<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No.
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Post-Effective Amendment No. 12 File No. 33-33980 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 13 File No. 811-6067 X
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DIMENSIONAL INVESTMENT GROUP INC.
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(Exact Name of Registrant as Specified in Charter)
1299 Ocean Avenue, 11th Floor, Santa Monica CA 90401
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(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code (310) 395-8005
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Irene R. Diamant, 1299 Ocean Avenue, 11th Floor,
Santa Monica, California 90401
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(Name and Address of Agent for Service)
Copies of communications to Stephen W. Kline, Esquire, Stradley, Ronon, Stevens
& Young, Great Valley Corporate Center, 30 Valley Stream Parkway, Malvern, PA
19355, (215) 640-5801.
It is proposed that this filing will become effective
(check appropriate box):
/ / Immediately upon filing pursuant to paragraph (b)
/ / On (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / On (date) pursuant to paragraph (a)(2) of Rule 485
/X/ 75 days after filing pursuant to paragraph (a)(2).
This Registrant has registered an indefinite number of shares of common stock
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. The Registrant intends to file a Rule 24f-2 Notice for
Registrant's most recent fiscal year, ended November 30, 1995, on or about
January 29, 1996.
The Trustees and principal officers of The DFA Investment Trust Company also
have executed this registration statement.
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FORM N-1A
CROSS REFERENCE SHEET
(as required by Rule 404)
FORM N-1A PART A ITEM NO. PROSPECTUS LOCATION
- ------------------------- -------------------
Item 1. Cover Page......................... Cover Page
Item 2. Synopsis........................... Highlights
Item 3. Condensed Financial Information.... Not Applicable
Item 4. General Description of Registrant.. Cover Page; Highlights;
RWB/DFA U.S. High Book to
Market Portfolio-
Investment Objective and
Policies; Investment
Objectives and Policies-
Fixed Income Portfolios;
Securities Loans; Risk
Factors; General
Information
Item 5. Management of the Fund............. Highlights; Management of
the Portfolios
Item 6. Capital Stock and Other Securities. Highlights; Dividends,
Capital Gains
Distributions and Taxes;
General Information
Item 7. Purchase of Securities Being
Offered............................ Highlights; Purchase of
Shares; Valuation of
Shares; Distribution;
Exchange of Shares
Item 8. Redemption or Repurchase........... Highlights; Redemption of
Shares
Item 9. Pending Legal Proceedings.......... Not Applicable
-1-
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FORM N-1A PART B ITEM NO. LOCATION IN STATEMENT OF
- ------------------------- ADDITIONAL INFORMATION
------------------------
Item 10. Cover Page......................... Cover Page
Item 11. Table of Contents.................. Table of Contents
Item 12. General Information and History.... Other Information
Item 13. Investment Objectives and Policies. Investment Objective and
Policies; Investment
Limitations
Item 14. Management of the Fund.............. Management of the
Portfolios; Directors and
Officers
Item 15. Control Persons and Principal
Holders of Securities.............. Not Applicable
Item 16. Investment Advisory and Other
Services........................... Management of the
Portfolios
Item 17. Brokerage Allocation and Other
Practices.......................... Brokerage Transactions
Item 18. Capital Stock and Other Securities. Not Applicable
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered........ Purchase of Shares;
Redemption of Shares
Item 20. Tax Status......................... Federal Tax Treatment of
Futures Contracts
Item 21. Underwriters....................... Not Applicable
Item 22. Calculation of Performance Data.... Calculation of
Performance Data
Item 23. Financial Statements............... Not Applicable
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FORM N-1A PART C ITEM NO. LOCATION IN PART C
- ------------------------- ------------------
Item 24. Financial Statements and Exhibits.. Financial Statements and
Exhibits
Item 25. Persons Controlled by or Under
Common Control with Registrant..... Persons Controlled by or
Under Common Control with
Registrant
Item 26. Number of Holders of Securities.... Number of Holders of
Securities
Item 27. Indemnification.................... Indemnification
Item 28. Business and Other Connections of
Investment Advisor................. Business and Other
Connections of Investment
Advisor
Item 29. Principal Underwriters............. Principal Underwriters
Item 30. Location of Accounts and Records... Location of Accounts and
Records
Item 31. Management Services................ Management Services
Item 32. Undertakings....................... Undertakings
-3-
<PAGE>
PROSPECTUS
MARCH 1, 1996
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
--------------------
This prospectus describes RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO,
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO and RWB/DFA TWO-YEAR
GOVERNMENT PORTFOLIO (collectively the "Portfolios"), each a series of shares
issued by Dimensional Investment Group Inc. (the "Fund"), 1299 Ocean Avenue,
11th floor, Santa Monica, California 90401, (310) 395-8005. Each Portfolio is
an open-end, management investment company whose shares are offered, without a
sales charge, to clients of Reinhardt Werba Bowen Advisory Services ("RWBAS").
The Fund issues eleven series of shares, each of which represents a
separate class of the Fund's common stock, having its own investment objective
and policies. This prospectus relates to three series of shares. The
investment objective of RWB/DFA U.S. High Book to Market Portfolio is to achieve
long-term capital appreciation. The investment objective of RWB/DFA Two-Year
Corporate Fixed Income Portfolio is to maximize total returns consistent with
the preservation of capital and the investment objective of RWB/DFA Two-Year
Government Portfolio is to maximize total returns available from the universe of
debt obligations of the U.S. government and U.S. government agency obligations
and consistent with preservation of capital.
EACH PORTFOLIO, UNLIKE MANY OTHER INVESTMENT COMPANIES WHICH DIRECTLY
ACQUIRE AND MANAGE THEIR OWN PORTFOLIO OF SECURITIES, SEEKS TO ACHIEVE ITS
INVESTMENT OBJECTIVE BY INVESTING ALL OF ITS INVESTABLE ASSETS IN THE SHARES OF
A CORRESPONDING SERIES OF THE DFA INVESTMENT TRUST COMPANY (THE "TRUST"), AN
OPEN-END, MANAGEMENT INVESTMENT COMPANY THAT OFFERS SERIES THAT HAVE THE SAME
INVESTMENT OBJECTIVES, POLICIES AND LIMITATIONS AS THE PORTFOLIOS. THE
INVESTMENT EXPERIENCE OF EACH PORTFOLIO WILL CORRESPOND DIRECTLY WITH THE
INVESTMENT EXPERIENCE OF ITS CORRESPONDING SERIES. INVESTORS SHOULD CAREFULLY
CONSIDER THIS INVESTMENT APPROACH. FOR ADDITIONAL INFORMATION, SEE "THE
PORTFOLIOS."
This prospectus sets forth information about the Portfolios that
prospective investors should know before investing and should be read carefully
and retained for future reference. A statement of additional information about
the Portfolios, dated March 1, 1996, which is incorporated herein by reference,
has been filed with the Securities and Exchange Commission and is available upon
request, without charge, by writing or calling the Fund at the above address or
telephone number.
____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
PAGE
HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE PORTFOLIOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT
OBJECTIVE AND POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Portfolio Characteristics and Policies. . . . . . . . . . . . . . . . . . 5
Portfolio Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . 7
INVESTMENT OBJECTIVES AND POLICIES - FIXED INCOME PORTFOLIOS . . . . . . . . . 7
RWB/DFA Two-Year Corporate
Fixed Income Portfolio . . . . . . . . . . . . . . . . . . . . . . . . 7
RWB/DFA Two-Year Government Portfolio . . . . . . . . . . . . . . . . . . 7
Description of Investments. . . . . . . . . . . . . . . . . . . . . . . . 8
Investments in the Banking Industry . . . . . . . . . . . . . . . . . . . 9
Portfolio Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECURITIES LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Foreign Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Portfolio Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Futures Contracts and Options in Futures. . . . . . . . . . . . . . . . .11
Banking Industry Concentration. . . . . . . . . . . . . . . . . . . . . .11
Repurchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . .11
MANAGEMENT OF THE PORTFOLIOS . . . . . . . . . . . . . . . . . . . . . . . . .11
Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . .12
Client Service Agent. . . . . . . . . . . . . . . . . . . . . . . . . . .12
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES . . . . . . . . . . . . . . .13
(i)
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PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
In Kind Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
VALUATION OF SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
(ii)
<PAGE>
HIGHLIGHTS
THE PORTFOLIOS PAGE 4
This prospectus relates to three separate Portfolios of the Fund. Each
Portfolio, in effect, represents a separate mutual fund with its own investment
objective and policies. The investment objective of each Portfolio is a
fundamental policy and may not be changed without the affirmative vote of a
majority of its outstanding securities. Clients of RWBAS may choose to invest
in one or more of the Portfolios. Proceeds from the sale of shares of a
Portfolio will be invested in accordance with that Portfolio's investment
objective and policies. A shareholder will be entitled to a pro rata share of
all dividends and distributions arising from the assets of the Portfolio in
which he invests. Upon redeeming shares, a shareholder will receive the current
net asset value per share of the Portfolio represented by the redeemed shares.
INVESTMENT OBJECTIVE - RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO PAGE 5
The investment objective of the Portfolio is to achieve long-term capital
appreciation. The Portfolio will invest all of its assets in U.S. Large Cap
Value Series of the Trust (the "Large Cap Value Series"), which in turn will
invest in the common stocks of U.S. companies with shares that have a high book
value in relation to their market value. The Large Cap Value Series will
purchase common stocks of companies whose market capitalizations equal or exceed
that of a company having the median market capitalization of companies whose
shares are listed on the New York Stock Exchange (the "NYSE"). (See "RWB/DFA
U.S. HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT OBJECTIVE AND POLICIES.")
INVESTMENT OBJECTIVE - RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO PAGE 7
The investment objective of the Portfolio is to maximize total returns
consistent with the preservation of capital. The Portfolio will invest all of
its assets in DFA Two-Year Corporate Fixed Income Series of the Trust (the "Two-
Year Corporate Fixed Income Series"), which is expected to commence operations
in February, 1996. Generally, the Two-Year Corporate Fixed Income Series will
acquire high quality obligations which mature within two years from the date of
settlement. In addition, the Two-Year Corporate Fixed Income Series intends to
concentrate investments in the banking industry under certain circumstances.
(See "FIXED INCOME PORTFOLIOS - INVESTMENT OBJECTIVES AND POLICIES" and
"Investments in the Banking Industry.")
INVESTMENT OBJECTIVE - RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO PAGE 7
The investment objective of the Portfolio is to maximize total returns
available from the universe of debt obligations of the U.S. government and U.S.
government agencies and consistent with preservation of capital. The Portfolio
will invest all of its assets in DFA Two-Year Government Series of the Trust
(the "Two-Year Government Series"), which is expected to commence operations in
February, 1996. Generally, the Two-Year Government Series will acquire U.S.
government obligations and U.S. government agency obligations that mature within
two years from the date of settlement and repurchase agreements. (See "FIXED
INCOME PORTFOLIOS -INVESTMENT OBJECTIVES AND POLICIES.")
1
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RISK FACTORS PAGE 10
The RWB/DFA High Book to Market Portfolio (indirectly through its
investments in the Large Cap Value Series) may invest in financial futures
contracts and options thereon. The RWB/DFA Two-Year Corporate Fixed Income
Portfolio (indirectly through its investment in the Two-Year Corporate Fixed
Income Series) is authorized to invest in dollar-denominated obligations of U.S.
subsidiaries and branches of foreign banks and dollar-denominated obligations of
foreign issuers traded in the U.S. In addition, the Two-Year Corporate Fixed
Income Series is authorized to concentrate investments in the banking industry
in certain circumstances. Each Portfolio is authorized to invest in repurchase
agreements. Those policies and the policy of the Portfolios to invest in the
shares of corresponding Series of the Trust involve certain risks. (See "RISK
FACTORS.")
MANAGEMENT AND ADMINISTRATIVE SERVICES PAGE 11
Dimensional Fund Advisors Inc. (the "Advisor") provides each Portfolio with
administrative services and also serves as investment advisor to each Series of
the Trust. PFPC Inc. ("PFPC") provides the Portfolios and the Series with
certain accounting, transfer agency and other services. RWBAS serves as client
service agent to each Portfolio. (See "MANAGEMENT OF THE PORTFOLIOS.")
DIVIDEND POLICY PAGE 12
The RWB/DFA U.S. High Book to Market Portfolio and the Fixed Income
Portfolios distribute dividends from their net investment income quarterly.
Each of the Portfolios will make any distributions from realized net capital
gains on an annual basis. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND
TAXES.")
PURCHASE, VALUATION AND REDEMPTION OF SHARES PAGE 14
The shares of the Portfolios are offered at net asset value, which is
calculated as of the close of the NYSE on each day that the Exchange is open for
business. The value of a Portfolio's shares will fluctuate in relation to the
investment experience of its corresponding Series. The redemption price of a
share of each Portfolio is equal to its net asset value. (See "PURCHASE OF
SHARES" and "REDEMPTION OF SHARES.")
2
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SHAREHOLDER TRANSACTION EXPENSES
None*
ANNUAL FUND OPERATING EXPENSES**
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
Management Fee 0.10%
Administration Fee 0.01%
Other Expenses 0.24%
Total Operating Expenses 0.35%
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
Management Fee 0.15%
Administration Fee 0.01%
Other Expenses 0.25%
Total Operating Expenses 0.41%
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
Management Fee 0.15%
Administration Fee 0.01%
Other Expenses 0.27%
Total Operating Expenses 0.43%
*MOST SHARES OF THE PORTFOLIOS THAT WILL BE PURCHASED THROUGH OMNIBUS
ACCOUNTS MAINTAINED BY SECURITIES FIRMS MAY BE SUBJECT TO A SERVICE FEE OR
COMMISSION ON SUCH PURCHASES.
**The "Management Fee" is payable by the Series and the "Administration
Fee" is payable by the Portfolio. The amount set forth in "Other Expenses"
represents the aggregate amount that is payable by both the Series and the
Portfolio, and also includes a client services fee of 0.04% payable by the
RWB/DFA U.S. High Book to Market Portfolio and a client services fee of 0.03%
payable by the Fixed Income Portfolios to RWBAS.
EXAMPLE
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>
RWB/DFA U.S. High Book to Market
Portfolio $4 $11 n/a n/a
RWB/DFA Two-Year Corporate
Fixed Income Portfolio $4 $13 n/a n/a
RWB/DFA Two-Year Government
Portfolio $4 $14 n/a n/a
</TABLE>
The purpose of the above fee table and Example is to assist investors in
understanding the various costs and expenses that an investor in the Portfolios
will bear directly or indirectly. THE EXAMPLE SHOULD NOT BE
3
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CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE
GREATER OR LESSER THAN THOSE SHOWN.
The table summarizes the aggregate estimated annual operating expenses of
both the Portfolios and the corresponding Series. (See "MANAGEMENT OF THE
PORTFOLIOS" for a description of Portfolio and Series expenses.) The Board of
Directors of the Fund has considered whether such expenses will be more or less
than they would have been if each Portfolio were to have invested directly in
the securities held by its corresponding Series. The aggregate amount of
expenses for a Portfolio and the corresponding Trust Series may be greater than
it would have been if the Portfolio were to invest directly in the securities
held by the corresponding Trust Series. However, the total expense ratios for
the Portfolios and their corresponding Series are expected to be less over time
than such ratios would have been if the Portfolios would have invested directly
in the underlying securities. This is because this arrangement enables
institutional investors, including the Portfolios, to pool their assets, which
may be expected to result in economies by spreading certain fixed costs over a
larger asset base. Each shareholder in a Series, including the corresponding
Portfolio, will pay its proportionate share of the expenses of the Series.
The Portfolios are new and, therefore, their expenses included in the table
are the estimated annualized expenses that are expected to be incurred through
the fiscal period ending November 30, 1996; and the above example is based on
estimated expenses for the current and next two fiscal years and does not extend
those estimates over five and ten-year periods. The estimated expenses with
respect to the RWB/DFA U.S. High Book to Market Portfolio take into account the
actual expenses of the Large Cap Value Series for the fiscal year ended November
30, 1995.
THE PORTFOLIOS
Each of the Portfolios, unlike many other investment companies which
directly acquire and manage their own portfolio of securities, seeks to achieve
its investment objective by investing all of its investable assets in a
corresponding Series of the Trust, an open-end, management investment company,
registered under the Investment Company Act of 1940, that issues Series having
the same investment objective as each of the Portfolios. The investment
objective of a Portfolio may not be changed without the affirmative vote of a
majority of its outstanding securities and the investment objective of a Series
of the Trust may not be changed without the affirmative vote of a majority of
its outstanding securities. Shareholders of a Portfolio will receive written
notice thirty days prior to any change in the investment objective of its
corresponding Trust Series.
This prospectus describes the investment objective, policies and
restrictions of each Portfolio and its corresponding Series. (See "RWB/DFA U.S.
HIGH BOOK TO MARKET PORTFOLIO - INVESTMENT OBJECTIVE AND POLICIES" and "FIXED
INCOME PORTFOLIOS - INVESTMENT OBJECTIVES AND POLICIES.") In addition, an
investor should read "MANAGEMENT OF THE PORTFOLIOS" for a description of the
management and other expenses associated with the Portfolios' investment in the
Trust. Other institutional investors, including other mutual funds, may invest
in each Series and the expenses of such other investors and, correspondingly,
their returns may differ from those of the Portfolios. Please contact the Trust
at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401, (310) 395-8005 for
information about the availability of investing in the Series other than through
the Portfolios.
The shares of the Series will be offered to institutional investors for the
purpose of increasing the funds available for investment, to reduce expenses as
a percentage of total assets and to achieve other economies that might be
available at higher asset levels. For example, a Series might be able to place
larger block trades at more advantageous prices and to participate in securities
transactions of larger denominations, thereby reducing the relative amount of
certain transaction costs in relation to the total size of the transaction.
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
4
<PAGE>
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 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. Moreover, a distribution in kind by the Series
corresponding to the RWB/DFA U.S. High Book to Market Portfolio and RWB/DFA Two-
Year Corporate Fixed Income Portfolio may constitute a taxable exchange for
federal income tax purposes resulting in gain or loss to these Portfolios. Any
net capital gains so realized will be distributed to such a Portfolio's
shareholders as described below under "Dividends, Capital Gains Distributions
and Taxes."
Finally, the Portfolios' investment in the shares of a registered
investment company such as the Trust is new and results in certain operational
and other complexities. However, management believes that the benefits to be
gained by shareholders outweigh the additional complexities and that the risks
attendant to such investment are not inherently different from the risks of
direct investment in securities of the type in which the Trust Series invest.
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO -
INVESTMENT OBJECTIVE AND POLICIES
PORTFOLIO CHARACTERISTICS AND POLICIES
The investment objective of the RWB/DFA U.S. High Book to Market Portfolio
is to achieve long-term capital appreciation. The Portfolio pursues its
objective by investing all of its assets in the U.S. Large Cap Value Series of
the Trust (the "Large Cap Value Series"), which has the same investment
objective and policies as the Portfolio. The Large Cap Value Series seeks to
achieve its objective by investing in common stocks of large U.S. companies with
shares that have a high book value in relation to their market value (a "book to
market ratio"). A company's shares will be considered to have a high book to
market ratio if the ratio equals or exceeds the ratios of any of the 30% of
companies with the highest positive book to market ratios whose shares are
listed on the NYSE and, except as described below under "Portfolio Structure,"
will be considered eligible for investment. A company will be considered
"large" if its market capitalization (i.e., the market price of its common stock
multiplied by the number of outstanding shares) equals or exceeds that of the
company having the median market capitalization of companies whose shares are
listed on the NYSE. In addition, the Large Cap Value Series is authorized to
invest in private placements of interest-bearing debentures that are convertible
into common stock ("privately placed convertible debentures"). Such investments
are considered illiquid and the value thereof together with the value of all
other illiquid investments may not exceed 15% of the value of the Large Cap
Value Series' total assets at the time of purchase.
5
<PAGE>
PORTFOLIO STRUCTURE
The Large Cap Value Series will operate as a "diversified" investment
company. Further, the Large Cap Value Series will not invest more than 25% of
its total assets in securities of companies in a single industry. Ordinarily,
at least 80% of the assets of the Large Cap Value Series will be invested in a
broad and diverse group of readily marketable common stocks of large U.S.
companies with high book to market ratios, as described above. The Large Cap
Value Series may invest a portion of its assets, ordinarily not more than 20%,
in high quality, highly liquid fixed income securities such as money market
instruments, including short-term repurchase agreements. The Large Cap Value
Series will purchase securities that are listed on the principal U.S. national
securities exchanges and traded over-the-counter.
The Large Cap Value Series will be structured on a market capitalization
basis, by generally basing the amount of each security purchased on the issuer's
relative market capitalization, with a view to creating in the Large Cap Value
Series a reasonable reflection of the relative market capitalizations of its
portfolio companies. However, the Advisor may exclude the securities of a
company that otherwise meets the applicable criteria described above if the
Advisor determines, in its best judgment, that other conditions exist that make
the inclusion of such security inappropriate.
Deviation from strict market capitalization weighing will also occur
because the Large Cap Value Series intends to purchase round lots only. In
order to retain sufficient liquidity, the relative amount of any security held
by the Large Cap Value Series may be reduced, from time to time, from the level
which adherence to market capitalization weighing would otherwise require. A
portion, but generally not in excess of 20%, of the Large Cap Value Series'
assets may be invested in interest-bearing obligations, as described above,
thereby causing further deviation from market capitalization weighing. The
Large Cap Value Series may make block purchases of eligible securities at
opportune prices even though such purchases exceed the number of shares which,
at the time of purchase, strict adherence to the policy of market capitalization
weighing would otherwise require. While such transactions might cause a
temporary deviation from market capitalization weighing, they would ordinarily
be made in anticipation of further growth of the assets of the Large Cap Value
Series. If securities must be sold in order to obtain funds to make redemption
payments, such securities may be repurchased by the Large Cap Value Series as
additional cash becomes available to it. However, the Portfolio and the Large
Cap Value Series each has retained the right to borrow to make redemption
payments and are also authorized to redeem their shares in kind. (See
"REDEMPTION OF SHARES.")
