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

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] 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
- --------------------------------------------------------------------------------
(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:

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2) Aggregate number of securities to which transaction applies:

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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
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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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[ ] Fee paid previously with preliminary materials:

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

1) Amount previously paid:
------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------
3) Filing Party:
----------------------------------------------------
4) Date Filed:
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[LOGO]
ILX RESORTS INCORPORATED

2111 East Highland Avenue, Suite 210
Phoenix, Arizona 85016

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON JUNE 20, 2002

To the Shareholders of ILX Resorts Incorporated:

Notice is hereby given that the 2002 Annual Meeting of Shareholders of ILX
Resorts Incorporated, an Arizona corporation (the "Company"), will be held at
the Los Abrigados Resort & Spa, at 160 Portal Lane, Sedona, Arizona 86336 on the
20th day of June, 2002 at 11:00 a.m., local time, to consider and act upon the
following proposals:

(a) To elect eight (8) 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 11, 2002 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
March 29, 2002

ILX RESORTS INCORPORATED

2111 East Highland Avenue, Suite 210
Phoenix, Arizona 85016

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS

To Be Held on June 20, 2002

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 2002 Annual Meeting of
Shareholders (the "Meeting"), to be held on June 20, 2002, at 11:00 a.m., local
time, and at any and all adjournments and postponements of the Meeting. The
Meeting will be held at the Los Abrigados Resort & Spa, 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 April 22, 2002.

Only holders of record of the Company's no par value common stock (the
"Common Stock") at the close of business on April 11, 2002 (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, 2002, the Company had issued and
outstanding 2,938,463 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 eight nominees receiving the most votes shall be deemed
elected to the Company's Board of Directors.

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 11,
2002, at the Annual Meeting of Shareholders to be held June 20, 2002, or any
adjournment thereof.

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT

The following table sets forth, as of February 28, 2002, 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 1,120,330 (2) 38.1%
Nancy J. Stone 148,736 (3) 5.0%
Edward S. Zielinski 46,570 (4) 1.6%
Patrick J. McGroder III 41,215 (5) 1.4%
Joseph P. Martori, II 38,289 1.3%
James W. Myers 4,800 *
Steven R. Chanen 0 *
Steven A. White 1,525 *
Donald D. Denton, Jr. 14,363 (6) *
Edward J. Martori ("EJM") 925,661 (7) 31.5%
ILX Resorts Incorporated Employee Stock 595,300 (8) 19.6%
Ownership Plan & Trust
Margaret M. Eardley 0 *
Martori Enterprises Incorporated ("MEI") 844,110 28.7%
All Directors and Officers as a Group (10 persons) 1,415,828 (9) 47.6%

- ----------

* Less than 1%.

(+) Unless otherwise indicated, each holder has the address: c/o ILX Resorts
Incorporated, 2111 East Highland Avenue, 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 844,110 shares owned by MEI, of which Joseph P. Martori is a
director and owner of 40% of the voting capital stock; 132,300 shares held
in IRA accounts of which he is beneficiary; 6,925 shares held by his wife,
Mia A. Martori; 212 shares held by a trust of which he is trustee; 5,100
shares which he holds as custodian for his daughter for Arianne Terres
Martori and 142 shares owned by an estate of which he is a personal
representative.

(3) Includes 5,000 shares issuable by the Company pursuant to options at $8.125
per share; 7,000 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 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; 5 shares held by Shamrock Consultants, which is wholly owned by
Patrick J. McGroder III; 19 shares held by Patrick J. McGroder III, P.C.,
an Arizona professional corporation, wholly owned by Patrick J. McGroder
III; 1,000 shares held by Susan McGroder IRA; 1,128 shares held by Susan
McGroder R/O 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; 500 shares by the Patrick J. McGroder IV
UTMA Arizona Trust; and options to purchase 5,000 shares from the Company
at $3.25 per share.

(6) Includes 674 shares held by his wife, Linda C. Denton.

(7) Includes 844,110 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.

(8) Includes options to purchase 100,000 shares from the Company at $4.00 per
share.

(9) Includes options to purchase 33,500 shares from the Company.

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.

