![[f2008proxyv2edgarizingver001.jpg]](https://capedge.com/proxy/DEF 14A/0000819551-08-000013/f2008proxyv2edgarizingver001.jpg)
2111 East Highland Avenue, Suite 200
Phoenix, Arizona 85016
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 18, 2008
To the Shareholders of ILX Resorts Incorporated:
Notice is hereby given that the 2008 Annual Meeting of Shareholders of ILX Resorts Incorporated, an Arizona corporation (the “Company”), will be held at 2111 E. Highland Avenue, Phoenix, Arizona, 85016, on the 18th day of June, 2008 at 11:00 a.m., local time, to consider and act upon the following proposals:
a)
To elect nine (9) 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 April 14, 2008 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,
![[f2008proxyv2edgarizingver003.gif]](https://capedge.com/proxy/DEF 14A/0000819551-08-000013/f2008proxyv2edgarizingver003.gif)
Margaret M. Eardley
Secretary
Phoenix, Arizona
April 14, 2008
ILX RESORTS INCORPORATED
2111 East Highland Avenue, Suite 200
Phoenix, Arizona 85016
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
To Be Held on June 18, 2008
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 2008 Annual Meeting of Shareholders (the “Meeting”), to be held on June 18, 2008, at 11:00 a.m., local time, and at any and all adjournments and postponements of the Meeting. The Meeting will be held at 2111 E. Highland Avenue, Phoenix, Arizona 85016. This Proxy Statement and the accompanying form of proxy (the “Proxy”) will be first mailed to shareholders on or about May 5, 2008.
Only holders of record of the Company’s no par value common stock (the “Common Stock”) at the close of business on April 14, 2008 (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 29, 2008, the Company had issued and outstanding 3,657,763 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 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 nine nominees receiving the most votes shall be deemed elected to the Company’s Board of Directors. As required by law, in order to exercise cumulative voting rights, the shareholder must notify th e Company of that intention at least 60 days prior to the Annual Meeting date and must vote in person at the Meeting.
Any shareholder wishing to do so may appoint Joseph P. Martori and Nancy J. Stone as proxies to vote such shareholder’s stock by so indicating his preference on his Proxy Form. By making such an election, the shareholder 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 on the Proxy Form, all the shares of Common Stock of ILX Resorts Incorporated held of record by the shareholder on April 14, 2008, at the Annual Meeting of Shareholders to be held June 18, 2008, or any adjournment thereof.
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.
Certain information concerning the director nominees as of February 29, 2008 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 Since |
Steven R. Chanen | 54 | 1995 |
Wayne M. Greenholtz | 67 | 2003 |
Joseph P. Martori | 66 | 1986 |
Joseph P. Martori, II | 38 | 1999 |
Patrick J. McGroder III | 62 | 1997 |
James W. Myers | 73 | 2004 |
Nancy J. Stone | 50 | 1989 |
Steven A. White | 63 | 2001 |
Edward S. Zielinski | 56 | 1996 |
Director Nominees
2
Steven R. Chanenhas served as a director of the Company since July 1995 when he was elected as an independent director. Mr. Chanen has served as President of Chanen Construction Company, Inc., Phoenix, Arizona, since 1989. Chanen Construction, formed in 1955, is a premier builder in the Southwest with such projects as Terminals 2 and 4 at Phoenix Sky Harbor International Airport, the 535-room Sheraton Hotel at Fisherman’s Wharf in San Francisco, California and the Midwestern University Medical School campuses in Glendale, Arizona and Chicago, Illinois. Prior thereto, Mr. Chanen served as shareholder and director of Wentworth & Lundin law firm from 1980 to 1986, practicing in the areas of corporate finance and securities. Mr. Chanen received B.S. and J.D. degrees from Arizona State University.
Wayne M. Greenholtzhas served as a director of the Company since April 2003 when he was elected as an independent director. Mr. Greenholtz is President of Nedra Capital, an independent specialty finance and consulting company which he founded in January 2000. From 1995 until 2000, Mr. Greenholtz served as Senior Vice President of Litchfield Financial Corporation, overseeing the operations of their Denver, Colorado facility until the company was acquired by Textron Financial Corporation. For twelve years prior to 1995, Mr. Greenholtz was Senior Vice President and Chief Operating Officer for Government Employees Financial Corporation, a subsidiary of GEICO Corporation that specialized in banking, finance and resort development, marketing and finance. Overall, Mr. Greenholtz has in excess of 30 years experience in financial services, with emphasis in serving the resort/hospitality industry. Mr. Greenho ltz attended the University of Maryland.
Joseph P. Martorihas 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 served on its Board of Directors from 1983 to 2001. Mr. Martori is Chairman of the Board of MEI, an investment company that holds 16.7% of the Company’s outstanding Common Stock. Mr. Martori is 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. degreefrom the University of Notre Dame Law School. Mr. Martori is the father of Joseph P. Martori, II.
Joseph P. Martori, IIhas served as Vice Chairman of the Company since March 2007 and as a director since July 1999. He has been employed by the Company since October 1995, has been a Vice President since June 1996, a Senior Vice President since June 2000, an Executive Vice President since June 2001 and Chief Sales and Marketing Officer since March 2007. Mr. Martori has also served as Executive Vice President of Sales of Varsity Clubs of America Incorporated since July 1997, in which role he oversees the operations of the Company’s Varsity Clubs sales offices. From September 1993 until August 1995, Mr. Martori attended the University of New Mexico in the Anderson School of Management MBA program. Mr. Martori holds a B.S. degree in Agriculture from the University of Arizona. Joseph P. Martori, II is the son of Joseph P. Martori.
Patrick J. McGroder IIIhas served as a director of the Company since June 1997 when he was elected as an independent director. Mr. McGroder has been a trial lawyer engaged in the practice of law since 1970, currently with the law firm of Gallagher & Kennedy, P.A. Prior thereto, Mr. McGroder served as a member of the law firm of Goldstein & McGroder, Ltd. of Phoenix, Arizona (which he co-founded) from 1990 through 2001. 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.
James W. Myers has served as director of the Company since June 2004 when he was elected as an independent director and from July 1995 through December 2002. Mr. Myers has served as Chief Executive Officer of Myers Management and Capital Group, Inc., a management consulting firm he founded, since December 1995 and was also Chief Executive Officer for CMC Golf, Inc. from 2003 through December 2007. 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 China Mist Tea, CMC Golf, Inc., Landiscor, Inc., Science Care, and Involve Technology, Inc. Mr. Myers received a B.S. degree from Northwestern University and an M.B.A. degree from the University of Chicago.