Changes in the composition and relative ranking (in terms of market
capitalization and book to market ratio) of the stocks which are eligible for
purchase by the Large Cap Value Series take place with every trade when the
securities markets are open for trading due, primarily, to price fluctuations of
such securities. On not less than a semi-annual basis, the Advisor will prepare
a current list of large U.S. companies with high book to market ratios whose
stock is eligible for investment. Only common stocks whose market
capitalizations are not less than the minimum on such list will be purchased by
the Large Cap Value Series. Additional investments will not be made in
securities of issuers which have depreciated in value to such an extent that
they are not then considered by the Advisor to be large companies. This may
result in further deviation from market capitalization weighing and such
deviation could be substantial if a significant amount of the Large Cap Value
Series' holdings decrease in value sufficiently to be excluded from the then
current market capitalization requirement for eligible securities, but not by a
sufficient amount to warrant their sale. A further deviation from market
capitalization weighing may occur if the Large Cap Value Series invests a
portion of its assets in privately placed convertible debentures. (See
"Portfolio Characteristics and Policies.")
It is management's belief that the stocks of large U.S. companies with high
book to market ratios offer, over a long term, a prudent opportunity for capital
appreciation but, at the same time, selecting a limited number of such issues
for inclusion in the Large Cap Value Series involves greater risk than including
a large number of them. The Advisor does not anticipate that a significant
number of securities which meet the market capitalization criteria will be
selectively excluded from the Large Cap Value Series.
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The Large Cap Value Series does not seek current income as an investment
objective and investments will not be based upon an issuer's dividend payment
policy or record. However, many of the companies whose securities will be
included in the Large Cap Value Series do pay dividends. It is anticipated,
therefore, that the Large Cap Value Series will receive dividend income.
PORTFOLIO TRANSACTIONS
The Large Cap Value Series does not intend to purchase or sell securities
based on the prospects for the economy, the securities markets or the individual
issuers whose shares are eligible for purchase. As described under "Portfolio
Structure," investments will be made in virtually all eligible securities on a
market capitalization weighted basis. This is a passive approach to investment
management that does not entail taking steps to reduce risk by replacing
portfolio equity securities with other securities that appear to have the
potential to provide better investment performance.
Generally, securities will be purchased with the expectation that they will
be held for longer than one year. The Advisor may, from time to time, sell
portfolio securities when, in its opinion, such action is necessary to pay
redemptions in cash. However, the Large Cap Value Series and the Portfolio are
authorized to borrow in order to pay redemptions in cash. The Large Cap Value
Series may sell portfolio securities when the issuer's market capitalization
falls substantially below that of the issuer with the minimum market
capitalization which is then eligible for purchase by the Large Cap Value
Series. In addition, the Large Cap Value Series may sell portfolio securities
when their book to market ratio falls substantially below that of the security
with the lowest such ratio that is then eligible for purchase by the Series.
However, securities may be sold at any time when, in the Advisor's judgment,
circumstances warrant their sale. The annual portfolio turnover rate is not
expected to exceed 25%.
INVESTMENT OBJECTIVES AND POLICIES - FIXED INCOME PORTFOLIOS
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
The investment objective of RWB/DFA Two-Year Corporate Fixed Income
Portfolio is to maximize total returns consistent with the preservation of
capital. This objective will be pursued by investing the assets of the
Portfolio in the Two-Year Corporate Fixed Income Series, which is expected to
commence operations in February, 1996. The Two-Year Corporate Fixed Income
Series has the same investment objective and policies as the Portfolio. The
Two-Year Corporate Fixed Income Series will invest in U.S. government
obligations, U.S. government agency obligations, dollar denominated obligations
of foreign issuers issued in the U.S., bank obligations, including U.S.
subsidiaries and branches of foreign banks, corporate obligations, commercial
paper, repurchase agreements and obligations of supranational organizations. It
is the Two-Year Corporate Fixed Income Series' policy to acquire obligations
which mature within two years from the date of settlement. The Two-Year
Corporate Fixed Income Series principally invests in certificates of deposit,
commercial paper, bankers' acceptances, notes and bonds. The Series will invest
more than 25% of its total assets in obligations of U.S. and/or foreign banks
and bank holding companies when the yield to maturity on these instruments
exceeds the yield to maturity on all other eligible portfolio investments of
similar quality for a period of five consecutive days when the NYSE is open for
trading. (See "Investments in the Banking Industry.")
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
The investment objective of the RWB/DFA Two-Year Government Portfolio is to
maximize total returns available from the universe of debt obligations of the
U.S. government and U.S. government agencies and consistent with the
preservation of capital. This objective will be pursued by investing the assets
of the Portfolio in the Two-Year Government Series, which is expected to
commence operations in February, 1996. The Two-Year Government Series has the
same investment objective and policies as the Portfolio. Generally, the Two-
Year
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Government Series will acquire U.S. government obligations and U.S. government
agency obligations that mature within two years from the date of settlement.
The Two-Year U.S. Government Series will also acquire repurchase agreements.
DESCRIPTION OF INVESTMENTS
The following is a description of the categories of investments which may
be acquired by the Fixed Income Portfolios:
Permissible
Categories
RWB/DFA Two-Year Corporate Fixed Income Portfolio 1-7
RWB/DFA Two-Year Government Portfolio 1, 2, 6
1. U.S. GOVERNMENT OBLIGATIONS - Debt securities issued by the U.S.
Treasury which are direct obligations of the U.S. government, including bills,
notes and bonds.
2. U.S. GOVERNMENT AGENCY OBLIGATIONS - Issued or guaranteed by U.S.
government-sponsored instrumentalities and federal agencies, including the
Federal National Mortgage Association, Federal Home Loan Bank and the Federal
Housing Administration.
3. CORPORATE DEBT OBLIGATIONS - Non-convertible corporate debt securities
(e.g., bonds and debentures) which are issued by companies whose commercial
paper is rated Prime-1 by Moody's Investors Services, Inc. ("Moody's") or A-1 by
Standard & Poor's Corporation ("S&P") and dollar-denominated obligations of
foreign issuers issued in the U.S. If the issuer's commercial paper is unrated,
then the debt security would have to be rated at least AA by S&P or Aa2 by
Moody's. If there is neither a commercial paper rating nor a rating of the debt
security, then the Advisor must determine that the debt security is of
comparable quality to equivalent issues of the same issuer rated at least AA or
Aa2.
4. BANK OBLIGATIONS - Obligations of U.S. banks and savings and loan
associations and dollar-denominated obligations of U.S. subsidiaries and
branches of foreign banks, such as certificates of deposit (including marketable
variable rate certificates of deposit) and bankers' acceptances. Bank
certificates of deposit will be acquired only if the bank has assets in excess
of $1,000,000,000.
5. COMMERCIAL PAPER - Rated, at the time of purchase, A-1 or better by
S&P or Prime-1 by Moody's, or, if not rated, issued by a corporation having an
outstanding unsecured debt issue rated Aaa by Moody's or AAA by S&P, and having
a maximum maturity of nine months.
6. REPURCHASE AGREEMENTS - Instruments through which the Series purchases
securities ("underlying securities") from a bank, or a registered U.S.
government securities dealer, with an agreement by the seller to repurchase the
security at an agreed price, plus interest at a specified rate. The underlying
securities will be limited to U.S. government and agency obligations described
in (1) and (2) above. The Series will not enter into a repurchase agreement
with a duration of more than seven days if, as a result, more than 10% of the
value of the Series' total assets would be so invested. The Series will also
only invest in repurchase agreements with a bank if the bank has at least
$1,000,000,000 in assets and is approved by the Investment Committee of the
Advisor. The Advisor will monitor the market value of the securities plus any
accrued interest thereon so that they will at least equal the repurchase price.
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7. SUPRANATIONAL ORGANIZATION OBLIGATIONS - Debt securities of
supranational organizations such as the European Coal and Steel Community, the
European Economic Community and the World Bank, which are chartered to promote
economic development.
INVESTMENTS IN THE BANKING INDUSTRY
The Two-Year Corporate Fixed Income Series will invest more than 25% of its
total assets in obligations of U.S. and/or foreign banks and bank holding
companies when the yield to maturity on these investments exceeds the yield to
maturity on all other eligible portfolio investments for a period of five
consecutive days when the NYSE is open for trading. For the purpose of this
policy, which is a fundamental policy of the Two-Year Corporate Fixed Income
Series, which can only be changed by a vote of the shareholders of the Series,
banks and bank holding companies are considered to constitute a single industry,
the banking industry. The RWB/DFA Two-Year Corporate Fixed Income Portfolio has
the same fundamental policy, which can only be changed by a vote of the
Portfolio's shareholders, except that the Portfolio's policy does not apply to
the extent that all or substantially all of its net assets are invested in the
Two-Year Corporate Fixed Income Series. When investment in such obligations
exceeds 25% of the total net assets of the Two-Year Corporate Fixed Income
Series, the Series will be considered to be concentrating its investments in the
banking industry.
The types of bank and bank holding company obligations in which the Two-
Year Corporate Fixed Income Series may invest include: dollar-denominated
certificates of deposit, bankers' acceptances, commercial paper and other debt
obligations issued in the United States and which mature within two years of the
date of settlement, provided such obligations meet the Series' established
credit rating criteria as stated under "Description of Investments." In
addition, the Two-Year Corporate Fixed Income Series is authorized to invest
more than 25% of its total assets in Treasury bonds, bills and notes and
obligations of federal agencies and instrumentalities.
PORTFOLIO STRATEGY
The Two-Year Corporate Fixed Income Series will be managed with a view to
capturing credit risk premiums and term or maturity premiums. As used herein,
the term "credit risk premium" means the anticipated incremental return on
investment for holding obligations considered to have greater credit risk than
direct obligations of the U.S. Treasury, and "maturity risk premium" means the
anticipated incremental return for holding securities having maturities of
longer than one month compared to securities having a maturity of one month.
The Advisor believes that credit risk premiums are available largely through
investment in high grade commercial paper, certificates of deposit and corporate
obligations. The holding period for assets of the Two-Year Corporate Fixed
Income Series will be chosen with a view to maximizing anticipated monthly
returns, net of trading costs.
The Two-Year Corporate Fixed Income Series and the Two-Year Government
Series are expected to have high portfolio turnover rates due to the relatively
short maturities of the securities to be acquired. The rate of portfolio
turnover will depend upon market and other conditions; it will not be a limiting
factor when management believes that portfolio changes are appropriate. It is
anticipated that the annual turnover rate of the Two-Year Corporate Fixed Income
Series could be 0% to 200%, and the Two-Year Government Series could be 100% to
500%. While the Two-Year Corporate Fixed Income Series and Two-Year Government
Series acquire securities in principal transactions and, therefore, do not pay
brokerage commissions, the spread between the bid and asked prices of a security
may be considered to be a "cost" of trading. Such costs ordinarily increase
with trading activity. However, as stated above, securities ordinarily will be
sold when, in the Advisor's judgment, the monthly return of the Two-Year
Corporate Fixed Income Series or the Two-Year Government Series will be
increased as a result of portfolio transactions after taking in to account the
cost of trading. It is anticipated that securities will be acquired in the
secondary markets for short term instruments.
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SECURITIES LOANS
The Portfolios and the corresponding Series of the Trust are authorized to
lend securities to qualified brokers, dealers, banks and other financial
institutions for the purpose of earning additional income, although inasmuch as
a Portfolio will only hold shares of its corresponding Series, the Portfolios do
not intend to lend those shares. While a Series may earn additional income from
lending securities, such activity is incidental to a Series' investment
objective. The value of securities loaned may not exceed 33 1/3% of the value
of a Series' total assets. In connection with such loans, a Series will receive
collateral consisting of cash or U.S. Government securities, which will be
maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. In addition, the Series will be able to
terminate the loan at any time, will receive reasonable interest on the loan, as
well as amounts equal to any dividends, interest or other distributions on the
loaned securities. In the event of the bankruptcy of the borrower, the Series
could experience delay in recovering the loaned securities. Management believes
that this risk can be controlled through careful monitoring procedures.
RISK FACTORS
FOREIGN SECURITIES
The Two-Year Corporate Fixed Income Series invests in foreign issuers.
Such investments involve risks that are not associated with investments in U.S.
public companies. Such risks may include legal, political and or diplomatic
actions of foreign governments, such as imposition of withholding taxes on
interest and dividend income payable on the securities held, possible seizure or
nationalization of foreign deposits, establishment of exchange controls or the
adoption of other foreign governmental restrictions which might adversely affect
the value of the assets held by the Two-Year Corporate Fixed Income Series.
Further, foreign issuers are not generally subject to uniform accounting,
auditing and financial reporting standards comparable to those of U.S. public
companies and there may be less publicly available information about such
companies than comparable U.S. companies. The Two-Year Corporate Fixed Income
Series may also invest in obligations of supranational organizations. The value
of the obligations of these organizations may be adversely affected if one or
more of their supporting governments discontinue their support.
BORROWING
Each Portfolio and each corresponding Series of the Trust has reserved the
right to borrow amounts not exceeding 33% of its net assets from banks as a
temporary measure for extraordinary or emergency purposes. When advantageous
opportunities to do so exist, each Portfolio and each Series may also purchase
securities when borrowings exceed 5% of the value of its net assets. Such
purchases can be considered to be "leveraging," and, in such circumstances, the
net asset value of the Series or Portfolio may increase or decrease at a greater
rate than would be the case if the Series or Portfolio had not leveraged. The
interest payable on the amount borrowed would increase the Series' or
Portfolios' expenses and if the appreciation and income produced by the
investments purchased when the Series or Portfolios has borrowed are less than
the cost of borrowing, the investment performance of each Series or Portfolio
will be reduced as a result of leveraging.
PORTFOLIO STRATEGY
The method employed by the Advisor to manage the Large Cap Value Series
differs from the process employed by many other investment advisors in that the
Advisor will rely on fundamental analysis of the investment merits of securities
to a limited extent to eliminate potential acquisitions rather than rely on this
technique to select securities. Further, because securities generally will be
held long-term and will not be eliminated based on short-term price
fluctuations, the Advisor generally will not act upon general market movements
or short-term price fluctuations of securities to as great an extent as many
other investment advisors.
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FUTURES CONTRACTS AND OPTIONS ON FUTURES
The Large Cap Value Series also may invest in index futures contracts and
options on index futures, provided that, in accordance with current regulations,
not more than 5% of the Series' total assets are then invested as initial or
variation margin deposits on such contracts or options. In addition, to the
extent that the Series invests in futures contracts and options thereon for
other than bona fide hedging purposes, the Series will enter into such
transactions if, immediately thereafter, the sum of the amount of initial margin
deposits and premiums paid for open futures options would exceed 5% of the
Series' total assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into; provided, however,
that, in the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5%.
These investments entail the risk that an imperfect correlation may exist
between changes in the market value of the stocks owned by the Large Cap Value
Series and the prices of such futures contracts and options and, at times, the
market for such contracts and options might lack liquidity, thereby inhibiting a
Series' ability to close a position in such investments. Gains or losses on
investments in options and futures depends on the direction of securities
prices, interest rates and other economic factors and the loss from investing in
futures transactions is potentially unlimited.
BANKING INDUSTRY CONCENTRATION
Concentrating in obligations of the banking industry may involve additional
risk by foregoing the safety of investing in a variety of industries. Changes
in the market's perception of the riskiness of banks relative to non-banks could
cause more fluctuations in the net asset value of the Two-Year Corporate Fixed
Income Series (and thus, the RWB/DFA Two-Year Corporate Fixed Income Portfolio)
than might occur in a less concentrated portfolio.
REPURCHASE AGREEMENTS
Each Series may invest in repurchase agreements. In the event of
bankruptcy of the other party to a repurchase agreement, the Trust could
experience delay in recovering the securities underlying such agreements.
Management believes that this risk can be controlled through stringent security
selection criteria and careful monitoring procedures.
MANAGEMENT OF THE PORTFOLIOS
Dimensional Fund Advisors Inc. serves as investment advisor to each Series
and, as such, is responsible for the management of their respective assets.
Investment decisions for the Series are made by the Investment Committee of the
Advisor which meets on a regular basis and also as needed to consider investment
issues. The Investment Committee is composed of certain officers and directors
of the Advisor who are elected annually. The Advisor provides each Series with
a trading department and selects brokers and dealers to effect securities
transactions.
Securities transactions are placed with a view to obtaining the best price
and execution of such transactions. The Advisor is authorized to pay a higher
commission to a broker, dealer or exchange member than another such organization
might charge if it determines, in good faith, that the commission paid is
reasonable in relation to the research or brokerage services provided by such
organization. The Large Cap Value Series, for the fiscal year ended November
30, 1995, paid an investment management fee to the Advisor equal to .10% of its
average net assets on an annual basis. Pursuant to the investment management
agreements between the Advisor and the Series, the Two-Year Corporate Fixed
Income Series and the Two-Year Government Series, each of which is expected to
commence operations in February, 1996, pay an investment management fee equal to
.15%, respectively, of the average net assets of the Series on an annual basis.
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Each Portfolio and Series bears all of its own costs and expenses,
including: services of its independent accountants, legal counsel, brokerage
commissions and transfer taxes in connection with the acquisition and
disposition of portfolio securities, taxes, insurance premiums, costs incidental
to meetings of its shareholders and directors or trustees, the cost of filing
its registration statements under federal and, for only a Portfolio, state
securities laws, reports to shareholders, and transfer and dividend disbursing
agency, administrative services and custodian fees. Expenses allocable to a
particular Portfolio of the Fund or Series of the Trust are so allocated and
expenses which are not allocable to a particular Portfolio or Series are borne
by each Portfolio or Series on the basis of the amount of fees paid by the Fund
or Trust to PFPC, the dividend disbursing and accounting services agent of the
Fund.
The Advisor was organized in May 1981 and is engaged in the business of
providing investment management services to institutional investors. Assets
under management total approximately $12.5 billion. David G. Booth and Rex A.
Sinquefield, directors and officers of both the Fund and the Advisor and
trustees and officers of the Trust, together own approximately 64% of the
Advisor's outstanding stock and may be deemed controlling persons of the
Advisor.
The Board of Directors is responsible for establishing Portfolio policies
and for overseeing the management of the Portfolios. Each of the Directors and
officers of the Fund is also a Trustee and officer of the Trust. The Directors
of the Fund, including all of the disinterested Directors, have adopted written
procedures to monitor potential conflicts of interest that might develop between
the Portfolios and the Series. The statement of additional information relating
to the Portfolios furnishes information about the Directors and officers of the
Fund. (See "DIRECTORS AND OFFICERS" in the statement of additional
information.)
ADMINISTRATIVE SERVICES
The Fund has entered into an administration agreement with the Advisor on
behalf of each Portfolio. Pursuant to the administration agreement, the Advisor
will perform various services, including: supervision of the services provided
by the Portfolio's custodian and dividend disbursing agent and others who
provide services to the Fund for the benefit of the Portfolio; assisting the
Fund to comply with the provisions of federal, state, local and foreign
securities, tax and other laws applicable to the Portfolio; providing
shareholders of record with information about the Portfolio and their
investments as they or the Fund may request; assisting the Fund to conduct
meetings of shareholders; furnishing information as the Board of Directors may
require regarding the Series; and any other administrative services for the
benefit of the Portfolio as the Board of Directors may reasonably request. The
Advisor also provides the Fund with office space and personnel. For these
administrative services, each Portfolio pays the Advisor a monthly fee which, on
an annual basis, equals .01% of the average daily net assets of each Portfolio.
PFPC serves as the accounting services, dividend disbursing and transfer
agent for the Portfolios and the Series. The services provided by PFPC are
subject to supervision by the executive officers and the Board of Directors of
the Fund, and include day-to-day keeping and maintenance of certain records,
calculation of the net asset value of the shares, preparation of reports,
liaison with the Portfolios' and the Series' custodian and dividend disbursing
agent. For its services, the RWB/DFA U.S. High Book to Market Portfolio and
RWB/DFA Two-Year Corporate Fixed Income Portfolio each pay PFPC a monthly fee of
$1,000 and RWB/DFA Two-Year Government Portfolio pays a monthly fee of $2,600.
CLIENT SERVICE AGENT
Pursuant to a Client Service Agent Agreement with each Portfolio, RWBAS
performs various services for the Portfolios, including establishment of a toll-
free telephone number for shareholders of each Portfolio to use to
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obtain or receive up-to-date account information; providing to shareholders
quarterly and other reports with respect to the performance of each Portfolio;
and providing shareholders with such information regarding the operations and
affairs of each Portfolio, and their investment in its shares, as the
shareholders or the Board of Directors may reasonably request. For its
services, each Portfolio pays RWBAS a monthly fee which, on an annual basis,
equals .04% of the average daily net assets of the RWB/DFA U.S. High Book to
Market Portfolio and .03% of the other Portfolios.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
Each Portfolio of the Fund intends to qualify each year as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"), so that it will not be liable for federal income taxes to the extent
that its net investment income and net realized capital gains are distributed.
The RWB/DFA U.S. High Book to Market Portfolio and the Fixed Income Portfolios
distribute dividends from their net investment quarterly. The three Portfolios
will distribute any realized net capital gains annually after the end of the
Fund's fiscal year. Each Portfolio of the Fund is treated as a separate
corporation for federal tax purposes.
As noted above, the RWB/DFA U.S. High Book to Market Portfolio and the
Fixed Income Portfolios (collectively the "Corporate Feeder Portfolios") seek to
achieve their investment objectives by investing all of their investable assets
in a corresponding series of shares of the Trust (collectively "Corporate
Series"). The Corporate Series intend to qualify each year as regulated
investment companies under the Code.
A Corporate Feeder Portfolio receives income in the form of income
dividends paid by the corresponding Corporate Series. This income, less the
expenses incurred in operations, is a Corporate Feeder Portfolio's net
investment income from which income dividends are distributed as described
above. A Corporate Feeder Portfolio also may receive capital gains
distributions from the corresponding Corporate Series and may realize capital
gains upon the redemption of the shares of the corresponding Corporate Series.
Any net realized capital gains of a Corporate Feeder Portfolio will be
distributed as described below.
As noted above, the RWB/DFA Two-Year Government Portfolio seeks to achieve
its investment objective by investing all of its investable assets in the Two-
Year Government Series of the Trust. The Two-Year Government Series is
classified as a partnership for federal income tax purposes. The RWB/DFA Two-
Year Government Portfolio receives a proportionate share of the net investment
income and capital gains and losses realized by the Series. This income, less
the expenses incurred in operations, is the source from which such Portfolio
distributes income and capital gain dividends as described above.
Whether paid in cash or additional shares and regardless of the length of
time a Portfolio's shares have been owned by shareholders who are subject to
federal income taxes, distributions from long-term capital gains are taxable as
such. Dividends from net investment income or net short-term capital gains will
be taxable as ordinary income, whether received in cash or in additional shares.
For those investors subject to tax, if purchases of shares of a Portfolio are
made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution. Shareholders are notified annually by the Fund as to the federal
tax status of dividends and distributions paid by the Portfolio whose shares
they own.
