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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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 COMMISSION ONLY
(AS PERMITTED BY RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-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)(4) and 0-11.

1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):

- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------
5) Total fee paid:

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

[ ] Fee paid previously with preliminary materials:

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

1) Amount Previously Paid:
------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------
3) Filing Party:
----------------------------------------------------
4) Date Filed:
------------------------------------------------------

ILX RESORTS INCORPORATED [LOGO]

2111 East Highland Avenue, Suite 210
Phoenix, Arizona 85016

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON JUNE 19, 2003

To the Shareholders of ILX Resorts Incorporated:

Notice is hereby given that the 2003 Annual Meeting of Shareholders of ILX
Resorts Incorporated, an Arizona corporation (the "Company"), will be held at
the ILX Resorts Phoenix Sales Office, at 2111 E. Highland Avenue, Suite 150, on
the 19th day of June, 2003 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 14, 2003 will be entitled to vote
at the meeting.

All shareholders are cordially invited to attend the meeting in person. You
are urged to sign, date and otherwise complete the enclosed proxy card and
return it promptly in the enclosed envelope whether or not you plan to attend
the meeting. If you attend the meeting, you may vote your shares in person even
if you have signed and returned your proxy card.

By order of the Board of Directors,

/s/ Stephanie D. Castronova

Stephanie D. Castronova
Secretary

Phoenix, Arizona
April 9, 2003

ILX RESORTS INCORPORATED

2111 East Highland Avenue, Suite 210
Phoenix, Arizona 85016

PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS

To Be Held on June 19, 2003

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 2003 Annual Meeting of
Shareholders (the "Meeting"), to be held on June 19, 2003, 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 ILX Resorts Phoenix Sales Office, 2111 E. Highland
Avenue, Suite 150, Phoenix, Arizona 85016. This Proxy Statement and the
accompanying form of proxy (the "Proxy") will be first mailed to shareholders on
or about April 28, 2003.

Only holders of record of the Company's no par value common stock (the
"Common Stock") at the close of business on April 14, 2003 (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, 2003, the Company had issued and
outstanding 2,935,845 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 14,
2003, at the Annual Meeting of Shareholders to be held June 19, 2003, or any
adjournment thereof.

SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
AND MANAGEMENT

The following table sets forth, as of February 28, 2003, 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 1,125,685(2) 38.3%

Nancy J. Stone 134,232(3) 4.6%

Edward S. Zielinski 48,647(4) 1.7%

Patrick J. McGroder III 41,973(5) 1.4%

Joseph P. Martori, II 44,604 1.5%

Wayne M. Greenholtz 0 *

Steven R. Chanen 5,000(6) *

Steven A. White 6,525(6) 0.2%

Donald D. Denton, Jr. 16,363(7) 0.6%

Margaret M. Eardley 1,000 *

Thomas F. Dunlap 0 *

Martori Enterprises Incorporated ("MEI") 849,110 28.9%

ILX Resorts Incorporated Employee Stock
Ownership Plan & Trust 613,802 20.9%

All Directors and Officers as a Group
(11 persons) 1,424,029(8) 48.1%

- ----------
* 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 849,110 shares owned by MEI, of which Joseph P. Martori is a
director and owner of 96% of the voting capital stock; 132,300 shares held
in IRA accounts of which he is beneficiary; 7,818 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 and 7,304 shares 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; 19 shares held by Patrick J. McGroder III, P.C., an Arizona
professional corporation, wholly owned by Patrick J. McGroder III; 2,255
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; 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 options to purchase 5,000 shares from the Company at $4.60 per
share.

(7) Includes 674 shares held by the estate of Linda C. Denton.

(8) Includes options to purchase 26,000 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,
2003 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 49 1995
Wayne M. Greenholtz 62 2003
Joseph P. Martori 61 1986
Joseph P. Martori, II 33 1999
Patrick J. McGroder III 57 1997
Nancy J. Stone 45 1989
Steven A. White 58 2001
Edward S. Zielinski 51 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.