Nancy J. Stonehas served as Vice Chairman of the Company since March 2007 and 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 also served as Vice President of Finance and Secretary of the Company from April 1987 to December 1989. She is a Certified Public Accountant in the State of Arizona. 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.
Steven A. White has served as a director of the Company since September 2001 when he was elected as an independent director. Mr. White has served as Chief Executive Officer of The Boston Financial Corporation, a financial consulting and real estate finance company, since 1974.
Edward S. Zielinskihas 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 more than twenty-five years of resort management and marketing experience in both domestic and international markets.
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT
The following table sets forth, as of February 29, 2008, 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 Beneficial Owner(+) |
| Number of Shares(l) |
| Percentage of Class |
Joseph P. Martori | 869,149(2) | 25.3% | ||
Nancy J. Stone |
| 203,999(3) | 5.6% | |
Joseph P. Martori, II | 117,161(4) | 3.2% | ||
Edward S. Zielinski | 80,539(5) | 2.2% | ||
Patrick J. McGroder III | 50,938(6) | 1.4% | ||
Wayne M. Greenholtz | 29,667(7) |
| * | |
Steven R. Chanen | 11,000(8) |
| * | |
Steven A. White | 35,647(9) | 1.0% |
3
James W. Myers | 18,383(10) | * | ||
Margaret M. Eardley | 22,563(11) |
| * | |
Thomas F. Dunlap | 7,987(12) |
| * | |
Ty D. Krehbiel | 21,327(13) | * | ||
Philip E. Baxter | -(14) | * | ||
Martori Enterprises Incorporated (“MEI”) | 610,116 | 16.7% | ||
Dimensional Fund Advisors Inc. | 260,521(15) | 6.6% | ||
1299 Ocean Ave., 11th Floor, Santa Monica, CA 90401 |
|
|
| |
ILX Resorts Incorporated Employee Stock Ownership Plan & Trust | 563,952(16) | 15.4% | ||
All Directors and Officers as a Group (13 persons) | 1,468,360(17) | 39.9% |
* Less than 1%.
(+)
Unless otherwise indicated, each holder has the address: c/o ILX Resorts Incorporated, 2111 East Highland Avenue, Suite 200, 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 610,116 shares owned by MEI, of which Joseph P. Martori is a director and owner of 96% of the voting capital stock; 162,313 shares held in IRA accounts of which he is beneficiary; 16,012 shares held by his wife, Mia A. Martori and 19,894 shares, all of which are vested, allocated to him as an ESOP participant.
(3)
Includes 12,000 shares issued under the Stock Bonus Plan; 7,000 shares of which are revocable in the event Ms. Stone is not employed by the Company on January 15, 2009 and 5,000 of which are revocable if she is not employed on January 15, 2010. Also includes 7,304 shares held by her husband, Michael W. Stone and 19,894 shares, all of which are vested, allocated to her as an ESOP participant.
(4)
Includes 8,000 shares issued under the Stock Bonus Plan; 4,000 of which are revocable in the event Mr. Martori is not employed by the Company on January 15, 2009 and 4,000 of which are revocable in the event he is not employed on January 15, 2010. Also includes 11,239 shares, all of which are vested, allocated to him as an ESOP participant.
(5)
Includes 8,000 shares issued under the Stock Bonus Plan; 4,000 of which are revocable in the event Mr. Zielinski is not employed by the Company on January 15, 2009 and 4,000 of which are revocable in the event he is not employed on January 15, 2010. Also includes 247 shares held by Edward S. Zielinski as custodian for his son, Stefan Edward Zielinski, 117 shares held by his wife, Nancy Zielinski and 18,478 shares, all of which are vested, allocated to him as an ESOP participant.
(6)
Includes 1,500 shares held by the Patrick J. McGroder III and Susan McGroder Revocable Trust; 6,700 shares held by the McGroder Family Limited Partnership, in which Patrick J. McGroder III and Susan McGroder have a 99% interest; 2,293 shares held by Susan McGroder IRA; 20,000 shares held by McMac, L.L.C., an Arizona limited liability company of which Patrick J. McGroder III 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. Also includes 1,000 shares issued under the Stock Bonus Plan of which all are revocable in the event Mr. McGroder does not provide service until March 1, 2010 and options to purchase 5,000 shares from the Company at $9.90 per share.
(7)
Includes 1,000 shares issued under the Stock Bonus Plan of which all are revocable in the event Mr. Greenholtz does not provide service through March 1, 2010, 1,000 shares owned by Nedra Capital and options to purchase 5,000 shares from the Company at $9.90 per share.
(8)
Includes 1,000 shares issued under the Stock Bonus Plan of which all are revocable in the event Mr. Chanen does not provide service through March 1, 2010 and options to purchase 5,000 shares from the Company at $9.90 per share.
(9)
Includes 1,000 shares issued under the Stock Bonus Plan of which all are revocable in the event Mr. White does not provide service through March 1, 2010, 1,500 shares held by the White Family Trust, 1,500 shares held by the White Family Limited Partnership, 1,050 shares held by his daughter, Kaci White, and options to purchase 5,000 shares from the Company at $9.90 per share.
(10)
Includes 1,000 shares issued under the Stock Bonus Plan all of which are revocable in the event Mr. Myers does not provide service through March 1, 2010 and options to purchase 5,000 shares from the Company at $9.90 per share.
(11)
Includes 10,000 shares issued under the Stock Bonus Plan; 5,000 of which are revocable in the event Ms. Eardley is not employed by the Company on January 15, 2009 and 5,000 of which are revocable in the event she is not employed on January 15, 2010. Also includes 2,707 shares (2,166 of which are vested) allocated to her as an ESOP participant.
(12)
Includes 4,000 shares issued under the Stock Bonus Plan; 2,000 of which are revocable in the event Mr. Dunlap is not employed by the Company on January 15, 2009 and 2,000 of which are revocable in the event he is not employed on January 15, 2010. Also includes 1,498 shares (899 of which are vested) allocated to him as an ESOP participant.