Shareholders of all of the Portfolios will automatically receive all income
dividends and any capital gains distributions in additional shares of the
Portfolio whose shares they hold at net asset value (as of the business date
following the dividend record date), unless upon written notice to the transfer
agent the shareholder selects one of the following options:
Income Option - to receive income dividends in cash and capital
gains distributions in additional shares at net
asset value.
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Capital Gains Option - to receive capital gains distributions in cash and
income dividends in additional shares at net asset
value.
Cash Option - to receive both income dividends and capital gains
distributions in cash.
Dividends which are declared in October, November or December to
shareholders of record in such a month but which, for operational reasons, may
not be paid to the shareholder until the following January, will be treated for
tax purposes as if paid by the Portfolio and received by the shareholder on
December 31 of the calendar year in which they are declared.
The sale of shares of a Portfolio is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may
be realized from an ordinary redemption of shares or an exchange of shares
between two Portfolios of the Fund. Any loss incurred on sale or exchange of a
Portfolio's shares, held for six months or less, will be treated as a long-term
capital loss to the extent of capital gain dividends received with respect to
such shares.
Since virtually all of the net investment income from the Fixed Income
Portfolios is expected to arise from earned interest, it is not expected that
either of the Portfolios' distributions will be eligible for the dividends
received deduction for corporations. The portion of dividends paid by the
RWB/DFA U.S. High Book to Market Portfolio from net investment income that is
eligible for the corporate dividends received deduction depends on the
Portfolio's pro rata share of the aggregate qualifying dividend income received
by its corresponding Series from domestic (U.S.) sources.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions. Distributions of interest income and capital
gains realized from certain types of U.S. government securities may be exempt
from state personal income taxes.
A Portfolio is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on the account registration form your proper Taxpayer
Identification Number and by certifying that you are not subject to backup
withholding.
The tax discussion set forth above is included for general information
only. Prospective investors should consult their own tax advisers concerning
the federal, state, local or foreign tax consequences of an investment in a
Portfolio.
PURCHASE OF SHARES
Only clients of RWBAS are eligible to purchase shares of the Portfolios.
Investors should first contact RWBAS at (800) 336-7266, ext. 124, to notify
RWBAS of the proposed investment.
Most shares of the Portfolios that will be purchased or sold through
omnibus accounts maintained by securities firms may be subject to a service fee
or commission for such transactions. Clients of RWBAS may also be subject to
investment advisory fees under their own arrangements with RWBAS.
IN KIND PURCHASES
If accepted by the Fund, shares of a Portfolio may be purchased in exchange
for securities which are eligible for acquisition by its corresponding Series as
described in this prospectus. Securities to be exchanged which
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are accepted by the Fund and Fund shares to be issued therefore will be valued
as set forth under "VALUATION OF SHARES" at the time of the next determination
of net asset value after such acceptance. All dividends, interests,
subscription, or other rights pertaining to such securities shall become the
property of the Portfolio whose shares are being acquired and must be delivered
to the Fund by the investor upon receipt from the issuer.
The Fund will not accept securities in exchange for shares of a Portfolio
unless: (1) such securities are, at the time of the exchange, eligible to be
included in the Series corresponding to the Portfolio whose shares are to be
issued and current market quotations are readily available for such securities;
(2) the investor represents and agrees that all securities offered to be
exchanged are not subject to any restrictions upon their sale by the Portfolio
under the Securities Act of 1933 or under the laws of the country in which the
principal market for such securities exists, or otherwise; and (3) at the
discretion of the Fund, the value of any such security (except U.S. Government
securities) being exchanged together with other securities of the same issuer
owned by the corresponding Series may not exceed 5% of the net assets of the
Series immediately after the transaction. The Fund will accept such securities
for investment and not for resale.
A gain or loss for federal income tax purposes will generally be realized
by investors who are subject to federal taxation upon the exchange depending
upon the cost of the securities. Investors interested in such exchanges should
contact the Advisor. Purchases of shares will be made in full and fractional
shares calculated to three decimal places. In the interest of economy and
convenience, certificates for shares will not be issued except at the written
request of stockholders. Certificates for fractional shares, however, will not
be issued.
VALUATION OF SHARES
The net asset value per share of each Portfolio and corresponding Series is
calculated as of the close of the NYSE by dividing the total market value of its
investments and other assets, less any liabilities, by the total outstanding
shares of the stock of the Series or Portfolio. The value of a Portfolio's
shares will fluctuate in relation to the investment experience of the
corresponding Series. Securities held by a Series which are listed on a
securities exchange and for which market quotations are available are valued at
the last quoted sale price of the day or, if there is no such reported sale, the
U.S. Large Cap Value Series values such securities at the mean between the most
recent quoted bid and asked prices. Price information on listed securities is
taken from the exchange where the security is primarily traded. Unlisted
securities for which market quotations are readily available are valued at the
mean between the most recent quoted bid and asked prices. The value of other
assets and securities for which no quotations are readily available (including
restricted securities) are determined in good faith at fair value in accordance
with procedures adopted by the Board of Trustees of the Trust.
The value of the shares of the Fixed Income Portfolios, the Two-Year
Corporate Fixed Income Series and the Two-Year Government Series will tend to
fluctuate with interest rates because, unlike money market funds, these
Portfolios and the Series do not seek to stabilize the value of their respective
shares by use of the "amortized cost" method of asset valuation. Net asset
value includes interest on fixed income securities which is accrued daily.
Securities which are traded over-the-counter and on a stock exchange will be
valued according to the broadest and most representative market, and it is
expected that for bonds and other fixed-income securities this ordinarily will
be the over-the-counter market. Securities held by the Two-Year Corporate Fixed
Income Series and the Two-Year Government Series may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the current market value of such securities. Other assets and securities for
which quotations are not readily available will be valued in good faith at fair
value using methods determined by the Board of Directors.
Provided that RWBAS has received the investor's investment instructions in
good order and the Custodian has received the investor's payment, shares of the
Portfolio selected will be priced at the net asset value calculated next after
receipt of the order by PFPC. If an order to purchase shares must be canceled
due to non-payment, the purchaser will be responsible for any loss incurred by
the Fund arising out of such cancellation. To recover any
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such loss, the Fund reserves the right to redeem shares owned by any purchaser
whose order is canceled, and such purchaser may be prohibited or restricted in
the manner of placing further orders.
The public offering price of shares of each Portfolio is the net asset
value next determined after the purchase order is received by PFPC; no sales
charge is imposed. Management believes that any dilutive effect of the cost of
investing the proceeds of the sale of the shares of the Portfolios is minimal
and, therefore, the shares of the Portfolios are currently sold at net asset
value, without imposition of a fee that would be used to reimburse a Portfolio
for such cost ("reimbursement fee"). Reimbursement fees may be charged
prospectively from time to time based upon the future experience of the
Portfolios and their corresponding Series. Any such charges will be described
in the prospectus.
DISTRIBUTION
The Fund acts as distributor of the Portfolios' shares. It has, however,
entered into an agreement with DFA Securities Inc., a wholly owned subsidiary of
DFA, pursuant to which DFA Securities Inc. is responsible for supervising the
sale of the Portfolios' shares. No compensation is paid by the Fund to DFA
Securities Inc. under this agreement.
EXCHANGE OF SHARES
An investor may exchange shares of one Portfolio for those of another
Portfolio described in this prospectus or a portfolio of DFA Investment
Dimensions Group Inc., an open-end, management investment company ("DFAIDG"), by
first contacting RWBAS and completing the documentation required by RWBAS.
Exchanges are accepted only into those portfolios of DFAIDG that are
eligible for the exchange privilege of DFAIDG. Investors should contact RWBAS
for a list of those portfolios of DFAIDG that accept exchanges.
The exchange privilege is not intended to afford shareholders a way to
speculate on short-term movements in the markets. Accordingly, in order to
prevent excessive use of the exchange privilege that may potentially disrupt the
management of the Portfolios or otherwise adversely affect the Fund, any
proposed exchange will be subject to the approval of the Advisor. Such approval
will depend on: (i) the size of the proposed exchange; (ii) the prior number of
exchanges by that shareholder; (iii) the nature of the underlying securities and
the cash position of the Portfolio and of the portfolio of DFAIDG involved in
the proposed exchange; (iv) the transaction costs involved in processing the
exchange; and (v) the total number of redemptions by exchange already made out
of the Portfolio.
The redemption and purchase prices of shares redeemed and purchased by
exchange, respectively, are the net asset values next determined after the
Advisor has received an Exchange Form in good order. "Good order" means a
completed Exchange Form specifying the dollar amount to be exchanged, signed by
all registered owners of the shares; and if the Fund does not have on file the
authorized signatures for the account, a guarantee of the signature of each
registered owner by an "eligible guarantor institution." Such institutions
generally include national or state banks, savings associations, savings and
loan associations, trust companies, savings banks, credit unions and members of
a recognized stock exchange. Exchanges will be accepted only if the
registrations of the two accounts are identical, stock certificates have not
been issued and the shares of the portfolio being acquired are registered in the
investor's state of residence.
There is no fee imposed on an exchange. However, the Fund reserves the
right to impose an administrative fee in order to cover the costs incurred in
processing an exchange. Any such fee will be disclosed in the prospectus. An
exchange is treated as a redemption and a purchase. Therefore, the investor
could realize a taxable gain or loss
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on the transaction. The Fund reserves the right to revise or terminate the
exchange privilege or limit the amount of or reject any exchange, as deemed
necessary, at any time.
REDEMPTION OF SHARES
An investor who desires to redeem shares of a Portfolio must furnish a
redemption request to RWBAS in the form required by RWBAS. The Portfolio will
redeem shares at the net asset value of such shares next determined after
receipt of a request for redemption in good order by PFPC.
Although the redemption payments will ordinarily be made within seven days
after receipt, payment to investors redeeming shares which were purchased by
check will not be made until the Fund can verify that the payments for the
purchase have been, or will be, collected, which may take up to fifteen days or
more. Investors may avoid this delay by submitting a certified check along with
the purchase order.
GENERAL INFORMATION
The Portfolios and the Series may disseminate reports of their investment
performance from time to time. Investment performance is calculated on a total
return basis; that is by including all net investment income and any realized
and unrealized net capital gains or losses during the period for which
investment performance is reported. If dividends or capital gains distributions
have been paid during the relevant period, the calculation of investment
performance will include such dividends and capital gains distributions as
though reinvested in shares of the Portfolio. Standard quotations of total
return are computed in accordance with SEC Guidelines and are presented whenever
any non-standard quotations are disseminated. Non-standardized total return
quotations may differ from the SEC Guideline computations by covering different
time periods and by linking the actual return of a Portfolio with data for
periods prior to the Portfolio's inception. In all cases, disclosures are made
when performance quotations differ from the SEC Guidelines. Performance data is
based on historical earnings and is not intended to indicate future performance.
Rates of return expressed on an annual basis will usually not equal the sum of
returns expressed for consecutive interim periods due to the compounding of the
interim yields.
The Fund was incorporated under Maryland law on March 19, 1990. The DFA
Investment Trust Company was organized as a Delaware business trust on October
27, 1992. The Trust offers shares of its Series only to institutional investors
in private offerings. The Fund may withdraw the investment of a Portfolio in a
Series at any time, if the Board of Directors of the Fund determines that it is
in the best interests of the Portfolio to do so. Upon any such withdrawal, 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 the same investment objective as the Portfolio or the
hiring of an investment advisor to manage the Portfolio's assets in accordance
with the investment policies described above.
Whenever a Portfolio, as an investor in its corresponding Trust Series, is
asked to vote on a shareholder proposal to change a fundamental investment
policy (i.e. a policy that may be changed only with the approval of
shareholders) of the Series, 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.
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Shareholder inquiries may be made by writing or calling the Client Service
Agent at the address or telephone number appearing on the back cover of this
prospectus. Only those individuals whose signatures are on file for the account
in question may receive specific account information or make changes in the
account registration.
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DIMENSIONAL INVESTMENT GROUP INC.
1299 Ocean Avenue
11th floor
Santa Monica, CA 90401
Tel. No. (310) 395-8005
DIMENSIONAL FUND ADVISORS INC.
1299 Ocean Avenue
11th floor
Santa Monica, CA 90401
Tel. No. (310) 395-8005
CLIENT SERVICE AGENT
Reinhardt Werba Bowen Advisory Services
1190 Saratoga Avenue, Suite 200
San Jose, CA 95129
Tel. No. (800) 366-7266
CUSTODIAN - DOMESTIC
PNC BANK, N.A.
200 Stevens Drive, Airport Business Center
Lester, PA 19113
ACCOUNTING SERVICE AND DIVIDEND DISBURSING AGENT
PFPC INC.
400 Bellevue Parkway
Wilmington, DE 19809
LEGAL COUNSEL
STRADLEY, RONON, STEVENS & YOUNG
2600 One Commerce Square
Philadelphia, PA 19103-7098
INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
19th and Market Streets
Philadelphia, PA 19103
<PAGE>
DIMENSIONAL INVESTMENT GROUP INC.
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
1299 OCEAN AVENUE, 11TH FLOOR, SANTA MONICA, CALIFORNIA 90401
TELEPHONE: (310) 395-8005
STATEMENT OF ADDITIONAL INFORMATION
MARCH 1, 1996
This statement of additional information is not a prospectus but should be
read in conjunction with the prospectus of RWB/DFA U.S. High Book to Market
Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-
Year Government Portfolio (collectively the "Portfolios") of Dimensional
Investment Group Inc. (the "Fund"), dated March 1, 1996, which can be obtained
from the Fund by writing to the Fund at the above address or by calling the
above telephone number.
TABLE OF CONTENTS
PAGE
INVESTMENT OBJECTIVE AND POLICIES. . . . . . . . . . . . . . . . . . . . . 2
BROKERAGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FUTURES CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FEDERAL TAX TREATMENT OF FUTURES CONTRACTS . . . . . . . . . . . . . . . . 6
MANAGEMENT OF THE PORTFOLIOS . . . . . . . . . . . . . . . . . . . . . . . 7
DIRECTORS AND OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . 7
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PURCHASE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
CALCULATION OF PERFORMANCE DATA . . . . . . . . . . . . . . . . . . . . . 10
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The following information supplements the information set forth in the
prospectus under the captions "RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO -
INVESTMENT OBJECTIVE AND POLICIES" and "FIXED INCOME PORTFOLIOS-INVESTMENT
OBJECTIVES AND POLICIES," and applies to the DFA Two-Year Corporate Fixed Income
Series (the "Two-Year Corporate Fixed Income Series"), the DFA Two-Year
Government Series (the "Two-Year Government Series") and the DFA U.S. Large Cap
Value Series (the "Large Cap Value Series") of The DFA Investment Trust Company
(the "Trust").
Because the structure of the Large Cap Value Series is based on the
relative market capitalizations of eligible holdings, it is possible that the
Large Cap Value Series might include at least 5% of the outstanding voting
securities of one or more issuers. In such circumstances, the Fund and the
issuer would be deemed "affiliated persons" under the Investment Company Act of
1940 and certain requirements of the Act regulating dealings between affiliates
might become applicable. However, based on the present capitalizations of the
groups of companies eligible for inclusion in the Large Cap Value Series and the
anticipated amount of the Series' assets intended to be invested in such
securities, management does not anticipate that the Large Cap Value Series will
include as much as 5% of the voting securities in any issuer.
BROKERAGE TRANSACTIONS
The Two-Year Corporate Fixed Income Series and the Two-Year Government
Series acquire and sell securities on a net basis with dealers which are major
market makers in such securities. The Investment Committee of the Advisor
selects dealers on the basis of their size, market making and credit analysis
ability. When executing portfolio transactions for the Two-Year Corporate Fixed
Income Series and the Two-Year Government Series, the Advisor seeks to obtain
the most favorable price for the securities being traded among the dealers with
whom the Series effect transactions.
Portfolio transactions will be placed with a view to receiving the best
price and execution. In addition, the Advisor will seek to acquire and dispose
of securities in a manner which would cause as little fluctuation in the market
prices of stocks being purchased or sold as possible in light of the size of the
transactions being effected, and brokers will be selected with these goals in
view. The Advisor monitors the performance of brokers which effect transactions
for the Series to determine the effect that their trading has on the market
prices of the securities in which it invests. The Advisor also checks the rate
of commission being paid by the Series to its brokers to ascertain that they are
competitive with those charged by other brokers for similar services. For the
fiscal years ended November 30, 1994 and 1993, the Large Cap Value Series paid
brokerage commissions of $367,810 and $134,312, respectively. During the fiscal
year ended November 30, 1994, the Large Cap Value Series paid $177,095 in
commissions (on securities transactions totalling $113,847,315 in value) to
brokers which provided market price monitoring services, market studies and
research services to the Series.
Transactions also may be placed with brokers who provide the Advisor with
investment research, such as reports concerning individual issuers, industries
and general economic and financial trends and other research services. The
Investment Management Agreement of each Series permits the Advisor knowingly to
pay commissions on these transactions which are greater than another broker
might charge if the Advisor, in good faith, determines that the commissions paid
are reasonable in relation to the research or brokerage services provided by the
broker or dealer when viewed in terms of either a particular transaction or the
Advisor's overall responsibilities to assets under its management. Brokerage
transactions may be placed with securities firms that are affiliated with an
affiliate of the Advisor. Commissions paid on such transactions would be
commensurate with the rate of commissions paid on similar transactions to
brokers that are not so
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<PAGE>
affiliated and the frequency of, and the selection of brokers to effect, such
transactions would be fair and reasonable to the Portfolio's shareholders.
The over-the-counter market ("OTC") companies eligible for purchase by the
Large Cap Value Series are thinly traded securities. Therefore, the Advisor
believes it needs maximum flexibility to effect OTC trades on a best execution
basis. To that end, the Advisor places buy and sell orders with market makers,
third market brokers, Instinet and with dealers on an agency basis when the
Advisor determines that the securities may not be available from other sources
at a more favorable price. Third market brokers enable the Advisor to trade
with other institutional holders directly on a net basis. This allows the
Advisor sometimes to trade larger blocks than would be possible by going through
a single market maker.
The Advisor places buy and sell orders on Instinet when the Advisor
determines that the securities may not be available from other sources at a more
favorable price. Instinet is an electronic information and communication
network whose subscribers include most market makers as well as many
institutions. Instinet charges a commission for each trade executed on its
system. On any given trade the Large Cap Value Series, by trading through
Instinet, would pay a spread to a dealer on the other side of the trade plus a
commission to Instinet. However, placing a buy (or sell) order on Instinet
communicates to many (potentially all) market makers and institutions at once.
This can create a more complete picture of the market and thus increase the
likelihood that the Large Cap Value Series can effect transactions at the best
available prices.
Each Portfolio will not incur any brokerage or other costs in connection
with its purchase or redemption of shares of the corresponding Series, except if
a Portfolio receives securities from the corresponding Series to satisfy the
Portfolio's redemption request. (See "REDEMPTION OF SHARES".)
INVESTMENT LIMITATIONS
Each of the Portfolios has adopted certain limitations which may not be
changed with respect to any Portfolio without the approval of the holders of a
majority of the outstanding voting securities of the Portfolio. A "majority" is
defined as the lesser of: (1) at least 67% of the voting securities of the
Portfolio (to be effected by the proposed change) present at a meeting if the
holders of more than 50% of the outstanding voting securities of the Portfolio
are present or represented by proxy, or (2) more than 50% of the outstanding
voting securities of such Portfolio. The investment limitations of each Series
are the same as those of the corresponding Portfolio.
The Portfolios will not:
(1) invest in commodities or real estate, including limited
partnership interests therein, although they may purchase and sell securities of
companies which deal in real estate and securities which are secured by
interests in real estate and may purchase or sell financial futures contracts
and options thereon;
(2) make loans of cash, except through the acquisition of repurchase
agreements and obligations customarily purchased by institutional investors;
(3) as to 75% of the total assets of a Portfolio, 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;
(4) purchase or retain 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;
3
<PAGE>
(5) borrow, except that the Portfolios may borrow from banks and as a
temporary measure for extraordinary or emergency purposes, amounts not exceeding
33% of a Portfolio's net assets from banks and pledge not more than 33% of such
assets to secure such loans;
(6) pledge, mortgage, or hypothecate any of its assets to an extent
greater than 10% of its total assets at fair market value, except as described
in (5) above;
(7) with respect to the U.S. Large Cap Value Portfolio invest more
than 15% of the value of the Portfolio's total assets in illiquid securities
which include certain restricted securities, repurchase agreements with
maturities of greater than seven days, and other illiquid investments;
(8) engage in the business of underwriting securities issued by
others;
(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, except
the RWB/DFA Two-Year Corporate Fixed Income Portfolio shall invest more than 25%
of its total assets in obligations of banks and bank holding companies in the
circumstances described in the prospectus under "Investments in the Banking
Industry" and as otherwise described under "Portfolio Strategy;"
(13) write or acquire options (except as described in (1) above) or
interests in oil, gas or other mineral exploration, leases or development
programs;
(14) purchase warrants, except that the RWB/DFA U.S. High Book to
Market Portfolio may acquire warrants as a result of corporate actions involving
its holdings of equity securities;
(15) purchase securities on margin or sell short; or
(16) acquire more than 10% of the voting securities of any issuer,
provided that this limitation applies only to 75% of the assets of the RWB/DFA
U.S. High Book to Market Portfolio.
The investment limitations described in (3), (7), (9), (10), (11), (12) and
(16) above do not prohibit each 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 described in (1) and (15) above do not prohibit
a Portfolio from making margin deposits not exceeding 5% of its net assets.
Although (2) above prohibits cash loans, the Portfolios are authorized to
lend portfolio securities. Inasmuch as the Portfolios will only hold shares of
a corresponding Series, the Portfolios do not intend to lend those shares.
For purposes of (7) above, the RWB/DFA Two-Year Corporate Fixed Income
Portfolio may invest in commercial paper that is exempt from the registration
requirements of the Securities Act of 1933 (the
4
<PAGE>
"1933 Act"), subject to the requirements regarding credit ratings stated in the
prospectus under "Description of Investments." Further, pursuant to Rule 144A
under the 1933 Act, the Portfolios may purchase certain unregistered (i.e.
restricted) securities upon a determination that a liquid institutional market
exists for the securities. If it is decided that a liquid market does exist,
the securities will not be subject to the 15% limitation on holdings of illiquid
securities described below. While maintaining oversight, the Board of Directors
has delegated the day-to-day function of making liquidity determinations to the
Advisor. For 144A securities to be considered liquid, there must be at least
two dealers making a market in such securities. After purchase, the Board of
Directors and the Advisor will continue to monitor the liquidity of Rule 144A
securities.
