-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Aq5DTyQOun2f/6KCQfeZXQCwe0tZUsW2/ZHAJvjBG30uAtkvUHnY0zPx2pVZwrfc QYvBiYKAddJHJPp/nZrIIg== 0001047469-98-008484.txt : 19980304 0001047469-98-008484.hdr.sgml : 19980304 ACCESSION NUMBER: 0001047469-98-008484 CONFORMED SUBMISSION TYPE: POS AMI PUBLIC DOCUMENT COUNT: 35 FILED AS OF DATE: 19980303 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DFA INVESTMENT TRUST CO CENTRAL INDEX KEY: 0000896162 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: POS AMI SEC ACT: SEC FILE NUMBER: 811-07436 FILM NUMBER: 98556840 BUSINESS ADDRESS: STREET 1: 1299 OCEAN AVE STREET 2: 11TH FLOOR CITY: SANTA MONICA STATE: CA ZIP: 90401 BUSINESS PHONE: 3103958005 POS AMI 1 POS AMI File No. 811-7436 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form N-1A REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 (X) Amendment No. 14 (X) THE DFA INVESTMENT TRUST COMPANY (Exact Name of Registrant as Specified in Charter) 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices (Zip Code) Registrant's Telephone Number, Including Area Code (310) 395-8005 -------------- Irene R. Diamant, 1299 Ocean Avenue, 11th Floor, Santa Monica CA 90401 - -------------------------------------------------------------------------------- (Name and Address of Agent for Service of Process) ----------------------- Please Send Copy of Communications to: Stephen W. Kline, Esq. Stradley, Ronon, Stevens & Young, LLP Great Valley Corporate Center 30 Valley Stream Parkway Malvern, Pennsylvania 19355 THE DFA INVESTMENT TRUST COMPANY THE U.S. 9-10 SMALL COMPANY SERIES THE U.S. 6-10 SMALL COMPANY SERIES THE U.S. LARGE COMPANY SERIES THE ENHANCED U.S. LARGE COMPANY SERIES THE U.S. 6-10 VALUE SERIES THE U.S. LARGE CAP VALUE SERIES THE U.S. 4-10 VALUE SERIES THE JAPANESE SMALL COMPANY SERIES THE PACIFIC RIM SMALL COMPANY SERIES THE UNITED KINGDOM SMALL COMPANY SERIES THE EMERGING MARKETS SERIES THE DFA INTERNATIONAL VALUE SERIES THE EMERGING MARKETS SMALL CAP SERIES THE CONTINENTAL SMALL COMPANY SERIES THE DFA ONE-YEAR FIXED INCOME SERIES THE DFA TWO-YEAR GLOBAL FIXED INCOME SERIES MARCH 3, 1998 FORM N-1A, Part A: Responses to Items 1 through 3 have been omitted pursuant to paragraph 3 of Instruction F of the General Instructions to Form N-1A. ITEM 4. GENERAL DESCRIPTION OF REGISTRANT (a)(i) The DFA Investment Trust Company (the "Trust") is an open-end management investment company organized as a Delaware business trust on October 27, 1992 and registered under the Investment Company Act of 1940. The Trust issues sixteen series which are listed above, each of which operates as a diversified investment company and represents a separate class ("Series") of the Trust's shares of beneficial interest. Dimensional Fund Advisors Inc. (the "Advisor") serves as investment advisor to each of the Series. The investment objectives, policies and investment limitations of each Series are set forth below. The investment objective of a Series may not be changed without the affirmative vote of a majority of the outstanding voting securities of that Series. The Trust sells its shares to institutional investors only. Shares of each Series may be issued for cash and/or securities in which a Series is authorized to invest. In addition, when acquiring securities from an institutional investor in consideration of the issuance of its shares, a Series may accept securities from the transferor which it would not otherwise purchase pursuant to its investment policies, as described below. Any such acquisition would be very small in relation to the then total current value of the assets acquired by a Series in any such transaction. (a)(ii) INVESTMENT OBJECTIVE AND POLICIES - SMALL COMPANY SERIES The U.S. 6-10 Small Company, U.S. 9-10 Small Company, Japanese Small Company, Pacific Rim Small Company, United Kingdom Small Company and Continental Small Company Series of the Trust (the "Small Company Series"), each operate as a diversified investment company whose investment objective is to achieve long- term capital appreciation. The Small Company Series provide investors with access to securities portfolios consisting of small U.S., Japanese, United Kingdom, European and Pacific Rim companies. Company size will be determined for purposes of these Series solely on the basis of a company's market capitalization. "Market capitalization" for domestic securities will be calculated by multiplying the price of a company's stock by the number of its shares of outstanding common stock. "Market capitalization" for foreign securities will be calculated using the number of outstanding stocks similar to domestic common stocks. Each Small Company Series intends to invest at least 80% of its assets in equity securities of U.S., Japanese, United Kingdom, European and Pacific Rim small companies, as defined herein, and as applicable to the Series. Each Small Company Series will be structured to reflect reasonably the relative market capitalizations of its portfolio companies. The Advisor believes that over the long term the investment performance of small companies is superior to large companies, not only in the U.S. but in other developed countries as well, and that investment in the Series is an effective way to improve global diversification. Investors which, for a variety of reasons, may choose not to make substantial, or any, direct investment in companies whose securities will be held by the Small Company Series, may participate in the investment performance of these companies through ownership of a Series' stock. THE U.S. 6-10 SMALL COMPANY SERIES The U.S. 6-10 Small Company Series (the "U.S. 6-10 Series") will invest in a broad and diverse group of small U.S. companies having readily marketable securities. References in this registration statement to a "small U.S. company" mean a company whose securities are traded in the U.S. securities markets and whose market capitalization is not larger than the largest of those in the smaller one-half (deciles 6 through 10) of companies listed on the New York Stock Exchange ("NYSE"). The Series will purchase common stocks of companies whose shares are listed on the NYSE, the American Stock Exchange ("AMEX") and traded in the over-the-counter market ("OTC"). The 6-10 Series may invest in securities of foreign issuers which are traded in the U.S. securities markets, but such investments may not exceed 5% of the gross assets of the Series. It is the intention of the U.S. 6-10 Series to acquire a portion of the common stock of each eligible NYSE, AMEX and OTC company on a market capitalization weighted basis. In the future, the U.S. 6-10 Series may purchase common stocks of small U.S. companies which are listed on other U.S. -2- securities exchanges. In addition, the Series is authorized to invest in private placements of interest-bearing debentures that are convertible into common stock. 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 Series' net assets at the time of purchase. THE U.S. 9-10 SMALL COMPANY SERIES The U.S. 9-10 Small Company Series (the "U.S. 9-10 Series") will invest in a broad and diverse segment of small U.S. companies having readily marketable stocks, and whose market capitalization is not larger than the largest of those in the quintile of companies listed on the NYSE having the smallest market capitalizations (smallest 20%). The U.S. 9-10 Series will purchase stocks of companies whose share are listed on the NYSE or AMEX or traded OTC. The U.S. 9- 10 Series may invest in securities of foreign issuers which are traded in the U.S. securities markets, but such investments may not exceed 5% of the gross assets of the Series. There is some overlap in the companies in which the U.S. 9-10 Series and the U.S. 6-10 Series invest. It is the intention of the U.S. 9- 10 Series to acquire a portion of the stock of each eligible NYSE, AMEX and OTC company on a market capitalization weighted basis. (See INVESTMENT OBJECTIVES AND POLICIES - SMALL COMPANY SERIES - "Portfolio Structure.") In the future, the U.S. 9-10 Series may include stocks of small U.S. companies which are listed on other U.S. securities exchanges. The U.S. 9-10 Series is authorized to invest in privately placed convertible debentures and the value thereof together with the value of all other illiquid investments may not exceed 10% of the value of the Series' net assets at the time of purchase. THE JAPANESE SMALL COMPANY SERIES The Japanese Small Company Series (the "Japanese Series") will invest in a broad and diverse group of readily marketable stocks of Japanese small companies which are traded in the Japanese securities markets. Generally, reference in this registration statement to the term "Japanese small company" means a company located in Japan whose market capitalization is not larger than the largest of those in the smaller one-half (deciles 6 through 10) of companies whose securities are listed on the First Section of the Tokyo Stock Exchange ("TSE"). While the Japanese Series will invest primarily in the stocks of small companies which are listed on the TSE, it may acquire the stocks of Japanese small companies which are traded in other Japanese securities markets as well. It is the intention of the Japanese Series to acquire a portion of the stock of each of these companies on a market capitalization weighted basis. The Japanese Series also may invest up to 5% of its assets in convertible debentures issued by Japanese small companies. (See "INVESTMENT OBJECTIVES AND POLICIES - SMALL COMPANY SERIES -Portfolio Structure.") -3- THE UNITED KINGDOM SMALL COMPANY SERIES The United Kingdom Small Company Series (the "United Kingdom Series") will invest in a broad and diverse group of readily marketable stocks of United Kingdom small companies which are traded principally on the International Stock Exchange of the United Kingdom and the Republic of Ireland ("ISE"). Generally, reference in this registration statement to a "United Kingdom small company" means a company organized in the United Kingdom, with shares listed on the ISE whose market capitalization is not larger than the largest of those in the smaller one-half (deciles 6 through 10) of companies included in the Financial Times-Actuaries All Share Index ("FTA"). The FTA is an index of stocks traded on the ISE, which is similar to the S&P 500 Index, and is used by investment professionals in the United Kingdom for the same purposes as investment professionals in the U.S. use the S&P 500 Index. While the FTA typically will be used by the United Kingdom Series to determine the maximum market capitalization of any company whose stock the Series will purchase, acquisitions by the United Kingdom Series will not be limited to stocks which are included in the FTA. The United Kingdom Series will not, however, purchase shares of any investment trust or of any company whose market capitalization is less than $5,000,000. It is the intention of the United Kingdom Series to acquire a portion of the stock of each eligible company on a market capitalization basis. The United Kingdom Series also may invest up to 5% of its assets in convertible debentures issued by United Kingdom small companies. (See "INVESTMENT OBJECTIVES AND POLICIES - SMALL COMPANY SERIES - Portfolio Structure.") THE CONTINENTAL SMALL COMPANY SERIES The Continental Small Company Series (the "Continental Series") is authorized to invest in readily marketable stocks of a broad and diverse group of small companies organized under the laws of certain European countries. As of the date of this registration statement, the Continental Series may invest in small companies located in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Norway, Spain, Sweden, and Switzerland, whose shares are traded principally in securities markets located in those countries. Company size will be determined by the Advisor in a manner that will compare the market capitalizations of companies in all countries in which the Continental Series invests (i.e., on a European basis). The Advisor typically will use the appropriate country indices of the Financial Times-Actuaries World Index ("FTW") converted to a common currency, the United States dollar, and aggregated to define "small companies." The FTW consists of a series of country indices which contain generally the largest companies in the major industry sectors in proportion to their market capitalization whose shares are available for purchase by non-resident investors. Its constituents represent about 70% of the total market capitalization of the respective markets. -4- Generally, companies with publicly traded stock whose market capitalizations are not greater than the largest of those in the smallest 20% (9th and 10th deciles) of companies listed in the FTW as combined for the countries in which the Continental Series invests will be considered to be "small companies" and will be eligible for purchase by the Continental Series. While the Advisor typically will use the aggregated FTW indices to determine the maximum size of eligible portfolio companies, portfolio acquisitions will not be limited to stocks listed on the FTW for any country. The Continental Series does not intend, however, to purchase shares of any company whose market capitalization is less than the equivalent of $5,000,000. The Continental Series intends to acquire a portion of the stock of each eligible company on a market capitalization basis. The Continental Series also may invest up to 5% of its assets in convertible debentures issued by European small companies. The Continental Series has acquired the stocks of small companies located in Denmark, France, Germany, Italy, Switzerland, the Netherlands, Belgium, Sweden and Spain. When the Advisor determines that the investments of the Continental Series in the stocks of small companies in those countries are sufficiently diverse, the stocks of small companies located in other European countries may be acquired on a country-by-country basis. In addition, the Advisor may in its discretion either limit further investments in a particular country or divest the Continental Series of holdings in a particular country. (See "INVESTMENT OBJECTIVES AND POLICIES - SMALL COMPANY SERIES - Portfolio Structure.") THE PACIFIC RIM SMALL COMPANY SERIES The Pacific Rim Small Company Series (the "Pacific Rim Series") is authorized to invest in stocks of a broad and diverse group of small companies located in Australia, New Zealand and Asian countries whose shares are traded principally on the securities markets located in those countries. As of the date of this registration statement, the Pacific Rim Series may invest in small companies located in Australia, Hong Kong, Malaysia, New Zealand and Singapore. In the future, the Advisor may add small companies located in other Asian countries as securities markets in these countries become accessible. In addition, the Advisor may in its discretion either limit further investments in a particular country or divest the Pacific Rim Series of holdings in a particular country. Company size will be determined by the Advisor in a manner that will compare the market capitalizations of the companies in all countries in which the Pacific Rim Series invests (i.e., on a Pacific Rim basis). The Advisor typically will use the appropriate country indices of the FTW converted to a common currency and aggregated, to define "small companies." Generally, companies with publicly traded stock whose market capitalizations are not greater than the largest of those in the smallest 30% of companies (8th, 9th and 10th deciles) listed in the FTW as combined for the countries in which the Pacific Rim Series -5- invests will be considered to be "small companies" and will be eligible for purchase by the Pacific Rim Series. While the Advisor typically will use the aggregated FTW indices to determine the maximum size of eligible portfolio companies, portfolio acquisitions will not be limited to stocks listed on the FTW for any country. The Pacific Rim Series does not intend to purchase shares of any company whose market capitalization is less than $5,000,000. The Pacific Rim Series intends to acquire a portion of the stock of each eligible company on a market capitalization basis. The Pacific Rim Series also may invest up to 5% of its assets in convertible debentures issued by small companies located in the Pacific Rim. (See "INVESTMENT OBJECTIVES AND POLICIES - SMALL COMPANY PORTFOLIOS - Portfolio Structure.") PORTFOLIO STRUCTURE Each Small Company Series is structured by generally basing the amount of each security purchased on the issuer's relative market capitalization with a view to creating in each Series a reasonable reflection of the relative market capitalizations of its portfolio companies. The following discussion applies to the investment policies of the Small Company Series. The decision to include or exclude the shares of an issuer will be made on the basis of such issuer's relative market capitalization determined by reference to other companies located in the same country; except with respect to Continental and Pacific Rim Series, such determination shall be made by reference to other companies located in all countries in which the Series invest. Company size is measured in terms of local currencies in order to eliminate the effect of variations in currency exchange rates, except that Continental and Pacific Rim Series each will measure company size in terms of a common currency. Even though a company's stock may meet the applicable market capitalization criterion, it may not be purchased if (i) in the Advisor's judgment, the issuer is in extreme financial difficulty, (ii) the issuer is involved in a merger or consolidation or is the subject of an acquisition or (iii) a significant portion of the issuer's securities are closely held. Further, securities of real estate investment trusts will not be acquired (except as a part of a merger, consolidation or acquisition of assets). In addition, the Advisor may exclude the stock of a company that otherwise meets applicable market capitalization criterion if the Advisor determines in its best judgment that other conditions exist that make the purchase of such stock inappropriate. Deviation from strict market capitalization weighting also will occur because the Advisor intends to purchase round lots only. