<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section240.14a-11(c) or Section240.14a-12
DFA Investment Dimensions Group Inc.
- --------------------------------------------------------------------------------
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] 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:
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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 calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
PRELIMINARY PROXY MATERIAL
DFA INVESTMENT DIMENSIONS GROUP INC.
1299 OCEAN AVENUE
11TH FLOOR
SANTA MONICA, CALIFORNIA 90401
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS OF
JAPANESE SMALL COMPANY PORTFOLIO
PACIFIC RIM SMALL COMPANY PORTFOLIO
UNITED KINGDOM SMALL COMPANY PORTFOLIO
CONTINENTAL SMALL COMPANY PORTFOLIO
JULY 3, 1996
To Shareholders:
A Special Meeting of Shareholders of Japanese Small Company Portfolio,
Pacific Rim Small Company Portfolio, United Kingdom Small Company Portfolio and
Continental Small Company Portfolio (collectively, the "Portfolios") of DFA
Investment Dimensions Group Inc. (the "Fund") will be held at the offices of the
Portfolios' investment advisor, Dimensional Fund Advisors Inc., 1299 Ocean
Avenue, 11th Floor, Santa Monica, California, 90401 at 8:00 a.m. Pacific Coast
time, on July 3, 1996 for the following purposes:
THE FOLLOWING ITEM IS TO BE VOTED ON ONLY BY SHAREHOLDERS OF RECORD OF
JAPANESE SMALL COMPANY PORTFOLIO:
1. To approve or disapprove changes in certain of the investment
limitations of Japanese Small Company Portfolio to permit it to invest
all of its assets in an open-end, management investment company having
the same investment objective, policies and limitations as the
Portfolio.
THE FOLLOWING ITEM IS TO BE VOTED ON ONLY BY SHAREHOLDERS OF RECORD OF
PACIFIC RIM SMALL COMPANY PORTFOLIO:
2. To approve or disapprove changes in certain of the investment
limitations of Pacific Rim Small Company Portfolio to permit it to
invest all of its assets in an open-end, management investment company
having the same investment objective, policies and limitations as the
Portfolio.
THE FOLLOWING ITEM IS TO BE VOTED ON ONLY BY SHAREHOLDERS OF RECORD OF
UNITED KINGDOM SMALL COMPANY PORTFOLIO:
3. To approve or disapprove changes in certain of the investment
limitations of United Kingdom Small Company Portfolio to permit it to
invest all of its assets in an open-end, management investment company
having the same investment objective, policies and limitations as the
Portfolio.
<PAGE>
THE FOLLOWING ITEM IS TO BE VOTED ON ONLY BY SHAREHOLDERS OF RECORD OF
CONTINENTAL SMALL COMPANY PORTFOLIO:
4. To approve or disapprove changes in certain of the investment
limitations of Continental Small Company Portfolio to permit it to
invest all of its assets in an open-end, management investment company
having the same investment objective, policies and limitations as the
Portfolio.
Shareholders of record at the close of business on April 30, 1996 are
entitled to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors
IRENE R. DIAMANT
Secretary
May __, 1996
Santa Monica, California
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IMPORTANT
Whether or not you plan to attend the meeting, please mark your voting
instructions on the enclosed proxy and promptly date, sign and return it in the
enclosed envelope. No postage is required if mailed in the United States. We
ask your cooperation in helping the Fund by mailing your proxy promptly.
- -------------------------------------------------------------------------------
<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
1299 OCEAN AVENUE
11TH FLOOR
SANTA MONICA, CALIFORNIA 90401
PROXY STATEMENT - SPECIAL MEETING OF SHAREHOLDERS OF
JAPANESE SMALL COMPANY PORTFOLIO
PACIFIC RIM SMALL COMPANY PORTFOLIO
UNITED KINGDOM SMALL COMPANY PORTFOLIO
CONTINENTAL SMALL COMPANY PORTFOLIO
July 3, 1996
The enclosed proxy is solicited by the Board of Directors of DFA Investment
Dimensions Group Inc. (the "Fund") in connection with a Special Meeting of
Shareholders ("Meeting") of Japanese Small Company Portfolio, Pacific Rim Small
Company Portfolio, United Kingdom Small Company Portfolio and Continental Small
Company Portfolio (collectively, the "Portfolios") and any adjournment thereof.