For the purposes of (12) above, utility companies will be divided according
to their services; e.g., gas, gas transmission, electric and gas, electric,
water and telephone will each be considered a separate industry.
Although not a fundamental policy subject to shareholder approval, the
RWB/DFA Two-Year Corporate Fixed Income Portfolio and the RWB/DFA Two-Year
Government Portfolio do not intend to invest more than 15% of their total assets
in illiquid securities.
While the RWB/DFA U.S. High Book to Market Portfolio and the RWB/DFA Two-
Year Government Portfolio (indirectly through their investment in the
corresponding Series) have retained authority to buy and sell financial futures
contracts and options thereon, they have no present intention to do so.
Unless otherwise indicated, all limitations applicable to the Portfolios'
and Series' investments apply only at the time that a transaction is undertaken.
Any subsequent change in a rating assigned by any rating service to a security
or change in the percentage of a Portfolio's or Series' assets invested in
certain securities or other instruments resulting from market fluctuations or
other changes in a Portfolio's or Series' total assets will not require a
Portfolio or Series to dispose of an investment until the Advisor determines
that it is practicable to sell or closeout the investment without undue market
or tax consequences. In the event that ratings services assign different
ratings to the same security, the Advisor will determine which rating it
believes best reflects the security's quality and risk at that time, which may
be the higher of the several assigned ratings.
FUTURES CONTRACTS
Please note that while the following discussion relates to the policies of
the Portfolios with respect to futures contracts, it should be understood that
with respect to the Portfolios, the discussion applies to the Series of the
Trust in which the Portfolio invests all of its assets.
The Large Cap Value Series, Two-Year Corporate Fixed Income Series and Two-
Year Government Series each may enter into futures contracts and options on
futures contracts only for the purpose of remaining fully invested and to
maintain liquidity to pay redemptions. Futures contracts provide for the future
sale by one party and purchase by another party of a specified amount of defined
securities at a specified future time and at a specified price. Futures
contracts which are standardized as to maturity date and underlying financial
instrument are traded on national futures exchanges. A Series will be required
to make a margin deposit in cash or government securities with a broker or
custodian to initiate and maintain positions in futures contracts. Minimal
initial margin requirements are established by the futures exchange and brokers
may establish margin requirements which are higher than the exchange
requirements. After a futures contract position is opened, the value of the
contract is marked to market daily. If the futures contract price changes to
the extent that the margin on deposit does not satisfy margin requirements,
payment of additional "variation" margin will be required. Conversely,
reduction in the contract value may reduce the required margin resulting in a
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<PAGE>
repayment of excess margin to a Series. Variation margin payments are made to
and from the futures broker for as long as the contract remains open. The
Series expect to earn income on their margin deposits. Pursuant to current
regulations, a Series will not enter into futures contract transactions if
immediately thereafter, the sum of its initial and variation margin deposits on
open contracts exceeds 5% of the market value of its total assets. In addition,
to the extent that the Series invests in futures contracts and options thereon
for other than bona fide hedging purposes, the Series will not enter into such
transactions if, immediately thereafter, the sum of the amount of initial margin
deposits and premiums paid for open futures options would exceed 5% of the
Series' total assets, after taking into account unrealized profits and
unrealized losses on such contracts it has entered into; provided, however,
that, in the case of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5%. Pursuant to
published positions of the Securities and Exchange Commission (the "SEC"), the
Portfolios or Series may be required to maintain segregated accounts consisting
of liquid assets, such as cash, U.S. Government securities, or other high grade
debt obligations (or, as permitted under applicable regulation, enter into
offsetting positions) in connection with their futures contract transactions in
order to cover their obligations with respect to such contracts.
Positions in futures contracts may be closed out only on an exchange which
provides a secondary market. However, there can be no assurance that a liquid
secondary market will exist for any particular futures contract at any specific
time. Therefore, it might not be possible to close a futures position and, in
the event of adverse price movements, a Series would continue to be required to
continue to make variation margin deposits. In such circumstances, if a Series
has insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when it might be disadvantageous to do so.
Management intends to minimize the possibility that it will be unable to close
out a futures contract by only entering into futures which are traded on
national futures exchanges and for which there appears to be a liquid secondary
market.
FEDERAL TAX TREATMENT OF FUTURES CONTRACTS
Except for transactions a Series has identified as hedging transactions,
the Series is required for federal income tax purposes to recognize as income
for each taxable year its net unrealized gains and losses on certain futures
contracts as of the end of the year as well as those actually realized during
the year. In most cases, any gain or loss recognized with respect to a futures
contract is considered to be 60% long-term gain or loss and 40% short-term
capital gain or loss, without regard to the holding period of the contract.
Furthermore, sales of futures contracts which are intended to hedge against a
change in the value of securities held by a Series may affect the holding period
of such securities and, consequently, the nature of the gain or loss on such
securities upon disposition.
In order for a Series to continue to qualify for federal income tax
treatment as a regulated investment company, at least 90% of its gross income
for a taxable year must be derived from qualifying income; i.e., dividends,
interest, income derived from loans of securities, gains from the sale of
securities and other income derived with respect to the Series' business of
investing in securities. In addition, gains realized on the sale or other
disposition of securities held for less than three months must be limited to
less than 30% of the Series' annual gross income. It is anticipated that any
net gain realized from closing futures contracts will be considered gain from
the sale of securities and, therefore, constitute qualifying income for purposes
of the 90% requirement. In order to avoid realizing excessive gains on
securities held less than three months, a Series may be required to defer the
closing out of futures contracts beyond the time when it would otherwise be
advantageous to do so. It is anticipated that unrealized gains on futures
contracts which have been open for less than three months as of the end of a
Series' fiscal year and which are recognized for tax purposes, will not be
considered gains on sales of securities held less than three months for the
purpose of the 30% test. The Series will distribute to shareholders annually
any net capital gains which have been recognized for
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federal income tax purposes (including unrealized gains at the end of the
Series' fiscal year) on futures transactions. Such distributions will be
combined with distributions of capital gains realized on the Series' other
investments.
MANAGEMENT OF THE PORTFOLIOS
The Advisor has undertaken to reimburse each Portfolio to the extent
necessary to satisfy the most restrictive expense ratio required by any state in
which the particular Portfolio's shares are qualified for sale. Presently, the
most restrictive expense limitation is 2.5% on the first $30,000,000 of average
annual net assets of the Portfolio, 2.0% of the next $70,000,000 of such assets,
and 1.5% of any excess.
DIRECTORS AND OFFICERS
The names and addresses of the directors and officers of the Fund and a
brief statement of their present positions and principal occupations during the
past five years is set forth below.
DIRECTORS
David G. Booth*, 49, Director, President and Chairman-Chief Executive
Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and
Director: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia
Pty Limited, DFA Investment Dimensions Group Inc. (registered investment
company) and Dimensional Emerging Markets Fund Inc. (registered investment
company). Trustee, President and Chairman-Chief Executive Officer of The DFA
Investment Trust Company. Chairman and Director, Dimensional Fund Advisors Ltd.
George M. Constantinides, 47, Director, Chicago, IL. Leon Carroll Marshall
Professor of Finance, Graduate School of Business, University of Chicago.
Trustee, The DFA Investment Trust Company. Director, DFA Investment Dimensions
Group Inc. and Dimensional Emerging Markets Fund Inc. Academic Advisory Council
Member, Merrill Lynch & Co.
John P. Gould, 57, Director, Chicago, IL. Distinguished Service Professor
of Economics, Graduate School of Business, University of Chicago. Trustee, The
DFA Investment Trust Company and First Prairie Funds (registered investment
company). Director, DFA Investment Dimensions Group Inc., Dimensional Emerging
Markets Fund Inc. and Harbor Investment Advisors.
Roger G. Ibbotson, 52, Director, New Haven, CT. Professor in Practice of
Finance, Yale School of Management. Trustee, The DFA Investment Trust Company.
Director, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets
Fund Inc., Hospital Fund, Inc. (investment management services) and BIRR
Portfolio Analysis, Inc. (software products). Chairman, Institute Study of
Security Markets. Chairman and President, Ibbotson Associates, Inc., Chicago,
IL (software, data, publishing and consulting).
Merton H. Miller, 72, Director, Chicago, IL. Robert R. McCormick
Distinguished Service Professor, Graduate School of Business, University of
Chicago. Trustee, The DFA Investment Trust Company. Director, DFA Investment
Dimensions Group Inc. and Dimensional Emerging Markets Fund Inc.
Myron S. Scholes, 54, Director, Greenwich, CT. Frank E. Buck Professor of
Finance, Graduate School of Business and Professor of Law, Law School, Senior
Research Fellow, Hoover Institution, (all) Stanford University. Trustee, The
DFA Investment Trust Company. Director, DFA Investment Dimensions Group Inc.,
Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of
Investment
7
<PAGE>
Companies and Smith Breeden Group of Investment Companies. Limited Partner,
Long-Term Capital Management L.P. (money manager).
Rex A. Sinquefield*, 51, Director, Chairman and Chief Investment Officer,
Santa Monica, CA. Chairman-Chief Investment Officer and Director, Dimensional
Fund Advisors Inc., DFA Securities Inc., DFA Australia Pty Limited, DFA
Investment Dimensions Group Inc., and Dimensional Emerging Markets Fund Inc.
Trustee, Chairman-Chief Investment Officer of The DFA Investment Trust Company.
Chairman, Chief Executive Officer and Director, Dimensional Fund Advisors Ltd.
*Interested Director of the Fund.
OFFICERS
Each of the officers listed below holds the same office in the following
entities: Dimensional Fund Advisors Inc., DFA Securities Inc., DFA Australia
Pty Limited, DFA Investment Dimensions Group Inc., The DFA Investment Trust
Company, Dimensional Fund Advisors Ltd., and Dimensional Emerging Markets Fund
Inc.
Arthur Barlow, 40, Vice President, Santa Monica, CA.
Truman Clark, 54, Vice President, Santa Monica, CA.
Maureen Connors, 59, Vice President, Santa Monica, CA.
Robert Deere, 38, Vice President, Santa Monica, CA.
Irene R. Diamant, 45, Vice President and Secretary, Santa Monica, CA.
Associate attorney, Cahill, Gordon & Reindel, from 1987 to 1991.
Eugene Fama, Jr., 35, Vice President, Santa Monica, CA.
David Plecha, 34, Vice President, Santa Monica, CA.
George Sands, 40, Vice President, Santa Monica, CA. Managing Director,
Asset Strategy Consulting, Los Angeles, CA from 1991 to 1992 and previously
Vice President, Wilshire Associates, Santa Monica, CA.
Michael T. Scardina, 40, Vice President, Chief Financial Officer,
Controller and Treasurer, Santa Monica, CA.
Cem Severoglu, 32, Vice President, Santa Monica, CA.
Jeanne C. Sinquefield, Ph.D., 49, Executive Vice President, Santa Monica,
CA.
Rex A. Sinquefield and Jeanne C. Sinquefield are husband and wife.
Directors and officers as a group own less than 1% of each Portfolio's
outstanding stock.
Set forth below is a table listing, for each director entitled to receive
compensation, the compensation received from the Fund during the fiscal year
ended November 30, 1995, and the total compensation received
8
<PAGE>
from all four registered investment companies for which the Advisor serves as
investment advisor during that same fiscal year.
<TABLE>
<CAPTION>
Aggregate Total Compensation from
Compensation Fund
Director from Fund and Fund Complex
- -------- ------------------ ---------------------------
<S> <C> <C>
George M. Constantinides $ 5,000 $30,000
John P. Gould $ 5,000 $30,000
Roger G. Ibbotson $ 5,000 $30,000
Merton H. Miller $ 4,000 $24,000
Myron S. Scholes $ 5,000 $30,000
</TABLE>
OTHER INFORMATION
The Fund was known as DFA U.S. Large Cap Inc. from February, 1992 until the
Fund amended its Articles of Incorporation in April, 1993 to change to its
present name. Prior to a February, 1992 amendment to the Fund's Articles of
Incorporation, the Fund was known as DFA U.S. Large Cap Portfolio Inc. The Fund
commenced offering shares of the Portfolios in March, 1996.
The shares of each Portfolio, when issued and paid for in accordance with
the Portfolios' prospectus, will be fully paid and nonassessable shares, with
equal, non-cumulative voting rights and no preferences as to conversion,
exchange, dividends, redemption or any other feature. With respect to matters
which require shareholder approval, shareholders are entitled to vote only with
respect to matters which affect the interest of the class of shares (Portfolio)
which they hold, except as otherwise required by applicable law. If liquidation
of the Fund should occur, shareholders would be entitled to receive on a per
class basis the assets of the particular Portfolio whose shares they own, as
well as a proportionate share of Fund assets not attributable to any particular
Portfolio. Ordinarily, the Fund does not intend to hold annual meetings of
shareholders, except as required by the Investment Company Act of 1940 (the
"1940 Act") or other applicable law. The Fund's by-laws provide that special
meetings of shareholders shall be called at the written request of at least 10%
of the votes entitled to be cast at such meeting. Such meeting may be called to
consider any matter, including the removal of one or more directors.
Shareholders will receive shareholder communications with respect to such
matters as required by the 1940 Act, including semi-annual and annual financial
statements of the Fund, the latter being audited.
PNC Bank, N.A. serves as the custodian for the Portfolios and the Series.
The custodian maintains a separate account or accounts for the Portfolios and
Series; receives, holds and releases portfolio securities on account of the
Portfolios and Series; makes receipts and disbursements of money on behalf of
the Portfolios and Series; and collects and receives income and other payments
and distributions on account of the Portfolios' and Series' portfolio
securities.
Coopers & Lybrand L.L.P., the Fund's independent accountants, audits the
Fund's financial statements on an annual basis.
PURCHASE OF SHARES
The following information supplements the information set forth in the
prospectus under the caption "PURCHASE OF SHARES".
9
<PAGE>
The Fund will accept purchase and redemption orders on each day that the
New York Stock Exchange ("NYSE") is open for business. On other days, the Fund
will generally be closed. The NYSE is scheduled to be open Monday through
Friday throughout the year except for days closed to recognize New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas Day. Orders for redemptions and purchases will not
be processed if the Fund is closed.
The Fund reserves the right, in its sole discretion, to suspend the
offering of shares of any or all Portfolios or reject purchase orders when, in
the judgment of management, such suspension or rejection is in the best interest
of the Fund or a Portfolio. Securities accepted in exchange for shares of a
Portfolio will be acquired for investment purposes and will be considered for
sale under the same circumstances as other securities in the Portfolio.
REDEMPTION OF SHARES
The following information supplements the information set forth in the
prospectus under the caption "REDEMPTION OF SHARES".
The Fund may suspend redemption privileges or postpone the date of payment:
(1) during any period when the NYSE is closed, or trading on the Exchange is
restricted as determined by the Securities and Exchange Commission (the "SEC"),
(2) during any period when an emergency exists as defined by the rules of the
SEC as a result of which it is not reasonably practicable for the Fund to
dispose of securities owned by it, or fairly to determine the value of its
assets and (3) for such other periods as the SEC may permit.
If the Board of Directors of the Fund determines that it would be
detrimental to the best interests of the remaining shareholders of a Portfolio
to make payment wholly or partly in cash, the Portfolio may pay the redemption
price by a distribution of readily marketable portfolio securities from the
Portfolio in lieu of cash. Upon such a determination by both the Board of
Directors of the Fund and Board of Trustees of the Trust, a Portfolio may pay
the redemption price, in lieu of cash, by a distribution of portfolio securities
that the Portfolio receives from the Series to satisfy the Portfolio's
redemption request. Any such redemption by the Series and/or the Portfolio
would be in accordance with Rule 18f-1 under the 1940 Act. Investors may incur
brokerage charges and other transaction costs selling securities that were
received in payment of redemptions.
Shareholders may transfer shares of any Portfolio to another person by
making a written request therefore to the Advisor who will transmit the request
to PFPC. The request should clearly identify the account and number of shares
to be transferred, and include the signature of all registered owners and all
stock certificates, if any, which are subject to the transfer. The signature on
the letter of request, the stock certificate or any stock power must be
guaranteed in the same manner as described in the prospectus under "REDEMPTION
OF SHARES." As with redemptions, the written request must be received in good
order before any transfer can be made.
CALCULATION OF PERFORMANCE DATA
As the following formula indicates, each Portfolio and Series determines
its annualized total return by finding the annualized total return over the
stated time period that would equate a hypothetical initial purchase order of
$1,000 to its redeemable value (including capital appreciation/depreciation and
dividends and distributions paid and reinvested less any fees charged to a
shareholder account) at the end of the stated time period. The calculation
assumes that all dividends and distributions are reinvested at the public
offering
10
<PAGE>
price on the reinvestment dates during the period. The calculation also assumes
the account was completely redeemed at the end of each period and the deduction
of all applicable charges and fees. According to the SEC formula:
n
P(1 + T) = ERV
where:
P = a hypothetical initial payment of $1,000
T = annualized compounded rate of return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the one-, five- and ten-year periods at the end of the one-, five-
and ten-year periods (or fractional portion thereof).
In addition to the standardized method of calculating performance required
by the SEC, the Portfolios and Series may disseminate other performance data.
Non-standardized return data may be presented over time periods which extend
prior to when a Portfolio or its corresponding Series commenced investment
operations by using simulated data consistent with the investment policy of the
Portfolio and the Series for that portion of the period prior to the initial
investment date. The simulated data would exclude the deduction of Portfolio
and Series expenses which would otherwise reduce the returns quotations.
The Portfolios may compare their investment performance to appropriate
market and mutual fund indices.
11
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
PART A: FINANCIAL HIGHLIGHTS*
PART B:
(1) Statement of Assets and Liabilities*
(2) Statement of Operations*
(3) Statement of Changes in Net Assets*
(4) Financial Highlights*
(5) Report of Coopers & Lybrand L.L.P., independent accountants,
dated January 23, 1995*
(6) Notes to Financial Statements*
(b) EXHIBITS
(1) Form of Articles of Restatement
(a) Form of Articles Supplementary
(2) Form of By-Laws, as amended
(3) None
(4) (i) Specimen Security of The DFA 6-10 Institutional
Portfolio**
(ii) Specimen Security of The DFA International Value
Portfolio**
(iii) Specimen Security of DFA International Value Portfolio
II**
(iv) Specimen Security of U.S. Large Cap Value Portfolio
II**
(v) Specimen Security of U.S. Small Cap Value Portfolio
II**
(vi) Specimen Security of DFA One-Year Fixed Income
Portfolio II**
(vii) Specimen Security of DFA International Value Portfolio
III**
(viii) Specimen Security of U.S. Large Cap Value Portfolio
III**
(ix) Specimen Security of DFA Five-Year Government Portfolio
II**
(x) Specimen Security of RWB/DFA Two-Year Corporate Fixed
Income Portfolio
(xi) Specimen Security of RWB/DFA Two-Year Government
Portfolio
(xii) Specimen Security of RWB/DFA U.S. High Book to Market
Portfolio
<PAGE>
(5) Investment Advisory Agreement**
(6) None
(7) None
(8) Form of Custodian Agreement with Provident National Bank**
(i) Form of Amendment**
(a) Form of Amendment Number One+
(b) Form of Amendment Number Two+
(c) Form of Amendment Number Three+
(d) Form of Amendment Number Four+
(e) Form of Amendment Number Five+
(f) Form of Amendment Number Six
(9) (i) Form of Transfer Agency Agreement with Provident
Financial Processing Corporation**
(a) Form of Amendment**
(b) Form of Amendment Number One+
(c) Form of Amendment Number Two+
(d) Form of Amendment Number Three+
(e) Form of Amendment Number Four+
(f) Form of Amendment Number Five+
(g) Form of Amendment Number Six
(ii) Form of Administration and Accounting Services
Agreement with Provident Financial Processing
Corporation**
(a) Form of Amendment**
(b) Form of Amendment Number One+
(c) Form of Amendment Number Two+
(d) Form of Amendment Number Three+
(e) Form of Amendment Number Four+
(f) Form of Amendment Number Five+
(g) Form of Amendment Number Six
(iii) Form of Facility Agreement with Dimensional Fund
Advisors Inc.**
(iv) Agreement with DFA Securities Inc.**
(v) Form of Shareholders Agreement**
(vi) Form of Administration Agreement re The DFA 6-10
Institutional Portfolio**
(vii) Form of Administration Agreement re The DFA
International Value Portfolio**
(viii) Form of Administration Agreement re DFA International
Value Portfolio II**
(ix) Form of Administration Agreement re U.S. Large Cap
Value Portfolio II**
(x) Form of Administration Agreement re U.S. Small Cap
Value Portfolio II**
(xi) Form of Administration Agreement re DFA One-Year Fixed
Income Portfolio II**
(xii) Form of Administration Agreement re DFA International
Value Portfolio III**
C-2
<PAGE>
(xiii) Form of Administration Agreement re U.S. Large Cap
Value Portfolio III**
(xiv) Form of Administration Agreement re DFA Five-Year
Government Portfolio II**
(xv) Form of Administration Agreement re RWB/DFA Two-Year
Corporate Fixed Income Portfolio
(xvi) Form of Administration Agreement re RWB/DFA Two-Year
Government Portfolio
(xvii) Form of Administration Agreement re RWB/DFA U.S. High
Book to Market Portfolio
(xviii) Form of Client Service Agent Agreement re RWB/DFA Two-
Year Corporate Fixed Income Portfolio
(xviv) Form of Client Service Agent Agreement re RWB/DFA Two-
Year Government Portfolio
(xx) Form of Client Service Agent Agreement re RWB/DFA U.S.
High Book to Market Portfolio
(10) Opinion of counsel**
(11) Not applicable
(12) Not applicable
(13) Form of Subscription Agreement under Section 14(a)(3) of
Investment Company Act of 1940**
(14) None
(15) None
(16) Schedules for computation of performance quotations
INCORPORATED HEREIN BY REFERENCE TO:
Filing: Post-Effective Amendment No. 9 to the Registration
Statement of Registrant on
Form N-1A
File Nos.: 33-33980 and 811-6067
Filing Date: August 3, 1995
(17) Not applicable
(18) Not applicable
(19) (i) Power of Attorney and certified resolution relating
thereto**
(ii) Power of Attorney re The DFA Investment Trust Company
and certified resolution relating thereto**
*For all series of shares of the Registrant, except DFA International
Value Portfolio III, U.S. Large Cap Value Portfolio III, DFA One-Year Fixed
Income Portfolio II, DFA Five-Year Government Portfolio II, RWB/DFA Two-Year
Corporate Fixed Income Portfolio, RWB/DFA Two-Year Government Portfolio and
RWB/DFA U.S. High Book to Market Portfolio, the audited financial statements
were filed on February 2, 1995 with the Securities and Exchange Commission (the
"SEC") as DIMENSIONAL INVESTMENT GROUP INC. Annual Report to Shareholders for
the period ended November 30, 1994 ("Annual Report") pursuant to Rule 30b2-1
under the Investment Company Act of 1940 (the "1940 Act") and (1) with respect
to the financial statements, they are incorporated by reference into the
relevant Statements of Additional Information; and (2) with respect to the
Financial Highlights, they are incorporated by reference into the relevant
Prospectuses. A duplicate copy of the Annual Report was submitted
electronically to the SEC via the EDGAR system on July 20, 1995.
