<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:
/ / 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 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/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
DFA INVESTMENT DIMENSIONS GROUP INC.
1299 OCEAN AVENUE
11TH FLOOR
SANTA MONICA, CALIFORNIA 90401
------------------------
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS OF
U.S. 9-10 SMALL COMPANY PORTFOLIO
NOVEMBER 15, 1997
------------------------
To the Shareholders:
A Special Meeting of Shareholders of U.S. 9-10 Small Company Portfolio (the
"Portfolio") of DFA Investment Dimensions Group Inc. (the "Fund") will be held
at the offices of the Portfolio's investment advisor, Dimensional Fund Advisors
Inc., 1299 Ocean Avenue, 11th Floor, Santa Monica, California, 90401 at 8:00
a.m. Pacific Coast time, on November 15, 1997 for the following purposes:
1. To approve or disapprove changes in certain of the fundamental
investment limitations of U.S. 9-10 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.
2. To approve or disapprove certain other revisions to the Portfolio's
fundamental investment limitations.
Shareholders of record at the close of business on September 23, 1997 are
entitled to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors
IRENE R. DIAMANT
SECRETARY
September 25, 1997
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>
DFA INVESTMENT DIMENSIONS GROUP INC.
1299 OCEAN AVENUE
11TH FLOOR
SANTA MONICA, CALIFORNIA 90401
------------------------
PROXY STATEMENT--SPECIAL MEETING OF SHAREHOLDERS OF
U.S. 9-10 SMALL COMPANY PORTFOLIO
NOVEMBER 15, 1997
------------------------
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 U.S. 9-10 Small Company Portfolio (the "Portfolio")
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 October 1, 1997. 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 September 23, 1997, the record date fixed by
the Board of Directors for the determination of shareholders of the Portfolio
entitled to notice of and to vote at the Meeting ("Record Date"),
107,800,350.466 shares of the Portfolio were outstanding. Each share is entitled
to one vote.
The vote of the holders of a "majority of the outstanding voting securities"
of the 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 Act
Majority Vote means the vote of (a) at least 67% of the shares of the 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 the 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 Portfolio. 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 Portfolio and
it is estimated to be no more than $10,000.
<PAGE>
PRINCIPAL SHAREHOLDERS
The following shareholders beneficially owned more than 5% of the
Portfolio's outstanding shares as of the Record Date:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE
BENEFICIALLY OF
NAME AND ADDRESS OWNED PORTFOLIO
- -------------------------------------------------------------- ----------------- -----------
<S> <C> <C>
Charles Schwab & Company, Inc.-REIN*.......................... 33,705,164.920 31.27%
101 Montgomery Street
San Francisco, CA 94104
State Farm Insurance Companies................................ 10,900,773.998 10.11%
One State Farm Plaza
Bloomington, IL 61710
Pepsico Inc. Master Trust..................................... 8,984,324.108 8.33%
The Northern Trust Company Trustee
P.O. Box 92956
Chicago, IL 60675
National Electric Benefits Fund............................... 7,655,306.215 7.10%
1125 15th Street NW
Washington, DC 20005
</TABLE>
- ------------------------
* Owner of record only.
As of the Record Date, the Directors and Officers of the Fund, as a group,
beneficially owned 1% or less of the Portfolio's outstanding shares. The number
of outstanding shares of the Portfolio beneficially owned by the Directors or
executive officers of the Fund is set forth below.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY
NAME AND TITLE OWNED
- --------------------------------------------------------------------------- -----------------
<S> <C>
David G. Booth,
Chairman, Chief Executive Officer and President.......................... 3,031.530
Myron S. Scholes,
Director................................................................. 1,661.281
Rex A. Sinquefield,
Chairman, Chief Investment Officer....................................... 92,698.647
Michael T. Scardina,
Vice President, Chief Financial
Officer and Treasurer.................................................... 3,326.532
Truman Clark,
Vice President........................................................... 1,884.307
Eugene Fama, Jr.
Vice President........................................................... 854.688
</TABLE>
PROPOSAL 1: APPROVAL OR DISAPPROVAL OF CHANGES IN CERTAIN OF THE FUNDA-
MENTAL INVESTMENT LIMITATIONS OF THE 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 Board of Directors of the Fund has approved the adoption of certain
changes in the Portfolio's fundamental investment limitations to permit the
Portfolio to invest all of its investable assets ("Assets") in shares of the
U.S. 9-10 Small Company Series (the "Series") of The DFA Investment Trust
Company (the "Trust"), an open-end, management investment company registered
under the Investment Company Act of
2
<PAGE>
1940 (the "1940 Act"). The Series has the same investment objective, policies
and limitations as the Portfolio. The proposed changes to the investment
limitations of the Portfolio are subject to approval of the Portfolio's
shareholders. Specifically, if Proposal No. 1 is approved, the Portfolio intends
to invest all of its Assets in the Series.