Certain information concerning the director nominees as of February 28,
2002 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 48 1995
Joseph P. Martori 60 1986
Joseph P. Martori, II 32 1999
Patrick J. McGroder III 56 1997
James W. Myers 67 1995
Nancy J. Stone 44 1989
Steven A. White 57 2001
Edward S. Zielinski 50 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 and as Chairman of the
Board of Media Technology Capital Corporation (doing business as S.R. Chanen &
Co., Inc.) 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 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
served on its Board of Directors from 1983 to 2001. Mr. Martori is also Chairman
of the Board of MEI, an investment company that holds 28.7% 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.
degree from the University of Notre Dame Law School. Mr. Martori is the father
of Joseph P. Martori, II.

JOSEPH P. MARTORI, II has served as a director of the Company since July
1999, has been employed by the Company since October 1995, has been a Vice
President since June 1996, a Senior Vice President since June 2000 and an
Executive Vice President since June 2001. 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. Mr. Martori also oversees operations of the Company's new
offsite Las Vegas sales office that opened in January 2002. 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 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, 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. Mr. McGroder also served as Chairman of
the Board of Sedona Worldwide Incorporated ("SWI") from April 1998 to December
2001. SWI was a majority owned subsidiary of the Company until December 31,
1999.

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 (which was a majority owned subsidiary of the Company until
December 31, 1999), Autom, BG Associates, Chambers Belt, Inc., China Mist Tea,
First Solar, Inc., Landiscor, Inc., OmniMount, Poore Brothers, Inc., Solar
Cells, Inc. and True North, LLC. 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 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 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. Mr. White has served as Chief Executive Officer of The Boston Financial
Corporation, a financial consulting and real estate finance company, since 1974.

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 over twenty years of resort management and
marketing experience in both the domestic and international markets.

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS MEETINGS

The Board of Directors of the Company met three times during the fiscal
year ended December 31, 2001. 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 2001 fiscal year, except for Steven R. Chanen and Patrick J.
McGroder, who missed the October meeting.

The Board of Directors maintains an audit committee ("Audit Committee"), a
stock option committee ("Stock Option Committee"), a compensation committee
("Compensation Committee"), an executive committee and an information technology
committee. There is no nominating committee or any committee performing that
function.

AUDIT COMMITTEE

The Audit Committee, which during 2001 consisted of Messrs. Myers, McGroder
and Chanen, met three times during fiscal year 2001. 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.

STOCK OPTION COMMITTEE

The Stock Option Committee, which consists of Messrs. Myers and McGroder,
met once during fiscal year 2001. 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 2001. 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, 2001
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.

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 committed to provide an initial 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. Effective January 1, 2000, the base
salaries of Ms. Stone and Mr. Zielinski were increased to $175,000 and $140,000,
respectively, and effective January 1, 2001 to $225,000, $200,000 and $150,000
for Mr. Martori, Ms. Stone and Mr. Zielinski, respectively. Effective April 1,
2001, the base salaries of Mr. Martori, Ms. Stone and Mr. Zielinski were
increased to $300,000, $250,000 and $180,000 respectively. Ms. Stone and Mr.
Zielinski received 15,000 and 7,000 restricted shares of Common Stock on January
1st of each year during their respective terms under the four-year employment
agreements which terminated in 2001.

In July 1999, the Company entered into an agreement with MEI to purchase
sixty vacation ownership interests for a purchase price of $500,000. The
purchase was financed with a promissory note bearing interest at 8% and with a
maturity date of December 15, 2002. During 2001, the Company made no principal
payments and paid $18,200 in interest on the note. In conjunction with this
transaction, the terms of a note payable to EJM were modified, as further
described below.

In 1999, the Company modified the terms of a note payable to EJM, which was
to mature on December 31, 1999 and which had been issued in conjunction with the
acquisition in 1994 of all of the Class A Limited Partnership Interests in Los
Abrigados Partners Limited Partnership, a subsidiary of the Company. The
modified terms provide for a 10% interest rate, quarterly interest payments and
a maturity date of December 15, 2003. The Company paid $53,083 in interest on
the note during 2001.

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 28.8% of the
Common Stock outstanding as of February 28, 2002. 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.