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held may be reduced from time to time from the level which strict adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of assets may be invested in interest-bearing obligations, such as money-market instruments -6- for this purpose, thereby causing further deviation from strict market capitalization weighting. Block purchases of eligible securities may be made 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 weighting would otherwise require. In addition, each Small Company Series may, in exchange for the issuance of shares, acquire securities eligible for purchase or otherwise represented in their portfolios at the time of the exchange. (See "In Kind Purchases in Item 7(a).") While such purchases and acquisitions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of assets. If securities must be sold in order to obtain funds to make redemption payments, they may be repurchased as additional cash becomes available. In most instances, however, management would anticipate selling securities which had appreciated sufficiently to be eligible for sale and, therefore, would not need to repurchase such securities. (See "INVESTMENT OBJECTIVES AND POLICIES - SMALL COMPANY SERIES - Portfolio Transactions.") Changes in the composition and relative ranking (in terms of market capitalization) of the stocks which are eligible for purchase take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On a not less than semi-annual basis, the Advisor will determine the market capitalization of the largest small company eligible for investment. Common stocks whose market capitalizations are not greater than such company will be purchased. Additional investments generally will not be made in securities which have appreciated in value sufficiently to be excluded from the Advisor's then current market capitalization limit for eligible portfolio securities. This may result in further deviation from strict market capitalization weighting and such deviation could be substantial if a significant amount of holdings increase in value sufficiently to be excluded from the limit for eligible securities, but not by a sufficient amount to warrant their sale. (See "INVESTMENT OBJECTIVES AND POLICIES -SMALL COMPANY PORTFOLIOS - Portfolio Transactions.") A further deviation from market capitalization weighting may occur if a Series invests a portion of its assets in convertible debentures. It is management's belief that the stocks of small companies offer, over a long term, a prudent opportunity for capital appreciation, but, at the same time, selecting a limited number of such issues for investment involves greater risk than investing in a large number of them. Generally, current income is not sought 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 selected for investment do pay dividends. It is anticipated, therefore, that dividend income will be received. Also, each Small Company Series may lend -7- securities to qualified brokers, dealers, banks and other financial institutions for the purpose of realizing additional income. (See "Securities Loans" under Item 4(a)(ii).) PORTFOLIO TRANSACTIONS On a periodic basis, the Advisor will review the holdings of each of the Small Company Series and determine which, at the time of such review, are no longer considered small U.S., Japanese, United Kingdom, European or Pacific Rim companies. The present policy of the Advisor (except with respect to the U.S. 6-10 Series) is to consider portfolio securities for sale when they have appreciated sufficiently to rank, on a market capitalization basis, more than one full decile higher than the company with the largest market capitalization that is eligible for purchase by the particular Small Company Series as determined periodically by the Advisor. As of the date of this registration statement, the Advisor has established the following policy with respect to the U.S. 6-10 Series: securities held by the Series which have appreciated in value will be considered for sale when the market capitalization of the issuer has increased sufficiently to rank it in the largest 50% (deciles 5 through 1) based on market capitalization of securities listed on the NYSE. The Advisor may, from time to time, revise such policies if, in the opinion of the Advisor, such revision is necessary to maintain appropriate market capitalization weighting. Securities which have depreciated in value since their acquisition will not be sold solely because prospects for the issuer are not considered attractive, or due to an expected or realized decline in securities prices in general. Securities may be disposed of, however, at any time when, in the Advisor's judgment, circumstances, such as (but not limited to) tender offers, mergers and similar transactions, or bids made for block purchases at opportune prices, warrant their sale. Generally, securities will not be sold to realize short-term profits, but when circumstances warrant, they may be sold without regard to the length of time held. Generally, securities will be purchased with the expectation that they will be held for longer than one year and will be held until such time as they are no longer considered an appropriate holding in light of the policy of maintaining portfolios of companies with small market capitalizations. THE U.S. LARGE COMPANY SERIES The U.S. Large Company Series seeks, as its investment objective, to approximate the investment performance of the Standard & Poor's 500 Composite Stock Index (the "S&P 500 Index"), both in terms of the price of the Series' shares and its total investment return. The Series intends to invest in all of the stocks that comprise the S&P 500 Index in approximately the same proportions as they are represented in the Index. The amount of each stock purchased for the Series, therefore, will be based on the issuer's respective market capitalization. The S&P 500 Index is comprised of a broad and diverse group of stocks most of which -8- are traded on the NYSE. Generally, these are the U.S. stocks with the largest market capitalizations and, as a group, they represent approximately 70% of the total market capitalization of all publicly traded U.S. stocks. Under normal market conditions, at least 95% of the Series' assets will be invested in the stocks that comprise the S&P 500 Index. Ordinarily, portfolio securities will not be sold except to reflect additions or deletions of the stocks that comprise the S&P 500 Index, including mergers, reorganizations and similar transactions and, to the extent necessary, to provide cash to pay redemptions of the Series' shares. The Series may lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. For information concerning Standard & Poor's Rating Group, a Division of The McGraw-Hill Companies ("S&P") and disclaimers of S&P with respect to the Series, see "STANDARD & POOR'S INFORMATION AND DISCLAIMERS," below. THE ENHANCED U.S. LARGE COMPANY SERIES The Enhanced U.S. Large Company Series seeks, as its investment objective, to achieve a total return which exceeds the total return performance of the S&P 500 Index. The Series may invest in all of the stocks represented in the S&P 500 Index, options on stock indices, stock index futures, options on stock index futures, swap agreements on stock indices and, to the extent permissible pursuant to the Investment Company Act of 1940, shares of investment companies that invest in stock indices. The S&P 500 Index is comprised of a broad and diverse group of stocks most of which are traded on the NYSE. Generally, these are the U.S. stocks with the largest market capitalizations and, as a group, they represent approximately 70% of the total market capitalization of all publicly traded U.S. stocks. The Series may, from time to time, also invest in options on stock indices, stock index futures, options on stock index futures and swap agreements based on indices other than, but similar to, the S&P 500 Index (such instruments whether or not based on the S&P 500 Index hereinafter collectively referred to as "Index Derivatives"). The Series may invest all of its assets in Index Derivatives (See Item 4(c) "Risk Factors - All Series"). Assets of the Series not invested in S&P 500 stocks or Index Derivatives may be invested in the same types of short-term fixed income obligations as may be acquired by The DFA Two-Year Global Fixed Income Series and, to the extent allowed by the Investment Company Act of 1940, shares of money market mutual funds (collectively, "Fixed Income Investments"). (See "INVESTMENT OBJECTIVES AND POLICIES - FIXED INCOME SERIES - Description of Investments.") Investments in the securities of other investment companies will involve duplication of certain fees and expenses. The percentage of assets of the Series that will be invested at any one time in S&P 500 Index stocks, Index Derivatives and Fixed Income Investments may vary from time to time, within the discretion of the Advisor and according to restraints imposed by -9- the Investment Company Act of 1940. The Series will maintain a segregated account consisting of liquid assets (or, as permitted by applicable regulation, enter into offsetting positions) to cover its open positions in Index Derivatives to avoid leveraging of the Series. The Series will enter into positions in futures and options on futures only to the extent such positions are permissible with respect to applicable rules of the Commodity Futures Trading Commission without registering the Series or the Trust as a commodities pool operator. In addition, the Series may not be able to utilize Index Derivatives to the extent otherwise permissible or desirable because of constraints imposed by the Internal Revenue Code or by unanticipated illiquidity in the marketplace for such instruments. For more information about Index Derivatives, see Item 4(c) "Risk Factors - All Series." It is the position of the Securities and Exchange Commission that over-the- counter options are illiquid. Accordingly, the Series will invest in such options only to the extent consistent with its 15% limit on investment in illiquid securities. STANDARD AND POOR'S - INFORMATION AND DISCLAIMERS Neither The U.S. Large Company Series or The Enhanced U.S. Large Company Series (together, the "Large Company Series") are sponsored, endorsed, sold or promoted by S&P. S&P makes no representation or warranty, express or implied, to the owners of the Large Company Series or any member of the public regarding the advisability of investing in securities generally or in the Large Company Series particularly or the ability of the S&P 500 Index to track general stock market performance. S&P's only relationship to the Large Company Series is the licensing of certain trademarks and trade names of S&P and of the S&P 500 Index which is determined, composed and calculated by S&P without regard to the Large Company Series. S&P has no obligation to take the needs of the Large Company Series or their respective owners into consideration in determining, composing or calculating the S&P 500 Index. S&P is not responsible for and has not participated in the determination of the prices and amount of the Large Company Series or in the issuance or sale of the Large Company Series or in the determination or calculation of the equation by which the Large Company Series are to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Large Company Series. S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN, AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH -10- RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. INVESTMENT OBJECTIVES AND POLICIES - FIXED INCOME SERIES THE DFA ONE-YEAR FIXED INCOME SERIES The investment objective of The DFA One-Year Fixed Income Series is to achieve a stable real value (i.e. a return in excess of the rate of inflation) of invested capital with a minimum of risk. The Series will pursue its objective by investing its assets 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. Generally, the Series will acquire obligations which mature within one year from the date of settlement, but substantial investments may be made in obligations maturing within two years from the date of settlement when greater returns are available. It is the Series' policy that the weighted average length of maturity of investments will not exceed one year. The 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" in Item 4(a)(ii).) THE DFA TWO-YEAR GLOBAL FIXED INCOME SERIES The investment objective of The DFA Two-Year Global Fixed Income Series is to maximize total returns consistent with preservation of capital. The Series will invest in obligations issued or guaranteed by the U.S. and foreign governments, their agencies and instrumentalities, corporate debt obligations, bank obligations, commercial paper, repurchase agreements, obligations of other domestic and foreign issuers having quality ratings meeting the minimum standards described in "Description of Investments," securities of domestic or foreign issuers denominated in U.S. dollars but not trading in the United States, and obligations of supranational organizations, such as the World Bank, the European Investment Bank, European Economic Community and European Coal and Steel Community. At the present time, the Advisor expects that most investments will be made in the obligations of issuers which are in developed countries, such as those countries which are members of the Organization of Economic Cooperations and Development ("OECD"). However, in the future, the Advisor anticipates investing in issuers located in other countries as well. Under normal market conditions, the Series -11- will invest at least 65% of the value of its assets in issuers organized or having a majority of their assets in, or deriving a majority of their operating income in, at least three different countries, one of which may be the United States. The Series will acquire obligations which mature within two years from the date of settlement. Because many of the Series' investments will be denominated in foreign currencies, the Series will also enter into forward foreign currency contracts solely for the purpose of hedging against fluctuations in currency exchange rates. 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" in Item 4(a)(ii).) DESCRIPTION OF INVESTMENTS The following is a description of the categories of investments which may be acquired by The DFA One-Year Fixed Income Series and Two-Year Global Fixed Income Series (the "Fixed Income Series").
Permissible Categories: ----------- The DFA One-Year Fixed Income Series 1-6, 8 The DFA Two-Year Global Fixed Income Series 1-10
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 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 -12- certificates of deposit) and bankers' acceptances. Bank certificates of deposit will only be acquired from banks having 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 purchase 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. 7. FOREIGN GOVERNMENT AND AGENCY OBLIGATIONS - Bills, notes, bonds and other debt securities issued or guaranteed by foreign governments, or their agencies and instrumentalities. 8. 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. 9. FOREIGN ISSUER OBLIGATIONS - Debt securities of non-U.S. issuers rated AA or better by S&P or Aa2 or better by Moody's. 10. EURODOLLAR OBLIGATIONS - Debt securities of domestic or foreign issuers denominated in U.S. dollars but not trading in the United States. Investors should be aware that the net asset values of the Fixed Income Series may change as general levels of interest rates fluctuate. When interest rates increase, the value of a portfolio of fixed-income securities can be expected to decline. Conversely, when interest rates decline, the value of a portfolio of fixed-income securities can be expected to increase. INVESTMENTS IN THE BANKING INDUSTRY The DFA One-Year Fixed Income and Two-Year Global Fixed Income Series will invest more than 25% of their total respective assets in obligations of U.S. and/or foreign banks and bank holding companies when the yield to maturity on these investments exceeds -13- 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 each Series and can only be changed by a vote of the shareholders of each Series, banks and bank holding companies are considered to constitute a single industry, the banking industry. When investment in such obligations exceeds 25% of the total net assets of any of these Series, such Series will be considered to be concentrating their investments in the banking industry. As of the date of this registration statement, The DFA One-Year Fixed Income Series and the Two-Year Global Fixed Income Series are concentrating their investments in this industry. The types of bank and bank holding company obligations in which The DFA One-Year Fixed Income and Two-Year Global 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 each Series' established credit rating criteria as stated under "Description of Investments." In addition, both Series are authorized to invest more than 25% of their total assets in Treasury bonds, bills and notes and obligations of federal agencies and instrumentalities. PORTFOLIO STRATEGY The DFA One-Year Fixed Income and Two-Year Global 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 on investment 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 Series will be chosen with a view to maximizing anticipated monthly returns, net of trading costs. The Fixed Income 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 Global Fixed Income Series could be 0% to 200%. While the Fixed Income 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 Fixed Income Series will be -14- increased as a result of portfolio transactions after taking into account the cost of trading. It is anticipated that securities will be acquired in the secondary markets for short term instruments. THE U.S. LARGE CAP VALUE SERIES, THE U.S. 4-10 VALUE SERIES AND THE U.S. 6-10 VALUE SERIES The investment objective of The U.S. Large Cap Value Series (the "Large Cap Value Series"), U.S. 4-10 Value Series (the "4-10 Value Series") and U.S. 6-10 Value Series (the "6-10 Value Series") (collectively the "U.S. Value Series") is to achieve long-term capital appreciation. Ordinarily, each Series will invest at least 80% of its assets in a broad and diverse group of readily marketable common stocks of U.S. companies which the Advisor believes to be value stocks at the time of purchase. Securities are considered value stocks primarily because a company's shares have a high book value in relation to their market value (a "book to market ratio"). Generally, 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. The Large Cap Value Series will purchase common stocks of companies whose market capitalizations equal or exceed that of the company having the median market capitalization of companies whose shares are listed on the NYSE, and the 6-10 Value Series will purchase common stocks of companies whose market capitalizations are smaller than such company. The 4-10 Value Series will purchase common stocks of companies whose market capitalizations are equal to the market capitalizations of companies in the 4th through 10th deciles of those companies listed on the NYSE. With respect to the 9th and 10th deciles, the 4- 10 Value Series will only purchase such common stocks when it is advantageous to do so through block trades with the Advisor's other accounts. In measuring value, the Advisor may consider additional factors such as cash flow, economic conditions and developments in the issuer's industry. 4-10 VALUE SERIES. Within approximately six months from the date of this registration statement, the 4-10 Value Series may acquire between $300-500 million of securities in exchange for shares of the Series. These securities would be contributed by one or more institutional investors invested in a group trust advised by the Advisor using an investment strategy identical to the investment guidelines for this Series. Each investor would deliver its pro rata share of securities from the group trust in exchange for shares of the Series. Management anticipates that approximately 10% of the securities contributed would be marked for sale by the Series, thus incurring brokerage fees. Nevertheless, the Series would not incur brokerage commissions in connection with acquiring those contributed securities which are retained by the Series. -15- PORTFOLIO STRUCTURE. Each Series will operate as a "diversified" investment company. Further, no Series will invest more than 25% of its total assets in securities of companies in a single industry. The Series may invest a portion of their assets, ordinarily not more than 20%, in high quality, highly liquid fixed income securities such as money market instruments and short-term repurchase agreements. The Series will purchase securities that are listed on the principal U.S. national securities exchanges and traded OTC. Each of the U.S. 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 each 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 weighting also will occur in the Series because they intend to purchase round lots only and, with respect to the 4-10 Value Series, because it intends to purchase common stocks in the 9th and 10th deciles only through block trades, as described above. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held by a Series may be reduced, from time to time, from the level which strict adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of a Series' assets may be invested in interest-bearing obligations, as described above, thereby causing further deviation from strict market capitalization weighting. The 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 weighting would otherwise require. In addition, the Series may acquire securities eligible for purchase or otherwise represented in their portfolios at the time of the exchange in exchange for the issuance of their shares. (See "In Kind Purchases" in Item 7(a).) While such purchases and acquisitions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of a Series. On not less than a semi-annual basis, for each Series the Advisor will calculate the book to market ratio necessary to determine those companies whose stocks may be eligible for investment. PORTFOLIO TRANSACTIONS. The Series do 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 above under "Portfolio Structure," investments will be made in virtually all eligible securities on a market capitalization weighted basis. -16- Generally, securities will be purchased with the expectation that they will be held for longer than one year. 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 Series, and the 4-10 and 6-10 Value Series each may sell portfolio securities when the issuer's market capitalization increases to a level that substantially exceeds that of the issuer with the largest market capitalization which is then eligible for investment by the Series. However, securities may be sold at any time when, in the Advisor's judgment, circumstances warrant their sale. 