WAYNE M. GREENHOLTZ has served as a director of the Company since April
2003. 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 Business. Mr. Greenholtz attended the University of Maryland.

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 Chairman of
the Board of MEI, an investment company that holds 28.9% of the Company's
outstanding Common Stock. Mr. Martori is also Chairman of the Board of Greens
Worldwide Incorporated ("GWWI"). The Company owns (directly and indirectly)
37.7% of GWWI. 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
offsite Las Vegas sales office. 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 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. Mr.
McGroder currently serves as Director of GWWI. The Company owns (directly and
indirectly) 37.7% of GWWI.

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.

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.

BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS MEETINGS

The Board of Directors of the Company met four times during the fiscal year
ended December 31, 2002. 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 2002 fiscal year, except for Patrick J. McGroder, who missed the
February 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 consists of Messrs. Greenholtz, McGroder and
White, met four times during fiscal year 2002. 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.

STOCK OPTION COMMITTEE

The Stock Option Committee, which consists of Messrs. Chanen, McGroder and
White, met once during fiscal year 2002. 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. Chanen, McGroder, and
White met once during fiscal year 2002. 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, 2002
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.

During 1999, the Company adopted the ILX Resorts Incorporated Employee
Stock Ownership Plan & Trust ("ESOP"). During the year ended December 31, 2002,
the Company contributed $400,000 in cash to the ESOP which used the funds to
exercise options for 100,000 shares of the Company's common stock.

In December 1999, the Company completed the spin-off of its 80% owned
subsidiary Sedona Worldwide Incorporated ("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 August 2002, SWI was reorganized and named Greens Worldwide
Incorporated. The Company invested $1,000,000 in cash for 8,000,000 shares or an
approximately 36.4% ownership in GWWI. The Company also holds 270,618 shares
indirectly through the ILX Resorts Employee Stock Ownership Plan and Trust and
the ILX Resorts Profit Sharing Plan. GWWI plans to develop 23-acres of the
Company's 44-acre parcel in Las Vegas, Nevada. The facility will include a
sports themed restaurant and bar, pro-shop, and natural grass putting courses.
Plans include six putting courses of which four will be developed using 24
full-sized championship putting greens, each inspired by famous greens known
around the world.

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 2002 were 58,745 shares of which 31,742 were issued at $6.90 per
share and 27,003 were issued at $6.80 per share.

In March 2002, the Company completed a transaction with Edward John Martori
(EJM). EJM had been a creditor of the company and was a direct and indirect
major shareholder of the Company. EJM purchased the Sedona Station (the Sedona
sales office) for $1,650,000 and the Company recorded a gain of $586,111 on the
transaction. The loan to the Company secured by the property, which had a
balance of $794,345, was assumed by EJM and a note payable from the Company to
EJM of $700,000 was paid in full as a part of the transaction. The balance of
the purchase price was paid to the Company in cash. The Company is leasing the
space back from EJM under a nine-year lease agreement (at $165,000 per annum)
and paid $123,751 for rent expense during the twelve months ended December 31,
2002.

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 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 2002. Three one-year options to
renew at the rate of $48,000 per year remain on the existing lease.

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 28.9% of the
Common Stock outstanding as of February 28, 2003. The voting stock of MEI is
controlled by Mr. Martori.

In August 2002, the Company's Series B Convertible Preferred shareholders
converted the remaining 55,000 outstanding shares of Series B Convertible
Preferred Stock for 22,000 shares of common stock, and the ESOP agreed to
purchase such common shares at $8.25 per share in exchange for notes payable of
$181,500. The notes bear interest at 6%, payable in quarterly payments of
principal and interest through 2003, and are secured by the common shares. The
principal amount of the notes is guaranteed by the Company. No principal or
interest payments were made in 2002. The Company also settled the liquidation
preference for $204,649.