(13)
Includes 5,000 shares issued under the Stock Bonus Plan; 4,000 of which are revocable in the event Mr. Krehbiel is not employed by the Company on January 15, 2009 and 1,000 of which are revocable in the event he is not employed on January 15, 2010. Also includes 11,610 shares, all of which are vested, allocated to him as an ESOP participant.
(14)
Mr. Baxter’s employment terminated in December 2007.
(15)
Number of shares as of December 31, 2007. Dimensional Fund Advisors Inc. (“Dimensional”), is an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts. These investment companies, trusts and accounts are the “Funds.” In its role as investment advisor or manager, Dimensional possesses investment and/or voting power over the securities of the Company that are owned by the Funds, and may be deemed to be the beneficial owner of the shares of the Company held by the Funds. However, all securities reported are owned by the Funds. Dimensional disclaims beneficial ownership of such securities.
(16)
All shares have been allocated to participant accounts.
(17)
Includes options to purchase 25,000 shares from the Company. Excludes shares owned by the ILX Resorts Incorporated Employee Stock Ownership Plan & Trust, except those allocated to the accounts of Named Executive Officers.
4
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.
Board of Directors and Committees of the Board of Directors Meetings
The Board of Directors of the Company met five times during the fiscal year ended December 31, 2007. All directors attended a minimum of 75% 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 2007 fiscal year. The Company does not have a policy regarding board members’ attendance at annual meetings; however, all directors but two were present at the 2007 annual meeting.
Shareholders may send communications to the Board of Directors at: Board of Directors, ILX Resorts Incorporated, 2111 E. Highland Avenue, Suite 200, Phoenix, Arizona 85016. Please specify individual director’s name on envelope if appropriate. All communications from shareholders are sent directly to the directors.
The Company does not have a policy regarding consideration of director candidates recommended by shareholders, but it does consider director recommendations from all sources. Recommendations for director candidates submitted to the Secretary of the Company will be provided to the Board of Directors.
The Board of Directors does not maintain a nominating committee; nor does any committee perform that function because all directors desire to be involved in the selection process. However, independent directors Messrs. Chanen, Greenholtz, Myers and White nominated all directors for election at the Meeting.
For purposes of determining independence, the Board observes all criteria for independence established by the SEC and AMEX.
The Board of Directors maintains an audit committee (“Audit Committee”), a compensation committee (“Compensation Committee”), and an executive committee.
Audit Committee
The Audit Committee, which consists of Messrs. Greenholtz, McGroder and White, met five times during fiscal year 2007. The Audit Committee is responsible for appointing, compensating and overseeing the work of 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 engaging, reviewing and monitoring the provision of non-audit services by the Company’s auditors. The Audit Committee operates under a written charter, a copy of which is available in the Corporate Governance section of the Company’s website, www.ilxresorts.com, or by writing to Attention: Corporate Secretary, 2111 E. Highland Ave., Suite 200, Phoenix, AZ 85016.
The Company’s Board of Directors has determined that the Audit Committee members meet the independence standards as set forth by AMEX Section 803(A). In addition, the Board of Directors has determined that Mr. Greenholtz is its Audit Committee financial expert.
Compensation Committee
The Compensation Committee, which consists of Messrs. Chanen, McGroder, and White met once during fiscal year 2007. The Committee does not have a charter, but 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. The Compensation Committee also administers the Company’s Stock Bonus Plan.
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee during 2007 and continuing through 2008 is or has been an officer or employee of the Company. There are no Compensation Committee interlock relationships with respect to ILX.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following is a summary of certain agreements or transactions between and among the Company and certain related parties in which the amount involved since January 1, 2007 exceeded $120,000. It is the Company’s policy to enter into transactions with related parties on terms that, on the whole, are no less favorable than those that would be available from unaffiliated parties. Management reviews the transactions as they occur and monitors them for compliance with the Code of Ethics, internal procedures, accounting procedures and applicable legal requirements. Management or the Board of Directors approves such transactions.
In March 2002, the Company sold the Sedona Station (the Sedona Sales Office) to Edward John Martori (EJM). EJM had been a creditor of the company and was a direct and indirect major shareholder of the Company. The Company leases the Sedona Station from EJM under a nine-year lease agreement (at $165,000 per annum) and paid $165,000 in rent expense during the twelve months ended December 31, 2007.
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 16.7% of the Common Stock outstanding as of February 29, 2008. The voting stock of MEI is controlled by Mr. Martori.
In January 2007, the Company purchased 32,500 shares of common stock at $9.61 or $312,325 from MEI for the Stock Bonus Plan.
During 2003 through 2007, the Company’s wholly owned subsidiary, Genesis Investment Group, Inc. (“Genesis”), recorded the sale of Vacation Ownership Interests to Premiere Vacation Club homeowners’ association, an Arizona nonprofit corporation (“PVC”). PVC purchased the intervals at $2,415 per interval, the same price at which it has historically acquired intervals in arms-length negotiations with unaffiliated third parties. PVC is owned by the holders of its vacation ownership interests, including the Company. PVC paid cash of $346,257 on notes payable to Genesis in 2007 and entered into an additional $115,195 of promissory notes related to the purchases. At December 31, 2007, deeds of trust for 665 of the Vacation Ownership Interests secure outstanding indebtedness from PVC to Genesis of $1,537,607.
In 2005, the Company, together with James Bruno Enterprises LLC (“Bruno”), formed ILX-Bruno LLC (“ILX-Bruno”) to purchase and develop three parcels approximating 22 acres of land in Sedona, Arizona. The Company holds an outstanding promissory note from ILX-Bruno in the amount of $5,000,000 which is in default to the Company. In October 2007, ILX-Bruno entered into a promissory note to borrow $2.0 million for working capital including planning, development and carrying costs of the 22 acres of land. In conjunction with the promissory note, the Company entered into a guaranty agreement with the lender under which the Company guarantees performance of the terms of the promissory note.
In July 2007, the Company sold land and a building in Sedona, Arizona to Indian Wells Partners (“Indian Wells”) for approximately $0.9 million. Jerome White, the father of director Steven A. White, controls Indian Wells. The note payable secured by the property was paid in full for $257,344 and the Company received cash proceeds (net of closing costs) of $632,209. The Company leases back the property under a five year lease agreement, has an option to and has agreed to repurchase, and paid $40,000 in lease payments and $20,000 toward the option to repurchase during the twelve months ended December 31, 2007.