Proxies will be voted in accordance with the instructions contained thereon. If
no instructions are given, proxies that are signed and returned will be voted in
favor of the proposals. A shareholder may revoke his or her proxy at any time
before it is exercised by delivering a written notice to the Fund expressly
revoking such proxy, by executing and forwarding to the Fund a subsequently
dated proxy, or by voting in person at the Meeting. This proxy statement and
the accompanying form of proxy are being first sent to shareholders on
approximately May 20, 1996. In the event a quorum is not present in person or
by proxy at the Meeting or, if there are insufficient votes to approve a
particular proposal, the persons named as proxies will consider the best
interests of the shareholders in deciding whether the Meeting should be
adjourned.
As of the close of business on April 30, 1996, the record date fixed by the
Board of Directors for the determination of shareholders of the Portfolios
entitled to notice of and to vote at the Meeting ("Record Date"),
_________________ shares of the Japanese Small Company Portfolio, ______________
shares of the Pacific Rim Small Company Portfolio, ______________ shares of the
United Kingdom Small Company Portfolio and ___________ shares of the Continental
Small Company Portfolio were outstanding. SHAREHOLDERS OF A PORTFOLIO ARE
ENTITLED TO VOTE ONLY ON THE PROPOSAL THAT AFFECTS THAT PARTICULAR PORTFOLIO.
EACH SHARE IS ENTITLED TO ONE VOTE.
<PAGE>
The vote of the holders of a "majority of the outstanding voting
securities" of each Portfolio, as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), represented at the meeting in person or by proxy,
is required for the approval of each proposal ("1940 Act Majority Vote"). A
1940 Majority Act Vote means the vote of (a) at least 67% of the shares of each
Portfolio present in person or by proxy, if more than 50% of the shares of the
Portfolio are represented at the meeting, or (b) more than 50% of the
outstanding shares of each Portfolio, whichever is less. Under Maryland law,
abstentions and broker non-votes will be included for purposes of determining
whether a quorum is present at the Meeting, but will be treated as votes not
cast and, therefore, would not be counted for purposes of determining whether
the Proposals have been approved. No other business may properly come before
the Meeting.
The cost of solicitation, including preparing and mailing the proxy
materials, will be borne by the Portfolios. In addition to solicitations
through the mails, the employees of the Fund's investment advisor may solicit
proxies by telephone, telegraph and personal interviews. It is not anticipated
that any of the foregoing persons will be specially engaged for that purpose.
Furthermore, if necessary to obtain the requisite representation of
shareholders, an outside solicitation agent may be used. The cost of such
additional solicitation, if any, including out-of-pocket disbursements, will be
borne by the Portfolios and it is estimated to be no more than $7,500 per
Portfolio.
PRINCIPAL SHAREHOLDERS
The following shareholders beneficially owned more than 5% of the
Portfolios' outstanding shares as of the Record Date:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
NAME & ADDRESS BENEFICIALLY OWNED OF PORTFOLIO
- -------------- ------------------ ------------
<S> <C> <C>
JAPANESE SMALL COMPANY PORTFOLIO:
- ---------------
- ---------------
- --------------- ---------------- -----------
TOTAL
PACIFIC RIM SMALL COMPANY PORTFOLIO:
- ---------------
- ---------------
- --------------- ---------------- -----------
TOTAL
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<PAGE>
UNITED KINGDOM SMALL COMPANY PORTFOLIO
- ---------------
- ---------------
- --------------- ---------------- -----------
TOTAL
CONTINENTAL SMALL COMPANY PORTFOLIO:
- ---------------
- ---------------
- --------------- ---------------- -----------
TOTAL
</TABLE>
As of the Record Date, the Directors and officers of the Fund, as a group,
beneficially owned less than 1% of the Portfolios' outstanding shares. The
directors and executive officers who beneficially own 1% or less of the
outstanding shares of a Portfolio, as well as the number of shares held, are as
follows:
<TABLE>
<CAPTION>
NAME AND TITLE PORTFOLIO NAME NUMBER OF SHARES
- -------------- -------------- ----------------
<S> <C> <C>
Arthur Barlow Continental Small Company 813.299
(Vice President) Japanese Small Company 703.098
United Kingdom Small Company 238.185
Eugene F. Fama Jr. Continental Small Company 2,550.999
(Vice President) Japanese Small Company 3,934.316
United Kingdom Small Company 2,439.989
Rex Sinquefield Continental Small Company 6,001.115
(Director, Chairman Japanese Small Company 20,873.616
and Chief Investment
Officer) United Kingdom Small Company 18,449.542
& Jeanne Sinquefield
(Executive Vice President)
</TABLE>
-3-
<PAGE>
PROPOSAL NOS. 1-4: APPROVAL OR DISAPPROVAL OF CHANGES IN THE PORTFOLIOS'
INVESTMENT LIMITATIONS
The Board of Directors of the Fund has approved the adoption of certain
changes in the Portfolios' investment limitations to permit each of the
Portfolios to invest all of its investable assets ("Assets") in shares of a
corresponding series of The DFA Investment Trust Company (the "Trust"), an
open-end, management investment company registered under the Investment Company
Act of 1940 (the "1940 Act") that issues series of shares having the same
investment objective, policies and limitations as each of the Portfolios
(individually and collectively, the "Series"). The proposed changes to the
investment limitations of the Portfolios are subject to approval by the
Portfolios' shareholders. Specifically, if Proposal No. 1 is approved, the
Japanese Small Company Portfolio intends to invest all of its Assets in the
Japanese Small Company Series of the Trust. If Proposal No. 2 is approved,
the Pacific Rim Small Company Portfolio intends to invest all of its Assets in
the Pacific Rim Small Company Series of the Trust. If Proposal No. 3 is
approved, the United Kingdom Small Company Portfolio intends to invest all of
its Assets in the United Kingdom Small Company Series of the Trust. If Proposal
No. 4 is approved, the Continental Small Company Portfolio intends to invest
all of its Assets in the Continental Small Company Series of the Trust.