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. The 4-10 and 6-10 Value Series may also sell portfolio securities in the same circumstances, however, each Series anticipates generally to retain securities of issuers with relatively smaller market capitalizations for longer periods, despite any decrease in the issuer's book to market ratio. THE DFA INTERNATIONAL VALUE SERIES The investment objective of The DFA International Value Series is to achieve long-term capital appreciation. The Series operates as a diversified investment company and seeks to achieve its objective by investing in the stocks of large non-U.S. companies that the Advisor believes to be value stocks at the time of purchase. Securities are considered value stocks primarily because a company's shares have a high book value in relation to their market value (a "book to market ratio"). In measuring value, the Advisor may consider additional factors such as cash flow, economic conditions and developments in the issuer's industry. Generally, the shares of a company in any given country 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 in that country with the highest positive book to market ratios whose shares are listed on a major exchange, and, except as described below, will be considered eligible for investment. The Series intends to invest in the stocks of large companies in countries with developed markets. As of the date of this registration statement, the Series may invest in the stocks of large companies in Australia, Belgium, France, Germany, Hong Kong, Italy, Japan, Malaysia, the Netherlands, New Zealand, Singapore, Spain, Sweden, Switzerland, the United Kingdom, Denmark and Norway. As the Series' asset growth permits, it may invest in the stocks of large companies in other developed markets, including Austria, Finland and Ireland. Under normal market conditions, at least 65% of the Series' assets will be invested in companies organized or having a -17- majority of their assets in or deriving a majority of their operating income in at least three non-U.S. countries and no more than 40% of the Series' assets will be invested in such companies in any one country. The Series reserves the right to invest in index futures contracts to commit funds awaiting investment or to maintain liquidity. Such investments entail certain risks. (See Item 4(c).) As of the date of this registration statement, the Series intends to invest in companies having at least $800 million of market capitalization, and the Series will be approximately market capitalization weighted. The Advisor may reset such floor from time to time to reflect changing market conditions. In determining market capitalization weights, the Advisor, using its best judgment, will seek to eliminate the effect of cross holdings on the individual country weights. As a result, the weighting of certain countries in the Series may vary from their weighting in international indices such as those published by The Financial Times, Morgan Stanley Capital International or Salomon/Russell. The Advisor, however, will not attempt to account for cross holding within the same country. The Advisor may exclude the stock of a company that otherwise meets the applicable criteria if the Advisor determines in its best judgment that other conditions exist that make the purchase of such stock for the Series inappropriate. Deviation from market capitalization weighting also will occur because the Series intends to purchase round lots only. Furthermore, in order to retain sufficient liquidity, the relative amount of any security held by the Series may be reduced from time to time from the level which adherence to market capitalization weighting would otherwise require. A portion, but generally not in excess of 20%, of the Series' assets may be invested in interest-bearing obligations, such as money-market instruments, thereby causing further deviation from market capitalization weighting. Such investments would be made on a temporary basis pending investment in equity securities pursuant to the Series' investment objective. The 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, adherence to the policy of market capitalization weighting would otherwise require. In addition, the Series may acquire securities eligible for purchase or otherwise represented in its portfolio at the time of the exchange in exchange for the issuance of its shares. (See "In Kind Purchases" in Item 7(a).) While such transactions might cause a temporary deviation from market capitalization weighting, they would ordinarily be made in anticipation of further growth of the assets of the Series. 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 Series take place with every trade when the securities markets are open for trading due, primarily, to price fluctuations of such securities. On a -18- periodic basis, the Advisor will prepare a list of eligible large companies with high book to market ratios whose stock are eligible for investment; such list will be revised not less than semi-annually. Only common stocks whose market capitalizations are not less than such minimum will be purchased by the Series. Additional investments will not be made in securities 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 weighting and such deviation could be substantial if a significant amount of the 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. It is management's belief that the value stocks of large companies 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 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 Series. The 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 Series do pay dividends. It is anticipated, therefore, that the Series will receive dividend income. The Series may lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of realizing additional income. (See "Securities Loans" below.) Securities which have depreciated in value since their acquisition will not be sold by the Series solely because prospects for the issuer are not considered attractive, or due to an expected or realized decline in securities prices in general. Securities may be disposed of, however, at any time when, in the Advisor's judgment, circumstances warrant their sale, such as tender offers, mergers and similar transactions, or bids made for block purchases at opportune prices. Generally, securities will not be sold to realize short-term profits, but when circumstances warrant, they may be sold without regard to the length of time held. Generally, securities will be purchased with the expectation that they will be held for longer than one year, and will be held until such time as they are no longer considered an appropriate holding in light of the policy of maintaining a portfolio of companies with large market capitalizations and high book to market ratios. In addition to the policies discussed in response to this Item 4(a), investment limitations have been adopted by each Series and are noted in response to Item 13(b) of Part B. -19- THE EMERGING MARKETS SERIES AND THE EMERGING MARKETS SMALL CAP SERIES The investment objective of both The Emerging Markets Series and The Emerging Markets Small Cap Series is to achieve long-term capital appreciation. Each Series operates as a diversified investment company and seeks to achieve its investment objective by investing in emerging markets designated by the Investment Committee of the Advisor ("Approved Markets"). Each Series invests its assets primarily in Approved Market equity securities listed on bona fide securities exchanges or actively traded on OTC markets. These exchanges or OTC markets may be either within or outside the issuer's domicile country, and the securities may be listed or traded in the form of International Depository Receipts ("IDRs") or American Depository Receipts ("ADRs"). SERIES' CHARACTERISTICS AND POLICIES. The Emerging Markets Series will seek a broad market coverage of larger companies within each Approved Market. This Series will attempt to own shares of companies whose aggregate overall share of the Approved Market's total public market capitalization is at least in the upper 40% of such capitalization, and can be as large as 75%. The Emerging Markets Series may limit the market coverage in the smaller emerging markets in order to limit purchases of small market capitalization companies. The Emerging Markets Small Cap Series will seek a broad market coverage of smaller companies within each Approved Market. This Series will attempt to own shares of companies whose market capitalization is less than $1.5 billion. On a periodic basis, the Advisor will review the holdings of the Emerging Markets Small Cap Series and determine which, at the time of such review, are no longer considered small emerging market companies. The present policy is to consider portfolio securities for sale when they have appreciated sufficiently to rank, on a market capitalization basis, 100% larger than the largest market capitalization that is eligible for purchase as set by the Advisor for that Approved Market. Each Series may not invest in all such companies or Approved Markets described above or achieve approximate market weights, for reasons which include constraints imposed within Approved Markets (E.G., restrictions on purchases by foreigners), and each Series' policy not to invest more than 25% of its assets in any one industry. Under normal market conditions, the Emerging Markets Series will invest at least 65% of its assets in Approved Market securities, and the Emerging Markets Small Cap Series will invest at least 65% of its assets in small company (as defined above) Approved Market Securities. Approved Market securities are defined to be (a) securities of companies organized in a country in an Approved Market or for which the principal trading market is in an Approved Market, (b) securities issued or guaranteed by the government of an Approved Market country, its agencies or instrumentalities, or the central bank of such country, (c) -20- securities denominated in an Approved Market currency issued by companies to finance operations in Approved Markets, (d) securities of companies that derive at least 50% of their revenues primarily from either goods or services produced in Approved Markets or sales made in Approved Markets and (e) Approved Markets equity securities in the form of depositary shares. Securities of Approved Markets may include securities of companies that have characteristics and business relationships common to companies in other countries. As a result, the value of the securities of such companies may reflect economic and market forces in such other countries as well as in the Approved Markets. The Advisor, however, will select only those companies which, in its view, have sufficiently strong exposure to economic and market forces in Approved Markets such that their value will tend to reflect developments in Approved Markets to a greater extent than developments in other regions. For example, the Advisor may invest in companies organized and located in the United States or other countries outside of Approved Markets, including companies having their entire production facilities outside of Approved Markets, when such companies meet the definition of Approved Markets securities so long as the Advisor believes at the time of investment that the value of the company's securities will reflect principally conditions in Approved Markets. The Advisor defines the term "emerging market" to mean a country which is considered to be an emerging market by the International Finance Corporation. Approved emerging markets may not include all such emerging markets. In determining whether to approve markets for investment, the Board of Trustees will take into account, among other things, market liquidity, investor information, government regulation, including fiscal and foreign exchange repatriation rules and the availability of other access to these markets by the investors of each of the Series. As of the date of this registration statement, the following countries are designated as Approved Markets: Argentina, Brazil, Chile, Indonesia, Israel, Malaysia, Mexico, Philippines, Portugal, South Korea, Thailand and Turkey. Countries that may be approved in the future include but are not limited to Colombia, Czech Republic, Greece, Hungary, India, Jordan, Nigeria, Pakistan, Poland, Republic of China (Taiwan), Republic of South Africa, Venezuela and Zimbabwe. Each Series may invest up to 35% of its assets in securities of issuers that are not Approved Markets securities, but whose issuers the Advisor believes derive a substantial proportion, but less than 50%, of their total revenues from either goods and services produced in, or sales made in, Approved Markets. Pending the investment of new capital in Approved Market equity securities, each Series will typically invest in money market instruments or other highly liquid debt instruments denominated in U.S. dollars (including, without limitation, repurchase agreements). In addition, each Series may, for liquidity, or for temporary defensive purposes during periods in which market or -21- economic or political conditions warrant, purchase highly liquid debt instruments or hold freely convertible currencies, although neither Series expects the aggregate of all such amounts to exceed 10% of its net assets under normal circumstances. Both Series also may invest in shares of other investment companies that invest in one or more Approved Markets, although they intend to do so only where access to those markets is otherwise significantly limited. The Series may also invest in money market mutual funds for temporary cash management purposes. The Investment Company Act of 1940 limits investment by a Series in shares of other investment companies as follows: (1) no more than 10% of the value of a Series' total assets may be invested in shares of other investment companies; (2) a Series may not own securities issued by an investment company having an aggregate value in excess of 5% of the value of the total assets of the Series; and (3) a Series may not own more than 3% of the total outstanding voting stock of an investment company. If either Series invests in another investment company, the Series' shareholders will bear not only their proportionate share of expenses of the Series (including operating expenses and the fees of the Advisor), but also will bear indirectly similar expenses of the underlying investment company. In some Approved Markets, it will be necessary or advisable for a Series to establish a wholly-owned subsidiary or a trust for the purpose of investing in the local markets. Each Series also may invest up to 5% of its assets in convertible debentures issued by companies organized in Approved Markets. PORTFOLIO STRUCTURE. Each Series' policy of seeking broad market diversification means that the Advisor will not utilize "fundamental" securities research techniques in identifying securities selections. The decision to include or exclude the shares of an issuer will be made primarily on the basis of such issuer's relative market capitalization determined by reference to other companies located in the same country. Company size is measured in terms of reference to other companies located in the same country and in terms of local currencies in order to eliminate the effect of variations in currency exchange rates. Even though a company's stock may meet the applicable market capitalization criterion, it may not be included in a Series for one or more of a number of reasons. For example, in the Advisor's judgment, the issuer may be considered in extreme financial difficulty, a material portion of its securities may be closely held and not likely available to support market liquidity, or the issuer may be a "passive foreign investment company" (as defined in the Internal Revenue Code of 1986, as amended). To this extent, there will be the exercise of discretion and consideration by the Advisor which would not be present in the management of a portfolio seeking to represent an established index of broadly traded domestic securities (such as the S&P 500 Index). The Advisor will also exercise discretion in determining the allocation of capital as between Approved Markets. It is management's belief that equity investments offer, over a long term, a prudent opportunity for capital appreciation, but, -22- at the same time, selecting a limited number of such issues for inclusion in a Series involves greater risk than including a large number of them. Neither Series seeks 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 a Series do pay dividends. It is anticipated, therefore, that both Series will receive dividend income. Generally, securities will be purchased with the expectation that they will be held for longer than one year. However, securities may be disposed of at any time when, in the Advisor's judgment, circumstances warrant their sale. Generally, securities will not be sold to realize short-term profits, but when circumstances warrant, they may be sold without regard to the length of time held. The portfolio turnover rate of the Emerging Markets Small Cap Series ordinarily is anticipated to be low, and is not expected to exceed 20% per year. For the purpose of converting U.S. dollars to another currency, or vice versa, or converting one foreign currency to another foreign currency, each Series may enter into forward foreign exchange contracts. In addition, to hedge against changes in the relative value of foreign currencies, each Series may purchase foreign currency futures contracts. A Series will only enter into such a futures contract if it is expected that the Series will be able readily to close out such contract. There can, however, be no assurance that it will be able in any particular case to do so, in which case the Series may suffer a loss. SECURITIES LOANS Each Series of the Trust may lend securities to qualified brokers, dealers, banks and other financial institutions for the purpose of earning additional income. While a Series may earn additional income from lending securities, such activity is incidental to the investment objective of a Series. 