In September 2007, First Piggy LLC was formed to further the promotion of the Company’s “First Piggy” concept. First Piggy LLC was 48% owned by Nancy J. Stone, Joseph P. Martori, II, MEI, Edward J. Martori, Steven A. White and Wayne M. Greenholtz (each owning 8% shares). First Piggy LLC entered into an Asset Purchase agreement with the Company to purchase all intellectual and tangible personal property in connection with the First Piggy concept. The purchase price was $130,000 in cash, a promissory note payable to the Company for $700,000 and a 20% interest in First Piggy LLC. First Piggy LLC was capitalized with $600,000 from the above named individuals and MEI. In November 2007, the Company entered into an Assignment of Membership Interest agreement with Ms. Stone, Mr. Martori, II, MEI, Mr. Martori, Mr. White and Mr. Greenholtz to purchase their collective 48% ownership interest for a $600,000 note payable. & nbsp;In February 2008, $300,000 of the $600,000 note payable was satisfied through the issuance of 100,002 shares of the Company’s common stock and the remaining $300,000 plus interest was paid in cash.
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 |
| 66 |
| Chairman of the Board and Chief Executive Officer |
Nancy J. Stone |
| 50 |
| Vice Chairman, President and Chief Operating Officer |
Joseph P. Martori, II |
| 38 |
| Vice Chairman, Chief Sales and Marketing Officer, Executive Vice President of Sales of Varsity Clubs of America Incorporated |
Edward S. Zielinski |
| 56 |
| Executive Vice President, President and Chief Operating Officer of Varsity Clubs of America Incorporated and Director |
Margaret M. Eardley |
| 39 |
| Executive Vice President, Chief Financial Officer, and Secretary |
Thomas F. Dunlap |
| 59 |
| Executive Vice President |
Ty D. Krehbiel |
| 38 |
| Executive Vice President |
Executive Officers
Joseph P. Martorihas 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 served on its Board of Directors from 1983 to 2001. Mr. Martori is Chairman of the Board of MEI, an investment company that holds 16.7% of the Company’s outstanding Common Stock. Mr. Martori is 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. degreefrom the University of Notre Dame Law School. Mr. Martori is the father of board member and executive officer Joseph P. Martori, II.
Nancy J. Stonehas served as Vice Chairman since March 2007 and 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 also served as Vice President of Finance and Secretary of the Company from April 1987 to December 1989. She is a Certified Public Accountant in the State of Arizona. 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.
Joseph P. Martori, IIhas served as Vice Chairman since March 2007 and as a director of the Company since July 1999. He has been employed by the Company since October 1995, has been a Vice President since June 1996, a Senior Vice President since June 2000, an Executive Vice President since June 2001 and Chief Sales and Marketing Officer since March 2007. Mr. Martori has also served as Executive Vice President of Sales of Varsity Clubs of America Incorporated since July 1997, in which role he oversees the operations of the Company’s Varsity Clubs sales offices. From September 1993 until August 1995, Mr. Martori attended the University of New Mexico in the Anderson School of Management MBA program. Mr. Martori holds a B.S. degree in Agriculture from the University of Arizona. Joseph P. Martori, II is the son of Joseph P. Martori.
Edward S. Zielinskihas 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 more than twenty-five years of resort management and marketing experience in both domestic and international markets.
Margaret M. Eardleyhas served as Executive Vice President and Chief Financial Officer of the Company since October 2001 and from March 2000 to July 2000 and Secretary since December 2004. Ms. Eardley was Vice President, Chief Financial Officer and Chief Operating Officer of Republic Western Insurance Company from August 2000 to 2001. Ms. Eardley received a B.S. degree in Finance from Arizona State University and an M.B.A. from the University of Phoenix.
Thomas F. Dunlap has served as Executive Vice President since September 2002. Mr. Dunlap oversees the Company’s operations in Mexico. Prior thereto, Mr. Dunlap served as Vacation Ownership Director for London Bridge Resort from June 1990 to July 2001. Mr. Dunlap has more than twenty-five years of sales and marketing experience in resort development.
Ty D. Krehbiel has served as Executive Vice President since April 2006. He served as Senior Vice President of the Company since February 2006 and as a Vice President since June of 1998. Mr. Krehbiel's direct responsibilities within the organization have included management of sales and marketing of vacation ownership interests at Kohl's Ranch Lodge since October 1995 and as Project Director, overseeing operations, sales and marketing since June 2004. Mr. Krehbiel has more than thirteen years of management tenure with the Company in sales and marketing of vacation ownership interests.
The Company has adopted a code of ethics that applies to the registrant’s executive officers. The code can be viewed on the Corporate Governance section of the Company’s website, www.ilxresorts.com.
Compensation Discussion and Analysis
We rely on our executives’ judgment, initiative and effort in order to operate successfully. Therefore, we strive to compensate our executives in order to align their interests with our long-term interests and those of our shareholders. Our compensation plan is designed to attract and retain qualified senior executives and reward them for their contribution to our leadership, growth and profitability. The Chief Executive Officer and President provide input to the members of the Compensation Committee to set compensation programs. Our compensation components include a mix of base salary, discretionary bonuses, discretionary equity based grants and retirement programs for all executives and, for certain executives who oversee our sales operations, compensation may also include commission as a percentage of vacation ownership interest sales.
The base salary component, as noted in column (c) of the Summary Compensation Table, is the principal component of all executive compensation except for certain executives who oversee our sales operations. We consider each executive’s position compared to other executives, their areas of responsibility, their performance and achievement of past performance objectives. We also informally gather salary information from our peer group or similar companies. In 2007, we decided the base salary component should be equal at $200,000 for all Executive Vice Presidents, except for certain executives whose primary responsibility is the sale of vacation ownership interests, in order to foster a teamwork atmosphere and communicate that we are all equally responsible for the success of our objectives. In addition, we determined that the President’s base salary would be $125,000 more than that of the Executive Vice Presidents’ ; and the Chief Executive Officer’s base salary $125,000 more than the President’s as compensation for their additional leadership and responsibility. In January 2008, the Chief Executive Officer voluntarily reduced his salary to $325,000.
The Executive Vice President whose primary responsibility is the sale of vacation ownership interests is principally compensated on commissions as a percentage of vacation ownership interest sales. The commission component is indicated in column (d) of the Summary Compensation Table. The percentage is confidential and could result in competitive harm if disclosed. We determine the percentage by analyzing profit margins of sales of vacation ownership interests.