The same persons who serve as Directors and officers 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 the Portfolio, is the investment
advisor to the Series.
PROPOSED CHANGES TO INVESTMENT LIMITATIONS
Certain investment limitations of the Portfolio would prohibit it from
investing its Assets in the Series. For example, one of these limitations
currently provides that the Portfolio may not invest in other investment
companies. As described below, it is proposed that these limitations be
eliminated or 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 Portfolio. (See "Specific Changes" below.)
If the proposed changes in the investment limitations are approved by the
Portfolio's shareholders, the Board of Directors of the Fund intends to invest
the Assets of the Portfolio in the Series on a continuing basis. The Portfolio
will transfer its Assets to the Series in exchange for shares of beneficial
interest in the Series having the same dollar value as the Assets transferred.
The Series will be managed in the same manner as the Portfolio is currently
managed. DFA, the current investment advisor of the Portfolio, is the investment
advisor of the Series. Accordingly, by investing in the Series, the 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 Series rather than through direct investments in
the stocks of small companies. The Series intends to invest its monies in the
same types of securities, subject to the same policies and limitations, and
under the same management as the Portfolio. Inasmuch as the Assets of the
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 the
Series that are different from those to which shareholders of the Portfolio are
currently subject.
The Portfolio may redeem all or a portion of its investment in the Series at
any time at the net asset value thereof if the Board of Directors of the Fund
determines that it is in the best interests of the shareholders of the 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 the Series' investors would not be required to change
certain of its investment policies, any change in the Series' investment
objective and fundamental investment limitations would require such approval.
The Portfolio, as an investor in the Series, will have the right to vote the
shares of the Series that it holds. Whenever the Portfolio, as an investor in
the Series, is asked to vote on a shareholder proposal, the Directors of the
Fund will solicit voting instructions from the Portfolio's shareholders 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
accordance with their best judgment. 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.
3
<PAGE>
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 Proposal is approved, the Portfolio will invest all of its Assets in
the Series, and the Portfolio will no longer require investment advisory
services. For this reason, the existing investment advisory agreement between
the Fund and DFA with respect to the Portfolio would be terminated. Under the
existing investment advisory agreement, DFA also provides certain administrative
services that will continue to be provided to the Portfolio after it invests in
the Series. Pursuant to the existing investment advisory agreement, the
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 the Portfolio, for the provision of certain
administrative services to the Portfolio. Under this agreement, DFA will be
compensated for providing administrative services at an annual rate of .40% of
the average net assets of the Portfolio. The investment advisory agreement with
respect to the Portfolio will terminate and the administration agreement with
respect to the Portfolio will take effect at such time as the Portfolio invests
its Assets in the Series.
The assets of the Series will be managed pursuant to an individual
investment management agreement with DFA. Under this agreement, DFA will charge
the Series an investment management fee equal, on an annual basis, to .10% of
the average net assets of the Series. The rate of the management fee under the
new investment management agreement with the Series and the rate of the
administration fee under the new administration agreement with the Portfolio, in
total, are equal to the rate of the Portfolio's present investment management
fee.
The following table shows the anticipated expenses of the Portfolio for the
Fund's current fiscal year ending November 30, 1997, based on expenses that were
incurred during the fiscal year ended November 30, 1996, and a pro forma
adjustment thereof assuming that the Portfolio had invested all of its Assets in
the Series for the entire year. The pro forma adjustment assumes that the
average assets of the Series and Portfolio during the year were the same.
Currently, there are no other investors in the Series.
ANTICIPATED EXPENSES
FOR THE FISCAL YEAR ENDING NOVEMBER 30, 1997
<TABLE>
<CAPTION>
PRO FORMA EXPENSES
PORTFOLIO ---------------------------------
ONLY* PORTFOLIO SERIES TOTAL
----------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses.......................................... None None None None
Annual Operating Expenses:
(as a percentage of average net assets)
Management Fee.......................................................... 0.50% 0.00% 0.10% 0.10%
Administration Fee...................................................... 0.00% 0.40% 0.10% 0.40%
Other Expenses**........................................................ 0.10% 0.01% 0.09% 0.10%
Total Operating Expenses.................................................. 0.60% 0.41% 0.29% 0.60%
</TABLE>
- ------------------------
* This column shows the anticipated expenses of the Portfolio for the current
fiscal year ending November 30, 1997. If the proposed investment by the
Portfolio in the 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.