The mailing address and telephone number of the Trust are the same as that
of the Fund. Dimensional Fund Advisors Inc. ("DFA"), the current investment
advisor to each of the Portfolios, is the investment advisor to each Series of
the Trust. DFA Australia Pty Limited ("DFA Australia"), the current sub-advisor
of Japanese Small Company and Pacific Rim Small Company Portfolios, is the
sub-advisor of the Japanese Small Company and Pacific Rim Small Company Series
of the Trust. Dimensional Fund Advisors Ltd. ("DFAL"), the current sub-advisor
of United Kingdom Small Company and Continental Small Company Portfolios, is
the sub-advisor of the United Kingdom Small Company and Continental Small
Company Series of the Trust. The same persons who serve as officers and
directors of the Fund also serve the Trust in identical capacities.
PROPOSED CHANGES TO INVESTMENT LIMITATIONS
Certain investment limitations of the Portfolios would prohibit the
Portfolios from investing their assets in the corresponding Series of the Trust.
For example, one of these limitations currently provides that the Portfolios may
not invest in other investment companies. It is proposed that the limitations
be revised to exclude from their scope an investment in an open-end, management
investment company or a series thereof with the same objectives, policies and
limitations as the Portfolios. (See "Specific Changes" on page __.)
If the proposed changes in the investment limitations are approved by the
respective Portfolios' shareholders, the Board of Directors of the Fund intends
to invest the Assets of each Portfolio in a corresponding Series on a continuing
basis. Each
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<PAGE>
Portfolio will transfer its Assets to the corresponding Series in exchange for
shares of beneficial interest in that Series having the same dollar value as the
Assets transferred. Each Series will be managed in the same manner as each
Portfolio is currently managed. DFA, the current investment advisor of the
Portfolios, is the investment advisor of the Series, and the Portfolios' current
sub-advisors also serve as the sub-advisors of the corresponding Series of the
Trust. Accordingly, by investing in a Series, each Portfolio intends to
continue to pursue its present investment objective in substantially the same
manner as it does currently, except that it would pursue that objective through
its investment in the corresponding Series rather than through direct
investments in the stocks of foreign small companies. Each Series of the Trust
intends to invest its monies in the same types of securities, subject to the
same policies and limitations, and under the same management as each
corresponding Portfolio. Inasmuch as the assets of a Portfolio would be
directly invested in a portfolio of similar securities, the directors of the
Fund believe there are no material risks of investing in a Series that are
different from those to which shareholders of the Portfolios are currently
subject.
A Portfolio may redeem all or a portion of its investment in a Series at
any time at net asset value thereof if the Board of Directors of the Fund
determines that it is in the best interests of the shareholders of a Portfolio
to do so. In such circumstances, the Board of Directors of the Fund would
consider what action might be taken, including the investment of all of the
Assets of the Portfolio in another pooled investment entity having substantially
the same investment objective as the Portfolio, or retention of an investment
advisor to manage the Portfolio's Assets in accordance with its investment
policies.