We adopted the Stock Bonus Plan, after shareholder approval, in 2005. The Stock Bonus Plan encourages and enables executives to acquire and retain common stock ownership, aids in retention and compensates them for contributions to our growth and profits. We evaluate the Company’s overall results as well as each executive’s annual performance in December and typically issue shares under the Stock Bonus Plan in January. The shares normally vest in three years and require the recipient to be employed on the vesting date in order to encourage longevity. In 2007, we issued 20,000 shares valued at $150,720, under the Stock Bonus Plan, to executive officers. We did not issue any shares to Executive Officers in 2008 (for 2007 performance). The breakdown of the value of shares issued to each named executive officer is noted in column (e) of the Summary Compensation Table. The value is determined as 80% of our sto ck price on the date of issuance. The expense is deferred and recognized pro-rata over the vesting period. The unrecognized portion for shares issued in 2005, 2006 and 2007 is in deferred compensation on our balance sheet. Each named executive’s number and value of unvested shares issued under the Stock Bonus Plan in 2005, 2006 and 2007 are listed in the Outstanding Equity Awards At Fiscal Year-End table under the Stock Awards columns. The value of each executive’s stock will be added to their taxable earnings in the year in which their shares are fully vested.
We sometimes grant cash bonuses. The cash bonuses are discretionary and are used to recognize contributions above and beyond base salary.
We have a Profit Sharing Plan and Employee Stock Ownership Plan for the benefit of all employees, including executives. We determine total contributions to each of the Plans based on overall profitability and allocations to individuals are based on participant earnings and formulas defined in the Plans that comply with Internal Revenue Service regulations. We do not anticipate any executive officer will receive more than a $2,000 contribution allocation to their individual Profit Sharing Plan account. No contribution was made to the Employee Stock Ownership Plan for the year ended December 31, 2007.
We have no employment contracts and no termination arrangements with any of our executives.
We comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (“Tax Code”). The Tax Code limits the corporate deduction for aggregate compensation paid to Named Executive Officers to $1,000,000 per year, unless certain requirements are met. We have reviewed the impact of the Tax Code provision on the current compensation package for the Named Executive Officers and none of the Named Executive Officers will exceed the applicable limit. We will continue to review the impact of this Tax Code Section and make appropriate recommendations to shareholders in the future.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and has recommended to the Board of Directors that it be included in the Company’s Proxy Statement.
The ILX RESORTS INCORPORATED COMPENSATION COMMITTEE
Steven R. Chanen
Patrick J. McGroder, III
Steven A. White
The table below summarizes the total compensation paid or earned by the Chief Executive Officer, the Chief Financial Officer and the other most highly compensated executive officers for the fiscal years ended December 31, 2006 and December 31, 2007.
SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Change in |
|
|
|
|
|
|
|
|
| Pension Value |
|
|
|
|
|
|
|
| Non- | and Nonqualified |
|
|
|
|
|
|
|
| Equity | Deferred | All |
|
Name and |
|
|
| Stock | Option | Incentive | Compensation | Other |
|
Principal |
|
|
| Award(s) | Award(s) | Plan Comp- | Earnings | Compensation | Total |
Position | Year | Salary($) | Bonus ($) | ($) | ($) | ensation ($) | ($) | ($) | ($) |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
|
|
|
|
|
|
|
|
|
|
Joseph P. Martori |
|
|
|
|
|
|
|
|
|
Chairman and | 2007 | $ 471,154 | $ - | $ - | $ - | $ - | $ - | $ - | $ 471,154 |
Chief Executive Officer | 2006 | 354,000 | - | - | - | - | - | - | 354,000 |
|
|
|
|
|
|
|
|
|
|
Margaret M. Eardley |
|
|
|
|
|
|
|
|
|
Executive Vice President | 2007 | 212,692 | - | 30,1441 | - | - | - | - | 242,836 |
Chief Financial Officer | 2006 | 172,000 | - | 41,5501 | - | - | - | 21,5422 | 235,092 |
|
|
|
|
|
|
|
|
|
|
Nancy J. Stone |
|
|
|
|
|
|
|
|
|
Vice Chairman and | 2007 | 342,684 | - | 37,6801 | - | - | - | - | 380,364 |
President | 2006 | 303,000 | - | 58,1701 | - | - | - | 33,7163 | 394,886 |
|
|
|
|
|
|
|
|
|
|
Joseph P. Martori, II |
|
|
|
|
|
|
|
|
|
Vice Chairman and | 2007 | 200,000 | - | 30,1441 | - | - | - | - | 230,144 |
Chief Sales and Marketing Officer | 2006 | 147,116 | - | 33,2401 | - | - | - | 21,7924 | 202,148 |
|
|
|
|
|
|
|
|
|
|
Edward S. Zielinski | 2007 | 200,000 | - | 30,1441 | - | - | - | - | 230,144 |
Executive Vice President | 2006 | 190,000 | - | 33,2401 | - | - | - | 18,975 5 | 242,215 |
|
|
|
|
|
|
|
|
|
|
Thomas F. Dunlap | 2007 | 180,000 | 260 6 | 15,0721 | - | - | - | - | 195,332 |
Executive Vice President | 2006 | 180,000 | 6,091 6 | 16,6201 | - | - | - | 13,5847 | 216,295 |
|
|
|
|
|
|
|
|
|
|
Ty D. Krehbiel | 2007 | 36,000 | 110,1348 | 7,5361 | - | - | - | - | 153,670 |
Executive Vice President | 2006 | 62,712 | 96,7658 | 31,7401 | - | - | - | 9,9879 | 201,204 |
|
|
|
|
|
|
|
|
|
|
________________________
1
Includes stock issued under the Stock Bonus Plan. See the Grants of Plan-Based Awards Table and Outstanding Equity Awards at Fiscal Year End Table for additional information.
2
Includes 1,875 shares of Common Stock at $7.70 per share for 1,125 shares, $7.02 per share for 375 shares and $8.31 per share for 375 shares issued in 2005 and 2006 but which did not vest until 2006.
3
Includes 2,500 shares of Common Stock at $7.70 per share for 1,500 shares, $7.02 per share for 500 shares and $8.31 per share for 500 shares issued in 2005 and 2006 but which did not vest until 2006.