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 and 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 Trust could experience delay in recovering the loaned securities. Management believes that this risk can be controlled through careful monitoring procedures. -23- ITEM 4(b) OTHER INVESTMENT PRACTICES The U.S. 6-10 Small Company Series and U.S. 9-10 Small Company Series may invest in securities of foreign issuers that are traded in the U.S. securities markets, but such investments may not exceed 5% of the gross assets of the Series. The U.S. Large Company Series may invest generally not more than 5% of its net assets in the same types of short-term fixed income obligations as may be acquired by The DFA One-Year Fixed Income Series, in order to maintain liquidity or to invest temporarily uncommitted cash balances. (See "The DFA One-Year Fixed Income Series" in Item 4(a)(ii).) The U.S. Large Company Series, the U.S. Value Series and The DFA International Value Series may acquire stock index futures contracts and options thereon in order to commit funds awaiting investment in stocks or maintain cash liquidity. To the extent that such Series invest in futures contracts and options thereon for other than bona fide hedging purposes, no Series will enter into such transactions if, immediately thereafter, the sum of the amount of 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%. Such investments entail certain risks. (See "Risk Factors - All Series" in Item 4(c).) ITEM 4(c) RISK FACTORS - ALL SERIES SMALL COMPANY SECURITIES Typically, securities of small companies are less liquid than securities of large companies. Recognizing this factor, management will endeavor to effect securities transactions in a manner to avoid causing significant price fluctuations in the market for these securities. In addition, the prices of small company securities may fluctuate more sharply than those of other securities. FOREIGN SECURITIES The Japanese Small Company, United Kingdom Small Company, Continental Small Company, Pacific Rim Small Company, Enhanced U.S. Large Company, DFA One-Year Fixed Income, Two-Year Global Fixed Income and DFA International Value Series invest 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 -24- held by the Series. (Also see "Foreign Currencies and Related Transactions" below) 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 Enhanced U.S. Large Company Series, DFA One-Year Fixed Income and Two-Year Global Fixed Income Series also may 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. Also, there can be no assurance that any of the Series will achieve its investment objective. The economies of many countries in which The Japanese Small Company, United Kingdom Small Company, Continental Small Company, Pacific Rim Small Company, Enhanced U.S. Large Company, DFA One-Year Fixed Income, Two-Year Global Fixed Income and DFA International Value Series invest are not as diverse or resilient as the U.S. economy, and have significantly less financial resources. Some countries are more heavily dependent on international trade and may be affected to a greater extent by protectionist measurers of their governments, or dependent upon a relatively limited number of commodities and, thus, sensitive to changes in world prices for these commodities. In many foreign countries, stock markets are more variable than U.S. markets for two reasons. Contemporaneous declines in both (i) foreign securities prices in local currencies and (ii) the value of local currencies in relation to the U.S. dollar can have a significant negative impact on the net asset value of a Series that holds the foreign securities. The next asset value of the Series is denominated in U.S. dollars, and therefore, declines in market price of both the foreign securities held by a Series and the foreign currency in which those securities are denominated will be reflected in the net asset value of the Series' shares. INVESTING IN EMERGING MARKETS The investments of The Emerging Markets Series and The Emerging Markets Small Cap Series involve risks that are in addition to the usual risks of investing in developed foreign markets. A number of emerging securities markets restrict, to varying degrees, foreign investment in stocks. Repatriation of investment income, capital and the proceeds of sales by foreign investors may require governmental registration and/or approval in some emerging countries. In some jurisdictions, such restrictions and the imposition of taxes are intended to discourage shorter- rather than longer-term holdings. While The Emerging Markets Series and The Emerging Markets Small Cap Series will invest only in markets where these restrictions are considered acceptable to the Advisor, new or additional repatriation restrictions might be imposed subsequent to a Series' investment. If such restrictions were imposed subsequent to investment in the securities of a particular country, a Series might, among other things, discontinue the purchasing of -25- securities in that country. Such restrictions will be considered in relation to the Series' liquidity needs and other factors and may make it particularly difficult to establish the fair market value of particular securities from time to time. The valuation of securities held by a Series is the responsibility of the Board of Trustees, acting in good faith and with advice from the Advisor. (See Item 7(b).) Further, some attractive equity securities may not be available to the Series because foreign shareholders hold the maximum amount permissible under current laws. Relative to the U.S. and to larger non-U.S. markets, many of the emerging securities markets in which The Emerging Markets Series and The Emerging Markets Small Cap Series may invest are relatively small, have low trading volumes, suffer periods of illiquidity and are characterized by significant price volatility. Such factors may be even more pronounced in jurisdictions where securities ownership is divided into separate classes for domestic and non- domestic owners. These risks are heightened for investments in small company emerging markets securities. In addition, many emerging markets, including most Latin American countries, have experienced substantial, and, in some periods, extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had and may continue to have very negative effects on the economies and securities markets of certain countries. In an attempt to control inflation, wage and price controls have been imposed at times in certain countries. Certain emerging markets have recently transitioned, or are in the process of transitioning, from centrally controlled to market-based economies. There can be no assurance that such transitions will be successful. Brokerage commissions, custodial services and other costs relating to investment in foreign markets generally are more expensive than in the United States; this is particularly true with respect to emerging markets. Such markets have different settlement and clearance procedures. In certain markets there have been times when settlements do not keep pace with the volume of securities transactions, making it difficult to conduct such transactions. The inability of a Series to make intended securities purchases due to settlement problems could cause the Series to miss investment opportunities. Inability to dispose of a portfolio security caused by settlement problems could result either in losses to a Series due to subsequent declines in value of the portfolio security or, if a Series has entered into a contract to sell the security, could result in possible liability to the purchaser. The risk also exists that an emergency situation may arise in one or more emerging markets as a result of which trading of securities may cease or may be substantially curtailed and prices for a Series' portfolio securities in such markets may not be readily available. The Series' portfolio securities in the -26- affected markets will be valued at fair value determined in good faith by or under the direction of the Board of Trustees. Government involvement in the private sector varies in degrees among the emerging securities markets contemplated for investment by the Series. Such involvement may, in some cases, include government ownership of companies in certain commercial business sectors, wage and price controls or imposition of trade barriers and other protectionist measures. With respect to any developing country, there is no guarantee that some future economic or political crisis will not lead to price controls, forced mergers of companies, expropriation, the creation of government monopolies, or other measures which could be detrimental to the investments of a Series. Taxation of dividends and capital gains received by non-residents varies among countries with emerging markets and, in some cases, is high in relation to comparable U.S. rates. Particular tax structures may have the intended or incidental effect of encouraging long holding periods for particular securities and/or the reinvestment of earnings and sales proceeds in the same jurisdiction. In addition, emerging market jurisdictions typically have less well-defined tax laws and procedures than is the case in the United States, and such laws may permit retroactive taxation so that The Emerging Markets Series and The Emerging Markets Small Cap Series could in the future become subject to local tax liability that it had not reasonably anticipated in conducting its investment activities or valuing its assets. FOREIGN CURRENCIES AND RELATED TRANSACTIONS Investments of the Japanese, United Kingdom, Continental and Pacific Rim Series, The DFA International Value Series, The Emerging Markets Series, The Emerging Markets Small Cap Series, many of the investments of The DFA Two-Year Global Fixed Income Series and, to a lesser extent, the investments of The Enhanced U.S. Large Company Series, will be denominated in foreign currencies. Changes in the relative values of foreign currencies and the U.S. dollar, therefore, will affect the value of investments of the Series. The Series may purchase foreign currency futures contracts and options in order to hedge against changes in the level of foreign currency exchange rates. Such contracts involve an agreement to purchase or sell a specific currency at a future date at a price set in the contract and enable the Series to protect against losses resulting from adverse changes in the relationship between the U.S. dollar and foreign currencies occurring between the trade and settlement dates of Series securities transactions, but they also tend to limit the potential gains that might result from a positive change in such currency relationships. Gains and losses on investments in futures and options thereon depend on the direction of securities prices, interest rates and other economic factors. -27- BORROWING Each Series, except the U.S. 9-10 Series, Japanese Series and The DFA One-Year Fixed Income Series, has reserved the right to borrow amounts not exceeding 33% of its net assets for the purposes of making redemption payments. When advantageous opportunities to do so exist, the Series may purchase securities when borrowings exceed 5% of the value of the Series' net assets. Such purchases can be considered to be "leveraging," and in such circumstances, the net asset value of the Series may increase or decrease at a greater rate than would be the case if the Series had not leveraged. The interest payable on the amount borrowed would increase the Series' expenses and if the appreciation and income produced by the investments purchased when the Series has borrowed are less than the cost of borrowing, the investment performance of the Series will be reduced as a result of leveraging. PORTFOLIO STRATEGIES The method employed by the Advisor to manage each Series, except The U.S. Large Company Series, The Enhanced U.S. Large Company Series and the Fixed Income Series, will differ 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 portfolio 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. The U.S. Large Company Series will operate as an index fund and, therefore, represents a passive method of investing in all stocks that comprise the S&P 500 Index which does not entail selection of securities based on the individual investment merits of their issuers. The investment performance of The U.S. Large Company Series is expected to approximate the investment performance of the S&P 500 Index, which tends to be cyclical in nature, reflecting periods when stock prices generally rise or fall. FUTURES CONTRACTS AND OPTIONS ON FUTURES The U.S. Large Company Series, The Enhanced U.S. Large Company Series, the U.S. Value Series, The DFA International Value Series, The Emerging Markets Series and The Emerging Markets Small Cap Series may invest in index futures contracts and options on index futures. To the extent that such Series invest in futures contracts and options thereon for other than bona fide hedging purposes, no Series will enter into such transactions if, immediately thereafter, the sum of the amount of 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 -28- 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 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 depend on the direction of securities prices, interest rates and other economic factors, and the loss from investing in futures transactions is potentially unlimited. Certain restrictions imposed by the Internal Revenue Code may limit the ability of a Series to invest in futures contracts and options on futures contracts. OPTIONS ON STOCK INDICES The Enhanced U.S. Large Company Series may purchase put and call options and write put and call options on stock indices and stock index futures listed on national securities exchanges or traded in the over-the-counter market. The Enhanced U.S. Large Company Series may use these techniques to hedge against changes in securities prices or as part of its overall investment strategy. An option on an index is a contract that gives the holder of the option, in return for a premium, the right to buy from (in the case of a call) or sell to (in the case of a put) the writer of the option the cash value of the index at a specified exercise price at any time during the term of the option. Upon exercise, the writer of an option on an index is obligated to pay the difference between the cash value of the index and the exercise price multiplied by the specified multiplier for the index option. (An index is designed to reflect specified facets of a particular financial or securities market, a specific group of financial instruments or securities, or certain economic indicators.) A stock index fluctuates with changes in the market values of the stocks included in the index. With respect to the writing of options, the writer has no control over the time when it may be required to fulfill its obligation. Prior to exercise or expiration, an option may be closed out by an offsetting purchase or sale of an option on the same series. There can be no assurance, however, that a closing purchase or sale transaction can be effected when The Enhanced U.S. Large Company Series desires. The Enhanced U.S. Large Company Series may write covered straddles consisting of a combination of a call and a put written on the same index. A straddle will be covered when sufficient assets are deposited to meet The Enhanced U.S. Large Company Series' immediate obligations. The Series may use the same liquid assets to cover both the call and put options where the exercise price of the call and the put are the same or the exercise price of the call is higher than that of the put. In such cases, the Series will also segregate liquid assets -29- equivalent to the amount, if any, by which the put is "in the money." The effectiveness of purchasing stock index options will depend upon the extent to which price movements in The Enhanced U.S. Large Company Series' portfolio correlate with price movements of the stock index selected. Because the value of an index option depends upon movements in the level of the index rather than the price of a particular stock, whether the Series will realize a gain or loss from the purchase of options on an index depends upon movements in the level of stock prices in the stock market generally or, in the case of certain indices, in an industry or market segment, rather than movements in the price of a particular stock. If The Enhanced U.S. Large Company Series takes positions in options instruments contrary to prevailing market trends, the Series could be exposed to the risk of a loss. Certain restrictions imposed on The Enhanced U.S. Large Company Series by the Internal Revenue Code may limit the ability of such Series to invest in options. SWAPS The Enhanced U.S. Large Company Series may enter into equity index swap agreements for purposes of attempting to obtain a particular desired return at a lower cost to the Series than if the Series had invested directly in an instrument that yielded that desired return. Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or "swapped" between the parties are generally calculated with respect to a "notional amount," i.e., the return on or increase in value of a particular dollar amount invested in a group of securities representing a particular index. The "notional amount" of the swap agreement is only a fictive basis on which to calculate the obligations which the parties to a swap agreement have agreed to exchange. Most swap agreements entered into by The Enhanced U.S. Large Company Series would calculate the obligations of the parties to the agreement on a "net basis." Consequently, the Series' current obligations (or rights) under a swap agreement will generally be equal only to the net amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the "net amount"). The Enhanced U.S. Large Company Series' current obligations under a swap agreement will be accrued daily (offset against amounts owed to the Series) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the maintenance of a segregated account consisting of liquid assets to avoid any potential leveraging of the Series' portfolio. The Enhanced U.S. Large Company Series will not enter into a swap agreement with any single party if the net amount -30- owed or to be received under existing contracts with that party would exceed 5% of the Series' assets. Because they are two-party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid, and, therefore, swap agreements entered into by The Enhanced U.S. Large Company Series and other illiquid securities will be limited to 15% of the net assets of the Series. Moreover, The Enhanced U.S. Large Company Series bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. The Advisor will cause The Enhanced U.S. Large Company Series to enter into swap agreements only with counterparties that the Investment Committee of the Advisor has approved. Certain restrictions imposed on the Enhanced U.S. Large Company Series by the Internal Revenue Code may limit the Series' ability to use swap agreements. The swap market is a relatively new market and is largely unregulated. It is possible that developments in the swaps market, including potential government regulation, could adversely affect The Enhanced U.S. Large Company Series' ability to terminate existing swap agreements or to realize amounts to be received under such agreements. BANKING INDUSTRY CONCENTRATIONS 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 DFA One-Year Fixed Income and Two-Year Global Fixed Income Series than might occur in less concentrated portfolios. REPURCHASE AGREEMENTS In addition, all of the Series may invest in repurchase agreements. In the event of the 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. ITEM 5. MANAGEMENT OF THE TRUST (a) The Trust has a Board of Trustees, which is responsible for establishing Trust policies and for overseeing the management of the Trust. (b)(i) Dimensional Fund Advisors Inc., 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401, serves as investment advisor to each of the Series. 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 $26 billion. David G. Booth and Rex A. Sinquefield, directors and officers of the Advisor and -31- trustees and officers of the Trust, and shareholders of the Advisor's outstanding voting stock, may be deemed controlling persons of the Advisor. (b)(ii) Pursuant to an investment management agreement with the Trust with respect to each Series, the Advisor manages the investment and reinvestment of their assets. The Advisor also provides the Trust with records concerning the Advisor's activities which the Trust is required to maintain and renders regular reports to the Trust's officers and the Board of Trustees. The Advisor also provides all of the Series with a trading department and selects brokers and dealers to effect securities transactions. (b)(iii) For the fiscal year ended November 30, 1997, (i) the Advisor received a fee for its services which, on an annual basis, equaled the following percentage of the average net assets of each Series; and (ii) the total expenses of each Series were the following percentages of respective average net assets:
Series Management Fee Total Expenses ------ -------------- -------------- U.S. 6-10 Small Company 0.03% 0.11% U.S. Large Company 0.025% 0.07% U.S. 6-10 Value 0.20% 0.28% U.S. Large Cap Value 0.10% 0.18% DFA One-Year Fixed Income 0.05% 0.10% DFA International Value 0.20% 0.32% Emerging Markets 0.10% 0.54% Enhanced U.S. Large 0.05% 0.25% Company DFA Two-Year Global Fixed 0.05% 0.18% Income Japanese Small Company 0.10% 0.29% United Kingdom Small 0.10% 0.25% Company Pacific Rim Small Company 0.10% 0.40% Continental Small Company 0.10% 0.29% Emerging Markets Small 0.20% 0.90% Cap