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 61 Chairman of the Board and Chief Executive Officer
Nancy J. Stone 45 President, Chief Operating Officer and Director
Edward S. Zielinski 51 Executive Vice President, President and Chief
Operating Officer of Varsity Clubs of America
Incorporated and Director
Joseph P. Martori, II 33 Executive Vice President, Executive Vice
President of Sales of Varsity Clubs of America
Incorporated and Director
Margaret M. Eardley 34 Executive Vice President and Chief Financial
Officer
Donald D. Denton 42 Executive Vice President of Sales
Thomas F. Dunlap 54 Executive Vice President of Marketing

EXECUTIVE OFFICERS

JOSEPH P. MARTORI has served as a director of the Company since its
inception and as Chairman of the Board since 1991. Mr. Martori served as
President from November 1993 through 1995 and has served as Chief Executive
Officer since 1994. Prior thereto, Mr. Martori was engaged in the private
practice of law since 1967 with the New York City law firm of Sullivan &
Cromwell; the Phoenix law firms of Snell & Wilmer; Martori, Meyer, Hendricks &
Victor, P.A. (of which he was a founding member); and Brown & Bain, P.A. (of
which he was the Chairman of the Corporate, Real Estate and Banking Department).
Mr. Martori was a founder of Firstar Metropolitan Bank & Trust in Phoenix and
served on its Board of Directors from 1983 to 2001. Mr. Martori is Chairman of
the Board of MEI, an investment company that holds 28.9% of the Company's
outstanding Common Stock. Mr. Martori is also Chairman of the Board of GWWI. The
Company currently owns (directly and indirectly) 37.7% of GWWI. 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 board member Joseph P. Martori, II.

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.

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
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.

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 also serves as
Director of GWWI. The Company owns (directly and indirectly) 37.7% of GWWI. 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.

THOMAS F. DUNLAP has served as Executive Vice President of Marketing since
September 2002. Prior thereto, Mr. Dunlap served as Vacation Ownership Director
for London Bridge Resort from June 1990 to July 2001. Mr. Dunlap has over twenty
years of sales and marketing experience in resort development.

COMPENSATION OF EXECUTIVE OFFICERS

The following table shows, for each of the fiscal years ended December 31,
2002, 2001 and 2000, 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) 2002 306,660(3) -- -- -- -- --
Chairman and Chief 2001 289,551(4) 65,331(5) -- -- -- --
Executive Officer 2000 200,100 27,332(6) -- -- -- --

Nancy J. Stone (1) 2002 258,080(7) -- -- -- -- --
President 2001 245,804(8) 48,868(9) -- -- -- --
2000 175,000 55,839(10) -- -- -- --

Edward S. Zielinski (l) 2002 178,121(11) -- -- -- -- --
Executive Vice President 2001 172,582(12) 12,420(13) -- -- -- --
2000 140,000 10,951(14) -- -- -- --

Donald D. Denton 2002 36,000 211,215(15) -- -- -- --
Executive Vice President 2001 36,000 260,512(16) -- -- -- --
of Sales 2000 36,000 238,112(17) -- -- -- --

Margaret M. Eardley 2002 137,149 --(18) -- -- -- --
Executive Vice President 2001 31,192(19) -- -- -- -- --
and Chief Financial Officer 2000 41,110(20) -- -- -- -- --

- ----------
(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 2000, 2001 and 2002. None
of the Named Executive Officers was allocated more than $9,200 for 2000,
$7,600 for 2001, and $8,900 for 2002 under the two plans.

(3) Includes 3,462 shares of Common Stock at $6.80 per share for 2002
compensation issued under the Stock Compensation Program.

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

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

(6) 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.

(7) Includes 2,885 shares of Common Stock at $6.80 per share for 2002
compensation issued under the Stock Compensation Program.

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

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

(10) 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.