While the approval of a Series' investors would not be required to change
certain of its investment policies, any change in a Series' investment objective
and fundamental investment limitations would require such approval. A
Portfolio, as an investor in a Series, will have the right to vote the shares of
the Series that it holds. Whenever a Portfolio, as an investor in its
corresponding Series, is asked to vote on a shareholder proposal, the Directors
of the Fund intend to vote all of the shares that the Portfolio holds in the
Series without submitting any such proposal to the shareholders of the
Portfolio, except when the Board of Directors of the Fund determines that it is
in the best interests of the Fund to submit the proposal to the Portfolio's
shareholders. Consequently, the proposed investment of the Portfolios' Assets
in the Series would alter the voting rights of shareholders of the Portfolios
because such shareholders will not have an absolute right to vote on matters
submitted to a Portfolio by its corresponding Series. If the Directors of the
Fund decide to submit a proposal to the Portfolio's shareholders, the Fund will
hold a special meeting of the Portfolio's shareholders to solicit their votes
with respect to the proposal. The Directors of the Fund will then vote the
Portfolio's shares in the Series in accordance with the voting instructions
received from the Portfolio's shareholders. The Directors of the Fund will vote
shares of the Portfolio for which they receive no voting instructions in the
same proportion as the shares for which they receive voting instructions.
Institutional investors that have a
-5-
<PAGE>
greater pro rata ownership interest in the Series than the Portfolio could have
effective voting control over operation of the Series.
The Trust has its own Board of Trustees, including a majority of trustees
who are not "interested persons," as defined by the 1940 Act, of the Trust. The
Board of Trustees of the Trust is primarily responsible for the overall
management of each Series and for electing officers who are responsible for
administering the day-to-day operations of the Trust.
Shares in the Trust have no preemptive or conversion rights, and are fully
paid and nonassessable. The Trust is not required to hold annual meetings of
its investors, but the Trust will hold special meetings of investors when, in
the judgment of its trustees, it is necessary or desirable to submit matters for
an investor vote. Investors in the Trust have, under certain circumstances
(e.g., upon application and submission of certain specified documents to the
trustees by a specified number of investors), the right to communicate with
other investors in the Trust in connection with requesting a meeting of
investors in the Trust for the purpose of removing one or more of the trustees.
Investors in the Trust also have the right to remove one or more trustees at any
meeting of shareholders by a vote of two-thirds of the outstanding shares. Upon
liquidation of the Trust, investors in a Series would be entitled to share pro
rata in the net assets of the Series available for distribution to investors.
If the proposals are approved, the Portfolios will invest all of their
Assets in the corresponding Series, and the Portfolios will no longer require
investment advisory services. For this reason, the existing investment advisory
agreements between the Fund and DFA with respect to the Portfolios would be
terminated. Under the existing investment advisory agreements, DFA also
provides certain administrative services that will continue to be provided to
the Portfolios after they invest in the corresponding Series. Pursuant to the
existing investment advisory agreements, each Portfolio pays DFA a fee at an
annual rate of .50% of the Portfolio's average net assets. The Board of
Directors of the Fund has approved a new administration agreement with DFA, on
behalf of each of the Portfolios, for the provision of certain administrative
services to each Portfolio. Under these agreements, DFA will be compensated for
providing administrative services at an annual rate of .40% of the average net
assets of each Portfolio. The investment advisory agreement with respect to
each Portfolio will terminate and the administration agreement with respect to
each Portfolio will take effect at such time as each Portfolio invests its
assets in the corresponding Series.
The assets of the Japanese Small Company Series, Pacific Rim Small Company
Series, United Kingdom Small Company Series and Continental Small Company Series
will be managed pursuant to individual investment management agreements with
DFA. Under these agreements, DFA will charge each Series an investment
management fee equal, on an annual basis, to .10% of the average net assets of
each such Series. The rate of the management fees under each new investment
management agreement with
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<PAGE>
each Series and the rate of the administration fees under each new
administration agreement with each Portfolio, in total, are equal to the rate of
each Portfolio's present investment management fees.
If the proposals are approved, each Portfolio's existing Sub-Advisory
Agreement among the sub-advisor, DFA and the Fund will be terminated. A
Sub-Advisory Agreement on behalf of each Series of the Trust will be executed
among the sub-advisor, DFA and the Trust. Pursuant to the existing Sub-Advisory
Agreements for the Japanese Small Company and Pacific Rim Small Company
Portfolios, DFA pays DFA Australia quarterly fees of 25,000 Hong Kong dollars
for services to each Portfolio. Under the Sub-Advisory Agreements for the
Japanese Small Company and Pacific Rim Small Company Series of the Trust, DFA
will pay DFA Australia quarterly fees of 25,000 Hong Kong dollars for services
to each Series. Pursuant to the existing Sub-Advisory Agreements for the United
Kingdom Small Company and Continental Small Company Portfolios, DFA pays DFAL
quarterly fees of 12,500 pounds sterling for services to each Portfolio. Under
the Sub-Advisory Agreements for the United Kingdom Small Company Series and the
Continental Small Company Series of the Trust, DFA will pay DFAL quarterly fees
of 12,500 pounds sterling for services to each Series.