C-3
<PAGE>
With respect to DFA International Value Portfolio III, U.S. Large Cap
Value Portfolio III and DFA One-Year Fixed Income Portfolio the unaudited
financial statements contained in the respective reports to shareholders of
the Portfolios, dated May 31, 1995, were filed electronically with the SEC
via the EDGAR system on August 3, 1995, pursuant to Rule 30b2-1 under the
1940 Act and are incorporated by reference into the Statements of Additional
Information of the Portfolios. The financial highlights are set forth in the
prospectus of the following Portfolios: DFA International Value Portfolio
III, U.S. Large Cap Value Portfolio III and DFA One-Year Fixed Income
Portfolio.
**Previously filed with this registration statement and incorporated herein
by reference.
+To be filed by amendment.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT
None
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
Title of Class Number of Record Holders
(Par Value $.01) as of November 30, 1995
---------------- ------------------------
The DFA 6-10 Institutional
Portfolio 2
The DFA International Value
Portfolio 72
DFA International Value
Portfolio II 1
U.S. Large Cap Value
Portfolio II 1
C-4
<PAGE>
U.S. Small Cap Value
Portfolio II 1
DFA One-Year Fixed Income
Portfolio II 4
DFA International Value
Portfolio III 1
U.S. Large Cap Value
Portfolio III 2
ITEM 27. INDEMNIFICATION
Registrant's By-Laws provide the following:
With respect to the indemnification of the Officers and Directors of
the corporation:
(a) the Corporation shall indemnify each Officer and Director
made party to a proceeding, by reason of service in such capacity, to
the fullest extent, and in the manner provided under Section 2-418 of
the Maryland General Corporation Law: (i) unless it is proved that
the person seeking indemnification did not meet the standard of
conduct set forth in subsection (b)(1) of such section; and (ii)
provided, that the Corporation shall not indemnify any Officer or
Director for any liability to the Corporation or its security holders
arising from the willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such
person's office.
(b) The provisions of clause (i) of paragraph (a) herein
notwithstanding, the Corporation shall indemnify each Officer and
Director against reasonable expenses incurred in connection with the
successful defense of any proceeding to which such Officer or Director
is a party by reason of service in such capacity.
(c) The Corporation, in the manner and to the extent provided by
applicable law, shall advance to each Officer and Director who is made
party to a proceeding by reason of service in such capacity the
reasonable expenses incurred by such person in connection therewith.
Registrant's Articles of Incorporation provide:
SEVENTH: (a) To the fullest extent that limitations on the
liability of directors and officers are permitted by the Maryland
General Corporation Law,
C-5
<PAGE>
as amended from time to time, no director or officer of the Corporation shall
have any liability to the Corporation or its stockholders for money damages.
This limitation on liability applies to liabilities occurring for acts or
omissions occurring at the time a person serves as a director or officer of the
Corporation, whether or not such person is a director or officer at the time of
any proceeding in which liability is asserted.
(b) Notwithstanding the foregoing, this Article
SEVENTH shall not operate to protect any director or officer of the
Corporation against any liability to the Corporation or its
stockholders to which such person would otherwise be subject by reason
or willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of such person's
office.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR
The Series' investment advisor (the "Advisor") was organized in May,
1981. The principal place of business of the Advisor is 1299 Ocean
Avenue, 11th Floor, Santa Monica, California 90401. The Advisor is
engaged in the business of providing investment advice primarily to
institutional investors.
The business, profession, vocation or employment of a substantial
nature in which each director and officer of the Advisor is or has
been, during the past two fiscal years, engaged for his own account in
the capacity of director, officer, employee, partner or trustee is as
follows:
DIRECTORS
David G. Booth is President, Chairman-Chief Executive Officer and
Director of the Advisor, the Registrant, DFA Securities Inc., DFA
Investment Dimensions Group Inc. (registered investment company),
Dimensional Fund Advisors Ltd., DFA Australia Pty. Limited (registered
investment advisor) and Dimensional Emerging Markets Fund Inc.
(registered investment company). Mr. Booth is also Trustee, President
and Chairman-Chief Executive Officer of The DFA Investment Trust
Company (registered investment company).
Eugene Francis Fama, a Director of the Advisor, is the Robert R.
McCormick Distinguished Service Professor of Finance, and has been
engaged in teaching and research in finance and economics at the
Graduate School of
C-6
<PAGE>
Business, University of Chicago, Chicago, Illinois, since September,
1963. Mr. Fama also is a Director of DFA Securities Inc.
John Andrew McQuown, a Director of the Advisor, has been self employed
since 1974 as an entrepreneur, financier and consultant to major
financial institutions. He is also a Director of Chalone Wine Group,
Inc., Mortgage Information Corporation, KMV Corporation and
Microsource, Inc.
David Salisbury, a Director of the Advisor, is Chief Executive Officer
of Schroder Capital Management International Inc.
Rex A. Sinquefield is Chairman-Chief Investment Officer and a Director
of the Advisor, the Registrant, DFA Securities Inc., DFA Investment
Dimensions Group Inc., DFA Australia Pty. Limited and Dimensional
Emerging Markets Fund Inc. Mr. Sinquefield is also Trustee, Chairman-
Chief Investment Officer of The DFA Investment Trust Company and
Chairman, Chief Executive Officer and Director of DFA Investment
Advisors Ltd.
Lloyd Stockel, a Director of the Advisor, is the Chairman of Sand
County Ventures, Inc. and a Trustee of Muir Investment Trust.
OFFICERS
Each of the officers listed below holds the same office in the
following entities: Dimensional Fund Advisors Inc., DFA Securities
Inc., DFA Australia Pty. Limited, Dimensional Investment Group Inc.,
The DFA Investment Trust Company, Dimensional Fund Advisors Ltd. and
Dimensional Emerging Markets Fund Inc.
Arthur Barlow, Vice President.
Truman Clark, Vice President.
Maureen Connors, Vice President.
Robert Deere, Vice President.
Irene R. Diamant, Vice President and Secretary.
Eugene Fama, Jr., Vice President.
David Plecha, Vice President.
George Sands, Vice President.
C-7
<PAGE>
Michael T. Scardina, Vice President, Chief Financial Officer,
Controller and Treasurer.
Cem Severoglu, Vice President.
Jeanne C. Sinquefield, Ph.D., Executive Vice President.
Each of the persons listed below are officers of the Advisor only.
Daniel Wheeler, Marketing Officer, Santa Monica, CA.
David Schneider, Marketing Officer, Santa Monica, CA.
Lawrence Spieth, Marketing Officer, Santa Monica, CA.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) None.
(b) Registrant distributes its own shares. It has entered into an
agreement, filed as Exhibit No. 9(iv) to the Registration
Statement, which provides that DFA Securities Inc., 1299 Ocean
Avenue, 11th Floor, Santa Monica, CA 90401, will supervise the
sale of Registrant's shares. This agreement is subject to the
requirements of Section 15(b) of the Investment Company Act of
1940.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Most accounts and records are maintained by PFPC Inc., 400 Bellevue
Parkway, Wilmington, DE 19809. Other records are maintained by
Registrant at its business office at 1299 Ocean Avenue, 11th Floor,
Santa Monica, CA 90401.
ITEM 31. MANAGEMENT SERVICES
Registrant has entered into a Transfer Agency and Dividend Disbursing
Agreement and Administration and Accounting Service Agreement with
PFPC Inc. which have been filed as Exhibits 9(i) and (ii) to this
Registration Statement.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
C-8
<PAGE>
(b) The Registrant hereby undertakes to file a post-effective
amendment, using financial statements for the RWB/DFA Two-Year
Corporate Fixed Income Portfolio, the RWB/DFA Two-Year Government
Portfolio and the RWB/DFA U.S. High Book to Market Portfolio,
which need not be certified, within four to six months from the
effective date of the Registration Statement which includes the
RWB/DFA Two-Year Corporate Fixed Income Portfolio, the RWB/DFA
Two-Year Government Portfolio and the RWB/DFA U.S. High Book to
Market Portfolio.
(c) The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
C-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(a) under the Securities Act of 1933 and has duly caused this Amendment No.
10 to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Monica and State of California
on the 15th day of December, 1995.
DIMENSIONAL INVESTMENT GROUP INC.
By: David G. Booth*
-------------------------------
David G. Booth
President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment No. 10 to the Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Director and
David G. Booth* Chairman-Chief December 15, 1995
- ------------------------- Executive Officer
David G. Booth
Director and
Rex A. Sinquefield* Chairman-Chief December 15, 1995
- ------------------------- Investment Officer
Rex A. Sinquefield
Chief Financial
Michael T. Scardina* Officer, Treasurer December 15, 1995
- ------------------------- and Vice President
Michael T. Scardina
George M. Constantinides* Director December 15, 1995
- -------------------------
George M. Constantinides
John P. Gould* Director December 15, 1995
- -------------------------
John P. Gould
Roger G. Ibbotson* Director December 15, 1995
- -------------------------
Roger G. Ibbotson
Merton H. Miller* Director December 15, 1995
- -------------------------
Merton H. Miller
Myron S. Scholes* Director December 15, 1995
- -------------------------
Myron S. Scholes
*By: Irene R. Diamant
---------------------------
Irene R. Diamant
Attorney-in-Fact
(Pursuant to Power of Attorney previously filed on October 3, 1994, with the SEC
as Exhibit 17 to Post-Effective Amendment No. 31 to the Registration Statement
of DFA Investment Dimensions Group Inc. (File No. 2-73948)).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Monica and State of California on the 15th day
of December, 1995.
THE DFA INVESTMENT TRUST COMPANY
By: David G. Booth*
-------------------------------
David G. Booth
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Trustee and
David G. Booth* Chairman-Chief December 15, 1995
- ------------------------- Executive Officer
David G. Booth
Trustee and
Rex A. Sinquefield* Chairman-Chief December 15, 1995
- ------------------------- Investment Officer
Rex A. Sinquefield
Chief Financial
Michael T. Scardina* Officer, Treasurer December 15, 1995
- ------------------------- and Vice President
Michael T. Scardina
George M. Constantinides* Trustee December 15, 1995
- -------------------------
George M. Constantinides
John P. Gould* Trustee December 15, 1995
- -------------------------
John P. Gould
Roger G. Ibbotson* Trustee December 15, 1995
- -------------------------
Roger G. Ibbotson
Merton H. Miller* Trustee December 15, 1995
- -------------------------
Merton H. Miller
Myron S. Scholes* Trustee December 15, 1995
- -------------------------
Myron S. Scholes
*By: Irene R. Diamant
--------------------------
Irene R. Diamant
Attorney-in-Fact
(Pursuant to Power of Attorney filed on August 2, 1994 with the SEC as Exhibit
17(ii) to the Registration Statement of Dimensional Investment Group Inc. (File
No. 33-33980).)
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
99(b)(1) Form of Articles of Restatement
99(b)(1)(a) Form of Articles Supplementary
99(b)(2) Form of By-Laws, as amended
99(b)(4)(x) Specimen Security of RWB/DFA Two-Year Corporate
Fixed Income Portfolio
99(b)(4)(xi) Specimen Security of RWB/DFA Two-Year Government
Portfolio
99(b)(4)(xii) Specimen Security of RWB/DFA U.S. High Book to
Market Portfolio
99(b)(8)(i)(f) Form of Amendment Number Six to Custodian Services
Agreement with PNC Bank, N.A. (formerly Provident
National Bank) re RWB/DFA U.S. High Book to Market
Portfolio, RWB/DFA Two-Year Corporate Fixed Income
Portfolio and RWB/DFA Two-Year Government
Portfolio
99(b)(9)(i)(g) Form of Amendment Number Six to Transfer Agency
Agreement with PFPC INC. (formerly Provident
Financial Processing Corporation) re RWB/DFA U.S.
High Book Market Portfolio, RWB/DFA Two-Year
Corporate Fixed Income Portfolio and RWB/DFA Two-
Year Government Portfolio
99(b)(9)(ii)(g) Form of Amendment Number Six to Administration and
Accounting Services Agreement with PFPC INC.
(formerly Provident Financial Processing
Corporation) re RWB/DFA U.S. High Book Market
Portfolio, RWB/DFA Two-Year Corporate Fixed Income
Portfolio and RWB/DFA Two-Year Government
Portfolio
99(b)(9)(xv) Form of Administration Agreement re RWB/DFA Two-
Year Corporate Fixed Income Portfolio
99(b)(9)(xvi) Form of Administration Agreement re RWB/DFA Two-
Year Government Portfolio
<PAGE>
99(b)(9)(xvii) Form of Administration Agreement re RWB/DFA U.S.
High Book to Market Portfolio
99(b)(9)(xviii) Form of Client Service Agent Agreement re RWB/DFA
Two-Year Corporate Fixed Income Portfolio
99(b)(9)(xviv) Form of Client Service Agent Agreement re RWB/DFA
Two-Year Government Portfolio
99(b)(9)(xx) Form of Client Service Agent Agreement re RWB/DFA
U.S. High Book to Market Portfolio
<PAGE>
Exhibit No. 99(b)(1)
DIMENSIONAL INVESTMENT GROUP INC.
ARTICLES OF RESTATEMENT
THIS IS TO CERTIFY THAT:
FIRST: Dimensional Investment Group Inc., a Maryland corporation (the
"Corporation"), desires to restate its charter as currently in effect.
SECOND: The following provisions are all the provisions of the charter
currently in effect:
"SECOND: The name of the Corporation is Dimensional Investment Group
Inc.
THIRD: The purpose for which the Corporation is formed is to act as
an open-end management investment company. The Corporation may exercise
all of the powers provided in these Articles or granted by law.
FOURTH: The post office address of the principal office of the
Corporation in the State of Maryland is 32 South Street, Baltimore,
Maryland 21202. The name and post office address of the resident agent of
the Corporation in the State of Maryland is The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202.
FIFTH: The total number of shares of stock which the Corporation
shall have the authority to issue is 2,000,000,000 shares of a par value of
one cent ($.01) per share and having an aggregate par value of $20,000,000,
all of which shall be considered common stock and of which 1,200,000,000
shares are allocated to the following classes (each a "Class" and,
collectively, the "Classes"):
<TABLE>
<CAPTION>
Number of Shares of Common Stock
Class Designation (par value $.01 per share)
----------------- Allocated
--------------------------------
<S> <C>
The DFA 6-10 Institutional 100,000,000
Portfolio Shares
The DFA International Value 100,000,000
Portfolio Shares
U.S. Large Cap Value 100,000,000
Portfolio II Shares
<PAGE>
U.S. Small Cap Value 100,000,000
Portfolio II Shares
DFA International Value 100,000,000
Portfolio II Shares
DFA One-Year Fixed Income 100,000,000
Portfolio II Shares
DFA International Value 100,000,000
Portfolio III Shares
U.S. Large Cap Value 100,000,000
Portfolio III Shares
DFA Five-Year Government 100,000,000
Portfolio II Shares
RWB/DFA U.S. High Book to 100,000,000
Market Portfolio Shares
RWB/DFA Two-Year Corporate 100,000,000
Fixed Income Portfolio
Shares
RWB/DFA Two-Year Government 100,000,000
Portfolio Shares
</TABLE>
Subject to the provisions of these Articles of Incorporation, the
Board of Directors shall have the power to authorize the issuance of shares
of stock of the Corporation for such consideration as may be fixed by the
Board of Directors.
The Board of Directors of the Corporation shall have the power to
classify and reclassify any unissued shares of stock of the Corporation
from time to time by setting or changing the preferences, conversion, or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, terms, and conditions of redemption and other
characteristics as the Board may determine. At any time when there are no
shares outstanding of a Class, such Class may be terminated by the Board of
Directors.
The holder of each share of each Class shall be entitled to one vote
for each full share and a fractional vote for each fractional share. On
any matter submitted to a vote of stockholders, all shares of all Classes
then issued and outstanding shall be voted in the aggregate, and not by
Class, except (1) when otherwise expressly provided by the Maryland General
Corporation Law, or (2) when required by the Investment Company Act of
1940, as amended,
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<PAGE>
shares shall be voted by Class, or (3) when the matter to be voted does not
affect any interest of a Class, then only stockholders of the affected
Class shall be entitled to vote thereon. There shall be no cumulative
voting.
Notwithstanding any provision of the Maryland General Corporation Law
requiring more than a majority of the votes of all Classes, or any Class,
entitled to vote on a matter, including but not limited to amending the
Articles of Incorporation, the Corporation may take or authorize corporate
action upon the favorable vote of a majority of the shares of stock of all
Classes, or the Class or Classes entitled to vote thereon as provided in
the preceding paragraph.
Each Class shall have the following powers, preferences, rights, and
the characteristics, restrictions, and limitations thereof shall be as
follows:
1. All consideration received by the Corporation for the issue or
sale of stock of a Class, together with all assets, income and proceeds
derived from the sale, exchange, or liquidation of assets of such Class,
and any funds or payments derived from any reinvestment thereof, shall
belong to such Class and shall be so recorded upon the books of account of
the Corporation.
2. The assets of any Class shall be charged with the liabilities of
such Class, and with such share of the general liabilities of the
Corporation as the Board of Directors may determine.
3. Dividends or distributions on shares of a Class shall be paid only
out of earnings, surplus, or other legally available assets of such Class.
4. In the event of the liquidation or dissolution of the Corporation,
stockholders of a Class shall be entitled to receive out of the assets of
the Corporation available for distribution to stockholders, but other than
general assets not belonging to any particular Class, the assets belonging
to such Class, and the assets so distributable to the stockholders of any
Class shall be distributed among such stockholders in proportion to the
number of shares of such Class held by them and recorded on the books of
the Corporation. In the event that there are any general assets of the
Corporation not belonging to any particular Class and available for
distribution, such assets shall be distributed to the holders of stock of
all Classes in proportion to the relative net asset value of the respective
Classes determined as hereinafter provided.
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<PAGE>
5. The holders of the shares of stock of the Corporation shall have
no preemptive rights to subscribe to new or additional shares of its stock
or other securities.
6. The shares of each Class shall be redeemable at the net asset
value thereof, calculated as provided by the Board of Directors, and the
proceeds of redemption shall be payable in cash or in other assets lawfully
available therefore, or a combination thereof, as determined by the Board
of Directors. The Board of Directors may, from time to time, place such
restrictions on the right of redemption and the manner of effecting
redemptions as, in their judgment, is necessary and desirable, provided,
however, that no such restriction may be imposed which is not consistent
with the requirements of the Investment Company Act of 1940, as amended.
Subject to the foregoing, the shares of each Class shall be redeemable by
the holders thereof upon request. In addition, the Corporation shall have
the right to redeem the shares of each Class at the net asset value of such
shares upon such terms and in such manner as the Board of Directors shall
determine.
SIXTH: The number of Directors shall be established as provided in
the bylaws of the Corporation, but shall not be less than three. The names
of the current directors who shall act until the next following annual or
special meeting and until their successors are duly chosen and qualify are:
David G. Booth Rex A. Sinquefield
George M. Constantinides John P. Gould
Roger G. Ibbotson Merton H. Miller
Myron S. Scholes
SEVENTH: (a) To the fullest extent that the limitations on the
liability of directors and officers are permitted by the Maryland General
Corporation Law, as amended from time to time, no director or officer of
the Corporation shall have any liability to the Corporation or its
stockholders for money damages. This limitation on liability applies to
liabilities occurring for acts or omissions occurring at the time a person
serves as a director or officer of the Corporation, whether or not such
person is a director or officer at the time of any proceeding in which
liability is asserted.
(b) Notwithstanding the foregoing, this Article SEVENTH
shall not operate to protect any director or officer of the Corporation
against any liability to the Corporation or its stockholders to which such
person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in
the conduct of such person's office.
-4-
<PAGE>
EIGHTH: The Corporation reserves the right to amend, alter, change,
or repeal any provision contained in these Articles of Incorporation, and
all rights, contract and otherwise, conferred herein upon the stockholders
are granted subject to such reservation.
THIRD: The foregoing restatement of the charter has been approved by a
majority of the entire board of directors.
FOURTH: The charter is not amended by these Articles of Restatement.
FIFTH: The current address of the principal office of the Corporation in
the State of Maryland is set forth in Article Fourth of the foregoing
restatement of the charter.
SIXTH: The name and address of the Corporation's current resident agent is
set forth in Article Fourth of the foregoing restatement of the charter.
SEVENTH: The number of directors of the Corporation and the names of those
currently in office are set forth in Article Sixth of the foregoing restatement
of the charter.
EIGHTH: The undersigned President acknowledges these Articles of
Restatement to be the corporate act of the corporation and as to all matters or
facts required to be verified under oath, the undersigned President acknowledges
that to the best of his knowledge, information and belief, these matters and
facts are true in all material respects and that this statement is made under
the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles to be signed
in its name and on its behalf by its President and attested to by its Secretary
on this ____ day of _________, 1995.
ATTEST: DIMENSIONAL INVESTMENT GROUP
INC.
By:
- ------------------------------ --------------------------
Irene R. Diamant, Secretary David G. Booth, President
-5-
<PAGE>
Exhibit No. 99(b)(1)(a)
DIMENSIONAL INVESTMENT GROUP INC.