The management fee applicable to The U.S. 9-10 Small Company and U.S. 4-10 Value Series, each of which had not commenced operations as of November 30, 1997, is equal to 0.10% and 0.10%, respectively, of the Series' average net assets on an annual basis. -32- INVESTMENT SERVICES - UNITED KINGDOM AND CONTINENTAL SMALL COMPANY SERIES Pursuant to Sub-Advisory Agreements with the Advisor, Dimensional Fund Advisors Ltd. ("DFAL"), 14 Berkeley Street, London, W1X 5AD, England, a company that is organized under the laws of England, has the authority and responsibility to select brokers or dealers to execute securities transactions for the United Kingdom and Continental Series. DFAL's duties include the maintenance of a trading desk for the Series and the determination of the best and most efficient means of executing securities transactions. On at least a semi-annual basis the Advisor reviews the holdings of the United Kingdom and Continental Series and reviews the trading process and the execution of securities transactions. The Advisor is responsible for determining those securities which are eligible for purchase and sale by these Series and may delegate this task, subject to its own review, to DFAL. DFAL maintains and furnishes to the Advisor information and reports on United Kingdom and European small companies, including its recommendations of securities to be added to the securities that are eligible for purchase by the Series. The Advisor pays DFAL quarterly fees of 12,500 pounds sterling for services to each Series. DFAL is a member of the Investment Management Regulatory Organization Limited ("IMRO"), a self regulatory organization for investment managers operating under the laws of England. The Advisor owns 100% of the outstanding shares of DFAL. INVESTMENT SERVICES - JAPANESE AND PACIFIC RIM SMALL COMPANY SERIES Pursuant to Sub-Advisory Agreements with the Advisor, DFA Australia Limited ("DFA Australia"), Suite 4403 Gateway, 1 MacQuarie Place, Sydney, New South Wales 2000, Australia, the successor to Dimensional Fund Advisors Asia Inc., has the authority and responsibility to select brokers and dealers to execute securities transactions for the Japanese and Pacific Rim Series. DFA Australia's duties include the maintenance of a trading desk for each Series and the determination of the best and most efficient means of executing securities transactions. On at least a semi-annual basis, the Advisor reviews the holdings of the Japanese and Pacific Rim Series and reviews the trading process and the execution of securities transactions. The Advisor is responsible for determining those securities which are eligible for purchase and sale by these Series and may delegate this task, subject to its own review, to DFA Australia. DFA Australia maintains and furnishes to the Advisor information and -33- reports on Japanese and Pacific Rim small companies, including its recommendations of securities to be added to the securities that are eligible for purchase by each Series. The Advisor pays DFA Australia fees of $13,000 per year for services to each Series. The Advisor beneficially owns 100% of DFA Australia. CONSULTING SERVICES - DFA INTERNATIONAL VALUE SERIES, EMERGING MARKETS SERIES AND EMERGING MARKETS SMALL CAP SERIES The Advisor has entered into a Consulting Services Agreement with DFAL and DFA Australia, respectively. Pursuant to the terms of each Consulting Services Agreement, DFAL and DFA Australia provide certain trading and administrative services to the Advisor with respect to DFA International Value Series, Emerging Markets Series and Emerging Markets Small Cap Series. (c) Investment decisions for all 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. (d) AND (e) PFPC Inc. ("PFPC"), 400 Bellevue Parkway, Wilmington, Delaware 19809, serves as the administrative and accounting services, dividend disbursing and transfer agent for all Trust Series. The services provided by PFPC are subject to supervision by the executive officers and the Board of Trustees of the Trust, and include day-to-day keeping and maintenance of certain records, calculation of the offering price of the shares, preparation of reports, liaison with its custodians, and transfer and dividend disbursing agency services. For its services, each Series pays PFPC annual fees which are set forth in the following table: U.S. 9-10 SMALL COMPANY SERIES U.S. 6-10 SMALL COMPANY SERIES U.S. 6-10 VALUE SERIES U.S. LARGE CAP VALUE SERIES ENHANCED U.S. LARGE COMPANY SERIES CHARGES FOR EACH SERIES: .1025% of the first $300 million of net assets .0769% of the next $300 million of net assets .0513% of the next $250 million of net assets .0205% of net assets over $850 million PFPC charges a minimum fee of $58,800 per year to each of the Large Cap Value and 6-10 Value Series. PFPC charges the Enhanced U.S. Large Company Series a minimum fee of $75,000 per year which is to be phased in over the first year of the Series' operation. PFPC has agreed that it may from time to time limit the fee rates and the minimum fees for these Series. -34- DFA TWO-YEAR GLOBAL FIXED INCOME SERIES .1230% of the first $150 million of net assets .0820% of the next $150 million of net assets .0615% of the next $300 million of net assets .0410% of the next $250 million of net assets .0205% of net assets over $850 million The Series is subject to a minimum fee of $75,000 per year which is to be phased in over the first year of the Series' operation. PFPC has agreed to limit the minimum fee for the Series from time to time. JAPANESE SMALL COMPANY SERIES UNITED KINGDOM SMALL COMPANY SERIES PACIFIC RIM SMALL COMPANY SERIES CONTINENTAL SMALL COMPANY SERIES DFA INTERNATIONAL VALUE SERIES EMERGING MARKETS SERIES EMERGING MARKETS SMALL CAP SERIES CHARGES FOR EACH SERIES: .123% of the first $300 million of net assets .0615% of the next $300 million of net assets .0410% of the next $250 million of net assets .0205% of net assets over $850 million The DFA International Value, Emerging Markets and Emerging Markets Small Cap Series are each subject to minimum fees of $75,000 per year. The Pacific Rim Small Company Series is subject to a minimum fee of $100,000 per year. PFPC has agreed to limit the minimum fee for these Series from time to time. DFA ONE-YEAR FIXED INCOME SERIES .0513% of the first $100 million of net assets .0308% of net assets .0205% of net assets over $200 million U.S. LARGE COMPANY SERIES .015% of net assets U.S. 4-10 VALUE SERIES .0160% of net assets (f) The Trust bears all of its own costs and expenses, including: services of its independent accountants, legal counsel, brokerage fees, 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 trustees, the cost of filing its registration statement under federal securities law, reports to shareholders, and transfer and dividend disbursing agency, administrative services and custodian fees. Expenses allocable to a particular Series are so allocated and expenses of the Trust which are not allocable to a particular Series are borne by each Series on the basis of its relative net assets. (g) The Advisor places portfolio securities transactions with a view to obtaining best price and execution. Subject to that -35- goal, transactions may be placed with securities firms that are affiliated with an affiliate of the Advisor. Response to Item 5A has been omitted pursuant to paragraph 4 of Instruction F of the General Instructions to Form N-1A. ITEM 6. CAPITAL STOCK AND OTHER SECURITIES (a) All sixteen Series issue shares of beneficial interest with a par value of $.01 per share without a sales load. The shares of each Series, when issued and paid for in accordance with this registration statement, will be fully paid and nonassessable shares, with equal, non-cumulative voting rights, except as described below, and no preferences as to conversion, exchange, dividends, redemptions or any other feature. Shareholders shall have the right to vote only (i) for removal of Trustees, (ii) with respect to such additional matters relating to the Trust as may be required by the applicable provisions of the 1940 Act, including Section 16(a) thereof, and (iii) on such other matters as the Trustees may consider necessary or desirable. In addition, the shareholders of each Series will be asked to vote on any proposal to change a fundamental investment policy (i.e. a policy that may be changed only with the approval of shareholders) of that Series. If a shareholder of The Emerging Markets, The Emerging Markets Small Cap, The U.S. Large Company, Japanese, Pacific Rim, United Kingdom or Continental Series redeems its entire interest in the Series or becomes bankrupt, a majority in interest of the remaining shareholders in such Series must vote within 120 days to approve the continuing existence of the Series or the Series will be liquidated. All shares of the Trust entitled to vote on a matter shall vote without differentiation between the separate Series on a one-vote-per-share basis; provided however, if a matter to be voted on affects only the interests of not all Series, then only the shareholders of such affected Series shall be entitled to vote on the matter. Investments in The Emerging Markets, The Emerging Markets Small Cap, The U.S. Large Company, Japanese, Pacific Rim, United Kingdom and Continental Series may not be transferred, but an investor may withdraw all or any portion of their investment at any time at net asset value. If liquidation of the Trust should occur, shareholders would be entitled to receive on a per class basis the assets of the particular Series whose shares they own, as well as a proportionate share of Trust assets not attributable to any particular class. Ordinarily, the Trust does not intend to hold annual meetings of shareholders, except as required by the Investment Company Act of 1940 or other applicable law. The Trust's by-laws provide that meetings of shareholders shall be called for the purpose of voting upon the question of removal of one or more Trustees upon the written request of the holders of not less than 10% of the outstanding shares. (b) As of January 31, 1998, the following persons may be deemed to control the following Series either by owning more than 25% of the voting securities of such Series directly or, through the operation of pass-through voting rights, by owning more than 25% -36- of the voting securities of a feeder portfolio investing its assets in the Series: THE DFA INTERNATIONAL VALUE SERIES BellSouth Corporation 1155 Peachtree Street N.E. Atlanta, GA 30309 26.09% JAPANESE SMALL COMPANY SERIES BellSouth Corporation 1155 Peachtree Street N.E. Atlanta, GA 30309 34.73% UNITED KINGDOM SMALL COMPANY SERIES BellSouth Corporation 1155 Peachtree Street N.E. Atlanta, GA 30309 38.48% PACIFIC RIM SMALL COMPANY SERIES BellSouth Corporation 1155 Peachtree Street N.E. Atlanta, GA 30309 43.07% CONTINENTAL SMALL COMPANY SERIES BellSouth Corporation 1155 Peachtree Street N.E. Atlanta, GA 30309 39.22% EMERGING MARKETS SMALL CAP SERIES South Dakota Retirement System 4009 W. 49th Street, Suite 300 Sioux Falls, SD 57105 99.26% ENHANCED U.S. LARGE COMPANY SERIES Misericordia Home Endowment Fund 6300 N. Ridge Avenue Chicago, IL 60660 25.90% U.S. 4-10 VALUE SERIES Dimensional Fund Advisors Inc. 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 100%
(c) Not applicable. (d) Not applicable. -37- (e) Shareholder inquiries may be made by writing or calling the Trust at 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401 or (310) 395-8005. (f) Except for the Partnership Series (defined below), the Trust's policy is to distribute substantially all net investment income not previously distributed during the year from the Small Company Series, U.S. 4-10 Value Series, U.S. 6-10 Value Series and the DFA International Value Series together with any net realized capital gains in December of each year. In addition, the Corporate Series (as defined below) will distribute all net investment income earned through the end of November each year in the month of November. Dividends from net investment income of The Enhanced U.S. Large Company Series and U.S. Large Cap Value Series, are distributed quarterly, and any net capital gains are distributed annually after November 30. Net investment income, which is accrued daily, will be distributed monthly (except for January) by The DFA One-Year Fixed Income Series and quarterly by The DFA Two-Year Global Fixed Income Series. Any net realized capital gains of the Fixed Income Series will be distributed annually after the end of the fiscal year. Shareholders of the Trust (other than shareholders of the Partnership Series) will automatically receive all income dividends and capital gains distributions in additional shares of the Series whose shares they hold at net asset value (as of the business date following the dividend record date), unless as to The U.S. 6-10 Small Company Series, U.S. 9-10 Small Company Series, the Fixed Income Series and the U.S. Value Series upon written notice to PFPC, the shareholder selects one of the following options: (i) Income Option -- to receive income dividends in cash and capital gains distributions in additional shares at net asset value; (ii) Capital Gains Option -- to receive capital gains distributions in cash and income dividends in additional shares at net asset value; or (iii) Cash Option - - -to receive both income dividends and capital gains distributions in cash. While shareholders of The Enhanced U.S. Large Company Series will automatically receive all capital gains distributions in additional shares of the Series, upon written notice to the Transfer Agent, they may receive all income dividends in cash. (g) Each Series of the Trust, other than the Japanese, United Kingdom, Pacific Rim, Continental, The U.S. Large Company, The Emerging Markets and The Emerging Markets Small Cap Series, is classified as a separate corporation for U.S. federal income tax purposes (collectively, referred to as the "Corporate Series"). Each Corporate Series intends to qualify each year as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"), so that it will not be liable for U.S. federal income taxes to the extent that its net investment income and net realized capital gains are distributed. The Japanese, United Kingdom, Pacific Rim, Continental, The U.S. Large Company, The Emerging Markets and The Emerging Markets Small Cap Series (together, the "Partnership Series") are classified as partnerships for U.S. federal income tax purposes. -38- If a Series of the Trust, including the Partnership Series, purchases shares in certain foreign investment entities, called "passive foreign investment companies" ("PFIC"), the Series (and in the case of the Partnership Series, its investors) may be subject to U.S. federal income tax and a related interest charge on a portion of any "excess distribution" or gain from the disposition of such shares even if such income is distributed as a taxable dividend by the Corporate Series to its shareholders or, in the case of the Partnership Series, even if such income is distributed to its investors. (See below for a more detailed discussion of the Partnership Series). The Series of the Trust, including the Partnership Series, may be subject to foreign withholding taxes on income from certain of their foreign securities. If more than 50% in value of the total assets of a Corporate Series at the end of its fiscal year are invested in securities of foreign corporations, the Corporate Series may elect to pass-through to its shareholders their pro rata share of foreign income taxes paid by the Corporate Series. If this election is made, shareholders will be (i) required to include in their gross income their pro rata share of foreign source income (including any foreign taxes paid by the Corporate Series), and (ii) entitled to either deduct their share of such foreign taxes in computing their taxable income or to claim a credit for such taxes against their U.S. federal income tax, subject to certain limitations under the Code. Shareholders will be informed by the Corporate Series at the end of each calendar year regarding the shareholder's proportionate share of taxes paid to any foreign country or possession of the United States, and gross income derived from sources within any foreign country or possession of the United States. The Enhanced U.S. Large Company Series' investments in Index Derivatives are subject to complex tax rules which may have the effect of accelerating income or converting, in part, what otherwise would have been long-term capital gain into short-term capital gain. These rules may affect both the amount, character and timing of income distributed to shareholders of The Enhanced U.S. Large Company Series. For the Corporate Series with the principal investment policy of investing in foreign equity securities and non-equity domestic investments, it is anticipated that only a small portion of such Corporate Series' dividends will qualify for the corporate dividends received deduction. To the extent that such Corporate Series pay dividends which qualify for this deduction, the availability of the deduction is subject to certain holding period and debt financing restrictions imposed under the Code on the corporation claiming the deduction. Since virtually all of the net investment income from The DFA One-Year Fixed Income and Two-Year Global Fixed Income Series is expected to arise from earned interest, it is not expected that -39- any of such Series' distributions will be eligible for the dividends received deduction for corporations. For U.S. federal income tax purposes, any income dividends which the shareholder receives from a Corporate Series, as well as any distributions derived from the excess of net short-term capital gain over net long-term capital loss, are treated as ordinary income whether the shareholder has elected to receive them in cash or in additional shares. Shareholders of a Corporate Series are notified annually by the Trust as to the U.S. federal tax status of dividends and distributions paid by the Corporate Series whose shares they own. Dividends which are declared by a Corporate Series 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 U.S. federal income tax purposes as if paid by a Corporate Series and received by the shareholder on December 31 of the calendar year in which they are declared. The sale of shares of a Corporate Series by redemption is a taxable event and may result in a capital gain or loss. Any loss incurred on sale or exchange of shares of the Corporate Series, 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. The Trust may accept securities or local currencies in exchange for shares of a Series. A gain or loss for U.S. federal income tax purposes may be realized by investors in a Corporate Series who are subject to U.S. federal taxation upon the exchange depending upon the cost of the securities or local currency exchanged. (See "In Kind Purchases" in Item 7.) The Series may be required to report to the Internal Revenue Service ("IRS") any taxable dividend or other reportable payment (including share redemption proceeds) and withhold 31% of any such payments made to individuals and other non-exempt shareholders who have not provided a correct taxpayer identification number and made certain required certifications that appear in the Shareholder Application form. A shareholder may also be subject to backup withholding if the IRS or a broker notifies the Corporate Series that the number furnished by the shareholder is incorrect or that the shareholder is subject to backup withholding for previous under-reporting of interest or dividend income. Shareholders of the Corporate Series who are not U.S. persons for purposes of U.S. federal income taxation should consult with their tax advisors regarding the applicability of U.S. withholding and other taxes to distributions received by them from the Corporate Series and the application of foreign tax laws to these distributions. Series shares held by the estate of a non-U.S. investor may also be subject to U.S. estate tax. -40- Shareholders should also consult their tax advisors with respect to the applicability of any state and local intangible property or income taxes to their shares of the Corporate Series and distributions and redemption proceeds received from the Corporate Series. The Partnership Series are series of a trust organized under Delaware law. The Partnership Series will not be subject to any U.S. federal income tax. Instead, each investor will be required to report separately on its own U.S. federal income tax return its distributive share (as determined in accordance with the governing instruments of the Partnership Series) of a Partnership Series' income, gains, losses, deductions and credits. Each investor will be required to report its distributive share regardless of whether it has received a corresponding distribution of cash or property from a Partnership Series. An allocable share of a tax-exempt investor's income will be "unrelated business taxable income" ("UBTI") only to the extent that a Partnership Series borrows money to acquire property or invests in assets that produce UBTI. In addition to U.S. federal income taxes, investors in the Partnership Series may also be subject to state and local taxes on their distributive share of a Partnership Series' income. The Partnership Series' taxable year-end will be November 30. Although, as described above, the Partnership Series will not be subject to U.S. federal income tax, they will file appropriate U.S. federal income tax returns. While the Partnership Series are not classified as "regulated investment companies" under