(11) Includes 2,077 shares of Common Stock at $6.80 per share for 2002
compensation issued under the Stock Compensation Program.

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

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

(14) 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.

(15) Includes commissions on sales of vacation ownership interests and 2,629
shares of Common Stock at $6.80 per share for 2002 compensation issued
under the Stock Compensation Program. Excludes 2,000 shares of restricted
Common Stock issued in 2002 but which are revocable in the event Mr. Denton
is not employed by the Company on January 1, 2004.

(16) 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.

(17) 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.

(18) Excludes 1,000 shares of restricted Common Stock issued in 2002 but which
are revocable in the event Ms. Eardley is not employed by the Company on
January 1, 2004.

(19) Ms. Eardley worked a partial year in 2001, commencing on October 1, 2001.

(20) Ms. Eardley worked a partial year in 2000, from March to August.

OPTION GRANTS IN THE LAST FISCAL YEAR

No stock options or stock appreciation rights were granted to Named
Executive Officers in 2002.

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 2002 and unexercised options held by Named
Executive Officers at December 31, 2002.

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 66,800 were available for future grants as of
December 31, 2002. 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 were granted at December 31, 2002. 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,
2002:

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.

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 2002, 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 2002.

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.

In 2002, 2,000 and 1,000 shares of unregistered Common Stock were
issued as discretionary bonuses to Mr. Denton and Ms. Eardley,
respectively. The shares will be revoked if the officers are not
employed on January 1, 2004.

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 2002 fiscal

year. The allocation did not exceed $1,500 for any executive officer.
Allocations are determined based on participant earnings and the
formulas defined in the plan, which are intended to comply with
Internal Revenue Service regulations.

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 2002 the Company
contributed $400,000 to the ESOP and the funds were used to exercise
options for 100,000 shares of Common Stock. The allocation did not
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 2002.

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
April 9, 2003 THE ILX RESORTS INCORPORATED COMPENSATION COMMITTEE

AUDIT COMMITTEE REPORT

The Board of Directors maintains an Audit Committee comprised of three
of the Company's outside 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 121(A). The Audit
Committee revised its original Charter and the current Charter is
found in Appendix 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.
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.

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, 2002.

Phoenix, Arizona
April 9, 2003 THE ILX RESORTS INCORPORATED AUDIT COMMITTEE

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, 1998 to
December 31, 2002. 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

[GRAPH]

1997 1998 1999 2000 2001 2002
------- ------- ------- ------- ------- -------

ILX Resorts Incorporated $100.00 $ 37.71 $ 27.43 $ 34.28 $121.59 $144.45
SIC Code Index $100.00 $ 75.26 $ 74.01 $ 87.50 $ 87.87 $ 79.14
Nasdaq Market Index $100.00 $141.04 $248.76 $156.35 $124.64 $ 86.94

ASSUMES $100 INVESTED ON JAN. 1, 1998
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2002

INDEPENDENT PUBLIC ACCOUNTANTS

At the determination of the Audit Committee, the accounting firm of Hansen,
Barnett & Maxwell, a professional corporation, was engaged as the Company's
principal accountants for the year ended December 31, 2002. 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, 2000, and 2001. The Board of Directors has not yet
selected independent accountants for the fiscal year ending December 31, 2003.

AUDIT FEES

Fees for the fiscal year 2002 audit and the review of Forms 10-Q for 2002
are $54,250; of which $2,500 has been billed as of April 9, 2003.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES.

There were no fees billed for Financial Information Systems Design and
Implementation Fees.

ALL OTHER FEES

Aggregate Fees contracted/billed for all other services rendered by Hansen,
Barnett & Maxwell for the year ended December 31, 2002 are $18,486 and consist
mainly of non-audit fees related to tax compliance services.