4
<PAGE>
** 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 the 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>
$ 6 $ 19 $ 33 $ 75
</TABLE>
You would pay the following expenses on the same investment assuming the
proposed investment of the Portfolio's Assets in the Series of the Trust:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
$ 6 $ 19 $ 33 $ 75
</TABLE>
TAX CONSIDERATIONS
The transfer of Assets of the Portfolio to the Series is not expected to
have any adverse tax effects on the Portfolio. The transfer of the Portfolio's
Assets to the 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 the Portfolio.
The 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 (the "Code"). By the Portfolio distributing all of its
income, and to the extent the Series on behalf of the 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. The Series also intends to qualify and elect to be
treated as a "regulated investment company" under the Code and, therefore, is
not expected to be liable for any federal income or excise taxes to the extent
the Series distributes all of its income and satisfies certain other
requirements. The Portfolio will receive income in the form of income dividends
paid by the Series. This income, less the expenses incurred in operations, is
the Portfolio's net investment income from which dividends are distributed to
the Portfolio's shareholders. The Portfolio also may receive capital gains
distributions from the Series and may realize capital gains upon the redemption
of the shares of the Series. Any net realized capital gains of the Portfolio
will be distributed to the Portfolio's shareholders.
EVALUATION BY THE DIRECTORS
The Board of Directors of the Fund has considered the proposal to change or
eliminate the investment limitations of the Portfolio, as set forth below, so as
to enable the Portfolio to invest its Assets in the Series. The Board's
decision, in part, was based on the fact that the Proposal does not entail any
increase in the rate of fees to be borne by the Portfolio 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.
5
<PAGE>
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 Portfolio which might not
otherwise be available. For example, the assets of the Series would be larger
than the assets of the Portfolio, 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, the Portfolio should benefit from the cost structure of the
Series and would be in a position to pass on such benefits to the Portfolio's
shareholders.
The Board of Directors considered the following risks which are attendant to
the proposed investment of the Portfolio's Assets in the Series. While
investment in the Series by other institutional investors offers potential
benefits to the Series and, through its investment in the Series, the Portfolio
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 the Series, the remaining
investors in the 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 the Series than the Portfolio could have
effective voting control over the operation of the Series.
Further, if the Series changes its investment objective in a manner which is
inconsistent with the investment objective of the 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 the Portfolio of its investment in the 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 Portfolio's direct investment in
securities.
Finally, the Portfolio's investment in the shares of a registered investment
company such as the Trust is relatively new and results in certain operational
and other complexities. For example, this investment arrangement entails the
administration of two registered investment companies operating in tandem, both
of which must comply with tax, accounting and other regulatory requirements.
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 Portfolio and its shareholders to
change or eliminate certain of the Portfolio's fundamental investment
limitations, as outlined below, to permit investment of the Portfolio's Assets
in the Series. Corresponding changes would be made to the Fund's By-Laws, which
contain a statement of the Portfolio's investment limitations. The 1940 Act
requires changes to a mutual fund's fundamental investment limitations to be
approved by shareholders.
6
<PAGE>
SPECIFIC CHANGES
The following investment limitations are numbered as they appear in the
Statement of Additional Information relating to the Portfolio. Each limitation
is a fundamental policy of the Portfolio and prohibits it from investing its
Assets in the Series. Investment limitations (3), (7) and (12) are proposed to
be changed so as to permit the 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. Investment
limitations (9), (10), (11) and (16) are proposed to be eliminated because the
1940 Act does not require a mutual fund to have these limitations expressed as a
fundamental policy.
The Portfolio will not:
3. As to 100% 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 the value 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; and
16. Acquire more than 10% of any class of securities of any issuer.
If the shareholders vote to approve the changes to, and elimination of, the
foregoing investment limitations, the effect will be that the Portfolio will not
be prohibited from investing all or substantially all of its assets in the
shares of another registered, open-end investment company, such as the Series.