Subchapter M of the Code, the Partnership Series' assets, income and distributions will be managed in such a way that an investor in the Series will be able to satisfy the requirements of Subchapter M of the Code, assuming that the investor invested all of its assets in a Partnership Series for such Series' entire fiscal year. There are certain other tax issues that will be relevant to only certain of the investors; for instance, investors that are segregated asset accounts and investors who contribute assets rather than cash to the Partnership Series. It is intended that contributions of assets will not be taxable provided certain requirements are met. Such investors are advised to consult their own tax advisors as to the tax consequences of an investment in the Partnership Series. Redemptions of shares in a Partnership Series may be taxable. In general, a redemption of shares resulting in a distribution of cash by a Partnership Series to an investor in excess of that investor's tax basis in its shares of such Partnership Series is taxable to the extent of such excess. The Partnership Series will inform investors promptly after the close of each fiscal year of the source of dividends and distributions at the time they are paid and will promptly advise investors of their allocable share of a Partnership Series' -41- income, gains, losses, deductions and credits for U.S. federal income tax purposes. Investors may wish to contact their tax advisors to determine the applicability of state and local taxes to their distributive share of a Partnership Series' income, gains, losses, deductions, and credits. Investors in the Partnership Series who are not U.S. persons for purposes of U.S. federal income taxation should consult with their tax advisors to determine the applicability of U.S. withholding by a Partnership Series on interest, dividends and any other items of fixed or determinable annual or periodical gains, profits and income included in such investors' distributive share of a Partnership Series' income. Non-U.S. investors may also wish to contact their tax advisors to determine the applicability of foreign tax laws. Series shares held by the estate of a non-U.S. investor may be subject to U.S. estate tax. ITEM 7. PURCHASE OF SECURITIES BEING OFFERED (a) The Trust's shares have not been registered under the Securities Act of 1933, which means that its shares may not be sold publicly. However, the Trust may sell its shares through private placements pursuant to available exemptions from registration under that Act. Shares of the Trust are sold only to other investment companies and certain institutional investors. Shares of The Emerging Markets, Emerging Markets Small Cap, Japanese, Pacific Rim and Continental Series are sold at a price which is equal to the net asset value of such shares plus a reimbursement fee. (SEE Item 7(b).) Shares of the other Series are sold at net asset value without a sales charge. Shares are purchased at the net asset value next determined after the Trust receives the order in proper form. All investments are credited to the shareholder's account in the form of full and fractional shares of the Series calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued. The Trust distributes its own shares. It has, however, entered into an agreement with DFA Securities Inc., a wholly-owned subsidiary of the Advisor, pursuant to which DFA Securities Inc. is responsible for supervising the sale of shares of each Series. No compensation is paid by the Trust to DFA Securities Inc. under this agreement. IN KIND PURCHASES If accepted by the Trust, shares of the Series may be purchased in exchange for securities which are eligible for purchase or otherwise represented in the Series' portfolios at the time of the exchange as described in this registration statement or in exchange for local currencies in which such securities of the Japanese, United Kingdom, Pacific Rim, Continental, The DFA -42- International Value, The Emerging Markets, The Emerging Markets Small Cap, The DFA Two-Year Global Fixed Income and The Enhanced U.S. Large Company Series are denominated. Securities and local currencies to be exchanged which are accepted by the Trust and Trust shares to be issued therefore will be valued, as set forth under "Valuation of Shares" in Item 7(b), at the time of the next determination of net asset value after such acceptance. All dividends, interest, subscription, or other rights pertaining to such securities shall become the property of the Series whose shares are being acquired and must be delivered to the Trust by the investor upon receipt from the issuer. Investors who desire to purchase shares of the Japanese, United Kingdom, Pacific Rim, Continental, The DFA International Value or DFA Two-Year Global Fixed Income with local currencies should first contact the Adviser for wire instructions. The Trust will not accept securities in exchange for shares of a Series unless: (1) such securities are eligible to be included, or otherwise represented, in the Series' portfolios at the time of exchange 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 Series 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 Series, the value of any such security (except U.S. Government Securities) being exchanged together with other securities of the same issuer owned by the Series will not exceed 5% of the net assets of the Series immediately after the transaction. (See Item 4(a)(i).) Investors interested in such exchanges should contact the Advisor. Investors should also know that an in-kind purchase of shares of a Series may result in taxable income; an investor desiring to make an in-kind purchase should consult its tax advisor. (b) VALUATION OF SHARES The net asset value per share of each Series is calculated as of the close of the NYSE by dividing the total market value of the Series' investments and other assets, less any liabilities, by the total outstanding shares of the stock of the Series. The value of the shares of each Series will fluctuate in relation to its own investment experience. Securities held by the Series which are listed on the 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. 6-10 Small Company, The U.S. 9-10 Small Company, The U.S. Large Company, The DFA International Value, the U.S. Value, The Emerging Markets and The Emerging Markets Small Cap Series value 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. Securities issued by open-end investment companies, such as the Series, are valued using their respective net asset values for purchase orders placed at the close of the NYSE. Unlisted -43- securities for which market quotations are readily available are valued at the mean between the most recent 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. The net asset values per share of the Japanese, Pacific Rim, Continental, United Kingdom, The DFA International Value, The DFA Two-Year Global Fixed Income, The Emerging Markets and The Emerging Markets Small Cap Series are expressed in U.S. dollars by translating the net assets of each Series using the bid price for the dollar as quoted by generally recognized reliable sources. The value of the shares of the Fixed Income Series will tend to fluctuate with interest rates because, unlike money-market funds, such Series do not seek to stabilize the value of their 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 OTC 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 OTC market. Securities held by the Fixed Income 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 Trustees. Generally, trading in foreign securities markets is completed each day at various times prior to the close of the NYSE. The values of foreign securities held by those Series that invest in such securities are determined as of such times for the purpose of computing the net asset value of the Series. If events which materially affect the value of the investments of the Series occur subsequent to the close of the securities market on which such securities are primarily traded, the investments affected thereby will be valued at "fair value" as described above. Certain of the securities holdings of The Emerging Markets Series and The Emerging Markets Small Cap Series in Approved Markets may be subject to tax, investment and currency repatriation regulations of the Approved Markets that could have a material effect on the valuation of the securities. For example, a Series might be subject to different levels of taxation on current income and realized gains depending upon the holding period of the securities. In general, a longer holding period (E.G., 5 years) may result in the imposition of lower tax rates than a shorter holding period (E.G., 1 year). The Series may also be subject to certain contractual arrangements with investment authorities in an Approved Market which require a Series to maintain minimum holding periods or to limit the extent of repatriation of income and realized gains. As a result, the valuation of particular securities at any one time may depend materially upon the assumptions that a Series makes at that time concerning the anticipated holding period for the securities. -44- Absent special circumstances as determined by the Board of Trustees, it is presently intended that the valuation of such securities will be based upon the assumption that they will be held for at least the amount of time necessary to avoid higher tax rates or penalties and currency repatriation restrictions. However, the use of such valuation standards will not prevent the Series from selling such securities in a shorter period of time if the Advisor considers the earlier sale to be a more prudent course of action. Revision in valuation of those securities will be made at the time of the transaction to reflect the actual sales proceeds inuring to the Series. Futures contracts are valued using the settlement price established each day on the exchange on which they are traded. The value of such futures contracts held by a Series are determined each day as of such close. It is management's belief that payment of a reimbursement fee by each investor, which is used to defray significant costs associated with investing proceeds of the sale of the Series' shares to such investors, will eliminate a dilutive effect such costs would otherwise have on the net asset value of shares held by existing investors. Therefore, the shares of The Emerging Markets, Emerging Markets Small Cap, Japanese, Pacific Rim and Continental Series are sold at an offering price which is equal to the current net asset value of such shares plus a reimbursement fee. The amount of the reimbursement fee represents management's estimate of the costs reasonably anticipated to be associated with the purchase of securities by that Series, and is paid to the Series and used by it to defray such costs. Such costs include brokerage commissions on listed securities and imputed commissions on OTC securities. The reimbursement fee for The Emerging Markets Series and the Japanese Series, expressed as a percentage of the net asset value of each Series' shares, is 0.50%. The reimbursement fee for The Emerging Markets Small Cap, Pacific Rim and Continental Series, expressed as a percentage of the net assets of each Series' shares, is 1.00%. Reinvestments of dividends and capital gains distributions paid by the Series and in-kind investments are not subject to a reimbursement fee. The offering price of shares of each Series, except for The Emerging Markets, Emerging Markets Small Cap, Japanese, Pacific Rim, and Continental Series, is the net asset value thereof next determined after the receipt of the investor's funds by the Custodian, provided that the purchase order in good order has been received by the Transfer Agent; no sales charge or reimbursement fee is imposed. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable. -45- (g) Not applicable. ITEM 8. REDEMPTION OR REPURCHASE (a) As stated above in response to Item 7(a), "Purchase of Securities Being Offered," the Trust's shares have not been registered under the Securities Act of 1933, which means that its shares are restricted securities which may not be sold unless registered or pursuant to an available exemption from that Act. Investors who desire to redeem shares of a Series must first contact the Advisor at (310) 395-8005. Redemptions are processed on any day on which the Trust is open for business and are effected at the Series' net asset value next determined after the Series receives a redemption request in good form. Redemption payments in cash will ordinarily be made within seven days after receipt of the redemption request in good form. However, the right of redemption may be suspended or the date of payment postponed in accordance with the 1940 Act. The amount received upon redemption may be more or less than the amount paid for the shares depending upon the fluctuations in the market value of the assets owned by the Series. When in the best interests of a Series, the Series may pay the redemption price in whole or in part by a distribution of portfolio securities from the Series of the shares being redeemed in lieu of cash in accordance with Rule 18f-1 under the Investment Company Act of 1940. Investors may incur brokerage charges and other transaction costs selling securities that were received in payment of redemptions. The Japanese Small Company, United Kingdom Small Company, Continental Small Company, Pacific Rim Small Company, Emerging Markets, Emerging Markets Small Cap, Two-Year Global Fixed Income and DFA International Value Series reserve the right to redeem their shares in the currencies in which their investments are denominated. Investors may incur charges in converting such currencies to dollars and the value of the securities may be affected by currency exchange fluctuations. For additional information about redemption of Trust shares, see Items 19(a) and (b) in Part B. (b) Not applicable. (c) Not applicable. (D) 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 Trust 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. -46- ITEM 9. PENDING LEGAL PROCEEDINGS Not applicable. Part B: ITEM 10. COVER PAGE Not applicable. ITEM 11. TABLE OF CONTENTS Not applicable. ITEM 12. GENERAL INFORMATION AND HISTORY Until August 1, 1997, The U.S. 6-10 Value Series was named The U.S. Small Cap Value Series. ITEM 13. INVESTMENT OBJECTIVES AND POLICIES (a) SEE Item 4(a)(ii) of Part A for a discussion of the investment policies of each Series of the Trust. (b) In addition to the policies stated in response to Item 4(a)(ii) of Part A, each of the Series has adopted certain limitations which may not be changed with respect to any Series without the approval of a majority of the outstanding voting securities of the Series. A "majority" is defined as the lesser of: (1) at least 67% of the voting securities of the Series (to be affected by the proposed change) present at a meeting, if the holders of more than 50% of the outstanding voting securities of the Series are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of such Series. The Series 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 all Series except The U.S. 9-10 and 6-10 Small Company Series and The DFA One-Year Fixed Income Series may purchase or sell financial futures contracts and options thereon; and The Enhanced U.S. Large Company Series may purchase, sell and enter into indices-related futures contracts, options on such futures contracts, securities-related swap agreements and other derivative instruments; (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 Series, invest in the securities of any issuer (except obligations of the U.S. Government and its instrumentalities) if, as a result, more than -47- 5% of the Series' total assets, at market, would be invested in the securities of such issuer; provided that this limitation applies to 100% of the total assets of The U.S. 9-10 Small Company Series; (4) purchase or retain securities of an issuer if those officers and trustees of the Trust or officers and directors of the Advisor owning more than 1/2 of 1% of such securities together own more than 5% of such securities; provided that The U.S. 4-10 Value Series is not subject to this limitation; (5) borrow, except from banks and as a temporary measure for extraordinary or emergency purposes and then, in no event, in excess of 5% of a Series' gross assets valued at the lower of market or cost; provided that each Series, except The DFA One-Year Fixed Income Series, U.S. 9-10 Small Company Series and the Japanese Series, may borrow amounts not exceeding 33% of their 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; provided that The U.S. 4-10 Value Series is not subject to this limitation; (7) invest more than 10% of the value of the Series' total assets in illiquid securities, which include certain restricted securities, repurchase agreements with maturities of greater than seven days, and other illiquid investments; provided that The U.S. 4-10 Value, Enhanced U.S. Large Company, The DFA Two-Year Global Fixed Income and The Emerging Markets Small Cap Series are not subject to this limitation, and The DFA International Value Series, The U.S. 6-10 Value Series, The U.S. Large Cap Value Series, The U.S. 6-10 Small Company Series and The Emerging Markets Series may invest not more than 15% of their total assets in illiquid securities; (8) engage in the business of underwriting securities issued by others; (9) invest for the purpose of exercising control over management of any company; provided that The U.S. 9-10 Small Company Series and The U.S. 4-10 Value Series are not subject to this limitation; (10) invest its assets in securities of any investment company, except in connection with a merger, acquisition of assets, consolidation or reorganization; provided that (a) The Emerging Markets, Emerging Markets Small Cap, Japanese, United Kingdom, Pacific Rim and Continental Series are not subject to this limitation; (b) each of the U.S. 4-10 Value, Enhanced U.S. Large Company, Emerging Markets, Emerging Markets Small Cap, Japanese, United Kingdom, Pacific Rim and Continental Series may invest its assets in securities of investment companies and units of such companies such as, but not limited to, S & P Depository Receipts; -48- and (c) the U.S. 9-10 Small Company Series is not subject to this limitation. (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; provided that The U.S. 9-10 Small Company Series and The U.S. 4-10 Value Series are not subject to this limitation; (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Series' total assets would be invested in securities of companies within such industry; except The DFA One- Year Fixed Income and Two-Year Global Fixed Income Series shall invest more than 25% of their total assets in obligations of banks and bank holding companies in the circumstances described in this registration statement in "Investments in the Banking Industry" under Item 4(a)(ii) of Part A; (13) write or acquire options (except as described in (1) above) or interests in oil, gas or other mineral exploration, leases or development programs except that (a) the Enhanced U.S. Large Company Series may write or acquire options; and (b) the U.S. 4-10 Value Series is not subject to these limitations; (14) purchase warrants; however, each Series, except The DFA One-Year Fixed Income Series and Two-Year Global Fixed Income Series (the "Fixed Income Series"), may acquire warrants as a result of corporate actions involving its holdings of other equity securities; and The U.S. 4-10 Value Series is not subject to this limitation; (15) purchase securities on margin or sell short; provided that The U.S. 4-10 Value Series is not subject to the limitation on selling securities short; (16) acquire more than 10% of the voting securities of any issuer; provided that (a) this limitation applies only to 75% of the assets of The U.S. Value Series, The Emerging Markets Series and The Emerging Markets Small Cap Series; and (b) The U.S. 9-10 Small Company Series is not subject to this limitation; or (17) issue senior securities (as such term is defined in Section 18(f) of the Investment Company Act of 1940), except to the extent permitted under the Act. The investment limitations described in (1) and (15) above do not prohibit each Series that may purchase or sell financial futures contracts and options thereon from making margin deposits to the extent permitted under applicable regulations; and the investment limitations described in (1), (13) and (15) above do not prohibit The Enhanced U.S. Large Company Series