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, 2003, 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, 2002, 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 2004 Annual Meeting of Shareholders, such proposals
must be received by the Secretary of the Company no later than January 22, 2004,
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, 2002:

Individual Number of Late Reports Total Transactions Covered
- ---------- ---------------------- --------------------------
Patrick J. McGroder III 1 3

The above individual has made his appropriate Form 3, Form 4 or Form 5
filings at the time of the mailing of this Proxy Statement.

Phoenix, Arizona
April 9, 2003 The Board of Directors

APPENDIX A

ILX RESORTS INCORPORATED
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

CHARTER

I. Purpose

The primary functions of the Audit Committee are to: (a) assist the
Board of Directors in fulfilling its oversight responsibilities by
reviewing: the financial reports and other financial information provided
by ILX Resorts Incorporated ("the Corporation") to any governmental body or
the public; the Corporation's systems of internal controls regarding
finance, accounting, legal compliance and ethics that management and the
Board have established; and the Corporation's auditing, accounting and
financial reporting processes generally; (b) prepare the report required by
the United States Securities and Exchange Commission (the "SEC") for
inclusion in the Corporation's annual proxy statement; (c) retain and
terminate the Corporation's independent accountant; and (d) approve audit
and non-audit services to be performed by the independent accountant.
Consistent with this function, the Audit Committee shall encourage
continuous improvement of, and foster adherence to, the Corporation's
policies, procedures and practices at all levels. The Audit Committee's
primary duties and responsibilities are to: o Serve as an independent and
objective party to monitor the Corporation's financial reporting process
and internal control system. o Review and appraise the audit efforts of the
Corporation's independent accountants. o Provide an open avenue of
communication among the independent accountants, financial and senior
management and the Board of Directors. o Provide a facility to which all
concerned outside parties as well as Corporation's employees can raise
concerns related to the Corporation's accounting, internal control or
audits.

The Audit Committee will primarily fulfill these responsibilities by
carrying out the activities enumerated in Section IV. of this Charter.

II. Composition

The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors as
such term is defined in the effective rules and regulations of the SEC and
the American Stock Exchange ("AMEX"), and free from any relationship that,
in the opinion of the Board, would interfere with the exercise of his or
her independent judgment as a member of the Audit Committee. A director
will not be considered "independent" if, among other things, he or she has:

* been employed by the Corporation or its subsidiaries or affiliates in
the current or past three years;

* accepted any compensation from the Corporation or its subsidiaries or
affiliates in excess of $60,000 during the previous fiscal year
(except for board service, retirement plan benefits or
non-discretionary compensation);

* an immediate family member who is, or has been in the past three
years, employed by the Corporation or its subsidiaries or affiliates
as an executive officer;

* been a partner, controlling shareholder or an executive officer of any
for-profit business to which the Corporation made, or from which it
received, payments (other than those which arise solely from
investments in the Corporation's securities) that exceed five percent
of the Corporation's consolidated gross revenues for that year, or
$200,000, whichever is more, in any of the past three years; or

* been employed as an executive of another entity where any of the
Corporation's executives serve on that entity's compensation committee

All members of the Audit Committee shall have a working familiarity
with basic finance and accounting practices, and at least one member of the
Audit Committee shall have accounting or related financial management
expertise.

The members of the Audit Committee shall be elected by the Board
annually at the Board Meeting following the Annual Meeting of Shareholders.
Unless a Chair is elected by the full Board, the members of the Audit
Committee may designate a Chair by majority vote of the full Committee
membership.

III. Meetings

The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate. In addition, as part of its job to
foster open communication, the Audit Committee shall meet at least annually
with management and the independent accountants in separate executive
sessions to discuss any matters that the Audit Committee or each of these
groups believe should be discussed privately.

The Audit Committee shall maintain minutes or other records of its
meetings and activities. In addition, the Audit Committee shall report
through its Chair to the Board of Directors following each meeting of the
Audit Committee.