The following table shows the anticipated expenses of each of the
Portfolios for the Fund's current fiscal year ending November 30, 1996, based on
expenses that were incurred during the fiscal year ended November 30, 1995, and
a pro forma adjustment thereof assuming that each Portfolio had invested all of
its Assets in a corresponding Series for the entire year. With respect to each
Portfolio, the pro forma adjustment assumes: (i) that there were no investors
in each Series other than the respective Portfolio; and (ii) that the average
assets of each Series and Portfolio during the year were the same.
-7-
<PAGE>
ANTICIPATED EXPENSES
FOR THE YEAR ENDING NOVEMBER 30, 1996
<TABLE>
<CAPTION>
PRO FORMA EXPENSES
--------------------------
PORTFOLIO
ONLY* PORTFOLIO SERIES TOTAL
--------- --------- ------ -----
<S>
JAPANESE SMALL COMPANY
<C> <C> <C> <C>
Shareholder Transaction Expenses** 0.50% 0.50% 0.00% 0.50%
Annual Operating Expenses:
Management Fee 0.50% 0.00% 0.10% 0.10%
Administration Fee 0.00% 0.40% 0.00% 0.40%
Other Expenses*** 0.24% 0.02% 0.24% 0.26%
----- ----- ----- -----
----- ----- ----- -----
Total Operating Expenses 0.74% 0.42% 0.34% 0.76%
PACIFIC RIM SMALL COMPANY
Shareholder Transaction Expenses** 1.00% 1.00% 0.00% 1.00%
Annual Operating Expenses:
Management Fee 0.50% 0.00% 0.10% 0.10%
Administration Fee 0.00% 0.40% 0.00% 0.40%
Other Expenses*** 0.33% 0.03% 0.33% 0.36%
----- ----- ----- -----
----- ----- ----- -----
Total Operating Expenses 0.83% 0.43% 0.43% 0.86%
UNITED KINGDOM SMALL COMPANY
Shareholder Transaction Expenses** 0.00% 0.00% 0.00% 0.00%
Annual Operating Expenses:
Management Fee 0.50% 0.00% 0.10% 0.10%
Administration Fee 0.00% 0.40% 0.00% 0.40%
Other Expenses*** 0.22% 0.04% 0.22% 0.26%
----- ----- ----- -----
----- ----- ----- -----
Total Operating Expenses 0.72% 0.44% 0.32% 0.76%
CONTINENTAL SMALL COMPANY
Shareholder Transaction Expenses** 1.00% 1.00% 0.00% 1.00%
Annual Operating Expenses:
Management Fee 0.50% 0.00% 0.10% 0.10%
Administration Fee 0.00% 0.40% 0.00% 0.40%
Other Expenses*** 0.24% 0.02% 0.24% 0.26%
----- ----- ----- -----
----- ----- ----- -----
Total Operating Expenses 0.74% 0.42% 0.34% 0.76%
</TABLE>
*This column shows the anticipated expenses of each Portfolio for the current
fiscal year ending November 30, 1996. If the proposed investment by a Portfolio
in a Series does not occur for any reason, the Portfolio's total operating
expenses for the current fiscal year are expected to be as indicated in this
column.
**Shareholder transaction expenses refer to reimbursement fees which are charged
to purchasers as a percentage of the original share purchase price. Such fees
are paid to the Portfolios and serve to offset costs
-8-
<PAGE>
incurred when investing the proceeds from the sale of shares and therefore
stabilize the return for all existing shareholders.
***Other Expenses include transfer agent and custodian fees, legal and auditing
fees, filing fees, insurance premiums, and other normal operating expenses for a
mutual fund.
