<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant
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 Section 240.14a-11(c) or Section 240.14a-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):
[ ] $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:
----------------------------------------------------------------------
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:
----------------------------------------------------------------------
[X] 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:
----------------------------------------------------------------------
<PAGE> 2
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
MAY 13, 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> 3
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 13, 1996
Santa Monica, California
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> 4
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
May 13, 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"),
16,360,493.388 shares of the Japanese Small Company Portfolio, 13,414,511.063
shares of the Pacific Rim Small Company Portfolio, 6,938,889.798 shares of the
United Kingdom Small Company Portfolio and 23,684,047.853 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.
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
<PAGE> 5
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:
Charles Schwab & Company, Inc. - REIN* 5,175,656.725 31.64%
101 Montgomery Street
San Francisco, CA 94104
BellSouth Corporation Master Pension Trust 4,872,348.912 29.78%
1155 Peachtree Street, N.E.
Atlanta, GA 30367
Bost & Co.* 2,019,074.962 12.34%
1 Cabot Road, AIM 028-0038
Medford, MA 02155
San Diego County Employees 875,590.155 5.35%
1600 Pacific Highway
San Diego, CA 92101
TOTAL 12,942,670.754 79.11%
============== ======
</TABLE>
- 2 -
<PAGE> 6
<TABLE>
<S> <C> <C>
PACIFIC RIM SMALL COMPANY PORTFOLIO:
BellSouth Corporation Master Pension Trust 7,846,524.222 58.49%
1155 Peachtree Street, N.E.
Atlanta, GA 30367
Charles Schwab & Company, Inc. - REIN* 2,232,811.025 16.64%
101 Montgomery Street
San Francisco, CA 94104
Bost & Co.* 1,326,449.764 9.89%
1 Cabot Road, AIM 028-0038
Medford, MA 02155
TOTAL 11,405,785.011 85.02%
============== ======
UNITED KINGDOM SMALL COMPANY PORTFOLIO:
BellSouth Corporation Master Pension Trust 2,303,755.466 33.20%
1155 Peachtree Street, N.E.
Atlanta, GA 30367
Charles Schwab & Company, Inc. - REIN* 2,301,533.759 33.17%
101 Montgomery Street
San Francisco, CA 94104
Bost & Co.* 850,463.622 12.26%
1 Cabot Road, AIM 028-0038
Medford, MA 02155
San Diego County Employees 430,592.898 6.21%
1600 Pacific Highway
San Diego, CA 92101
TOTAL 5,886,345.745 84.84%
============= ======
CONTINENTAL SMALL COMPANY PORTFOLIO:
BellSouth Corporation Master Pension Trust 7,658,368.176 32.34%
1155 Peachtree Street, N.E.
Atlanta, GA 30367
</TABLE>
-3-
<PAGE> 7
<TABLE>
<S> <C> <C>
Charles Schwab & Company, Inc. - REIN* 6,671,986.613 28.17%
101 Montgomery Street
San Francisco, CA 94104
Bost & Co.* 3,121,547.001 13.18%
1 Cabot Road, AIM 028-0038
Medford, MA 02155
San Diego County Employees 1,538,697.842 6.50%
1600 Pacific Highway
San Diego, CA 92101
TOTAL 5,886,345.745 84.84%
============= ======
</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 or 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 PORTFOLIO NAME NUMBER OF
- ---- -------------- ---------
SHARES
------
<S> <C> <C>
Arthur Barlow Continental Small Company 813.299
Japanese Small Company 703.098
United Kingdom Small Company 238.185
Eugene F. Fama Jr. Continental Small Company 2,550.999
Japanese Small Company 3,934.316
United Kingdom Small Company 2,439.989
Rex & Jeanne Sinquefield Continental Small Company 6,001.115
Japanese Small Company 20,873.616
United Kingdom Small Company 18,449.542
</TABLE>
-4-
<PAGE> 8
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 same persons who serve as officers and directors of the Fund also
serve the Trust in identical capacities. 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.
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 12.)
-5-
<PAGE> 9
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 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
-6-
<PAGE> 10
as the shares for which they receive voting instructions. Institutional
investors that have a 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 annual 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 annual 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
annual net assets of each such Series. The rate of the management fees under
each new investment management agreement with each Series
-7-
<PAGE> 11
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.
-8-
<PAGE> 12
ANTICIPATED EXPENSES
FOR THE YEAR ENDING NOVEMBER 30, 1996
PRO FORMA EXPENSES
<TABLE>
<CAPTION>
PORTFOLIO
ONLY* PORTFOLIO SERIES TOTAL
--------- --------- ------ -----
<S> <C> <C> <C> <C>
JAPANESE SMALL COMPANY
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 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.
-9-
<PAGE> 13
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 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
-10-
<PAGE> 14
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.
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
-11-
<PAGE> 15
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 Fund's 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 Fund's
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;
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;
-12-
<PAGE> 16
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. If the
shareholders vote to approve these changes, the effect will be that the
investment limitations described in (3), (7), (9), (10), (11), (12) and (16)
above will not prohibit a 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.
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
-13-
<PAGE> 17
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 13, 1996
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<PAGE> 18
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
ATTORNEYS AND PROXIES TO APPEAR AND VOTE ALL OF THE SHARES OF STOCK STANDING IN
THE NAME OF THE UNDERSIGNED 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.
1. FOR SHAREHOLDERS OF JAPANESE SMALL COMPANY PORTFOLIO ONLY: To approve
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.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
---------- ---------- ----------
--------- --------- ---------
--------- --------- ---------
---------- ---------- ----------
</TABLE>
2. FOR SHAREHOLDERS OF PACIFIC RIM SMALL COMPANY PORTFOLIO ONLY: To approve
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.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
---------- ---------- ----------
--------- --------- ---------
--------- --------- ---------
---------- ---------- ----------
</TABLE>
<PAGE> 19
3. FOR SHAREHOLDERS OF UNITED KINGDOM SMALL COMPANY PORTFOLIO ONLY: To
approve 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.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
---------- ---------- ----------
--------- --------- ---------
--------- --------- ---------
---------- ---------- ----------
</TABLE>
4. FOR SHAREHOLDERS OF CONTINENTAL SMALL COMPANY PORTFOLIO ONLY: To approve
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.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
---------- ---------- ----------
--------- --------- ---------
--------- --------- ---------
---------- ---------- ----------
</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.