4
Includes 1,875 shares of Common Stock at $7.70 per share for 1,125 shares, $7.02 per share for 375 shares and $8.31 per share for 375 shares issued in 2005 and 2006 but which did not vest until 2006.
5
Includes 1,875 shares of Common Stock at $7.70 per share for 1,125 shares, $7.02 per share for 375 shares and $8.31 per share for 375 shares issued in 2005 and 2006 but which did not vest until 2006.
6
Includes profit participation bonus based on sales office results.
7
Includes 1,250 shares of Common Stock at $7.70 per share for 750 shares, $7.02 per share for 250 shares and $8.31 per share for 250 shares issued in 2005 and 2006 but which did not vest until 2006.
8
Includes commissions on sales of Vacation Ownership interests.
9
Includes 1,000 shares of Common Stock at $7.70 per share for 500 shares, $7.02 per share for 250 shares and $8.31 per share for 250 shares issued in 2005 and 2006 but which did not vest until 2006.
Stock Bonus Plan
The Company’s Stock Bonus Plan is administered by the Compensation Committee which selects the persons to whom stock is granted and determines the terms and conditions of each grant.
The purpose of the Stock Bonus Plan is to advance the interests of the Company and its shareholders, by encouraging and enabling selected officers, directors, consultants and key employees upon whose judgment, initiative and effort the Company is largely dependent for the successful conduct of its business, to acquire and retain a proprietary interest in the Company by ownership of its stock, to keep personnel of experience and ability in the employ of the Company and to compensate them for their contributions to the growth and profits of the Company and thereby induce them to continue to make such contributions in the future.
The Stock Bonus Plan provided for establishment of a Bonus Share Reserve to which 600,000 shares of the Company’s common stock were credited, 250,000 of which to be authorized and unissued shares of the Company's common stock or treasury stock, and 350,000 of which to be purchased by the Company on the open market or from affiliates of the Company, including from MEI, an entity controlled by Joseph P. Martori. Through December 31, 2007, 219,685 remain in the authorized and unissued shares of the Company or treasury stock and 260,000 shares remain available to purchase on the open market or from affiliates. All purchases by the Company on the open market or from affiliates are approved by a majority of the Company's independent directors. The price of shares acquired from affiliates is determined by a majority of the Company's independent directors, but may not exceed the fair market value of such shares at the time of purchase, and, if su ch shares are then listed on the American Stock Exchange or other recognized exchange or Nasdaq, the fair market value of such shares is the average of the mean between the opening and closing price as reported by such exchange or Nasdaq for each trading day over the 30 day period ending on the date of such purchase (“Agreement Date”). Pursuant to Section 16 under the Exchange Act of 1934, the affiliate may not acquire shares of the Company's common stock, except pursuant to a transaction exempt from Section 16(b), within the six-month period preceding or following the Agreement Date. Any Bonus Shares forfeited by Recipients are credited back to the Bonus Share Reserve.
Grants of Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| All |
| All Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other |
| Option |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stock |
| Awards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Awards: |
| Number |
|
|
|
|
|
|
|
| Estimated Future Payouts |
|
|
|
|
|
| Number |
| of |
| Exercise |
|
| |||||
|
|
|
| Under Non-Equity Incentive | Estimated Future Payouts Under |
| of |
| Securities |
| or Base |
| Grant Date | |||||||||
|
|
|
| Plan Awards |
| Equity Incentive Plan Awards |
| Shares |
| Under- |
| Price of |
| Fair Value of | ||||||||
|
| Grant |
| Threshold |
| Target |
| Maxi- |
| Threshold |
| Target |
| Maxi- |
| of Stock |
| lying |
| Option |
| Stock and |
|
| Date |
| ($) |
| ($) |
| mum |
| (#) |
| (#) |
| mum |
| or Units |
| Options |
| Awards |
| Option |
Name |
|
|
|
|
|
|
| ($) |
|
|
|
|
| (#) |
| (#) |
| (#) |
| ($/Sh) |
| Awards |
(a) |
| (b) |
| (c) |
| (d) |
| (e) |
| (f) |
| (g) |
| (h) |
| (i) |
| (j) |
| (k) |
| (l) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph P. Martori |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer |
| - |
| $ - |
| $ - |
| $ - |
| - |
| - |
| - |
| - |
| - |
| $ - |
| $ - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Margaret M. Eardley |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer |
| 1/2/07 |
| - |
| - |
| - |
| - |
| - |
| - |
| 4,0001 |
| - |
| - |
| 30,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nancy J. Stone |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice Chairman and President |
| 1/2/07 |
| - |
| - |
| - |
| - |
| - |
| - |
| 5,0001 |
| - |
| - |
| 37,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph P. Martori, II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice Chairman and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Sales and Marketing Officer |
| 1/2/07 |
| - |
| - |
| - |
| - |
| - |
| - |
| 4,0001 |
| - |
| - |
| 30,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward S. Zielinski |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President |
| 1/2/07 |
| - |
| - |
| - |
| - |
| - |
| - |
| 4,0001 |
| - |
| - |
| 30,144 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas F. Dunlap |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President |
| 1/2/07 |
| - |
| - |
| - |
| - |
| - |
| - |
| 2,0001 |
| - |
| - |
| 15,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ty D. Krehbiel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President |
| 1/2/07 |
| - |
| - |
| - |
| - |
| - |
| - |
| 1,0001 |
| - |
| - |
| 7,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Stock issued under Stock Bonus Plan. All shares are revocable in the event the recipient is not employed by the Company on January 15, 2010.