In December 1999, the Company completed the spin-off of its 80% owned
subsidiary SWI. As a result of the spin-off, the shareholders of the Company's
common stock were issued the Company's 80% ownership in SWI and the Company no
longer held a material interest in SWI. Shareholders as of the record date,
including shareholder officers, directors and 5% beneficial owners of the
Company's common stock, were issued a prorata distribution of shares of stock in
SWI. Such shares were mailed to shareholders in January 2000. In conjunction
with the spin-off, the Company agreed to provide up to $200,000 of working
capital financing to SWI through November 30, 2000, with any such advances to
bear interest at prime plus 3% and be due on December 31, 2000. In December
2000, the terms of the note were modified to include securing the note with
inventory and extending the due date to December 31, 2001. During 2001, no
advances were made under this agreement and the balance of the note was
$108,000. Effective January 2, 2002 the Company entered into a General Bill of
Sale, Assignment and Assumption Agreement with SWI whereby the Company assumed
all of the assets and liabilities of SWI in full satisfaction of this advance.

In January 2000, the Company entered into an agreement to lease from EJM
for $48,000 rent per year the building that houses its telemarketing operations,
administrative offices and the SWI warehouse and administrative offices. The
agreement has a two-year term, with three one-year options of the Company to
renew. Prior to January 2000, SWI leased the building from EJM for $48,000 per
year rent under an original one-year term with four options to renew through
December 2000. The Company paid $48,000 rent to EJM in 2001. Commencing January
1, 2000, the Company sublet space in the building to SWI for $2,000 per month.

During 1999, the Company adopted the ILX Resorts Incorporated Employee
Stock Ownership Plan & Trust ("ESOP"). During the year ended December 31, 2001,
the Company contributed $290,862 in cash and issued 20,000 shares of its
restricted common stock valued at $41,905 to the ESOP. In addition, during 2001,
the Company paid interest on the indebtedness of the ESOP, which indebtedness it
guarantees, of $13,979. At December 31, 2001, there was no outstanding principal
balance or indebtedness.

In October 2001, the Company adopted a stock compensation program ("the
Stock Compensation Program") for certain of its employees, primarily those
earning $50,000 or more per year. Under the program, employees received a
portion of compensation they would otherwise have earned in cash during the
fourth quarter of 2001 in shares of stock of the Company at a prescribed
formula. This program was extended to the first quarter of 2002, with shares
issuable in the second quarter of 2002. The total number of shares issued under
the program in January 2002 was 31,647 shares at $6.90 per share.

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 60 Chairman of the Board and Chief Executive
Officer
Nancy J. Stone 44 President, Chief Operating Officer and
Director
Edward S. Zielinski 50 Executive Vice President, President and
Chief Operating Officer of Varsity Clubs of
America Incorporated and Director
Joseph P. Martori, II 32 Executive Vice President, Executive Vice
President of Sales of Varsity Clubs of
America Incorporated and Director
Margaret M. Eardley 33 Executive Vice President, Chief Financial
Officer and President of VCA Nevada
Donald D. Denton 41 Executive Vice President of Sales

EXECUTIVE OFFICERS

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 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 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.

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 over twenty years of resort management and
marketing experience in both the domestic and international markets.

MARGARET M. EARDLEY has served as Executive Vice President and Chief
Financial Officer of the Company since October 2001 and from March 2000 to July
2000. Ms. Eardley was Vice President, Chief Financial Officer and Chief
Operating Officer of Republic Western Insurance Company from August 2000 to
2001. Ms. Eardley served as Vice President and Chief Financial Officer of First

American Health Concepts, Inc. from 1998 to 2000 and Vice President of Finance
for Cedar Hill Assurance Company from 1997 to 1998. Ms. Eardley received a B.S.
degree in Finance from Arizona State University and an M.B.A. from the
University of Phoenix.

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
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.

COMPENSATION OF EXECUTIVE OFFICERS

The following table shows, for each of the fiscal years ended December 31,
2001, 2000 and 1999, 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.