Specifically, if this Proposal is approved by shareholders, the Portfolio's
investment limitations described in (3), (7) and (12) above will not prohibit
the Portfolio from investing all or substantially all of its assets in the
shares of another registered, open-end investment company. In addition, if this
Proposal is approved by shareholders, the investment limitations described in
(9), (10), (11) and (16) will be eliminated as fundamental policies and the
Portfolio will be permitted to invest all or substantially all of its assets in
the shares of another registered, open-end investment company.
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 NO. 1 TO CHANGE THE PORTFOLIO'S
INVESTMENT LIMITATIONS AS DESCRIBED ABOVE.
* * * * * *
7
<PAGE>
PROPOSAL 2: TO APPROVE OR DISAPPROVE CERTAIN OTHER
REVISIONS TO THE PORTFOLIO'S
FUNDAMENTAL INVESTMENT LIMITATIONS
PROPOSED ELIMINATION OF CERTAIN FUNDAMENTAL INVESTMENT LIMITATIONS
The Portfolio's fundamental investment limitations, as set forth in the
Statement of Additional Information relating to the Portfolio, currently contain
numerous restrictions against making certain types of investments based upon
prohibitions in the 1940 Act, as well as the various state securities laws. On
October 11, 1996, President Clinton signed the National Securities Markets
Improvement Act of 1996. This new legislation created a national system of
regulating mutual funds by pre-empting state blue sky laws that require the
registration or qualification of such securities. As a result of this
legislation, investment companies need not comply with state securities laws
restricting an investment company's investments, and management of the Fund
desires to eliminate all such restrictions with respect to the Portfolio.
Accordingly, it is proposed that the following restrictions on the Portfolio's
investment activities previously imposed by the state securities laws be
eliminated:
- purchasing or selling of financial futures contracts and options thereon;
- purchasing or retaining securities of an issuer if those officers and
directors of the Fund or the Advisor owning more than 1/2 of 1% of such
securities together own more than 5% of such securities;
- pledging, mortgaging or hypothecating any of the Portfolio's assets to an
extent greater than 10% of its total assets at fair market value;
- writing or acquiring options or interests in oil, gas or other mineral
exploration, leases or development programs;
- purchasing warrants, except as a result of corporate actions involving its
holdings of other equity securities; and
- selling securities short.
At the present time, the Portfolio does not intend to engage in the
foregoing investment activities, except with respect to pledges to secure
permitted borrowings as described below under "Borrowing Policy." None of the
foregoing restrictions that are proposed to be deleted are expected to have any
material impact upon the Portfolio's continued operations or, if Proposal No. 1
is approved, the investment of its Assets in the Series.
PROPOSED CHANGE TO DIVERSIFICATION POLICY
In response to the policies of certain states in connection with the
registration of the shares of the Portfolio, the Portfolio adopted the following
fundamental investment policies with respect to the diversification of its
assets at the time it commenced operations: "As to 100% of the Portfolio's
assets, it will not 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; and, as to 100% of its assets, it will not acquire more than 10%
of any class of securities of any issuer." These investment policies are more
restrictive than the 1940 Act's requirement for a diversified investment
company, such as the Portfolio. Management of the Fund wishes to revise the
Portfolio's policy with respect to the diversification of the Portfolio's assets
so that it is consistent with the requirements of the 1940 Act. Specifically,
the 1940 Act's 5% and 10% limitations on investment by a fund in the securities
of a single issuer apply only as to 75% of a fund's assets. In addition, the 10%
limitation on the acquisition of the securities of a single issuer only applies
to the "voting" securities of the issuer. Consequently, it is proposed that the
Portfolio's investment limitations be revised to provide that, as to 75% of the
Portfolio's assets, it will not invest in the securities of any issuer (except
obligations of the U.S.
8
<PAGE>
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; and, as to 75% of the Portfolio's assets, it will not acquire more than
10% of the voting securities of any issuer. If approved by shareholders, this
revised diversification policy will be a fundamental investment policy of the
Portfolio.
PROPOSED CHANGE TO BORROWING POLICY
Management of the Fund wishes to revise the Portfolio's policy with respect
to borrowing. Currently, the Portfolio's fundamental investment policy in this
regard states that it will not "borrow, except from banks and as a temporary
measure for extraordinary or emergency purposes and then, in no event, in excess
of 5% of the Portfolio's gross assets valued at the lower of market or cost."