Outstanding Equity Awards at Fiscal Year End
| Options Awards |
| Stock Awards | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
|
|
|
|
| Incentive |
|
|
|
|
|
|
|
|
|
| Equity | Plan |
|
|
|
|
|
|
|
|
|
| Incentive | Awards: |
|
|
| Equity |
|
|
|
|
|
| Plan | Market or |
|
|
| Incentive |
|
|
|
|
|
| Awards: | Payout |
|
|
| Plan |
|
|
|
|
|
| Number | Value |
|
|
| Awards: |
|
|
|
|
| Market | of | of |
| Number | Number | Number |
|
|
| Number |
| Value of | Unearned | Unearned |
| of | of | of |
|
|
| of Shares |
| Shares or | Shares, | Shares, |
| Securities | Securities | Securities |
|
|
| or Units |
| Units of | Units or | Units or |
| Underlying | Underlying | Underlying |
|
|
| of Stock |
| Stock | Other | Other |
| Unexercised | Unexercised | Undexercised | Option |
|
| That Have |
| That Have | Rights | Rights |
| Options | Options | Unearned | Exercise | Option |
| Not |
| Not | That Have | That Have |
| (#) | (#) | Options | Price | Expiration |
| Vested |
| Vested | Not Vested | Not Vested |
Name | Exercisable | Exercisable | (#) | ($) | Date |
| (#) |
| ($) | (#) | ($) |
(a) | (b) | (c) | (d) | (e) | (f) |
| (g) |
| (h) | (i) | (j) |
Joseph P. Martori |
|
|
|
|
|
|
|
|
|
|
|
Chairman and |
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer | - | - | - | $ - | - |
| - |
| $ - | - | $ - |
Margaret M. Eardley |
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President |
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer | - | - | - | - | - |
| 14,000 | 1 | 49,000 | - | - |
Nancy J. Stone |
|
|
|
|
|
|
|
|
|
|
|
President | - | - | - | - | - |
| 19,000 | 2 | 66,500 | - | - |
Joseph P. Martori, II |
|
|
|
|
|
|
|
|
|
|
|
Vice Chairman and |
|
|
|
|
|
|
|
|
|
|
|
Chief Sales and Marketing Officer | - | - | - | - | - |
| 13,000 | 3 | 45,500 |
|
|
Edward S. Zielinski |
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President | - | - | - | - | - |
| 13,000 | 4 | 45,500 | - | - |
Thomas F. Dunlap |
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President | - | - | - | - | - |
| 4,000 | 5 | 14,000 | - | - |
Ty D. Krehbiel |
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President | - | - | - | - | - |
| 7,000 | 6 | 24,500 | - | - |
|
|
|
|
|
|
|
|
|
|
|
|
1
Shares issued under the Stock Bonus Plan; 5,000 of which were revocable in the event Ms. Eardley was not employed by the Company on January 15, 2008, 5,000 of which are revocable in the event she is not employed on January 15, 2009 and 4,000 of which are revocable in the event she is not employed on January 15, 2010.
2
Shares issued under the Stock Bonus Plan; 7,000 of which were revocable in the event Ms. Stone was not employed by the Company on January 15, 2008, 7,000 of which are revocable in the event she is not employed on January 15, 2009 and 5,000 of which are revocable in the event she is not employed on January 15, 2010.
3
Shares issued under the Stock Bonus Plan; 5,000 of which were revocable in the event Mr. Martori was not employed by the Company on January 15, 2008, 4,000 of which are revocable in the event he is not employed by the Company on January 15, 2009 and 4,000 of which are revocable in the event he is not employed by the Company on January 15, 2010.
4
Shares issued under the Stock Bonus Plan; 5,000 of which were revocable in the event Mr. Zielinski was not employed by the Company on January 15, 2008, 4,000 of which are revocable in the event he is not employed by the Company on January 15, 2009 and4,000 of which are revocable in the event he is not employed by the Company on January 15, 2010.
5
Shares issued under the Stock Bonus Plan; 2,000 of which are revocable in the event Mr. Dunlap is not employed by the Company on January 15, 2009 and 2,000 of which are revocable in the event he is not employed by the Company on January 15, 2010.
6
Shares issued under the Stock Bonus Plan; 2,000 of which were revocable in the event Mr. Krehbiel was not employed by the Company on January 15, 2008, 4,000 of which are revocable in the event he is not employed on January 15, 2009 and 1,000 of which are revocable in the event he is not employed by the Company on January 15, 2010.
6
None of the named executive officers had stock awards that vested during the year ended December 31, 2007.
Equity Compensation Plan Information
|
|
|
|
|
| Number of Securities |
|
|
|
|
|
| Remaining Available for |
|
| Number of Securities to |
| Weighted-Average |
| Future Issuance Under |
|
| be Issued Upon Exercise |
| Exercise Price of |
| Equity Compensation Plans |
|
| of Outstanding Options, |
| Outstanding Options, |
| (Excluding Securities |
|
| Warrants and Rights |
| Warrants and Rights |
| Reflected in Column (a)) |
Plan Category |
| (a) |
| (b) |
| (c) |
Equity Compensation Plans Approved |
|
|
|
|
|
|
by Security Holders |
| - |
| N/A |
| 479,685 |
Equity Compensation Plans Not |
|
|
|
|
|
|
Approved by Security Holders |
| - |
| N/A |
| - |
Total |
| - |
|
|
| 479,685 |
Payments Upon Termination Or Change In Control
The Company has no employment contracts and no termination arrangements with any of our executives. Unvested shares issued under the Stock Bonus Plan before or during 2007 will vest immediately upon change in control.
Payments Made Upon Termination Or Retirement
Regardless of the manner in which a named executive officer’s employment terminates, they are entitled to receive amounts earned during employment. These payments are not caused or precipitated by termination or change in control, and are payable or due to any employee of the Company regardless of whether or not the employee was terminated or a change in control has occurred. Such amounts include:
·
vested amounts under the ILX Resorts Incorporated Profit Sharing Plan & Trust and ILX Resorts Incorporated Employee Stock Ownership Plan;
·
earned but unpaid compensation; and
·
unused vacation pay (if termination is voluntary and adequate notice is given).
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 $1,000. Previously, all non-employee directors also received a grant of options to purchase 5,000 shares of Common Stock following their election to the Board of Directors. The options were fully exercisable on the first anniversary of the date of grant. In addition, all non-employee directors received a grant of options to purchase an additional 5,000 shares of Common Stock in December 2004. The options were also fully exercisable on the first anniversary date of grant. Directors are also entitled to complimentary accommodations at ILX resorts and are eligible for grants of stock under the Stock Bonus Plan. The table below illustrates Director Compensation for the fiscal year ended December 31, 2007.