SUMMARY COMPENSATION

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

Joseph P. Martori (l) 2001 289,551(3) 65,331 (4) -- -- -- --
Chairman and Chief 2000 200,100 27,332 (5) -- -- -- --
Executive Officer 1999 200,100 -- (6) -- -- -- --

Nancy J. Stone (1) 2001 245,804(7) 48,868 (8) -- -- -- --
President 2000 175,000 55,839 (9) -- -- -- --
1999 150,000 43,358 (10) -- -- -- --

Edward S. Zielinski (l) 2001 172,582(11) 12,420 (12) -- -- -- --
Executive Vice President 2000 140,000 10,951 (13) -- -- -- --
1999 130,500 6,696 (14) -- -- -- --

Donald D. Denton 2001 36,000 260,512 (15) -- -- -- --
Executive Vice President 2000 36,000 238,112 (16) -- -- -- --
of Sales 1999 30,000 169,143 (17) -- -- --

(1) Effective as of January 1, 1998, each of Mr. Martori, Ms. Stone and Mr.
Zielinski entered into an employment agreement with the Company that
establishes the rates of annual base and incentive compensation to be
received by him or her commencing on such date. The respective agreements
terminated in 2001. See "Certain Relationships and Related Transactions."

(2) Excludes Profit Sharing Plan and Employee Stock Ownership 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. During 1999, the Company adopted an Employee Stock
Ownership Plan, to which it made contributions in 1999, 2000 and 2001. None
of the Named Executive Officers was allocated more than $7,200 for 1999,
$9,200 for 2000 nor is it expected to exceed $10,000 for 2001 under the two
plans.

(3) Includes 3,750 shares of Common Stock at $6.90 per share for 2001
compensation, but issued in 2002 under the Stock Compensation Program.

(4) Includes 10,000 and 12,500 shares of restricted Common Stock at $1.87 and
$2.06 per share respectively.

(5) Excludes 22,500 shares of restricted Common Stock issued in 2001, but which
were revocable in the event Mr. Martori was not employed by the Company on
January 1, 2002. Such shares are included in 2001 compensation.

(6) Includes 5,000 and 10,000 shares of restricted Common Stock at $1.125 and
$0.9375 per share, respectively.

(7) Includes 3,125 shares of Common Stock at $6.90 per share for 2001
compensation, but issued in 2002 under the Stock Compensation Program.

(8) Includes 15,000 and 5,000 shares of restricted Common Stock at $1.50 and
$1.87 per share, respectively.

(9) Includes 15,000 shares of unrestricted Common Stock at $1.125 per share.
Excludes 5,000 shares of restricted Common Stock issued in 2000, but which
were revocable if Ms. Stone was not employed by the Company on January 1,
2002, and 15,000 shares of restricted Common Stock issued in 2000 but not
earned until January 2001. Such shares are included in 2001 compensation.

(10) Includes 15,000, 5,000 and 5,000 shares of restricted Common Stock at
$1.03, $1.125 and $0.9375 per share, respectively, net of repayment of
$3,757 in 1999 of a 1998 overpayment of bonus.

(11) Includes 2,250 shares of Common Stock at $6.90 per share for 2001
compensation, but issued in 2002 under the Stock Compensation Program.

(12) Includes 7,000 shares of restricted Common Stock at $1.50 per share.

(13) Includes 7,000 shares restricted Common Stock at $1.125 per share. Excludes
7,000 shares of restricted Common Stock issued in 2000 but not earned until
January 2001. Such shares are included in 2001 compensation.

(14) Includes 7,000 and 5,000 shares of restricted Common Stock at $1.03 and
$1.125 per share, respectively, net of repayment of $11,325 in 1999 of a
1998 overpayment of bonus.

(15) Includes commissions on sales of vacation ownership interests and 3,174
shares of Common Stock at $6.90 per share for 2001 compensation, but issued
in 2002 under the Stock Compensation Program.

(16) Includes commissions on sales of vacation ownership interests and 6,000 and
4,000 shares of restricted Common Stock at $0.969 and $0.875 per share,
respectively.

(17) Includes commissions on sales of vacation ownership interests. Mr. Denton
worked a partial year in 1999, commencing March 1, 1999.

OPTION GRANTS IN THE LAST FISCAL YEAR

No stock options or stock appreciation rights were granted to Named
Executive Officers in 2001.

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 2001 and unexercised options held by Named
Executive Officers at December 31, 2001.