This borrowing policy is more restrictive than the provisions relating to
permissible borrowings contained in the 1940 Act for an open-end investment
company, such as the Portfolio. Management of the Fund wishes to revise the
Portfolio's policy with respect to borrowing. Specifically, it is proposed that
the Portfolio's investment limitation with respect to borrowing be revised to
provide that it may "borrow amounts not exceeding 33% of its net assets from
banks and pledge not more than 33% of such assets to secure such loans." As is
currently the case, the Portfolio would continue to be permitted to borrow from
banks as a temporary measure for extraordinary or emergency purposes, such as to
make redemption payments. However, the proposed increase in the amount the
Portfolio would be permitted to borrow would provide it with greater flexibility
in certain circumstances. For example, an increase in the amount the Portfolio
is permitted to borrow would enable the Portfolio to satisfy a large redemption
request without having to sell its portfolio securities at an inopportune time
in order to meet such a request. Consequently, it is proposed that the
Portfolio's borrowing policy be revised in order to provide it with this greater
flexibility. If approved by shareholders, this revised borrowing policy will be
a fundamental investment policy of the Portfolio.
PROPOSED CHANGE IN ILLIQUID SECURITIES POLICY
Management of the Fund also wishes to revise the Portfolio's policy with
respect to its investment in illiquid securities. At the time the Portfolio
commenced operations, it was the position of the Securities and Exchange
Commission ("SEC") not to permit an open-end investment company to invest more
than 10% of its assets in any combination of assets which are "illiquid." The
Portfolio adopted this SEC position as a fundamental investment restriction.
Generally, an asset is considered to be illiquid if disposition of the asset is
restricted by law, if there is no readily available market for the asset, or if
the proceeds of a sale or liquidation of the asset would not be available to the
selling fund in seven days at approximately the value at which the fund has
valued the investment. The SEC subsequently relaxed its position in this regard
and it is the SEC's current position that the limit on holdings of illiquid
assets by investment companies is 15% of its net assets. Accordingly, it is
proposed that the Portfolio's investment restriction with respect to illiquid
securities be revised so that it is consistent with the current SEC position. If
approved by shareholders, this revised illiquid securities policy will be a
fundamental investment policy of the Portfolio.
There is no present intention to modify the manner in which the Portfolio is
managed in light of the proposed changes to the Portfolio's policies with
respect to diversification, borrowing and illiquid securities. Consequently,
these proposed changes in policy are not expected to have any material impact
upon the Portfolio's continued operations.
If this Proposal is approved by shareholders, corresponding changes would be
made to the Fund's By-Laws, which contain a statement of the Portfolio's
investment limitations.
Because each of the foregoing investment limitations are fundamental
policies of the Portfolio, approval of these changes requires a 1940 Act
Majority Vote.
THE BOARD OF DIRECTORS OF THE FUND UNANIMOUSLY
RECOMMENDS THAT THE SHAREHOLDERS OF THE PORTFOLIO VOTE TO
APPROVE THE REVISIONS TO THE PORTFOLIO'S INVESTMENT
LIMITATIONS AS DESCRIBE ABOVE.
9
<PAGE>
OTHER MATTERS
OTHER INFORMATION
PFPC Inc. serves as the accounting services, dividend disbursing and
transfer agent for the 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. DFA Securities Inc. is located at 1299 Ocean Avenue, 11th Floor,
Santa Monica, California 90401.
SHAREHOLDER REPORTS
The most recent Annual Report for the Fund is available at no cost to
shareholders of the Portfolio 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 within a reasonable time
prior to the solicitation. Ordinarily, the Fund does not hold shareholders'
meetings.
By Order of the Board of Directors
IRENE R. DIAMANT
SECRETARY
September 25, 1997
10
<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 -- NOVEMBER 15, 1997
THE UNDERSIGNED HEREBY CONSTITUTES AND APPOINTS MICHAEL T. SCARDINA, IRENE R.
DIAMANT AND CATHERINE NEWELL, 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
U.S. 9-10 SMALL COMPANY PORTFOLIO OF DFA INVESTMENT DIMENSIONS GROUP INC. TO BE
HELD AT 1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA, ON THE 15TH DAY
OF NOVEMBER, 1997 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
ITEM. 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.
<PAGE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S><C> <C> <C> <C>
1. TO APPROVE OR DISAPPROVE CHANGES IN CERTAIN OF THE
FUNDAMENTAL INVESTMENT LIMITATIONS OF U.S. 9-10
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.
<CAPTION>
FOR AGAINST ABSTAIN
<S><C> <C> <C> <C>
2. TO APPROVE OR DISAPPROVE CERTAIN OTHER REVISIONS
TO THE PORTFOLIO'S FUNDAMENTAL INVESTMENT
LIMITATIONS.
</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.