ARTICLES SUPPLEMENTARY TO THE CHARTER
DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation having its
principal office in Baltimore, Maryland (hereinafter called the "Corporation")
and registered under the Investment Company Act of 1940 as an open-end company,
hereby certifies, in accordance with the requirements of Section 2-208 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Corporation has authority to issue a total of Two Billion
(2,000,000,000) shares of stock, with a par value of One Cent ($.01) per share,
having an aggregate par value of Twenty Million Dollars ($20,000,000), all of
which shall be considered common stock. The allocation of shares of each of its
nine existing classes is as follows:
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
Class Designation Allocated
----------------- --------------------------------
<S> <C>
The DFA 6-10 Institutional 100,000,000
Portfolio Shares
The DFA International Value 100,000,000
Portfolio Shares
U.S. Large Cap Value 100,000,000
Portfolio II Shares
U.S. Small Cap Value 100,000,000
Portfolio II Shares
DFA International Value 100,000,000
Portfolio II Shares
DFA One-Year Fixed Income 100,000,000
Portfolio II Shares
DFA International Value 100,000,000
Portfolio III Shares
U.S. Large Cap Value 100,000,000
Portfolio III Shares
<PAGE>
DFA Five-Year Government 100,000,000
Portfolio II Shares
</TABLE>
The Board of Directors of the Corporation has adopted a resolution classifying
unallocated and unissued common stock (par value $.01 per share) of the
Corporation as follows: one hundred million (100,000,000) shares were allocated
to a new class of common stock designated "RWB/DFA U.S. High Book to Market
Portfolio Shares," one hundred million (100,000,000) shares were allocated to a
new class of common stock designated "RWB/DFA Two-Year Corporate Fixed Income
Portfolio Shares" and one hundred million (100,000,000) shares were allocated to
a new class of common stock designated "RWB/DFA Two-Year Government Portfolio
Shares."
SECOND: Following the aforesaid classifications, the total number of
shares of stock which the Corporation is authorized to issue is Two Billion
(2,000,000,000) shares, with a par value of One Cent ($.01) per share and an
aggregate par value of Twenty Million Dollars ($20,000,000), and the allocation
of shares of each of the twelve classes of the Common Stock (each a "Class" and,
collectively, the "Classes") is as follows:
<TABLE>
<CAPTION>
Number of Shares of Common Stock
(par value $.01 per share)
Class Designation Allocated
----------------- ---------------------------------
<S> <C>
The DFA 6-10 Institutional 100,000,000
Portfolio Shares
The DFA International Value 100,000,000
Portfolio Shares
U.S. Large Cap Value 100,000,000
Portfolio II Shares
U.S. Small Cap Value 100,000,000
Portfolio II Shares
DFA International Value 100,000,000
Portfolio II Shares
DFA One-Year Fixed Income 100,000,000
Portfolio II Shares
DFA International Value 100,000,000
Portfolio III Shares
U.S. Large Cap Value 100,000,000
Portfolio III Shares
-2-
<PAGE>
DFA Five-Year Government 100,000,000
Portfolio II Shares
RWB/DFA U.S. High Book to 100,000,000
Market Portfolio Shares
RWB/DFA Two-Year Corporate 100,000,000
Fixed Income Portfolio
Shares
RWB/DFA Two-Year Government 100,000,000
Portfolio Shares
</TABLE>
THIRD: A description of the shares of each Class, with the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption as set or
changed by the Board of Directors of the Corporation, is as follows:
The holder of each share of each Class shall be entitled to one vote for
each full share, and a fractional vote for each fractional share of stock then
standing in his or her name on the books of the Corporation. All shares of the
Classes then issued and outstanding and entitled to vote, irrespective of Class,
shall be voted in the aggregate and not by Class, except: (1) when otherwise
expressly provided by the Maryland General Corporation Law; (2) when required by
the Investment Company Act of 1940, as amended, shares shall be voted by Class;
and (3) when a matter to be voted upon does not affect any interest of a
particular Class then only shareholders of the affected Class or Classes shall
be entitled to vote thereon.
Each share of each Class shall have the following preferences and special
rights, restrictions, and limitations:
(1) All consideration received by the Corporation for the issue or
sale of stock of a Class, together with all assets, income and proceeds
derived from the sale, exchange, or liquidation of assets of such Class,
and any funds or payments derived from any reinvestment thereof, shall
belong to such Class and shall be so recorded upon the books of account of
the Corporation.
(2) The assets of any Class shall be charged with the liabilities of
such Class, and with such share of the general liabilities of the
Corporation as the Board of Directors may determine.
(3) Dividends or distributions on shares of a Class shall be paid
only out of earnings, surplus, or other legally available assets of such
Class.
-3-
<PAGE>
(4) In the event of the liquidation or dissolution of the
Corporation, stockholders of a Class shall be entitled to receive, as a
Class, out of the assets of the Corporation available for distribution to
stockholders, but other than general assets not belonging to any particular
Class, the assets belonging to such Class; and the assets so distributable
to the stockholders of any Class shall be distributed among such
stockholders in proportion to the number of shares of such Class held by
them and recorded on the books of the Corporation. In the event that there
are any general assets of the Corporation not belonging to any particular
Class and available for distribution, such assets shall be distributed to
the holders of stock of all Classes in proportion to the relative net asset
value of the respective Classes determined as provided in the charter of
the Corporation.
(5) The holders of the shares of stock of the Corporation shall have
no preemptive rights to subscribe to new or additional shares of its stock
or other securities.
FOURTH: The shares aforesaid have been duly classified by the Board of
Directors pursuant to authority contained in the charter of the Corporation.
FIFTH: The undersigned President hereby acknowledges these Articles
Supplementary to the charter to be the corporate act of the Corporation and, as
to all matters or facts required to be verified under oath, the undersigned
President acknowledges that, to the best of his knowledge, information and
belief, these matters and facts are true in all material respects, and that this
statement is made under the penalties of perjury.
IN WITNESS WHEREOF, the Corporation has caused these Articles to be signed
in its name and on its behalf by its President and attested to by its Secretary
on this ____ day of _________, 1995.
ATTEST: DIMENSIONAL INVESTMENT GROUP INC.
By:
- ------------------------------ --------------------------------
Irene R. Diamant, Secretary David G. Booth, President
-4-
<PAGE>
Exhibit No. 99(b)(2)
DIMENSIONAL INVESTMENT GROUP INC.
* * * * * * * * *
BY-LAWS
* * * * * * * * *
ARTICLE I
SECTION 1. FISCAL YEAR. Unless otherwise provided by resolution of
the Board of Directors, the fiscal year of the Corporation shall begin December
1 and end on the last day of November.
SECTION 2. REGISTERED OFFICE. The registered office of the
Corporation in Maryland shall be located at 32 South Street, Baltimore, Maryland
21202. The name of its Resident Agent is The Corporation Trust Incorporated,
whose address is the same as above.
SECTION 3. OTHER OFFICES. The Corporation shall also have a place of
business in Santa Monica, California, and the Corporation shall have the power
to open additional offices for the conduct of its business, either within or
outside the States of Maryland and California, at such places as the Board of
Directors may from time to time designate.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE OF MEETING. Annual Meetings, if held, shall be held
in such place as the Board of Directors may by resolution establish. In the
absence of any specific resolution, Annual Meetings of Stockholders shall be
held at the Corporation's principal office in Santa Monica. Meetings of
stockholders for any other purpose may be held at such place as shall be stated
in the Notice of the Meeting, or in a duly executed Waiver of Notice thereof.
SECTION 2. ANNUAL MEETINGS. The Corporation is not required to hold
an Annual Meeting in any year in which the Corporation is not required to
convene a meeting under the Investment Company Act of 1940 (the "Act"). If the
Corporation is required by the Act to hold a meeting of stockholders to elect
directors, the meeting shall be designated an Annual Meeting of Stockholders for
that year and shall be held no later than 60 days after the
<PAGE>
occurrence of the event requiring the meeting; except if an Order is granted by
the Securities and Exchange Commission exempting the Corporation from the
operation of Section 16(a) of the Act or a no-action position of similar effect
is obtained, in which event such meeting shall be held no later than 120 days
after the occurrence of the event requiring the meeting. Otherwise, Annual
Meetings shall be held only if called by the Board of Directors of the
Corporation and, if called, shall be held during the month of May on such date
as fixed by the Board of Directors by resolution.
SECTION 3. SPECIAL MEETINGS. Special Meetings of the
stockholders may be called at any time by the President, or by a majority of the
Board of Directors, and shall be called by the President or Secretary upon
written request of the holders of shares entitled to cast not less than ten per
cent of all the votes entitled to be cast at such meeting.
SECTION 4. NOTICE. Not less than 10 or more than 90 days before the
date of every Annual or Special Meeting of Stockholders, the Secretary shall
give to each stockholder entitled to vote at such meeting written notice stating
the time and place of the meeting and, in the case of a Special Meeting, the
purpose or purposes for which the meeting is called. Business transacted at any
Special Meeting of Stockholders shall be limited to the purposes stated in the
Notice.
SECTION 5. RECORD DATE FOR MEETINGS. The Board of Directors may fix
in advance a date not more than 90 days, nor less than 10 days, prior to the
date of any Annual or Special Meeting of Stockholders as a record date for the
determination of the stockholders entitled to receive notice of the meeting, and
to vote at any meeting and any adjournment thereof. If an Annual Meeting is
held to elect directors pursuant to the requirements of the Act, the Board shall
fix the record date within the time required for holding such Annual Meeting as
provided in Section 2 of this Article but not more than 90 nor less than 10 days
prior to such meeting. Only those stockholders who are stockholders of record
on the date so fixed shall be entitled to receive notice of and to vote at such
meeting and any adjournment thereof as the case may be, notwithstanding any
transfer of any stock on the books of the Corporation after any such record date
fixed as aforesaid.
SECTION 6. QUORUM. At any meeting of stockholders, the presence in
person or by proxy of stockholders entitled to cast a majority of all the votes
entitled to be cast at the meeting shall constitute a quorum. If, however, such
quorum shall not be present or represented at any meeting of the stockholders,
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have the power to adjourn the meeting, until a time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted
-2-
<PAGE>
which might have been transacted at the meeting as originally notified.
SECTION 7. MAJORITY. Except as otherwise provided by applicable law
or the Articles of Incorporation, a majority of all votes cast at a meeting at
which a quorum is present is sufficient to approve any matter which properly
comes before the meeting.
SECTION 8. VOTING. The holders of each share of stock of the
Corporation then issued and outstanding and entitled to vote, irrespective of
the class, shall be voted in the aggregate and not by class, except: (1) when
otherwise expressly provided by the Maryland General Corporation Law; (2) when
required by the Act, shares shall be voted by class; and (3) when a matter to be
voted upon does not affect any interest of a particular class, then only
stockholders of the affected class or classes shall be entitled to vote thereon.
A stockholder may vote in person or by proxy, but no proxy shall
be valid after 11 months from its date, unless otherwise provided in the proxy.
At all meetings of stockholders, unless the voting is conducted by inspectors,
all questions relating to the qualification of voters and the validity of
proxies and the acceptance or rejection of votes shall be decided by the
Chairman of the meeting.
SECTION 9. INSPECTORS. At any election of Directors, the Board of
Directors prior thereto may, or, if they have not so acted, the Chairman of the
meeting may, and upon the request of the holders of 10% of the shares entitled
to vote at such election shall, appoint an inspector of election who shall first
subscribe an oath of affirmation to execute faithfully the duties of inspector
at such election with strict impartiality and according to the best of their
ability, and shall after the election make a certificate of the result of the
vote taken. No candidate for the office of Director shall be appointed an
inspector of election. The Chairman of the meeting may cause a vote by ballot
to be taken upon any election or matter, and such vote shall be taken upon the
request of the holders of 10% of the stock entitled to vote on such election or
matter.
ARTICLE III
DIRECTORS
SECTION 1. GENERAL POWERS. The business of the Corporation shall be
managed by its Board of Directors, which may exercise all powers of the
Corporation, except such as are by statute, or the Articles of Incorporation, or
by these By-Laws conferred upon or reserved to the stockholders.
SECTION 2. NUMBER AND TERM OF OFFICE. The number of Directors which
shall constitute the whole Board shall be determined
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<PAGE>
from time to time by the Board of Directors, but shall not be fewer than three,
nor more than fifteen, except when there are less than three stockholders of the
Corporation, when there may be two Directors. Each Director shall hold office
until his successor is elected and qualified. Directors need not be
stockholders.
SECTION 3. ELECTION. Directors shall be elected by the stockholders
except that any vacancy in the Board of Directors may be filled by a majority
vote of the entire Board of Directors if immediately after filling such vacancy
at least two-thirds of the Board of Directors have been elected by the
stockholders. In the event that at any time less than a majority of the
Directors of the Corporation were elected by the stockholders, the Corporation
shall cause a meeting of stockholders to be held for the purpose of electing
Directors, as provided in Article II Section 2 hereof.
SECTION 4. PLACE OF MEETING. Meetings of the Board of Directors,
regular or special, may be held at any place in or out of the State of Maryland
as the Board may from time to time determine.
SECTION 5. QUORUM. At all meetings of the Board of Directors a
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business and the action of a majority of the Directors present at
any meeting at which a quorum is present shall be the action of the Board of
Directors, except as otherwise provided by applicable law. If a quorum shall
not be present at any meeting of Directors, the Directors present thereat may by
a majority vote adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
SECTION 6. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such time and place as shall from time
to time be determined by the Board of Directors.
SECTION 7. SPECIAL MEETINGS. Special Meetings of the Board of
Directors may be called by the President on one day's notice to each Director;
Special Meetings shall be called by the President or Secretary in like manner
and on like notice on the written request of two Directors.
SECTION 8. INFORMAL ACTIONS. Any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting, if a written consent to such action is signed in one
or more counterparts by all members of the Board or of such committee, as the
case may be, and such written consent is filed with the minutes of proceedings
of the Board or committee.
SECTION 9. COMMITTEES. The Board of Directors may by resolution
passed by a majority of the whole Board appoint from among its members an
executive committee and other committees composed of
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<PAGE>
two or more Directors, and may delegate to such committees, in the intervals
between meetings of the Board of Directors, any or all of the powers of the
Board of Directors in the management of the business and affairs of the
Corporation, except those powers specifically listed in section 2-411 of the
Maryland General Corporation Law. In the absence of any member of such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a member of the Board of Directors to act in
the place of such absent member.
SECTION 10. ACTION OF COMMITTEES. Each committee shall report the
same to the Board of Directors at the meeting next succeeding, and any action by
the committee shall be subject to revision and alteration by the Board of
Directors, provided that no rights of third persons shall be affected by any
such revision or alteration.
SECTION 11. COMPENSATION. Any Director, whether or not a salaried
officer or employee of the Corporation, may be compensated for services as
Director or as a member of a committee of Directors, or as Chairman of the Board
or Chairman of a committee by fixed periodic payments or by fees for attendance
at meetings or by both, and may be reimbursed for transportation and other
expenses, all in such manner and amounts as the Board of Directors may from time
to time determine.
ARTICLE IV
NOTICES
SECTION 1. FORM. Notices to stockholders shall be in writing and
delivered personally or mailed to the stockholders at their addresses appearing
on the books of the Corporation. Notices to Directors shall be oral or by
telephone or telegram or in writing delivered personally or mailed to the
Directors at their addresses appearing on the books of the Corporation. Notice
by mail shall be deemed to be given at the time when the same shall be mailed.
Notice to Directors need not state the purpose of a Regular or Special Meeting.
SECTION 2. WAIVER. Whenever any notice of the time, place or purpose
of any meeting of the stockholders, Directors or committee is required to be
given under the provisions of Maryland law or under the provisions of the
Articles of Incorporation or these By-Laws, a waiver thereof in writing, signed
by the person or persons entitled to such notice and filed with the records of
the meeting, whether before or after the holding thereof, or actual attendance
at the meeting of stockholders in person or by proxy, or at the meeting of
Directors or committee in person, shall be deemed equivalent to the giving of
such notice to such persons.
-5-
<PAGE>
ARTICLE V
OFFICERS
SECTION 1. NUMBER. The officers of the Corporation shall be chosen
by the Board of Directors and shall include: (1) a President, who shall be the
Chief Operating Officer of the Corporation and a Director; (2) a Secretary; and
(3) a Treasurer. The Board of Directors may, from time to time, elect or
appoint a Controller, one or more Vice Presidents, Assistant Secretaries and
Assistant Treasurers. The Board of Directors shall also appoint two Chairmen,
one of whom shall be the Chief Executive Officer and the second shall be the
Chief Investment Officer of the Corporation and who shall perform and execute
such other duties and powers as the Board of Directors shall from time to time
prescribe. Two or more offices may be held by the same person but no officer
shall execute, acknowledge or verify any instrument in more than one capacity,
if such instrument is required by law, the Articles of Incorporation or these
By-Laws to be executed, acknowledged or verified by two or more officers.
SECTION 2. OTHER OFFICERS. The Board of Directors from time to time
may appoint such other officers and agents as it shall deem advisable, who shall
hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the Board. The Board of
Directors from time to time may delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and to prescribe the
respective rights, terms of office, authorities and duties.
SECTION 3. COMPENSATION. The salaries or other compensation of all
officers and agents of the Corporation shall be fixed by the Board of Directors,
except that the Board of Directors may delegate to any person or group of
persons the power to fix the salary or other compensation of any subordinate
officers or agents appointed pursuant to Section 2 of this Article V.
SECTION 4. TENURE. The officers of the Corporation shall serve at
the pleasure of Board of Directors and until their successors are elected and
qualify. Any officer may be removed by the affirmative vote of a majority of
the Board of Directors whenever, in its judgment, the best interests of the
Corporation will be served thereby. Any vacancy occurring in any office of the
Corporation by death, resignation, removal, or otherwise shall be filled by the
Board of Directors.
SECTION 5. PRESIDENT-CHIEF OPERATING OFFICER. The President shall be
the chief operating officer of the Corporation; he shall see that all orders and
resolutions of the Board are carried into effect. The President shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe. In the absence or disability of the President the
-6-
<PAGE>
Chairman-Chief Investment Officer shall perform the duties of the President.
SECTION 6. VICE-PRESIDENTS. The Vice-Presidents, in the order of
their seniority, shall in the absence or disability of the President, perform
the duties and exercise the powers of the President and shall perform such other
duties as the Board of Directors may from time to time prescribe; provided that
the Vice President-Chief Administrative Officer shall be the chief
administrative officer of the Corporation.
SECTION 7. SECRETARY. The Secretary and/or an Assistant Secretary
shall attend all meetings of the Board of Directors and all meetings of the
stockholders and record all the proceedings thereof and shall perform like
duties for any committee when required. The Secretary shall give, or cause to
be given, notice of meetings of the stockholders and of the Board of Directors,
and shall perform such other duties as may be prescribed by the Board of
Directors or President, under whose supervision the Secretary shall be. The
Secretary shall keep in safe custody the seal of the Corporation and, when
authorized by the Board of Directors, affix and attest the same to any
instrument requiring it. The Board of Directors may give general authority to
any other officer to affix the seal of the Corporation and to attest the
affixing by such officer's signature.
SECTION 8. ASSISTANT SECRETARIES. The Assistant Secretaries, in
order of their seniority, shall in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties as the Board of Directors shall prescribe.
SECTION 9. TREASURER. The Treasurer, unless another officer of the
Corporation has been so designated, shall be the chief financial officer of the
Corporation. He shall supervise the general activities of the Controller, if
any, and shall also perform those acts as the Board of Directors may from time
to time determine by resolution.
SECTION 10. CONTROLLER. The Board of Directors may designate a
Controller who shall be under the direct supervision of the Treasurer. He shall
maintain adequate records of all assets, liabilities and transactions of the
Corporation, establish and maintain internal accounting control and, in
cooperation with the independent public accountants selected by the Board of
Directors shall supervise internal auditing. He shall have such further powers
and duties as may be conferred upon him from time to time by the President or
the Board of Directors.
SECTION 11. ASSISTANT TREASURERS. The Assistant Treasurers, in the
order of their seniority, shall in the absence or disability of the Treasurer,
perform the duties and exercise the
-7-
<PAGE>
powers of the Treasurer and shall perform such other duties as the Board of
Directors may from time to time prescribe.
ARTICLE VI
NET ASSET VALUE
SECTION 1. NET ASSET VALUE. The net asset value per
share of each class of stock of the Corporation (each a "Portfolio" and,
collectively, the "Portfolios") shall be determined by dividing the total
current market value of the investments and other assets belonging to each
class, less any liabilities attributable to such class, by the total outstanding
shares of such class. Securities which are listed on a securities exchange for
which market quotations are available shall be valued at the last quoted sale
price of the day or, if there is no such reported sale, at the mean between the
most recent quoted bid and asked prices. Price information on listed securities
will be taken from the exchange where the security is primarily traded.
Unlisted securities for which market quotations are readily available will be
valued at the mean between the most recent quoted bid and asked prices. The
value of other assets and securities for which no quotations are readily
available (including restricted securities) will be determined in good faith at
fair value using methods determined by the Board of Directors.
The net asset value per share of each Portfolio shall be
determined as of the close of the New York Stock Exchange on each day that the
Exchange is open for business, except as otherwise described in the registration
statement of the Corporation.
ARTICLE VII
FUNDAMENTAL POLICIES
SECTION 1. INVESTMENT LIMITATIONS. The following restrictions shall
apply to the Portfolios and may not be changed with respect to any Portfolio
without the approval of the lesser of (i) 67% or more of the shares entitled to
vote thereon present at a meeting if the holders of more that 50% of the shares
entitled to vote thereon are present or represented by proxy, or (ii) more than
50% of the shares entitled to vote thereon:
The Portfolios shall not:
(a) Invest in commodities or purchase or sell real estate, including
limited partnership interests therein, although they may purchase and sell
securities of companies which deal in real estate and may purchase and sell
securities which are secured by interests in real estate, and DFA International
Value Portfolio, DFA International Value Portfolio II and DFA International
Value Portfolio III (collectively, the "International Value Portfolios") may
purchase or sell foreign currency futures contracts and options
-8-
<PAGE>
and the International Value Portfolios, U.S. Large Cap Portfolio II, U.S. Large
Cap Value Portfolio III, U.S. Small Cap Value Portfolio II, RWB/DFA U.S. High
Book to Market Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and
RWB/DFA Two-Year Government Portfolio may purchase or sell financial futures
contracts and options thereon;
(b) Make loans of cash, except through the acquisition of repurchase
agreements and obligations customarily purchased by institutional investors;
(c) As to 75% of a Portfolio's total assets, invest in the securities
of any issuer (except obligations of the United States Government, its agencies
and 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;
(d) Purchase or retain securities of an issuer if those officers and
directors of the Corporation or its investment advisor owning more than 1/2 of
1% of such securities together own more than 5% of such securities;
(e) Issue senior securities or borrow, except from banks and as a
temporary measure for extraordinary or emergency purposes and then in no event
in excess of 33% of a Portfolio's net assets, provided that DFA One-Year Fixed
Income Portfolio II may borrow no more than 5% of its net assets, or pledge in
excess of 33% of a Portfolio's net assets to secure such loans;
(f) Pledge, mortgage, or hypothecate any of its assets to an extent
greater than 10% of its total assets at fair market value, except as described
in paragraph (e) of this section;
(g) Invest more than 15% of the value of a Portfolio's total assets
in illiquid securities, which include certain restricted securities, repurchase
agreements with maturities of greater than seven days and other illiquid
investments; provided, however, that DFA One-Year Fixed Income Portfolio II may
invest not more than 10% of its total assets in illiquid securities;
(h) Engage in the business of underwriting securities issued by
others;
(i) Invest for the purpose of exercising control over management of
any company;
(j) Invest its assets in securities of any investment company, except
in connection with a merger, acquisition of assets, consolidation or
reorganization;
-9-
<PAGE>
(k) 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;
(l) Acquire any securities of companies within one industry if, as a
result of such acquisition, more than 25% of the value of the total assets of
the Portfolio would be invested in securities of companies within such industry;
provided, however, that the foregoing restriction shall not apply to obligations
issued or guaranteed by banks and bank holding companies or government
securities as defined in Section 2(a)(16) of the Act acquired by DFA One-Year
Fixed Income Portfolio II or RWB/DFA Two-Year Corporate Fixed Income Portfolio;
(m) Write or acquire options (except as described in paragraph (a) of
this section) or interests in oil, gas or other mineral exploration, leases or
development programs;
(n) Purchase warrants, provided, however, that the Portfolios, except
DFA One-Year Fixed Income Portfolio II, RWB/DFA Two-Year Corporate Fixed Income
Portfolio and RWB/DFA Two-Year Government Portfolio, may each acquire warrants
as a result of corporate actions involving their respective holdings of equity
securities;
(o) Purchase securities on margin or sell short; or
(p) Acquire more than 10% of the voting securities of any issuer,
provided that this limitation applies only to 75% of the assets of U.S. Small
Cap Value Portfolio II, U.S. Large Cap Value Portfolio II, U.S. Large Cap Value
Portfolio III and RWB/DFA U.S. High Book to Market Portfolio.