EXAMPLE
Currently, you would pay the following transaction and annual operating expenses
on a $1,000 investment in each Portfolio assuming a 5% annual return over each
of the following time periods and redemption at the end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Japanese Small Company 13 29 46 96
Pacific Rim Small Company 18 36 56 112
United Kingdom Small Company 7 23 40 89
Continental Small Company 17 33 51 101
</TABLE>
You would pay the following expenses on the same investment assuming the
proposed investment of the Portfolios' Assets in the corresponding Series of the
Trust:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Japanese Small Company 13 29 47 99
Pacific Rim Small Company 19 37 57 115
United Kingdom Small Company 8 24 42 94
Continental Small Company 18 34 52 103
</TABLE>
TAX CONSIDERATIONS
The transfer of Assets of the Portfolios to the Series is not expected to
have any adverse tax effects on the Portfolios. The transfer of a Portfolio's
Assets to a Series in exchange for shares of beneficial interest in the Series
is, in the opinion of Stradley, Ronon, Stevens & Young, LLP, counsel to the
Fund, expected to be a tax-free event, and, therefore, will not result in the
recognition of any taxable gain (or loss) to a Portfolio.
Each Portfolio has elected, and intends to continue to qualify, to be
treated as a "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended. By a Portfolio distributing all of its
income, and to the extent the
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<PAGE>
corresponding Series on behalf of such Portfolio satisfies certain other
requirements relating to the sources of its income and diversification of its
assets, the Portfolio will not be liable for federal income or excise taxes.
Each Series intends to be classified as a partnership for federal income tax
purposes and is not expected to be required to pay any federal income or excise
taxes. Income and any net capital gain allocated by a Series to a Portfolio
will be distributed by the Portfolio to its shareholders, and such distributions
will be subject to federal, state and local taxes applicable to the Portfolio's
shareholders.
EVALUATION BY THE DIRECTORS
The Board of Directors of the Fund has considered the proposals to change
the investment limitations of the Portfolios, as set forth below, so as to
enable the Portfolios to invest their Assets in the Series. The Board's
decision, in part, was based on the fact that the proposals do not entail any
increase in the rate of fees to be borne by the Portfolios for DFA's services,
both directly and indirectly through investment in the Series, and their
understanding that the level of services provided will not decrease.
In addition, the Trust intends to offer shares of the Series to other
institutional investors. If the Trust is successful in attracting institutional
investments, certain benefits might accrue to the Portfolios which might not
otherwise be available. For example, the assets of the Series would be larger
than the assets of the Portfolios, thereby enabling the Series to take advantage
of investment opportunities not available to smaller pools of assets. These
opportunities would include seeking larger block trades at more advantageous
prices and participating in securities transactions of larger denominations,
thereby reducing the relative amount of certain transaction costs in relation to
the total size of the transaction. In addition, certain operating costs tend to
increase at a lower rate than the rate of asset growth and, therefore, if asset
growth is achieved a Portfolio should benefit from the cost structure of the
Series in which it invests and would be in a position to pass on such benefits
to Portfolio shareholders.
The Board of Directors considered the following risks which are attendant
to the proposed investment of the Portfolios' Assets in the Series. While
investment in a Series by other institutional investors offers potential
benefits to the Series and, through their investment in the Series, the
Portfolios also, institutional investment in the Series also entails the risk
that economies and expense reductions might not be achieved, and additional
investment opportunities, such as increased diversification, might not be
available if other institutions do not invest in the Series. Also, if an
institutional investor were to redeem its interest in a Series, the remaining
investors in that Series could experience higher pro rata operating expenses,
thereby producing lower returns, and the Series' security holdings may become
less diverse, resulting in increased risk. Institutional investors that have a
greater pro rata ownership interest in a Series than the corresponding Portfolio
could have effective voting control over the operation of the Series.
-10-
<PAGE>
Further, if a Series changes its investment objective in a manner which is
inconsistent with the investment objective of a corresponding Portfolio and the
shareholders of the Portfolio fail to approve a similar change in the investment
objective of the Portfolio, the Portfolio would be forced to withdraw its
investment in the Series and either seek to invest its assets in another
registered investment company with the same investment objective as the
Portfolio, which might not be possible, or retain an investment advisor to
manage the Portfolio's assets in accordance with its own investment objective,
possibly at increased cost. A withdrawal by a Portfolio of its investment in
the corresponding Series could result in a distribution in kind of portfolio
securities (as opposed to a cash distribution) to the Portfolio. Should such a
distribution occur, the Portfolio could incur brokerage fees or other
transaction costs in converting such securities to cash in order to pay
redemptions. In addition, a distribution in kind to the Portfolio could result
in a less diversified portfolio of investments and could affect adversely the
liquidity of the Portfolio. The Board also considered the inherent market and
credit risks associated with investments in the Series and believes that
investment in the Series involves the same inherent market and credit risks as
are now associated with the Portfolios' direct investment in securities.