from (i) making margin deposits in connection with transactions in options; and (ii) maintaining a short position, or purchasing, writing or selling puts, calls, straddles, spreads or combinations thereof in -49- connection with transactions in options, futures, and options on futures and transactions arising under swap agreements or other derivative instruments. For purposes of (5) above, The Emerging Markets Series and The Emerging Markets Small Cap Series may borrow in connection with a foreign currency transaction or the settlement of a portfolio trade. The only type of borrowing contemplated thereby is the use of a letter of credit issued on such Series' behalf in lieu of depositing initial margin in connection with currency futures contracts, and the Series have no present intent to engage in any other types of borrowing transactions under this authority. Although (2) above prohibits cash loans, the Series are authorized to lend portfolio securities. (See "Securities Loans" in Item 4(a)(ii) of Part A.) For the purposes of (7) above, The DFA One-Year Fixed Income and Two-Year Global Fixed Income Series may invest in commercial paper that is exempt from the registration requirements of the Securities Act of 1933 (the "1933 Act") subject to the requirements regarding credit ratings stated in this registration statement under Item 4. Further, pursuant to Rule 144A under the 1933 Act, the Series 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 10% or 15% limitation on holdings of illiquid securities stated in (7) above. While maintaining oversight, the Board of Trustees has delegated the day-to-day function of making liquidity determinations to the Advisor. For Rule 144A securities to be considered liquid, there must be at least two dealers making a market in such securities. After purchase, the Board of Trustees and the Advisor will continue to monitor the liquidity of Rule 144A securities. (c) Although not a fundamental policy subject to shareholder approval: (1) The U.S. 6-10 Series, Japanese Series, United Kingdom Series, Pacific Rim Series and Continental Series, will not purchase interests in any real estate investment trust; and (2) The Enhanced U.S. Large Company, U.S. 4-10 Value, Two-Year Global Fixed Income and Emerging Markets Small Cap Series do not intend to invest more than 15% of their net assets in illiquid securities. The Japanese, United Kingdom, Pacific Rim, Continental, DFA International Value, The DFA Two-Year Global Fixed Income, The Emerging Markets and The Emerging Markets Small Cap Series may acquire and sell forward foreign currency exchange contracts in order to hedge against changes in the level of future currency rates. Such contracts involve an obligation to purchase or sell a specific currency at a future date at a price set in the -50- contract. While the U.S. Value Series and The DFA International Value Series have retained authority to buy and sell financial futures contracts and options thereon, they have no present intention to do so. Notwithstanding any of the above investment restrictions, The Emerging Markets Series and The Emerging Markets Small Cap Series may establish subsidiaries or other similar vehicles for the purpose of conducting their investment operations in Approved Markets, if such subsidiaries or vehicles are required by local laws or regulations governing foreign investors such as the Series or whose use is otherwise considered by the Series to be advisable. Such Series would "look through" any such vehicle to determine compliance with their investment restrictions. Subject to future regulatory guidance, for purposes of those investment limitations identified above that are based on total assets, "total assets" refers to the assets that the Series owns, and does not include assets which the Series does not own but over which it has effective control. For example, when applying a percentage investment limitation that is based on total assets, the Series will exclude from its total assets those assets which represent collateral received by the Series for its securities lending transactions. Unless otherwise indicated, all limitations applicable to the 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 Series' assets invested in certain securities or other instruments resulting from market fluctuations or other changes in a Series' total assets will not require a 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. Because the structure of each Series, except the Fixed Income Series, is based on the relative market capitalizations of eligible holdings, it is possible that the Series might include at least 5% of the outstanding voting securities of one or more issuers. In such circumstances, the Trust 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. OPTIONS ON STOCK INDICES The Enhanced U.S. Large Company Series may purchase and sell options on stock indices. With respect to the sale of call options on stock indices, pursuant to published positions of the Securities and Exchange Commission ("SEC"), The Enhanced U.S. Large Company Series will either (1) maintain with its custodian -51- liquid assets equal to the contract value (less any margin deposits); (2) hold a portfolio of stocks substantially replicating the movement of the index underlying the call option; or (3) hold a separate call on the same index as the call written where the exercise price of the call held is (a) equal to or less than the exercise price of the call written, or (b) greater than the exercise price of the call written, provided the difference is maintained by the Series in liquid assets in a segregated account with its custodian. With respect to the sale of put options on stock indices, pursuant to published SEC positions, The Enhanced U.S. Large Company Series will either (1) maintain liquid assets equal to the exercise price (less any margin deposits) in a segregated account with its custodian; or (2) hold a put on the same index as the put written where the exercise price of the put held is (a) equal to or greater than the exercise price of the put written, or (b) less than the exercise price of the put written, provided an amount equal to the difference is maintained by the Series in liquid assets in a segregated account with its custodian. Prior to the earlier of exercise or expiration, an option may be closed out by an offsetting purchase or sale of an option of the same series (type, exchange, underlying index, exercise price, and expiration). There can be no assurance, however, that a closing purchase or sale transaction can be effected when The Enhanced U.S. Large Company Series desires. The Enhanced U.S. Large Company Series will realize a gain from a closing purchase transaction if the cost of the closing option is less than the premium received from writing the option, or, if it is more, the Series will realize a loss. The principal factors affecting the market value of a put or a call option include supply and demand, interest rates, the current market price of the underlying index in relation to the exercise price of the option, the volatility of the underlying index, and the time remaining until the expiration date. If an option written by The Enhanced U.S. Large Company Series expires, the Series realizes a gain equal to the premium received at the time the option was written. If an option purchased by the Series expires unexercised, the Series realizes a loss equal to the premium paid. The premium paid for a put or call option purchased by The Enhanced U.S. Large Company Series is an asset of the Series. The premium received for an option written by the Series is recorded as a deferred credit. The value of an option purchased or written is marked to market daily and is valued at the closing price on the exchange on which it is traded or, if not traded on an exchange or no closing price is available, at the mean between the last bid and asked prices. RISKS ASSOCIATED WITH OPTIONS ON INDICES There are several risks associated with transactions in options on indices. For example, there are significant differences -52- between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives. The value of an option position will reflect, among other things, the current market price of the underlying index, the time remaining until expiration, the relationship of the exercise price, the term structure of interest rates, estimated price volatility of the underlying index and general market conditions. A decision as to whether, when and how to use options involves the exercise of skill and judgment, and even a well-conceived transaction may be unsuccessful to some degree because of market behavior or unexpected events. Options normally have expiration dates of up to 90 days. The exercise price of the options may be below, equal to or above the current market value of the underlying index. Purchased options that expire unexercised have no value. Unless an option purchased by The Enhanced U.S. Large Company Series is exercised or unless a closing transaction is effected with respect to that position, The Enhanced U.S. Large Company Series will realize a loss in the amount of the premium paid and any transaction costs. A position in an exchange-listed option may be closed out only on an exchange that provides a secondary market for identical options. Although The Enhanced U.S. Large Company Series intends to purchase or write only those options for which there appears to be an active secondary market, there is no assurance that a liquid secondary market will exist for any particular option at any specific time. Closing transactions may be effected with respect to options traded in the over-the-counter markets only by negotiating directly with the other party to the option contract, or in a secondary market for the option if such a market exists. There can be no assurance that The Enhanced U.S. Large Company Series will be able to liquidate an over-the-counter option at a favorable price at any time prior to expiration. In the event of insolvency of the counter-party, the Series may be unable to liquidate an over-the-counter option. Accordingly, it may not be possible to effect closing transactions with respect to certain options, with the result that The Enhanced U.S. Large Company Series would have to exercise those options which they have purchased in order to realize any profit. With respect to options written by The Enhanced U.S. Large Company Series, the inability to enter into a closing transaction may result in material losses to the Series. Index prices may be distorted if trading of a substantial number of securities included in the index is interrupted causing the trading of options on that index to be halted. If a trading halt occurred, The Enhanced U.S. Large Company Series would not be able to close out options which it had purchased and may incur losses if the underlying index moved adversely before trading resumed. If a trading halt occurred and restrictions prohibiting the exercise of options were imposed through the close of trading on the last day before expiration, exercises on that day would be settled on the basis of a closing index value that may not -53- reflect current price information for securities representing a substantial portion of the value of the index. The Enhanced U.S. Large Company Series' activities in the options markets may result in higher fund turnover rates and additional brokerage costs; however, the Series may also save on commissions by using options as a hedge rather than buying or selling individual securities in anticipation or as a result of market movements. INVESTMENT LIMITATIONS ON OPTIONS TRANSACTIONS The ability of The Enhanced U.S. Large Company Series to engage in options transactions is subject to certain limitations. The Enhanced U.S. Large Company Series will only invest in over-the-counter options to the extent consistent with the 15% limit on investments in illiquid securities. FUTURES CONTRACTS All Series except The U.S. 9-10 and 6-10 Small Company Series and The DFA One- Year Fixed Income Series may enter into index futures contracts and options on index futures contracts for the purpose of remaining fully invested and to maintain liquidity to pay redemptions. In addition, The Enhanced U.S. Large Company Series may use futures contracts and options thereon to hedge against securities prices or as part of its overall investment strategy. 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. The 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 repayment of excess margin to the 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. To the extent that a Series invests in futures contracts and options thereon for other than bona fide hedging purposes, no 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 -54- of purchase, the in-the-money amount may be excluded in calculating the 5%. Pursuant to published positions of the SEC, the Series may be required to maintain segregated accounts consisting of liquid assets (or, as permitted under applicable regulation, enter into offsetting positions) in connection with its futures contract transactions in order to cover its 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, the Series would continue to be required to continue to make variation margin deposits. In such circumstances, if the 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. (d) The portfolio turnover rate of each of the Small Company Series ordinarily is anticipated to be low and is not expected to exceed 35% per year. Generally, securities will be purchased with the expectation that they will be held for longer than one year. Generally, securities will be held until such time as, in the Advisor's judgment, they are no longer considered an appropriate holding in light of the policy of maintaining portfolios of companies with small market capitalization. The portfolio turnover rate for The U.S. 4-10 Value Series is anticipated to be approximately 35%. For a discussion of The Emerging Markets Small Cap Series' policy with respect to portfolio turnover, see Item 4(a)(ii) in Part A under "The Emerging Markets Series and The Emerging Markets Small Cap Series - Portfolio Structure." Ordinarily, portfolio securities in The U.S. Large Company Series will not be sold except to reflect additions or deletions of the stocks that comprise the S&P 500 Index, including mergers, reorganizations and similar transactions and, to the extent necessary, to provide cash to pay redemptions of the Series' shares. -55- ITEM 14. MANAGEMENT OF THE REGISTRANT (a) AND (b) TRUSTEES AND OFFICERS The names, addresses and dates of birth of the trustees and officers of the Trust and a brief statement of their present positions and principal occupations during the past five years is set forth below. As used below, "DFA Entities" refers to the following: Dimensional Fund Advisors Inc., Dimensional Fund Advisors Ltd., DFA Australia Limited, DFA Investment Dimensions Group Inc. (Registered Investment Company), Dimensional Emerging Markets Fund Inc. (Registered Investment Company), Dimensional Investment Group Inc. (Registered Investment Company) and DFA Securities Inc. TRUSTEES David G. Booth*, 12/2/46, Trustee, President and Chairman-Chief Executive Officer, Santa Monica, CA. President, Chairman-Chief Executive Officer and Director of all DFA Entities, except Dimensional Fund Advisors Ltd., of which he is Chairman and Director. George M. Constantinides, 9/22/47, Trustee, Chicago, IL. Leo Melamed Professor of Finance, Graduate School of Business, University of Chicago. Director, DFA Investment Dimensions Group Inc., Dimensional Investment Group Inc. and Dimensional Emerging Markets Fund Inc. John P. Gould, 1/19/39, Trustee, Chicago, IL. Steven G. Rothmeier Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago. Trustee, First Prairie Funds (registered investment company). Director, DFA Investment Dimensions Group Inc., Dimensional Investment Group Inc., Dimensional Emerging Markets Fund Inc. and Harbor Investment Advisors. Executive Vice President, Lexecon Inc. (economics, law, strategy and finance consulting). Roger G. Ibbotson, 5/27/43, Trustee, New Haven, CT. Professor in Practice of Finance, Yale School of Management. Director, DFA Investment Dimensions Group Inc., Dimensional Investment Group Inc., Dimensional Emerging Markets Fund Inc., Hospital Fund, Inc. (investment management services) and BIRR Portfolio Analysis, Inc. (software products). Chairman and President, Ibbotson Associates, Inc. (software, data, publishing and consulting). Merton H. Miller, 5/16/23, Trustee, Chicago, IL. Robert R. McCormick Distinguished Service Professor Emeritus, Graduate School of Business, University of Chicago. Director, DFA Investment Dimensions Group Inc., Dimensional Investment Group Inc. and Dimensional Emerging Markets Fund Inc. Public Director, Chicago Mercantile Exchange. Myron S. Scholes, 7/1/42, Trustee, Greenwich, CT. Limited Partner, Long-Term Capital Management L.P. (money manager). -56- Frank E. Buck Professor Emeritus of Finance, Graduate School of Business and Professor of Law, Law School, Senior Research Fellow, Hoover Institution, (all) Stanford University. Director, DFA Investment Dimensions Group Inc., Dimensional Investment Group Inc., Dimensional Emerging Markets Fund Inc., Benham Capital Management Group of Investment Companies and Smith Breeden Group of Investment Companies. Rex A. Sinquefield*, 9/7/44, Trustee, Chairman-Chief Investment Officer, Santa Monica, CA. Chairman-Chief Investment Officer and Director of all DFA Entities, except Dimensional Fund Advisors Ltd., of which he is Chairman, Chief Executive Officer and Director. * Interested Trustee of the Trust. OFFICERS Arthur Barlow, 11/7/55, Vice President, Santa Monica, CA. Vice President of all DFA Entities. Truman Clark, 4/8/41, Vice President, Santa Monica, CA. Vice President of all DFA Entities. Consultant until October 1995 and Principal and Manager of Product Development, Wells Fargo Nikko Investment Advisors, San Francisco, CA from 1990-1994. Maureen Connors, 11/17/36, Vice President and Assistant Secretary, Santa Monica, CA. Vice President of all DFA Entities. Robert Deere, 10/8/57, Vice President, Santa Monica, CA. Vice President of all DFA Entities. Irene R. Diamant, 7/16/50, Vice President and Secretary, Santa Monica, CA. Vice President and Secretary of all DFA Entities except Dimensional Fund Advisors Ltd. for which she is Vice President. Richard Eustice, 8/5/65, Vice President and Assistant Secretary, Santa Monica, CA. Eugene Fama, Jr., 1/21/61, Vice President, Santa Monica, CA. Vice President of all DFA Entities. Kamyab Hashemi-Nejad, 1/22/61, Vice President, Controller and Assistant Treasurer of all DFA Entities. Stephen P. Manus, 12/26/50, Vice President, Santa Monica, CA. Managing Director, ANB Investment Management and Trust Company from 1985-1993; President, ANB Investment Management and Trust Company from 1993-1997. Vice President of all DFA Entities. Karen McGinley, 3/10/66, Vice President, Santa Monica, CA. Vice President of all DFA Entities. -57- Catherine L. Newell, 5/7/64, Vice President and Assistant Secretary, Santa Monica, CA. Associate, Morrison & Foerster, LLP from 1989-1996. Vice President and Assistant Secretary of all DFA Entities except Dimensional Fund Advisors Ltd. for which she is Vice President. David Plecha, 10/26/61, Vice President, Santa Monica, CA. Vice President of all DFA Entities. George Sands, 2/8/56, Vice President, Santa Monica, CA. Vice President of all DFA Entities. Michael T. Scardina, 10/12/55, Vice President, Chief Financial Officer and Treasurer, Santa Monica, CA. Vice President, Chief Financial Officer and Treasurer of all DFA Entities. Jeanne C. Sinquefield, Ph.D., 12/2/46, Executive Vice President, Santa Monica, CA. Executive Vice President of all DFA Entities. Scott Thornton, 3/1/63, Vice President, Santa Monica, CA. Vice President of all DFA Entities. Weston Wellington, 3/1/51, Vice President, Santa Monica, CA. Vice President of all DFA Entities. Vice President, Director of Research, LPL Financial Services, Inc., Boston, MA 1987-1994. Rex A. Sinquefield, Trustee, Chairman-Chief Investment Officer of the Trust, and Jeanne C. Sinquefield, Executive Vice President of the Trust, are husband and wife. (c) Set forth below is a table listing, for each Trustee entitled to receive compensation, the compensation received from the Trust during the fiscal year ended November 30, 1997, and the total compensation received from all four registered investment companies for which the Advisor serves as investment advisor during that same fiscal year.