Notwithstanding the investment limitations described in (c), (g), (i),
(j), (k), (l) and (p) above, all or substantially all of the assets of each
Portfolio may be invested in another registered, open-end investment company
having the same investment objective, policies and limitations as the Portfolio.
SECTION 2. LENDING OF SECURITIES. Each of the Portfolios is
authorized to lend its portfolio securities to brokers, dealers and other
institutional borrowers, provided that a Portfolio shall not make any such loan
if when made more than one-third of the then current market value of such
Portfolio's assets would consist of lent securities.
-10-
<PAGE>
ARTICLE VIII
STOCK
SECTION 1. CERTIFICATES. Each stockholder shall be entitled, upon
request, to a certificate or certificates for the shares of the Portfolio and
the full number of shares of such Portfolio owned by such stockholder. Each
certificate shall be signed by the President or a Vice-President and counter-
signed by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer.
SECTION 2. SIGNATURE. Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent or (2) by a transfer clerk acting
on behalf of the Corporation and a registrar, the signature of any such
President, Vice-President, Treasurer, Assistant Treasurer, Secretary or
Assistant Secretary may be a facsimile. In case any officer who has signed any
certificate ceases to be an officer of the Corporation before the certificate is
issued, the certificate may nevertheless be issued by the Corporation with the
same effect as if the officer had not ceased to be such officer as of the date
of its issue.
SECTION 3. RECORDING AND TRANSFER WITHOUT CERTIFICATES.
Notwithstanding the foregoing provisions of this Article, the Corporation shall
have full power to participate in any program approved by the Board of Directors
providing for the recording and transfer of ownership of shares of the
Corporation's stock by electronic or other means without the issuance of
certificates.
SECTION 4. LOST CERTIFICATES. The Board of Directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been stolen,
lost or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be stolen, lost or destroyed, or upon other
satisfactory evidence of such loss or destruction. When authorizing such
issuance of a new certificate or certificates, the Board of Directors may, in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such stolen, lost, or destroyed certificate or certificates, or his
legal representative, to give the Corporation a bond with sufficient surety to
indemnify it against any loss or claim that may be made by reason of the
issuance of a new certificate.
SECTION 5. REGISTERED STOCKHOLDERS. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by laws of
Maryland.
-11-
<PAGE>
SECTION 6. TRANSFER AGENTS AND REGISTRARS. The Board of Directors
may, from time to time, appoint or remove transfer agents and/or registrars of
shares of stock of the Corporation, and it may appoint the same person as both
transfer agent and registrar. Upon any such appointment being made all
certificates representing shares of stock thereafter issued shall be
countersigned by one of such transfer agents or by one of such registrars or by
both and shall not be valid unless so countersigned. If the same person shall
be both transfer agent and registrar, only countersignature by such person shall
be required.
SECTION 7. STOCK LEDGER. The Corporation shall maintain an original
stock ledger containing the names and addresses of all stockholders and the
number and Portfolio of shares held by each stockholder. Such stock ledger may
be in written form or any other form capable of being converted into written
form within a reasonable time for visual inspection.
SECTION 8. TRANSFERS OF STOCK. Upon surrender to the Corporation or
the Transfer Agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession assignment, or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
ARTICLE IX
GENERAL PROVISIONS
SECTION 1. DIVIDENDS. With respect to "dividends" (including
dividends designated as "short" or "long" term "capital gains" distributions to
satisfy requirements of the Internal Revenue Code of 1986, as amended from time
to time):
(a) Such dividends shall be automatically reinvested solely in
additional shares (or fractions thereof) of the Portfolio in respect of which
such dividends were declared at the net asset value on the reinvestment date,
provided that a stockholder may notify the Corporation in writing of an election
to receive dividends in cash.
(b) The Board of Directors, in declaring any dividend, may fix a
record date not earlier than the date of declaration or more than 90 days after
the date of declaration, as of which the stockholders entitled to receive such
dividend shall be determined, notwithstanding any transfer or the repurchase or
issue (or sale) of any shares occurring after such record date.
(c) Dividends on shares of stock, whether payable in stock or cash,
shall be paid out of earnings, capital surplus or other lawfully available
assets. All dividend payments, or distributions
-12-
<PAGE>
in the nature of a dividend payment, may be made wholly or partly from any
source other than accumulated, undistributed net income, and such payment shall
be accompanied by a written statement clearly indicating what portion of such
payment per share is made from the following sources:
(i) Accumulated or undistributed net income, not including
profits or losses from the sale of securities or other properties;
(ii) Accumulated or undistributed net profits from the sale of
securities or other properties;
(iii) Paid-in capital.
(d) Anything in these By-Laws to the contrary notwithstanding, the
Board of Directors may at any time declare and distribute pro rata among the
stockholders as of a record date fixed as above provided, a "stock dividend" out
of either authorized but unissued stock of the Corporation, or both.
SECTION 2. RIGHTS IN SECURITIES. The Board of Directors, on behalf
of the Corporation, shall have the authority to exercise all of the rights of
the Corporation as owner of any securities which might be exercised by any
individual owning such securities in his own right; including but not limited
to, the rights to vote by proxy for any and all purposes, to consent to the
reorganization, merger or consolidation of any company or to consent to the
sale, lease or mortgage of all or substantially all of the property and assets
of any company; and to exchange any of the shares of stock of any company for
the shares of stock issued therefor upon any such reorganization, merger,
consolidation, sale, lease or mortgage.
SECTION 3. REPORTS. The Corporation shall furnish stockholders with
reports of its financial condition as required by Section 30(d) of the Act and
the rules thereunder.
SECTION 4. BONDING OF OFFICERS AND EMPLOYEES. All officers and
employees of the Corporation shall be bonded to such extent, and in such manner,
as may be required by law.
SECTION 5. SEAL. The Corporate seal shall have inscribed thereon the
name of the Corporation, the year of its organization and the words "Corporate
Seal, Maryland." The seal may be used by causing it or a facsimile thereof to
be impressed or affixed, or otherwise reproduced.
-13-
<PAGE>
ARTICLE X
INDEMNIFICATION OF
OFFICERS AND DIRECTORS
SECTION 1. With respect to the indemnification of the
officers and Directors of the Corporation:
(a) The Corporation shall indemnify each officer and Director made
party to a proceeding, by reason of service in such capacity, to the fullest
extent, and in the manner provided, under section 2-418 of the Maryland General
Corporation Law: (i) unless it is proved that the person seeking indemnification
did not meet the standard of conduct set forth in subsection (b)(1) of such
section; and (ii) provided, that the Corporation shall not indemnify any officer
or Director for any liability to the Corporation or its security holders arising
from the willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such person's office.
(b) The provisions of clause (i) of paragraph (a) herein
notwithstanding, the Corporation shall indemnify each officer and Director
against reasonable expenses incurred in connection with the successful defense
of any proceeding to which such officer or Director is a party by reason of
service in such capacity.
(c) The Corporation, in the manner and to the extent provided by
applicable law, shall advance to each officer and Director who is made party to
a proceeding by reason of service in such capacity the reasonable expenses
incurred by such person in connection therewith.
ARTICLE XI
AMENDMENTS
SECTION 1. These By-Laws may be altered or repealed
at any Regular or Special Meeting of the Board of Directors, except that the
fundamental investment limitations of the Corporation, set forth in Article VII,
Section 1 of these By-Laws, may only be amended by the stockholders of the
Corporation in the manner specified in said Article.
-14-
<PAGE>
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
Number Shares
DIMENSIONAL INVESTMENT GROUP INC.
SEE REVERSE SIDE FOR CUSIP
CERTAIN DEFINITIONS
VOID
THIS CERTIFIES THAT __________________________________________ IS THE OWNER OF
_______________________________________________________________________ FULLY
PAID AND NON-ASSESSABLE SHARES OF THE ABOVE CORPORATION BY THE HOLDER HEREOF IN
PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE
PROPERLY ENDORSED. THE CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE
TRANSFER AGENT. WITNESS THE SEAL OF THE CORPORATION AND THE SIGNATURES OF ITS
DULY AUTHORIZED OFFICERS.
COUNTERSIGNED:
PROVIDENT FINANCIAL PROCESSING CORPORATION
------------------------------------------
TRANSFER AGENT
DATED: BY
------------------------------------------
AUTHORIZED SIGNATURE
Michael T. Scardina David G. Booth
- ------------------------------ ------------------------------------------
TREASURER PRESIDENT
<PAGE>
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act . . . . . . . . . . . .
in common (State)
Additional abbreviations may also be used though not in the
above list.
FOR VALUE RECEIVED, _________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------
- -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHARES
- ------------------------------------------------------------------------
OF BENEFICIAL INTEREST REPRESENTED BY THE WITHIN CERTIFICATE AND DO HEREBY
IRREVOCABLY CONSTITUTE AND APPOINT
- ---------------------------------------------------------------------- ATTORNEY
TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN-NAMED CORPORATION AND FULL
POWER OF SUBSTITUTION IN THE PREMISES.
DATED: 19 SIGNED:
----------------- -- -------------------------------
---------------------------------------
(BOTH MUST SIGN IF JOINT TENANCY)
SIGNATURE(S)
GUARANTEED
----------------------------
FIRM OR BANK
BY
-------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
Number Shares
DIMENSIONAL INVESTMENT GROUP INC.
SEE REVERSE SIDE FOR CUSIP
CERTAIN DEFINITIONS
VOID
THIS CERTIFIES THAT __________________________________________ IS THE OWNER OF
_______________________________________________________________________ FULLY
PAID AND NON-ASSESSABLE SHARES OF THE ABOVE CORPORATION BY THE HOLDER HEREOF IN
PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE
PROPERLY ENDORSED. THE CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE
TRANSFER AGENT. WITNESS THE SEAL OF THE CORPORATION AND THE SIGNATURES OF ITS
DULY AUTHORIZED OFFICERS.
COUNTERSIGNED:
PROVIDENT FINANCIAL PROCESSING CORPORATION
------------------------------------------
TRANSFER AGENT
DATED: BY
------------------------------------------
AUTHORIZED SIGNATURE
Michael T. Scardina David G. Booth
- ------------------------------ ------------------------------------------
TREASURER PRESIDENT
<PAGE>
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act . . . . . . . . . . . .
in common (State)
Additional abbreviations may also be used though not in the
above list.
FOR VALUE RECEIVED, _________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------
- -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHARES
- ------------------------------------------------------------------------
OF BENEFICIAL INTEREST REPRESENTED BY THE WITHIN CERTIFICATE AND DO HEREBY
IRREVOCABLY CONSTITUTE AND APPOINT
ATTORNEY
- -----------------------------------------------------------------------
TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN-NAMED CORPORATION AND FULL
POWER OF SUBSTITUTION IN THE PREMISES.
DATED: 19 SIGNED:
----------------- -- -------------------------------
---------------------------------------
(BOTH MUST SIGN IF JOINT TENANCY)
SIGNATURE(S)
GUARANTEED ____________________________
FIRM OR BANK
BY
-------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
Number Shares
DIMENSIONAL INVESTMENT GROUP INC.
SEE REVERSE SIDE FOR CUSIP
CERTAIN DEFINITIONS
VOID
THIS CERTIFIES THAT __________________________________________ IS THE OWNER OF
_______________________________________________________________________ FULLY
PAID AND NON-ASSESSABLE SHARES OF THE ABOVE CORPORATION BY THE HOLDER HEREOF IN
PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS CERTIFICATE
PROPERLY ENDORSED. THE CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED BY THE
TRANSFER AGENT. WITNESS THE SEAL OF THE CORPORATION AND THE SIGNATURES OF ITS
DULY AUTHORIZED OFFICERS.
COUNTERSIGNED:
PROVIDENT FINANCIAL PROCESSING CORPORATION
------------------------------------------
TRANSFER AGENT
DATED: BY
------------------------------------------
AUTHORIZED SIGNATURE
Michael T. Scardina David G. Booth
- ------------------------------ ------------------------------------------
TREASURER PRESIDENT
<PAGE>
The following abbreviations, when used in the inscription on the face of
this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
-------------------
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act . . . . . . . . . . . .
in common (State)
Additional abbreviations may also be used though not in the
above list.
FOR VALUE RECEIVED, _________________ HEREBY SELL, ASSIGN AND TRANSFER UNTO
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------
- -------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHARES
- ------------------------------------------------------------------------
OF BENEFICIAL INTEREST REPRESENTED BY THE WITHIN CERTIFICATE AND DO HEREBY
IRREVOCABLY CONSTITUTE AND APPOINT
- ---------------------------------------------------------------------- ATTORNEY
TO TRANSFER THE SAID STOCK ON THE BOOKS OF THE WITHIN-NAMED CORPORATION AND FULL
POWER OF SUBSTITUTION IN THE PREMISES.
DATED: 19 SIGNED:
----------------- -- -------------------------------
---------------------------------------
(BOTH MUST SIGN IF JOINT TENANCY)
SIGNATURE(S)
GUARANTEED
----------------------------
FIRM OR BANK
BY
-------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
Exhibit No. 99(b)(8)(i)(f)
CUSTODIAN SERVICES AGREEMENT
AMENDMENT NUMBER SIX
THIS AGREEMENT is made as of the 1st day of March, 1996 by and between
DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.",
a Maryland corporation (the "Fund"), and PNC BANK, N.A., formerly "Provident
National Bank" ("PNC").
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund has retained PNC to provide certain custodian
services pursuant to a Custodian Agreement dated as of July 12, 1991 and as
amended (the "Agreement") which, as of the date hereof, is in full force and
effect; and
WHEREAS, PNC presently provides such services to the eight existing
Portfolios of the Fund; and
WHEREAS, the Fund has recently organized three new Portfolios,
designated "RWB/DFA U.S. High Book to Market Portfolio," "RWB/DFA Two-Year
Corporate Fixed Income Portfolio" and "RWB/DFA Two-Year Government Portfolio"
(the "New Portfolios"), and the parties hereto desire that PNC shall provide the
New Portfolios
<PAGE>
with the same services that PNC provides to the other Portfolios of the Fund
pursuant to the Agreement; and
WHEREAS, Section 28 of the Agreement provides that the Agreement may
be amended as agreed to in writing by PNC and the Fund.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound, the parties hereto agree as
follows:
1. The Fund has delivered to PNC copies of:
(a) Post-Effective Amendment Number 10 of the registration
statement of the Fund, as effective with the U.S. Securities and Exchange
Commission on March 1, 1996, wherein the New Portfolios are described;
(b) The exhibits to such post-effective amendment including the
Articles Supplementary to the Articles of Incorporation, specimen securities and
the forms of administration agreements with respect to the New Portfolios;
(c) Amendment Number Six dated March 1, 1996 of the Transfer
Agency Agreement between PFPC Inc. and the Fund dated as of July 12, 1991; and
(d) Amendment Number Six dated March 1, 1996 of the
Administration and Accounting Services Agreement between PFPC Inc. and the Fund
dated as of July 12, 1991.
-2-
<PAGE>
2. The Agreement hereby is amended effective March 1, 1996 by:
(a) adding the following sentence immediately after the second
sentence of Section 1 therein, "As of March 1, 1996, the Fund delivered to PFPC
a Prospectus dated March 1, 1996 wherein three new classes of Fund shares
designated the 'RWB/DFA U.S. High Book to Market Portfolio,' 'RWB/DFA Two-Year
Corporate Fixed Income Portfolio' and 'RWB/DFA Two-Year Government Portfolio'
are described and the parties agree that the terms of this Agreement shall apply
to the three Portfolios described in such Prospectus."; and
(b) adding a new sentence immediately following the second
sentence of Section 25 as follows: "The foregoing provisions of this Section 25
notwithstanding, this Agreement with respect to RWB/DFA U.S. High Book to Market
Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-
Year Government Portfolio may be terminated by either party upon not less than
180 days prior written notice to the other party."
3. The Fee Schedules of PNC applicable to the New Portfolios
shall be as agreed in writing from time to time.
4. In all other respects the Agreement shall remain unchanged
and in full force and effect.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Number Six to the Agreement to be executed by their duly authorized officers
designated below on the day and year first above written.
DIMENSIONAL INVESTMENT GROUP INC.
By:
---------------------------------
PNC BANK, N.A.
By:
---------------------------------
-4-
<PAGE>
Exhibit No. 99(b)(9)(i)(g)
TRANSFER AGENCY AGREEMENT
AMENDMENT NUMBER SIX
THIS AGREEMENT is made as of the 1st day of March, 1996 by and between
DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.,"
a Maryland corporation (the "Fund"), and PFPC INC., formerly "Provident
Financial Processing Corporation" ("PFPC"), a Delaware corporation, which is an
indirect wholly-owned subsidiary of PNC Financial Corp.
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund has retained PFPC to provide certain transfer agency
services pursuant to a Transfer Agency Agreement dated as of July 12, 1991 and
as amended (the "Agreement") which, as of the date hereof, is in full force and
effect; and
WHEREAS, PFPC presently provides such services to the eight existing
Portfolios of the Fund; and
WHEREAS, the Fund has since organized three new Portfolios, designated
"RWB/DFA U.S. High Book to Market Portfolio," "RWB/DFA Two-Year Corporate Fixed
Income Portfolio" and "RWB/DFA Two-Year Government Portfolio" (the "New
Portfolios"), and
<PAGE>
the parties hereto desire that PFPC shall provide the New Portfolios with the
same services that PFPC provides to the other Portfolios of the Fund pursuant to
the Agreement; and
WHEREAS, Section 1 of the Agreement provides that PFPC shall provide
such services to any Portfolio organized by the Fund after the date of the
Agreement as agreed to in writing by PFPC and the Fund.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound, the parties hereto agree as
follows:
1. The Fund has delivered to PFPC copies of:
(a) Post-Effective Amendment Number 10 of the registration
statement of the Fund, as effective with the U.S. Securities and Exchange
Commission on March 1, 1996, wherein the New Portfolios are described;
(b) The exhibits to such post-effective amendment including the
Articles Supplementary to the Articles of Incorporation, specimen securities and
the forms of administration agreements with respect to the New Portfolios;
(c) Amendment Number Six dated March 1, 1996 of the
Administration and Accounting Services Agreement between the parties dated as of
July 12, 1991; and
(d) Amendment Number Six dated March 1, 1996 of the Custodian
Agreement between PNC Bank, N.A. and the Fund dated as of July 12, 1991.
-2-
<PAGE>
2. The Agreement hereby is amended effective March 1, 1996 by:
(a) adding the following sentence immediately after the second
sentence of Section 1 therein, "As of March 1, 1996, the Fund delivered to PFPC
a Prospectus dated March 1, 1996 wherein three new classes of Fund shares
designated the 'RWB/DFA U.S. High Book to Market Portfolio,' 'RWB/DFA Two-Year
Corporate Fixed Income Portfolio' and 'RWB/DFA Two-Year Government Portfolio'
are described and the parties agree that the terms of this Agreement shall apply
to the three Portfolios described in such Prospectus."; and
(b) adding a new sentence immediately following the third
sentence of Section 19 as follows: "The foregoing provisions of this Section 19
notwithstanding, this Agreement with respect to RWB/DFA U.S. High Book to Market
Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-
Year Government Portfolio may be terminated by either party upon not less than
180 days prior written notice to the other party."
3. The Fee Schedules of PFPC applicable to the New Portfolios
shall be as agreed in writing from time to time.
4. In all other respects the Agreement shall remain unchanged
and in full force and effect.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Number Six to the Agreement to be executed by their duly authorized officers
designated below on the day and year first above written.
DIMENSIONAL INVESTMENT GROUP INC.
By:
--------------------------------
PFPC INC.
By:
--------------------------------
<PAGE>
Exhibit No. 99(b)(9)(ii)(g)
ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
AMENDMENT NUMBER SIX
THIS AGREEMENT is made as of the 1st day of March, 1996 by and between
DIMENSIONAL INVESTMENT GROUP INC., formerly "DFA U.S. Large Cap Portfolio Inc.",
a Maryland corporation (the "Fund"), and PFPC INC., formerly "Provident
Financial Processing Corporation" ("PFPC"), a Delaware corporation, which is an
indirect wholly-owned subsidiary of PNC Financial Corp.
