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE TIME OF THE
MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, 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.
The undersigned revokes any proxies heretofore given by the undersigned and
acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy
Statement furnished herewith and the Annual Report to Shareholders also
delivered herewith.
- -------------------------------
Signature
- -------------------------------
Signature if held jointly
DATED , 1999
-------------