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

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

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 that may be issued under the Stock Option Plan
is 100,000 shares, of which 9,300 were available for future grants as of
December 31, 2001. 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 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 that may be issued under the 1992 Stock Option
Plan is 100,000 shares, all of which have been granted at December 31, 2001.
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,
2001:

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 had a four-year term that expired in December 2001. These
agreements provided for an initial annual base salary of $200,000 to
Mr. Martori, $150,000 to Ms. Stone and $130,000 to Mr. Zielinski.
Effective January 1, 2000, the base salaries to Ms. Stone and Mr.
Zielinski were increased to $175,000 and $140,000, respectively, and
effective January 1, 2001, the base salaries of Mr. Martori, Ms. Stone
and Mr. Zielinski were increased to $225,000, $200,000 and $150,000,
respectively. Effective April 1, 2001 the base salaries of Mr.
Martori, Ms. Stone and Mr. Zielinski were increased to $300,000,
$250,000 and $180,000, respectively. In addition, each employee may
receive certain incentive compensation at the discretion of the Board
of Directors. Under the agreements, Ms. Stone and Mr. Zielinski
received awards of 15,000 and 7,000 shares of restricted Common Stock,
respectively, on January 1, 1998 and each anniversary thereof.

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 2001, 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 2001.

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 established a program for its President (Ms. Stone) and
certain other executive officers whereby they were granted
unregistered shares of Common Stock as a component of their total
compensation. In 2000, 15,000 shares earned on January 1, 2000 and
15,000 shares to be earned on January 1, 2001 were issued to Ms. Stone
and 7,000 shares earned on January 1, 2000 and 7,000 shares to be
earned on January 1, 2001 were issued to Mr. Zielinski under the
program. The shares not earned until January 1, 2001 would have been
revoked had the officers not been employed on January 1, 2001. In
addition, 22,500, 5,000 and 6,000 shares of unregistered Common Stock
were issued as discretionary bonuses to Mr. Martori, Ms. Stone and Mr.
Denton, respectively, during 2000.

PROFIT SHARING PLAN. In 1994, the Company adopted a Profit Sharing
Plan for the benefit of all employees, including executive officers. A
contribution of $50,000 was declared and funded for the 2001 fiscal
year. Allocation among the participants of the amount contributed has
not yet occurred. The allocation is not expected to exceed $2,000 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.

EMPLOYEE STOCK OWNERSHIP PLAN. In 1999, the Company adopted an
Employee Stock Ownership Plan for the benefit of all employees,
including executive officers. For fiscal year 2001 the Company
contributed $250,000 in cash and 20,000 shares of unregistered Common
Stock to the plan. Allocation among the participants of the amount
contributed has not yet occurred. The allocation is not expected to
exceed $8,000 for any executive officer.

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 during fiscal year 2001.

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
March 29, 2002 James W. Myers

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, 1997 to
December 31, 2001. 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 that derive
substantial revenues from hotel/motel operations.

COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG ILX RESORTS INCORPORATED,
NASDAQ MARKET INDEX AND SIC CODE INDEX

1996 1997 1998 1999 2000 2001
---- ---- ---- ---- ---- ----

ILX RESORTS INCORPORATED 100.00 109.38 41.25 30.00 37.50 133.00
SIC CODE INDEX 100.00 108.11 81.37 80.02 94.59 95.00
NASDAQ MARKET INDEX 100.00 122.32 172.52 304.29 191.25 152.46

ASSUMES $100 INVESTED ON JAN. 1, 1997
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2001

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, 2001.
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, 1999 and 2000. The Board of Directors has
not yet selected independent accountants for the fiscal year ending December 31,
2002.

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 11, 2002, 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, 2001, 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 2003 Annual Meeting of Shareholders, such proposals
must be received by the Secretary of the Company no later than January 22, 2003,
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 aware of the following late filings for the year ended
December 31, 2001:

Individual Number of Late Reports Total Transactions Covered
- ---------- ---------------------- --------------------------
Donald D. Denton 1 1
Edward J. Martori 1 6

Both of the above individuals have made their appropriate Form 3, Form 4 or
Form 5 filings at the time of the mailing of this Proxy Statement.

Phoenix, Arizona
March 29, 2002 The Board of Directors