Finally, the Portfolios' investment in the shares of a registered
investment company such as the Trust is relatively new and results in certain
operational and other complexities. However, the Board believes that the
benefits to be gained by shareholders outweigh the additional complexities and
the risks attendant to such investment.
Accordingly, the Board of Directors of the Fund, including the directors
who are not "interested persons" of the Fund, as defined by the 1940 Act,
decided that it would be in the best interests of the Portfolios and their
shareholders to change certain of the Portfolios' fundamental investment
limitations, as outlined below, to permit investment of the Portfolios' Assets
in the Series. Corresponding changes would be made to the Fund's By-Laws, which
contain a statement of the Portfolios' investment limitations.
SPECIFIC CHANGES
The following investment limitations, which are numbered as they appear in
the Statement of Additional Information relating to the Portfolios, are proposed
to be changed with respect to the Portfolios. The Portfolios' investment
limitations also are set forth in the Fund's By-Laws.
The Portfolios will not:
3. As to 75% of its total assets, invest in the securities of any issuer
(except obligations of the U.S. Government and its instrumentalities) if, as a
result, more than 5% of the Portfolio's total assets, at market, would be
invested in the securities of such issuer;
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<PAGE>
7. Invest more than 10% of its total assets in illiquid securities, which
include certain restricted securities, repurchase agreements with maturities of
greater than seven days, and other illiquid investments;
9. Invest for the purpose of exercising control over management of any
company;
10. Invest its assets in securities of any investment company, except in
connection with a merger, acquisition of assets, consolidation or
reorganization;
11. Invest more than 5% of its total assets in securities of companies
which have (with predecessors) a record of less than three years' continuous
operation;
12. Acquire any securities of companies within one industry if, as a
result of such acquisition, more than 25% of the value of the Portfolio's total
assets would be invested in securities of companies within such industry;
16. Acquire more than 10% of the voting securities of any issuer.
Each of the foregoing investment limitations is proposed to be changed so
that each would permit a Portfolio to invest all or substantially all of its
assets in another registered open-end investment company having the same
investment objective, policies and limitations as the Portfolio. In connection
with these proposed changes, the shareholders of each Portfolio are being asked
to consider the approval of the addition of the following provision to the
Portfolio's investment limitations:
"THE INVESTMENT LIMITATIONS DESCRIBED IN (3), (7), (9), (10), (11), (12)
AND (16) ABOVE DO NOT PROHIBIT THE PORTFOLIO FROM INVESTING ALL OR SUBSTANTIALLY
ALL OF ITS ASSETS IN THE SHARES OF ANOTHER REGISTERED, OPEN-END INVESTMENT
COMPANY, SUCH AS A SERIES OF THE TRUST. THE INVESTMENT LIMITATIONS OF A SERIES
ARE THE SAME AS THOSE OF ITS CORRESPONDING PORTFOLIO."
Because the foregoing investment limitations are fundamental policies of
the Fund, approval of these changes requires a 1940 Act Majority Vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS APPROVAL
OF PROPOSAL NOS. 1-4 TO CHANGE THE PORTFOLIOS'
INVESTMENT LIMITATIONS AS DESCRIBED ABOVE
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<PAGE>
OTHER MATTERS
OTHER INFORMATION
PFPC Inc. serves as the accounting services, dividend disbursing and
transfer agent for each Portfolio and is located at 400 Bellevue Parkway,
Wilmington, DE 19809. The Fund acts as distributor of each series of its own
shares of stock. The Fund has entered into an agreement with DFA Securities
Inc., a wholly-owned subsidiary of the Advisor, pursuant to which DFA Securities
Inc. is responsible for supervising the sale of each series of shares of the
Fund. No compensation is paid by the Fund to DFA Securities Inc. under this
agreement.
SHAREHOLDER REPORTS
The most recent Annual Report for the Fund is available at no cost to
shareholders of the Portfolios upon request by contacting the Fund at 1299 Ocean
Avenue, 11th Floor, Santa Monica, California 90401 or returning the enclosed
postage-paid card.
SHAREHOLDER PROPOSALS
Any shareholder who desires to submit a shareholder proposal may do so by
submitting such proposal in writing, addressed to the Secretary of the Fund, at
1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. Ordinarily, the Fund
does not hold shareholders meetings.