IV. Responsibilities and Duties

To fulfill its responsibilities and duties the Audit Committee shall:

DOCUMENTS/REPORTS REVIEW

1. Review and update this Charter periodically but no less frequently
than annually, as conditions dictate.

2. Review the Corporation's annual financial statements and any reports
or other financial information submitted to any governmental body, or
the public, including any certification, report, opinion or review
rendered by the independent accountants.

3. Review with financial management and the independent accountants the
Corporation's 10-Qs and 10-K prior to the filing of each. The Chair of
the Audit Committee may represent the entire Committee for purposes of
10-Q reviews.

4. Review and discuss with management and the independent accountant
earnings press releases. The Committee should discuss in advance each
earnings release and generally discuss the types of information to be
disclosed and the type of presentation to be made in any earnings
release or guidance. The failure to do so is not a violation of the
Committee's Charter if circumstances do not permit the Committee to
meet in advance of an earnings release.

5. Review with management and the independent accountant any
correspondence with regulators or government agencies and any employee
complaints or published reports that raise material issues regarding
the Corporation's financial statements or accounting policies.

6. Prepare the report required by the rules of the SEC to be included in
the Corporation's annual proxy statement.

7. Submit the minutes of all meetings of the Committee to, or discuss the
matters discussed at each Committee meeting with, the Board.

8. Review any restatements of financial statements that have occurred or
were recommended. Review the restatements made by other clients of the
independent accountant.

INDEPENDENT ACCOUNTANTS

9. Interview and retain the independent accountants, considering both
independence and effectiveness, and approve the fees and other
compensation to be paid to the independent accountants. On an annual
basis, the Audit Committee shall (a) review and discuss with the
accountants all significant relationships the accountants have with
the Corporation to determine the accountants' independence; (b) review
the performance of the independent accountants; and (c) appoint or
terminate the independent accountants.

10. Confer with the independent accountants concerning the scope of their
examinations of the books and records of the Corporation and its
subsidiaries; review and execute the independent accountants' annual
engagement letter; direct the special attention of the accountants to
specific matters or areas deemed by the Audit Committee or the
accountants to be of special significance; and authorize the
accountants to perform such supplemental review or audits as the Audit
Committee may deem desirable.

11. Review with management and the independent accountants significant
risks and exposures, audit activities and significant audit findings.

12. Review and approve the range and cost of audit as well as non-audit
services performed by the independent accountants.

13. Periodically consult with the independent accountants out of the
presence of management about internal controls and the fullness and
accuracy of the Corporation's financial statements.

FINANCIAL REPORTING PROCESS

14. In consultation with the independent accountants, review the integrity
of the Corporation's financial reporting processes, both internal and
external.

15. Review and approve all related-party transactions.

16. Consider the independent accountants' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied
in its financial reporting.

17. Annually review major issues regarding the Corporation's auditing and
accounting principles and practices and its presentation of financial
statements, including the adequacy of the Corporation's systems of
internal control and special audit steps adopted in light of material
internal control deficiencies.

18. Obtain from the independent accountants their recommendations
regarding internal controls and other matters relating to the
accounting procedures and the books and records of the Corporation and
its subsidiaries and review the correction of any controls deemed to
be deficient.

19. Consider and approve, if appropriate, major changes to the
Corporation's auditing and accounting principles and practices as
suggested by the independent accountants or management.

20. Discuss with management and legal counsel the status of pending
litigation, taxation matters, compliance policies and other areas of
oversight applicable to the legal and compliance area as may be
appropriate.

21. Review with management and the independent accountant the effect of
regulatory and accounting initiatives, as well as off-balance sheet
structures, on the Corporation's financial statements.

PROCESS IMPROVEMENT

22. Establish regular and separate systems of reporting to the Audit
Committee by each of management and the independent accountants
regarding any significant judgments made in management's preparation
of the financial statements and the view of each as to appropriateness
of such judgments.

23. Following completion of the annual audit, review separately with each
of management and the independent accountants any significant
difficulties encountered during the course of the audit, including any
restrictions on the scope of work or access to required information.