Director Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Change in |
|
|
|
|
|
|
| Pension Value |
|
|
|
|
|
| Non-Equity | and Nonqualified |
|
|
| Fees Earned | Stock | Option | Incentive Plan | Deferred | All Other |
|
| of Paid in Cash | Awards | Awards | Compensation | Compensation | Compensation | Total |
Name | ($) | ($) | ($) | ($) | Earnings | ($) | ($) |
(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) |
Steven R. Chanen | $ 4,000 | $7,5601 | - | - | - | - | $ 11,560 |
Wayne M. Greenholtz | 5,000 | 7,5601 | - | - | - | - | 12,560 |
Patrick J. McGroder III | 4,000 | 7,5601 | - | - | - | - | 11,560 |
James W. Myers | 4,000 | 7,5601 | - | - | - | - | 11,560 |
Steven A. White | 5,000 | 7,5601 | - | - | - | - | 12,560 |
1Stock issued under Stock Bonus Plan. All shares are revocable unless the recipient is a Director through March 1, 2008 and provides service as a Director or otherwise through March 1, 2010.
AUDIT COMMITTEE REPORT
The Board of Directors maintains an Audit Committee comprised of three of the Company’s independent directors. The Board of Directors and the Audit Committee believe that the Audit Committee’s current member composition satisfies the current rule of the American Stock Exchange (“AMEX”) that governs audit committee composition, including the requirement that audit committee members all be “independent directors” as that term is defined by AMEX Section 803(A).
The Audit Committee oversees the Company’s financial process on behalf of the Board of Directors. Management has the primary responsibility for the consolidated financial statements and the reporting process including the systems of internal controls. The Audit Committee has reviewed and discussed the audited financial statements with management.
The Audit Committee has also reviewed the audited financial statements with the independent auditors and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards, including Statement on Auditing Standards No. 61 as may be modified or supplemented. In addition the Audit Committee has discussed with the independent auditors the auditors’ independence from management and the Company including the matters in the written disclosures and the letter from the independent auditors required by the Independence Standards Board Standard No. 1 as may be modified or supplemented.
Based on the reviews and discussions above, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.
THE ILX RESORTS INCORPORATED AUDIT COMMITTEE
Wayne M. Greenholtz
Patrick J. McGroder III
Steven A. White
INDEPENDENT PUBLIC ACCOUNTANTS
At the determination of the Audit Committee, the accounting firm of Hansen, Barnett & Maxwell, P.C. a professional corporation, was engaged as the Company’s principal accountants for the year ended December 31, 2007. Representatives of Hansen, Barnett & Maxwell are expected to be available at the Annual Meeting. Such representatives will have an opportunity to make a statement if they desire to do so, and respond to appropriate questions. Hansen, Barnett
& Maxwell also served as the Company’s principal accountants for the fiscal years ended December 31, 1998 through 2006. The Board of Directors has not yet selected independent accountants for the fiscal year ending December 31, 2008 as its practice is to make the selection during the fourth quarter.
Audit Fees
Fees for the fiscal year 2007 audit and the review of Forms 10-Q were $76,000. Fees for the fiscal year 2006 audit and review of Forms 10-Q were $73,200.
Audit-Related Fees
Fees for the fiscal year 2007 and 2006 audits of the Company’s ESOP and Profit Sharing Plans were approximately $11,700 and $11,000 respectively.
Tax Fees
Fees for the fiscal year 2007 and 2006 tax compliance services were approximately $20,000 and $19,500 respectively.
All Other Fees
There were no other fees in 2007 or 2006.
The Audit Committee approved 89.3% of the above fees. The only fees they did not approve were fees related to the Audit of the Company’s ESOP and Profit Sharing Plans.
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 April 14, 2008, 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, 2007, 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 200, 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 2009 Annual Meeting of Shareholders, such proposals must be received by the Secretary of the Company no later than January 22, 2009, and must comply with certain rules and regulations promulgated by the Securities and Exchange Commission.
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 not aware of any late filing for the year ended December 31, 2007.
Phoenix, Arizona
April 14, 2008
The Board of Directors
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
--------------------------------------------------------------------------------------------------------------------------
![[f2008proxyv2edgarizingver004.jpg]](https://capedge.com/proxy/DEF 14A/0000819551-08-000013/f2008proxyv2edgarizingver004.jpg)
Proxy - ILX Resorts Incorporated
2111 East Highland Avenue, Suite 200
Phoenix, Arizona 85016
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 on the reverse side, all the shares of Common Stock of ILX Resorts Incorporated held of record by the undersigned on April 14, 2008, at the Annual Meeting of Shareholders to be held June 18, 2008, or any adjournment thereof.
INTHEEVENT THE SHAREHOLDER DOES NOT INDICATEAPREFERENCEON PROPOSALNO. 1, ELECTION OF DIRECTORS, MANAGEMENT INTENDS TO VOTE FOR PROPOSAL NO. 1.
SHARES REPRESENTED BY THIS PROXY WILL BE VOTEDAT THEMEETINGINACCORDANCEWITH THESHAREHOLDER'S SPECIFICATION ON THE REVERSE SIDE. THIS PROXY CONFERS DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS FOR WHICH THE SHAREHOLDER HAS NOT INDICATED A PREFERENCE OR IN RESPECTTOMATTERS NOT KNOWN OR DETERMINEDATTHE TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE UNDERSIGNED.
![[f2008proxyv2edgarizingver005.jpg]](https://capedge.com/proxy/DEF 14A/0000819551-08-000013/f2008proxyv2edgarizingver005.jpg)
Using ablack inkpen, mark your votes with anXas shown in this example. Please do not write outside the designated areas.
Annual Meeting ProxyCard |
|
|
|
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
A Election of Directors — The Board of Directors recommends a vote FOR all the nominees listed.
1. Nominees:
For
Withhold
For
Withhold
For
Withhold
01 - Steven R. Chanen
[ ]
[ ]
02 - Joseph P. Martori
[ ]
[ ]
03 - Joseph P. Martori, II
[ ]
[ ]
04 - Patrick J. McGroder III
[ ]
[ ]
05 – Wayne M. Greenholtz
[ ]
[ ]
06 – Nancy J. Stone
[ ]
[ ]
07 - Steven A. White
[ ]
[ ]
08 – Edward S. Zielinski
[ ]
[ ]
09 – James W. Myers
[ ]
[ ]
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.
YOUR VOTE IS IMPORTANT!
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED ENVELOPE
B Authorized Signatures – This section must be completed for your vote to be counted. – Date and Sign
Please sign exactly as name appears at above. 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 persons.
Date (mm/dd/yyyy) – Please print date below.
Signature 1 – Please keep signature within the box
Signature 2 – Please keep signature within the box
____________________________________
_____________________________________
___________________________________