By Order of the Board of Directors
IRENE R. DIAMANT
Secretary
May __, 1996
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<PAGE>
BY SIGNING AND DATING THE BACK OF THIS CARD, YOU AUTHORIZE THE PROXIES TO VOTE
EACH PROPOSAL AS MARKED, OR IF NOT MARKED TO VOTE "FOR" EACH PROPOSAL, AND TO
VOTE ANY OTHER MATTER AS MAY PROPERLY COME BEFORE THE MEETING. IF YOU DO NOT
INTEND TO PERSONALLY ATTEND THE MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT
ONCE IN THE ENCLOSED ENVELOPE.
DFA INVESTMENT DIMENSIONS GROUP INC.
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS -- JULY 3, 1996
THE UNDERSIGNED HEREBY CONSTITUTES AND APPOINTS IRENE R. DIAMANT, MICHAEL T.
SCARDINA AND MARTI WILES, OR ANY OF THEM, WITH POWER OF SUBSTITUTION, AS PROXIES
TO APPEAR AND VOTE ALL OF THE SHARES OF STOCK STANDING IN THE NAME OF THE
UNDERSIGNED ON THE RECORD DATE AT THE SPECIAL MEETING OF SHAREHOLDERS OF
JAPANESE SMALL COMPANY, PACIFIC RIM SMALL COMPANY, UNITED KINGDOM SMALL COMPANY
AND CONTINENTAL SMALL COMPANY PORTFOLIOS OF DFA INVESTMENT DIMENSIONS GROUP INC.
TO BE HELD AT 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA, ON THE
3RD DAY OF JULY 1996 AT 8:00 A.M. PACIFIC COAST TIME, OR AT ANY POSTPONEMENT OR
ADJOURNMENT THEREOF; AND THE UNDERSIGNED HEREBY INSTRUCTS SAID PROXIES TO VOTE
AS INDICATED ON THIS PROXY CARD.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED IN THE FOLLOWING
ITEMS 1, 2, 3 AND 4. IF NO CHOICE IS SPECIFIED, THEY WILL BE VOTED TO APPROVE
EACH PROPOSAL. PLEASE REFER TO THE PROXY STATEMENT DISCUSSION OF THESE MATTERS.
THIS PROXY IS SOLICITED ON BEHALF OF THE FUND'S BOARD OF DIRECTORS.
<TABLE>
<S><C> <C> <C> <C>
1. FOR SHAREHOLDERS OF JAPANESE SMALL COMPANY
PORTFOLIO ONLY: To approve changes in certain of
the FOR AGAINST ABSTAIN
investment limitations of Japanese Small Company
Portfolio to permit it to invest all of its assets
in an open-end management investment company
having the same investment objective, policies and
limitations as the Portfolio.
</TABLE>
(CONTINUED ON REVERSE SIDE)
<PAGE>
(CONTINUED FROM REVERSE SIDE)
<TABLE>
<S><C> <C> <C> <C>
2. FOR SHAREHOLDERS OF PACIFIC RIM SMALL COMPANY
PORTFOLIO ONLY: To approve changes in certain of
the FOR AGAINST ABSTAIN
investment limitations of Pacific Rim Small
Company Portfolio to permit it to invest all of
its assets in an open-end management investment
company having the same investment objective,
policies and limitations as the Portfolio.
3. FOR SHAREHOLDERS OF UNITED KINGDOM SMALL COMPANY
PORTFOLIO ONLY: To approve changes in certain FOR AGAINST ABSTAIN
of the investment limitations of United Kingdom
Small Company Portfolio to permit it to invest all
of its assets in an open-end management investment
company having the same investment objective,
policies and limitations as the Portfolio.
4. FOR SHAREHOLDERS OF CONTINENTAL SMALL COMPANY
PORTFOLIO ONLY: To approve changes in certain of
the FOR AGAINST ABSTAIN
investment limitations of Continental Small
Company Portfolio to permit it to invest all of
its assets in an open-end management investment
company having the same investment objective,
policies and limitations as the Portfolio.
</TABLE>
-------------------------------------
SIGNATURE
-------------------------------------
SIGNATURE (JOINT OWNER)
-------------------------------------
DATE
PLEASE DATE AND SIGN NAME OR NAMES TO
AUTHORIZE THE VOTING OF YOUR SHARES
AS INDICATED ABOVE. WHERE SHARES ARE
REGISTERED WITH JOINT OWNERS, ALL
JOINT OWNERS SHOULD SIGN. PERSONS
SIGNING AS AN EXECUTOR,
ADMINISTRATOR, TRUSTEE OR OTHER
REPRESENTATIVE SHOULD GIVE FULL TITLE
AS SUCH.