24. Review any significant disagreement among management and the
independent accountants in connection with the preparation of the
financial statements.

25. Review with the independent accountants and management the extent to
which changes or improvements in financial or accounting practices, as
approved by the Audit Committee, have been implemented. (This review
shall be conducted at an appropriate time subsequent to implementation
of changes or improvements, as declared by the Audit Committee.)

26. Review the procedures established by the Corporation that monitor the
compliance by the Corporation with its loan and indenture covenants
and restrictions.

ETHICAL AND LEGAL COMPLIANCE

27. Establish, review and update periodically the Corporation's code of
Business Conduct and ensure that management has established a system
to enforce this code.

28. Review management's monitoring of the Corporation's compliance with
its code of Business Conduct, and ensure that management has the
proper review system in place to ensure that the Corporation's
financial statements, reports and other financial information
disseminated to governmental organizations, and the public satisfy
legal requirements.

29. Review, with the Corporation's counsel, legal compliance matters
including corporate securities trading policies.

30. Review, with the Corporation's counsel, any legal matter that could
have a significant impact on the Corporation's financial statements.

31. Perform any other activities consistent with this Charter, the
Corporation's Bylaws and governing law, as the Audit Committee or the
Board deems necessary or appropriate.

OTHER

32. Conduct or authorize investigations into any matters within the Audit
Committee's scope of responsibilities. The Audit Committee shall be
empowered to retain independent counsel, accountants, or others to
assist it in the conduct of any investigation.

33. Consider such other matters in relation to the financial affairs of
the Corporation and its accounts, and in relation to the external
audit of the Corporation as the Audit Committee may, in its
discretion, determine to be advisable.

Adopted by the Audit Committee and approved by the Board of Directors on
April 9, 2003.

PROXY - ILX RESORTS INCORPORATED

2111 EAST HIGHLAND AVENUE, SUITE 210
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, 2003, at the Annual Meeting of Shareholders to
be held June 19, 2003, or any adjournment thereof.

IN THE EVENT THE SHAREHOLDER DOES NOT INDICATE A PREFERENCE ON PROPOSAL NO. 1,
MANAGEMENT INTENDS TO VOTE FOR PROPOSAL NO. 1.

SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING IN ACCORDANCE WITH
THE SHAREHOLDER'S SPECIFICATION ON THE REVERSE SIDE. THIS PROXY CONFERS
DISCRETIONARY AUTHORITY IN RESPECT TO MATTERS FOR WHICH THE SHAREHOLDER HAS NOT
INDICATED A PREFERENCE OR IN RESPECT TO MATTERS NOT KNOWN OR DETERMINED AT THE
TIME OF THE MAILING OF THE NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS TO THE
UNDERSIGNED.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE.)

ILX RESORTS INCORPORATED
[LOGO]

[ ] Mark this box with an X if you have
made changes to your name or
address details above.

================================================================================

ANNUAL MEETING PROXY CARD

A ELECTION OF DIRECTORS

1. The Board of Directors recommends a vote FOR the listed nominees.

FOR WITHHOLD FOR WITHHOLD
--- -------- --- --------

01 - Steven R. Chanen [ ] [ ] 05 - Wayne M. Greenholtz [ ] [ ]
02 - Joseph P. Martori [ ] [ ] 06 - Nancy J. Stone [ ] [ ]
03 - Joseph P. Martori, II [ ] [ ] 07 - Steven A. White [ ] [ ]
04 - Patrick J. McGroder III [ ] [ ] 08 - Edward S. Zielinski [ ] [ ]

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 - SIGN HERE - THIS SECTION MUST BE COMPLETED FOR YOUR
INSTRUCTIONS TO BE EXECUTED.

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.

Signature 1 - Please keep signature within the box Signature 2 - Please keep signature within the box Date (mm/dd/yyyy)

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