W I T N E S S E T H :
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Fund has retained PFPC to provide certain administration
and accounting services pursuant to an Administration and Accounting Services
Agreement dated as of July 12, 1991 and as amended (the "Agreement") which, as
of the date hereof, is in full force and effect; and
WHEREAS, PFPC presently provides such services to the eight existing
Portfolios of the Fund; and
WHEREAS, the Fund has since organized three new Portfolios, designated
"RWB/DFA U.S. High Book to Market Portfolio," "RWB/DFA Two-Year Corporate Fixed
Income Portfolio" and
<PAGE>
"RWB/DFA Two-Year Government Portfolio" (the "New Portfolios"), and the parties
hereto desire that PFPC shall provide the New Portfolios with the same services
that PFPC provides to the other Portfolios of the Fund pursuant to the
Agreement; and
WHEREAS, Section 1 of the Agreement provides that PFPC shall provide
such services to any Portfolio organized by the Fund after the date of the
Agreement as agreed to in writing by PFPC and the Fund.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound, the parties hereto agree as
follows:
1. The Fund has delivered to PFPC copies of:
(a) Post-Effective Amendment Number 10 of the registration
statement of the Fund, as effective with the U.S. Securities and Exchange
Commission on March 1, 1996, wherein the New Portfolios are described;
(b) The exhibits to such post-effective amendment including the
Articles Supplementary to the Articles of Incorporation, specimen securities and
the forms of administration agreements with respect to the New Portfolios;
(c) Amendment Number Six dated March 1, 1996 of the Transfer
Agency Agreement between the parties dated as of July 12, 1991; and
(d) Amendment Number Six dated March 1, 1996 of the Custodian
Agreement between PNC Bank, N.A. and the Fund dated as of
-2-
<PAGE>
July 12, 1991.
2. The Agreement hereby is amended effective March 1, 1996 by:
(a) adding the following sentence immediately after the third
sentence of Section 1 therein, "As of March 1, 1996, the Fund delivered to PFPC
a Prospectus dated March 1, 1996 wherein three new classes of Fund shares
designated the 'RWB/DFA U.S. High Book to Market Portfolio,' 'RWB/DFA Two-Year
Corporate Fixed Income Portfolio' and 'RWB/DFA Two-Year Government Portfolio'
are described and the parties agree that the terms of this Agreement shall apply
to the three Portfolios described in such Prospectus."; and
(b) adding a new sentence immediately following the third
sentence of Section 19 as follows: "The foregoing provisions of this Section 19
notwithstanding, this Agreement with respect to RWB/DFA U.S. High Book to Market
Portfolio, RWB/DFA Two-Year Corporate Fixed Income Portfolio and RWB/DFA Two-
Year Government Portfolio may be terminated by either party upon not less than
180 days prior written notice to the other party."
3. The Fee Schedules of PFPC applicable to the New Portfolios
shall be as agreed in writing from time to time.
-3-
<PAGE>
4. In all other respects the Agreement shall remain unchanged
and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Number Six to the Agreement to be executed by their duly authorized officers
designated below on the day and year first above written.
DIMENSIONAL INVESTMENT GROUP INC.
By:
-------------------------------
PFPC INC.
By:
--------------------------------
-4-
<PAGE>
Exhibit No. 99(b)(9)(xv)
DIMENSIONAL INVESTMENT GROUP INC.
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
AGREEMENT made this ____ day of March, 1996, by and between
DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on
behalf of the RWB/DFA Two-Year Corporate Fixed Income Portfolio (the
"Portfolio"), a separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC.,
a Delaware corporation (the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs of
the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the benefit
of the Portfolio by the Portfolio's custodian, transfer and
dividend disbursing agent, printers, insurance carriers (as
well as agents and brokers), independent accountants, legal
counsel and
<PAGE>
other persons who provide services to the Fund for the
benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax,
organizational and other laws that (i) govern the business
of the Fund in respect of the Portfolio (except those that
govern investment of the Portfolio's assets), (ii) regulate
the offering of the Portfolio's shares and (iii) provide for
the taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they or
the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its shareholders
if and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the
Fund may require regarding any investment company in whose
shares the Portfolio may invest; and
(6) provide such other administrative services for the benefit
of the Portfolio as the board of directors may reasonably
request.
B. In carrying out its responsibilities under Section A herein, to
the extent the Administrator deems necessary or desirable and at the expense of
the Portfolio, the Administrator shall be entitled to consult with, and obtain
the assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund
with such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will
pay all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be
rendered by the Administrator as provided in Section 2 of this Agreement, the
Portfolio shall pay to the
-2-
<PAGE>
Administrator, at the end of each month, a fee equal to one-twelfth of .01
percent of the net assets of the Portfolio. If this Agreement is terminated
prior to the end of any month, the fee for such month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator to the Fund or in respect of the Portfolio are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others as long as its services to the Fund or in respect of the Portfolio are
not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the board of
directors of the Fund, and shall continue in effect until terminated by the Fund
or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and effective on the ____ day of March, 1996.
DIMENSIONAL FUND DIMENSIONAL INVESTMENT
ADVISORS INC. GROUP INC.
By: By:
------------------------ ---------------------------
Chairman-Chief President
Investment Officer
-3-
<PAGE>
Exhibit No. 99(b)(9)(xvi)
DIMENSIONAL INVESTMENT GROUP INC.
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
AGREEMENT made this ____ day of March, 1996, by and between
DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on
behalf of the RWB/DFA Two-Year Government Portfolio (the "Portfolio"), a
separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware
corporation (the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs of
the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the benefit
of the Portfolio by the Portfolio's custodian, transfer and
dividend disbursing agent, printers, insurance carriers (as
well as agents and brokers), independent accountants, legal
counsel and
<PAGE>
other persons who provide services to the Fund for the
benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax,
organizational and other laws that (i) govern the business
of the Fund in respect of the Portfolio (except those that
govern investment of the Portfolio's assets), (ii) regulate
the offering of the Portfolio's shares and (iii) provide for
the taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they or
the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its shareholders
if and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the
Fund may require regarding any investment company in whose
shares the Portfolio may invest; and
(6) provide such other administrative services for the benefit
of the Portfolio as the board of directors may reasonably
request.
B. In carrying out its responsibilities under Section A herein, to
the extent the Administrator deems necessary or desirable and at the expense of
the Portfolio, the Administrator shall be entitled to consult with, and obtain
the assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund
with such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will
pay all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be
rendered by the Administrator as provided in Section 2 of this Agreement, the
Portfolio shall pay to the
-2-
<PAGE>
Administrator, at the end of each month, a fee equal to one-twelfth of .01
percent of the net assets of the Portfolio. If this Agreement is terminated
prior to the end of any month, the fee for such month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator to the Fund or in respect of the Portfolio are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others as long as its services to the Fund or in respect of the Portfolio are
not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the board of
directors of the Fund, and shall continue in effect until terminated by the Fund
or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and effective on the ____ day of March, 1996.
DIMENSIONAL FUND DIMENSIONAL INVESTMENT
ADVISORS INC. GROUP INC.
By: By:
------------------------ ---------------------------
Chairman-Chief President
Investment Officer
-3-
<PAGE>
Exhibit No. 99(b)(9)(xvii)
DIMENSIONAL INVESTMENT GROUP INC.
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
AGREEMENT made this ____ day of March, 1996, by and between
DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on
behalf of the RWB/DFA U.S. High Book to Market Portfolio (the "Portfolio"), a
separate series of the Fund, and DIMENSIONAL FUND ADVISORS INC., a Delaware
corporation (the "Administrator").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services, assistance and facilities of an administrator and
to have an administrator perform various administrative and other services for
it; and
WHEREAS, the Administrator desires to provide such services to the
Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. EMPLOYMENT OF THE ADMINISTRATOR. The Fund hereby employs the
Administrator to supervise the administrative affairs of the Portfolio, subject
to the direction of the board of directors and the officers of the Fund on the
terms hereinafter set forth. The Administrator hereby accepts such employment
and agrees to render the services described herein for the compensation herein
provided.
2. SERVICES TO BE PROVIDED BY THE ADMINISTRATOR.
A. The Administrator shall supervise the administrative affairs of
the Fund as they pertain to the Portfolio. Specifically, the Administrator
shall:
(1) supervise the services provided to the Fund for the benefit
of the Portfolio by the Portfolio's custodian, transfer and
dividend disbursing agent, printers, insurance carriers (as
well as agents and brokers), independent accountants, legal
counsel and
<PAGE>
other persons who provide services to the Fund for the
benefit of the Portfolio;
(2) assist the Fund to comply with the provisions of applicable
federal, state, local and foreign securities, tax,
organizational and other laws that (i) govern the business
of the Fund in respect of the Portfolio (except those that
govern investment of the Portfolio's assets), (ii) regulate
the offering of the Portfolio's shares and (iii) provide for
the taxation of the Portfolio;
(3) provide the shareholders of the Portfolio with such
information regarding the operation and affairs of the
Portfolio, and their investment in its shares, as they or
the Fund may reasonably request;
(4) assist the Portfolio to conduct meetings of its shareholders
if and when called by the board of directors of the Fund;
(5) furnish such information as the board of directors of the
Fund may require regarding any investment company in whose
shares the Portfolio may invest; and
(6) provide such other administrative services for the benefit
of the Portfolio as the board of directors may reasonably
request.
B. In carrying out its responsibilities under Section A herein, to
the extent the Administrator deems necessary or desirable and at the expense of
the Portfolio, the Administrator shall be entitled to consult with, and obtain
the assistance of, the persons described in Section A, paragraph (1) herein who
provide services to the Fund.
C. The Administrator, at its own expense, shall provide the Fund
with such office facilities and equipment as may be necessary to conduct the
administrative affairs of the Fund in respect of the Portfolio.
3. EXPENSES OF THE FUND. It is understood that the Portfolio will
pay all of its own expenses incurred to conduct its administrative affairs.
4. COMPENSATION OF THE ADMINISTRATOR. For the services to be
rendered by the Administrator as provided in Section 2 of this Agreement, the
Portfolio shall pay to the
-2-
<PAGE>
Administrator, at the end of each month, a fee equal to one-twelfth of .01
percent of the net assets of the Portfolio. If this Agreement is terminated
prior to the end of any month, the fee for such month shall be prorated.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator to the Fund or in respect of the Portfolio are not to be deemed
exclusive, and the Administrator shall be free to render similar services to
others as long as its services to the Fund or in respect of the Portfolio are
not impaired thereby.
6. LIABILITY OF THE ADMINISTRATOR. No provision of this Agreement
shall be deemed to protect the Administrator against any liability to the Fund
or its shareholders to which it might otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
the reckless disregard of its obligations under this Agreement.
7. DURATION AND TERMINATION.
A. This Agreement shall become effective on the date written below,
provided that prior to such date it shall have been approved by the board of
directors of the Fund, and shall continue in effect until terminated by the Fund
or the Administrator on 60 days' written notice to the other.
B. Any notice under this Agreement shall be given in writing
addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and effective on the ____ day of March, 1996.
DIMENSIONAL FUND DIMENSIONAL INVESTMENT
ADVISORS INC. GROUP INC.
By: By:
------------------------ ---------------------------
Chairman-Chief President
Investment Officer
-3-
<PAGE>
Exhibit No. 99(b)(9)(xviii)
DIMENSIONAL INVESTMENT GROUP INC.
RWB/DFA TWO-YEAR CORPORATE FIXED INCOME PORTFOLIO
CLIENT SERVICE AGENT AGREEMENT
AGREEMENT made this ____ day of March, 1996, by and between
DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on
behalf of the RWB/DFA Two-Year Corporate Fixed Income Portfolio (the
"Portfolio"), a separate series of the Fund, and REINHARDT, WERBA, BOWEN, INC.
(a California corporation) d/b/a REINHARDT WERBA BOWEN ADVISORY SERVICES
("RWB").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services and assistance of a client service agent and to
have a client service agent perform various services for it; and
WHEREAS, RWB desires to provide such services to the Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF RWB. The Fund hereby appoints RWB to serve as
client service agent to the Portfolio, subject to the direction of the Board of
Directors and the officers of the Fund for the period and on the terms
hereinafter set forth. RWB hereby accepts such appointment and agrees to
provide, at its own expense, the office space, furnishings and equipment and the
personnel required by it to perform the services described herein for the
compensation as provided in Section 3 of this Agreement.
2. SERVICES TO BE PROVIDED BY RWB. RWB shall provide the following
services to the Portfolio:
A. establish and maintain a toll-free telephone number for
shareholders of the Portfolio to use to obtain or receive up-to-
date account information;
<PAGE>
B. provide to shareholders of the Portfolio quarterly reports with
respect to the performance of the Portfolio, such reports to
be separate and apart from the Fund's semi-annual and annual
reports to shareholders; and
C. provide the shareholders of the Portfolio with such information
regarding the operation and affairs of the Portfolio, and their
investment in its shares, as they or the Fund may reasonably
request.
3. COMPENSATION OF RWB. For the services to be rendered by RWB as
provided in Section 2 of this Agreement, the Portfolio shall pay to RWB, at the
end of each month, a fee equal to one-twelfth of 0.03 percent of average daily
net assets of the Portfolio. If this Agreement is terminated prior to the end
of any month, the fee for such month shall be prorated.
4. ACTIVITIES OF RWB. The services of RWB to the Fund or in respect
of the Portfolio are not to be deemed exclusive, and RWB shall be free to render
similar services to others as long as its services to the Fund or in respect of
the Portfolio are not impaired thereby.
5. RESPONSIBILITY OF RWB. In the performance of its duties
hereunder, RWB shall be obligated to exercise due care and diligence and to act
in a timely manner and in good faith to assure the accuracy and completeness of
all services performed under this Agreement. RWB shall be under no duty to take
any action on behalf of the Portfolio except as specifically set forth herein or
as may be specifically agreed to by RWB in writing. RWB shall be responsible
for its own negligent failure to perform its duties under this Agreement. In
assessing negligence for purposes of this Agreement, the parties agree that the
standard of care applied to RWB's conduct shall be the care that would be
exercised by a similarly situated service provider, supplying substantially the
same services under substantially similar circumstances.
No provision of this Agreement shall be deemed to protect RWB against
any liability to the Fund or its shareholders to which it might otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or the reckless disregard of its obligations under
this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective
on March ___, 1996, provided that prior to such date it shall have been approved
by the Board of Directors of the Fund and shall continue in effect until
terminated by the Fund or RWB. This Agreement may at any time be terminated
without
-2-
<PAGE>
penalty by vote of the Board of Directors of the Fund on sixty days written
notice to RWB. This Agreement may be terminated by RWB after ninety days
written notice to the Fund.
7. NOTICES. Any notices under this Agreement shall be given in
writing addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
9. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
10. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
11. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the ____ day of March, 1996.
REINHARDT, WERBA, BOWEN, INC. DIMENSIONAL INVESTMENT GROUP
d/b/a REINHARDT WERBA BOWEN INC.
ADVISORY SERVICES
By: By:
-------------------------- --------------------------
President President
-3-
<PAGE>
Exhibit No. 99(b)(9)(xviv)
DIMENSIONAL INVESTMENT GROUP INC.
RWB/DFA TWO-YEAR GOVERNMENT PORTFOLIO
CLIENT SERVICE AGENT AGREEMENT
AGREEMENT made this ____ day of March, 1996, by and between
DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on
behalf of the RWB/DFA Two-Year Government Portfolio (the "Portfolio"), a
separate series of the Fund, and REINHARDT, WERBA, BOWEN, INC. (a California
corporation) d/b/a REINHARDT WERBA BOWEN ADVISORY SERVICES ("RWB").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services and assistance of a client service agent and to
have a client service agent perform various services for it; and
WHEREAS, RWB desires to provide such services to the Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF RWB. The Fund hereby appoints RWB to serve as
client service agent to the Portfolio, subject to the direction of the Board of
Directors and the officers of the Fund for the period and on the terms
hereinafter set forth. RWB hereby accepts such appointment and agrees to
provide, at its own expense, the office space, furnishings and equipment and the
personnel required by it to perform the services described herein for the
compensation as provided in Section 3 of this Agreement.
2. SERVICES TO BE PROVIDED BY RWB. RWB shall provide the following
services to the Portfolio:
A. establish and maintain a toll-free telephone number for
shareholders of the Portfolio to use to obtain or receive up-to-
date account information;
<PAGE>
B. provide to shareholders of the Portfolio quarterly reports with
respect to the performance of the Portfolio, such reports to
be separate and apart from the Fund's semi-annual and annual
reports to shareholders; and
C. provide the shareholders of the Portfolio with such information
regarding the operation and affairs of the Portfolio, and their
investment in its shares, as they or the Fund may reasonably
request.
3. COMPENSATION OF RWB. For the services to be rendered by RWB as
provided in Section 2 of this Agreement, the Portfolio shall pay to RWB, at the
end of each month, a fee equal to one-twelfth of 0.03 percent of average daily
net assets of the Portfolio. If this Agreement is terminated prior to the end
of any month, the fee for such month shall be prorated.
4. ACTIVITIES OF RWB. The services of RWB to the Fund or in respect
of the Portfolio are not to be deemed exclusive, and RWB shall be free to render
similar services to others as long as its services to the Fund or in respect of
the Portfolio are not impaired thereby.
5. RESPONSIBILITY OF RWB. In the performance of its duties
hereunder, RWB shall be obligated to exercise due care and diligence and to act
in a timely manner and in good faith to assure the accuracy and completeness of
all services performed under this Agreement. RWB shall be under no duty to take
any action on behalf of the Portfolio except as specifically set forth herein or
as may be specifically agreed to by RWB in writing. RWB shall be responsible
for its own negligent failure to perform its duties under this Agreement. In
assessing negligence for purposes of this Agreement, the parties agree that the
standard of care applied to RWB's conduct shall be the care that would be
exercised by a similarly situated service provider, supplying substantially the
same services under substantially similar circumstances.
No provision of this Agreement shall be deemed to protect RWB against
any liability to the Fund or its shareholders to which it might otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or the reckless disregard of its obligations under
this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective
on March ___, 1996, provided that prior to such date it shall have been approved
by the Board of Directors of the Fund and shall continue in effect until
terminated by the Fund or RWB. This Agreement may at any time be terminated
without
-2-
<PAGE>
penalty by vote of the Board of Directors of the Fund on sixty days written
notice to RWB. This Agreement may be terminated by RWB after ninety days
written notice to the Fund.
7. NOTICES. Any notices under this Agreement shall be given in
writing addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
9. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
10. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
11. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the ____ day of March, 1996.
REINHARDT, WERBA, BOWEN, INC. DIMENSIONAL INVESTMENT GROUP
d/b/a REINHARDT WERBA BOWEN INC.
ADVISORY SERVICES
By: By:
-------------------------- ---------------------------
President President
-3-
<PAGE>
Exhibit No. 99(b)(9)(xx)
DIMENSIONAL INVESTMENT GROUP INC.
RWB/DFA U.S. HIGH BOOK TO MARKET PORTFOLIO
CLIENT SERVICE AGENT AGREEMENT
AGREEMENT made this ____ day of March, 1996, by and between
DIMENSIONAL INVESTMENT GROUP INC., a Maryland corporation (the "Fund"), on
behalf of the RWB/DFA U.S. High Book to Market Portfolio (the "Portfolio"), a
separate series of the Fund, and REINHARDT, WERBA, BOWEN, INC. (a California
corporation) d/b/a REINHARDT WERBA BOWEN ADVISORY SERVICES ("RWB").
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 for the purposes of
investing and reinvesting its assets in securities, as set forth in its
Registration Statement under the Investment Company Act of 1940 and the
Securities Act of 1933, as heretofore amended and supplemented;
WHEREAS, the Portfolio, as a separate series of the Fund, desires to
avail itself of the services and assistance of a client service agent and to
have a client service agent perform various services for it; and
WHEREAS, RWB desires to provide such services to the Portfolio.
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. APPOINTMENT OF RWB. The Fund hereby appoints RWB to serve as
client service agent to the Portfolio, subject to the direction of the Board of
Directors and the officers of the Fund for the period and on the terms
hereinafter set forth. RWB hereby accepts such appointment and agrees to
provide, at its own expense, the office space, furnishings and equipment and the
personnel required by it to perform the services described herein for the
compensation as provided in Section 3 of this Agreement.
2. SERVICES TO BE PROVIDED BY RWB. RWB shall provide the following
services to the Portfolio:
A. establish and maintain a toll-free telephone number for
shareholders of the Portfolio to use to obtain or receive up-to-
date account information;
<PAGE>
B. provide to shareholders of the Portfolio quarterly reports with
respect to the performance of the Portfolio, such reports to
be separate and apart from the Fund's semi-annual and annual
reports to shareholders; and
C. provide the shareholders of the Portfolio with such information
regarding the operation and affairs of the Portfolio, and their
investment in its shares, as they or the Fund may reasonably
request.
3. COMPENSATION OF RWB. For the services to be rendered by RWB as
provided in Section 2 of this Agreement, the Portfolio shall pay to RWB, at the
end of each month, a fee equal to one-twelfth of 0.04 percent of average daily
net assets of the Portfolio. If this Agreement is terminated prior to the end
of any month, the fee for such month shall be prorated.
4. ACTIVITIES OF RWB. The services of RWB to the Fund or in respect
of the Portfolio are not to be deemed exclusive, and RWB shall be free to render
similar services to others as long as its services to the Fund or in respect of
the Portfolio are not impaired thereby.
5. RESPONSIBILITY OF RWB. In the performance of its duties
hereunder, RWB shall be obligated to exercise due care and diligence and to act
in a timely manner and in good faith to assure the accuracy and completeness of
all services performed under this Agreement. RWB shall be under no duty to take
any action on behalf of the Portfolio except as specifically set forth herein or
as may be specifically agreed to by RWB in writing. RWB shall be responsible
for its own negligent failure to perform its duties under this Agreement. In
assessing negligence for purposes of this Agreement, the parties agree that the
standard of care applied to RWB's conduct shall be the care that would be
exercised by a similarly situated service provider, supplying substantially the
same services under substantially similar circumstances.
No provision of this Agreement shall be deemed to protect RWB against
any liability to the Fund or its shareholders to which it might otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or the reckless disregard of its obligations under
this Agreement.
6. DURATION AND TERMINATION. This Agreement shall become effective
on March ___, 1996, provided that prior to such date it shall have been approved
by the Board of Directors of the Fund and shall continue in effect until
terminated by the Fund or RWB. This Agreement may at any time be terminated
without
-2-
<PAGE>
penalty by vote of the Board of Directors of the Fund on sixty days written
notice to RWB. This Agreement may be terminated by RWB after ninety days
written notice to the Fund.
7. NOTICES. Any notices under this Agreement shall be given in
writing addressed and delivered, or mailed post-paid, to the other party at the
principal business office of such party.
8. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
9. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
10. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
11. MISCELLANEOUS. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be binding and shall inure to the benefit of the
parties hereto and their respective successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the ____ day of March, 1996.
REINHARDT, WERBA, BOWEN, INC. DIMENSIONAL INVESTMENT GROUP
d/b/a REINHARDT WERBA BOWEN INC.
ADVISORY SERVICES
By: By:
-------------------------- ------------------------------
President President
-3-