Aggregate Total Compensation Compensation from Trust and Trustee from Trust Fund Complex ------- ------------ ------------------ George M. Constantinides $5,000 $30,000 John P. Gould $5,000 $30,000 Roger G. Ibbotson $5,000 $30,000 Merton H. Miller $5,000 $30,000 Myron S. Scholes $5,000 $30,000
-58- ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES (a) See Item 6(b). (b) As of January 31, 1998, the following shareholders owned beneficially at least 5% of the outstanding shares of the Series, as set forth below. Unless otherwise indicated, the address of each shareholder is 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. THE U.S. 9-10 SMALL COMPANY SERIES DFA Investment Dimensions Group Inc. - The U.S. 9-10 Small Company Portfolio 100% THE U.S. 6-10 SMALL COMPANY SERIES DFA Investment Dimensions Group Inc. - The U.S. 6-10 Small Company Portfolio 78.21% The California Wellness Foundation 6320 Canoga Avenue, Suite 1700 Woodland Hills, CA 91367 16.70% Dimensional Investment Group Inc. - DFA 6-10 Institutional Portfolio 5.10% THE U.S. LARGE COMPANY SERIES Blackrock Funds - Index Equity Portfolio c/o PFPC 400 Bellevue Parkway Wilmington, DE 19809 58.78% DFA Investment Dimensions Group Inc. - The U.S. Large Company Portfolio 41.22% THE DFA ONE-YEAR FIXED INCOME SERIES DFA Investment Dimensions Group Inc. - The DFA One-Year Fixed Income Portfolio 95.33% THE U.S. 6-10 VALUE SERIES DFA Investment Dimensions Group Inc. - The U.S. 6-10 Value Portfolio 94.33% Dimensional Investment Group Inc. - The U.S. 6-10 Value Portfolio II 5.67% THE U.S. LARGE CAP VALUE SERIES DFA Investment Dimensions Group Inc. - The U.S. Large Cap Value Portfolio 57.38%
-59- Dimensional Investment Group Inc. - U.S. Large Cap Value Portfolio III 30.73% Dimensional Investment Group Inc. - RWB/DFA U.S. High Book to Market Portfolio 8.59% THE DFA INTERNATIONAL VALUE SERIES BellSouth Corporation 1155 Peachtree Street N.E. Atlanta, GA 30309 26.09% Dimensional Investment Group Inc. - DFA International Value Portfolio 23.04% Dimensional Investment Group Inc. - RWB/DFA International Value Portfolio III 17.84% DFA Investment Dimensions Group Inc. - DFA International High Book to Market Portfolio 17.32% Dimensional Investment Group Inc. - DFA International Value Portfolio IV 6.43% THE EMERGING MARKETS SERIES DFA Investment Dimensions Group Inc. - Emerging Markets Portfolio 95.77% DFA TWO-YEAR GLOBAL FIXED INCOME SERIES DFA Investment Dimensions Group Inc. - DFA Two-Year Global Fixed Income Portfolio 100% ENHANCED U.S. LARGE COMPANY SERIES DFA Investment Dimensions Group Inc. Enhanced U.S. Large Company Portfolio 100% JAPANESE SMALL COMPANY SERIES DFA Investment Dimensions Group Inc. Japanese Small Company Portfolio 65.60% DFA Investment Dimensions Group Inc. International Small Company Portfolio 34.40% UNITED KINGDOM SMALL COMPANY SERIES DFA Investment Dimensions Group Inc. United Kingdom Small Company Portfolio 74.36% DFA Investment Dimensions Group Inc. International Small Company Portfolio 25.64%
-60- PACIFIC RIM SMALL COMPANY SERIES DFA Investment Dimensions Group Inc. Pacific Rim Small Company Portfolio 70.58% DFA Investment Dimensions Group Inc. International Small Company Portfolio 29.42% CONTINENTAL SMALL COMPANY SERIES DFA Investment Dimensions Group Inc. Continental Small Company Portfolio 71.12% DFA Investment Dimensions Group Inc. International Small Company Portfolio 28.88% EMERGING MARKETS SMALL CAP SERIES South Dakota Retirement System 4009 W. 49th Street, Suite 300 Sioux Falls, SD 57105 99.26% U.S. 4-10 VALUE SERIES DFA Investment Dimensions Group Inc. - U.S. 4-10 Value Portfolio 100%
(c) As of January 31, 1998, the trustees and officers as a group owned less than 1% of each Series' outstanding stock. ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES (a) The information provided in response to this item is in addition to the information provided in response to Item 5(b) in Part A and Items 14(a) and (b) in this Part B. David G. Booth and Rex A. Sinquefield are shareholders of the Advisor's outstanding voting stock and may be considered controlling persons of the Advisor. For the services its provides as investment advisor to each Series of the Trust, the Advisor is paid a monthly fee calculated as a percentage of average net assets of the Series. For the fiscal periods ended November 30, 1995, 1996 and 1997, as applicable, the Series paid management fees as set forth in the following table:
1995 1996 1997 (000) (000) (000) U.S. 6-10 Small Company $57 $81 $102 Japanese Small Company n/a $106 $258
-61- United Kingdom Small Company n/a $52 $180 Pacific Rim Small Company n/a $65 $230 Continental Small Company n/a $100 $351 U.S. Large Company $19 $62 $160 Enhanced U.S. Large Company n/a $386 $17 DFA One-Year Fixed Income $310 $82 $392 DFA Two-Year Global Fixed Income n/a $69 $185 U.S. 6-10 Value $976 $699 $3,534 U.S. Large Cap Value $306 $699 $1,255 DFA International Value $937 $2,124 $2,997 Emerging Markets $30 $111 $226 Emerging Markets Small Cap n/a n/a $47
The Japanese Small Company, United Kingdom Small Company, Pacific Rim Small Company and Continental Small Company Series commenced operations on August 10, 1996. The Emerging Markets Small Cap Series commenced operations on December 2, 1996. The U.S. 9-10 Small Company Series and The U.S. 4-10 Value Series had not commenced operations as of November 30, 1997. From December 1, 1993 through August 8, 1996, the Advisor agreed to waive its fee under the Investment Management Agreement with respect to The DFA International Value Series to the extent necessary to keep the cumulative annual expenses of the Series to not more than .45% of average net assets of the Series on an annualized basis. (b) The information provided in response to this item is in addition to the information provided in response to Item 5(a) of Part A. Initially, the investment management agreement with respect to each Series is in effect for a period of two years. Thereafter, each agreement may continue in effect for successive annual periods, provided such continuance is specifically approved at -62- least annually by a vote of the Trust's Board of Trustees or, by a vote of the holders of a majority of the Series' outstanding voting securities, and in either event by a majority of the trustees who are not parties to the agreement or interested persons of any such party (other than as trustees of the Trust), cast in person at a meeting called for that purpose. An investment management agreement may be terminated without penalty at any time by the Series or by the Advisor on 60 days' written notice and will automatically terminate in the event of its assignment as defined in the 1940 Act. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) Not applicable. (g) Not applicable. (h) Beginning February 17, 1998, Citibank, N.A. ("Citibank"), 111 Wall Street, New York, New York, 10005, will succeed Boston Safe Deposit and Trust Company ("Boston Safe"), Princess House, 1 Suffolk Lane, London EC4R 0AN, England, as the global custodian for The DFA International Value, Japanese Small Company, United Kingdom Small Company, Pacific Rim Small Company, Continental Small Company, The DFA Two-Year Global Fixed Income and The Enhanced U.S. Large Company Series (co-custodian with PNC Bank, N.A.). To ensure an orderly transition, the conversion to Citibank will be accomplished Series by Series and it is expected that the conversion will take approximately two and a half months from February 17, 1998. During the conversion process, Boston Safe will continue to serve as global custodian for each Series until its conversion date. The Chase Manhattan Bank, 4 Chase Metrotech Center, Brooklyn, NY 11245, serves as custodian for The Emerging Markets Series and The Emerging Markets Small Cap Series. PNC Bank, N.A., 200 Stevens Drive, Airport Business Center, Lester, PA 19113, serves as custodian for all other Series. The custodians maintain separate accounts for the Series; make receipts and disbursements of money on behalf of the Series; and collect and receive income and other payments and distributions on account of the Series' portfolio securities. The custodians do not participate in decisions relating to the purchase and sale of portfolio securities. Coopers & Lybrand L.L.P., 2400 Eleven Penn Center, Philadelphia, Pennsylvania 19103, the Trust's independent accountant, audit the Trust's financial statements on an annual basis. (i) Not applicable. -63- ITEM 17. BROKERAGE ALLOCATION (a) The following table depicts brokerage commissions paid by the following Series:
BROKERAGE COMMISSIONS FISCAL YEARS ENDED NOVEMBER 30, 1995, 1996 AND 1997 1995 1996 1997 U.S. 6-10 Small Company $ 361,784 $ 473,887 $ 855,652 Japanese Small Company n/a $ 466,795 $ 602,098 United Kingdom Small Company n/a $ 86,854 $ 68,028 Pacific Rim Small Company n/a $ 181,812 $ 485,846 Continental Small Company Series n/a $ 214,631 $ 145,195 U.S. Large Company $ 15,289 $ 72,262 $ 40,689 Enhanced U.S. Large Company n/a $ 1,650 $ 10,284 U.S. 6-10 Value $1,027,015 $2,754,009 $4,591,853 U.S. Large Cap Value $ 410,503 $ 934,452 $ 929,005 DFA International Value $ 542,306 $1,251,242 $1,133,787 Emerging Markets $ 166,601 $ 437,088 $ 559,853 Emerging Markets Small Cap n/a n/a $ 123,081
The substantial increases or decreases in the amount of brokerage commissions paid by certain Series from year to year indicated in the foregoing table resulted from increases or decreases in the amount of securities bought and sold by those Series. -64- No commissions were paid to affiliates or affiliates of affiliates during fiscal years 1995, 1996 or 1997. The DFA One-Year Fixed Income Series acquires and sells securities on a net basis with dealers which are major market markers 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, the Advisor seeks to obtain the most favorable price for the securities being traded among the dealers with whom such Series effects transactions. Portfolio transactions will be placed with a view to receiving the best price and execution. The OTC companies eligible for purchase by The U.S. 6-10 Small Company Series, The U.S. 9-10 Small Company Series, The U.S. 4-10 Value Series and The U.S. 6-10 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 brokers 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 to sometimes trade larger blocks than would be possible by going through a single market maker. 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 U.S. 6-10 Small Company Series, The U.S. 9-10 Small Company Series and the U.S. 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 Series can effect transactions at the best available prices. Brokerage commissions for transactions in securities listed on the Tokyo Stock Exchange ("TSE") and other Japanese securities exchanges are fixed. Under the current regulations of the TSE and the Japanese Ministry of Finance, member and non-member firms of Japanese exchanges are required to charge full commissions to all customers other than banks and certain financial institutions, but members and licensed non-member firms may confirm transactions to banks and financial institution affiliates located outside Japan with institutional discounts on brokerage commissions. The Japanese Small Company Series has been able to avail itself of institutional discounts. The Series' ability to effect transactions at a discount from fixed commission rates depends on a number of factors, including the size of the transaction, the relation between the cost to the -65- member or the licensed non-member firm of effecting such transaction and the commission receivable, and the law, regulation and practice discussed above. There can be no assurance that the Series will continue to be able to realize the benefit of discounts from fixed commissions. (b) Not applicable. (c) The Series 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 this goal in view. The Advisor monitors the performance of brokers which effect transactions for the Series to determine the effect that the Series' trading has on the market prices of the securities in which they invest. The Advisor also checks the rate of commission being paid by the Series to their brokers to ascertain that they are competitive with those charged by other brokers for similar services. Dimensional Fund Advisors Ltd. performs these services for the United Kingdom and Continental Small Company Series and DFA Australia Limited performs these services for the Japanese and Pacific Rim Small Company Series. Transactions also may be placed with brokers who provide the Advisor or sub-advisors with investment research, such as reports concerning individual issuers, industries and general economic and financial trends and other research services. The Investment Management Agreements permit the Advisor knowingly to pay commissions on such 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 the Trust. Research services furnished by brokers through whom securities transactions are effected may be used by the Advisor in servicing all of its accounts and not all such services may be used by the Advisor with respect to the Trust. Brokerage transactions may be placed with securities firms that are affiliated with an affiliate of the Advisor. Commission paid on such transactions would be commensurate with the rate of commissions paid on similar transactions to brokers that are not so affiliated. (d) During the fiscal year ended November 30, 1997, the Series paid commissions for securities transactions to brokers which provided market price monitoring services, market studies and research services to the Series as follows: -66-
VALUE OF SECURITIES BROKERAGE TRANSACTIONS COMMISSIONS U.S. 6-10 Small Company $153,272,761 $ 486,637 Japanese Small Company $ 40,864,513 $ 253,707 U.S. 6-10 Value $453,009,643 $1,899,654 U.S. Large Cap Value $ 78,961,638 $ 122,527 DFA International Value $ 4,623,558 $ 13,922 Pacific Rim Small Company $ 8,885,178 $ 35,584 ------------ ---------- TOTAL: $739,617,291 $2,812,031 ------------ ---------- ------------ ----------
-67- (e) Not applicable. ITEM 18. CAPITAL STOCK AND OTHER SECURITIES (a) The information provided in response to this item is in addition to the information provided in response to Item 6(a) in Part A. The Trust does not intend to hold annual meetings; it may, however, hold a meeting for such purposes as changing fundamental investment limitations, approving a new investment management agreement or any other matters which are required to be acted on by shareholders under the 1940 Act. Shareholders may receive assistance in communicating with other shareholders in connection with the election or removal of Trustees similar to the provisions contained in Section 16(c) of the 1940 Act. (b) Not applicable. ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED The information provided in response to this item is in addition to the information provided in response to Items 7 and 8 in Part A. (a) and (b) The Trust will accept purchase and redemption orders on each day that the NYSE is open for business, regardless of whether the Federal Reserve System is closed. However, no purchases by wire may be made on any day that the Federal Reserve System is closed. The Trust will generally be closed on days that the NYSE is closed. The NYSE is scheduled to be open Monday through Friday throughout the year except for days closed to recognize New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. The Federal Reserve System is closed on the same days as the NYSE, except that it is open on Good Friday and closed on Columbus Day and Veterans' Day. Orders for redemptions and purchases will not be processed if the Trust is closed. The TSE is closed on the following days in 1998: January 1, 2, 3 and 15, February 11, March 21, April 29, May 3, 4 and 5, July 20, September 15 and 23, October 10, November 3 and 23 and December 23 and 31. Orders for the purchase and redemption of shares of the Japanese Series received on those days will be priced as of the close of the NYSE on the next day that the TSE is open for trading. -68- The Trust reserves the right, in its sole discretion, to suspend the offering of shares of any or all Series or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interest of the Trust or a Series. Securities accepted in exchange for shares of a Series will be acquired for investment purposes and will be considered for sale under the same circumstances as other securities in the Portfolio. The Trust 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 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 Trust 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. (c) The Trust has filed a notice of election pursuant to Rule 18f-1 under the 1940 Act. (See Item 8(a) of Part A.) ITEM 20. TAX STATUS The information provided in response to this item is in addition to the information provided in response to Items 6(f) and (g) in Part A. FEDERAL TAX TREATMENT OF OPTIONS, FUTURES CONTRACTS AND SIMILAR POSITIONS The investment by a Series in options, futures contracts and options on futures contracts are subject to many complex and special tax rules. For example, options on stock and on narrowed-based stock indexes will generally produce long-term or short-term capital gain or loss upon the exercise, lapse, or closing out of the option or sale of the underlying stock or security. By contrast, the treatment by a Series of certain other options, futures and forward contracts is generally governed by Section 1256 of the Code. These "Section 1256" positions generally include listed options on debt securities, options on broad-based stock indexes, options on futures contracts, regulated futures contracts and certain foreign currency contracts and options thereon. Absent a tax election to the contrary, each such Section 1256 position held by a Series will be marked-to-market (i.e., treated as if it were sold for fair market value) on the last business day of a Series' fiscal year, and all gain or loss associated with fiscal year transactions and mark-to-market positions at fiscal year end (except certain currency gain or loss covered by Section 988 of the Code) will generally be treated as 60% long-term capital gain or loss and 40% short-term capital gain or loss. The effect of Section 1256 mark-to-market rules may be to accelerate income or to convert what otherwise would have been long-term capital gains into short-term capital gains or short-term capital losses into long-term capital losses within a -69- Series. The acceleration of income on Section 1256 positions may require a Series to accrue taxable income without the corresponding receipt of cash. In order to generate cash to satisfy the distribution requirements of the Code, a Series may be required to dispose of portfolio securities that it otherwise would have continued to hold or to use cash flows from other sources such as the sale of a Series' shares. In these ways, any or all of these rules may affect both the amount, character and timing of income distributed to shareholders by a Series. When a Series holds an option or contract which substantially diminishes a Series' risk of loss with respect to another position of a Series (as might occur in some hedging transactions), this combination of positions could be treated as a "straddle" for tax purposes, resulting in possible deferral of losses, adjustments in the holding periods of a Series' securities and conversion of short-term capital losses into long-term capital losses. Certain tax elections exist for mixed straddles (i.e., straddles comprised of at least one Section 1256 position and at least one non-Section 1256 position) which may reduce or eliminate the operation of these straddle rules. The Taxpayer Relief Act of 1997 has added new provisions for dealing with transactions that are generally called "Constructive Sale Transactions." Under these rules, a Series must recognize gain (but not loss) on any constructive sale of an appreciated financial position in stock, a partnership interest or certain debt instruments. A Series will generally be treated as making a constructive sale when it: 1) enters into a short sale on the same property, 2) enters into an offsetting notional principal contract, or 3) enters into a -70- futures or forward contract to deliver the same or substantially similar property. Other transactions (including certain financial instruments called collars) will be treated as constructive sales as provided in Treasury regulations to be published. There are also certain exceptions that apply for transactions that are closed before the end of the 30th day after the close of the taxable year. ITEM 21. UNDERWRITERS (a) Not applicable. (b) Not applicable. (c) Not applicable. ITEM 22. CALCULATION OF PERFORMANCE DATA (a) Not applicable. (b) Following are quotations of the annualized percentage total returns for the one-, five-, and ten-year periods ended November 30, 1997 (as applicable) using the standardized method of calculation required by the SEC. For those Series in effect for less than one, five or ten years, the time periods during which the Series have been active have been substituted for the periods stated (which in no case extends prior to the effective date of the registration statement relating to a particular Series).
ONE FIVE TEN YEAR YEARS YEARS The U.S. 6-10 Small Company 26.47 16.39 n/a Series (58 months) The Japanese Small Company -51.64 -48.34 n/a Series (15 months) The United Kingdom Small 9.0 14.52 n/a Company Series (15 months) The Pacific Rim Small Company -37.75 -28.39 n/a Series (15 months) -71- ONE FIVE TEN YEAR YEARS YEARS The Continental Small Company 13.50 12.69 n/a Series (15 months) The U.S. Large Company Series 28.36 19.69 n/a (58 months) The Enhanced U.S. Large Company 27.62 37.90 n/a Series (16 months) The DFA One-Year Fixed Income 5.81 5.34 n/a Series (57 months) The DFA Two-Year Global Fixed 5.98 6.56 n/a Income Series (22 months) The U.S. 6-10 Value Series 33.96 20.99 n/a (56 months) The U.S. Large Cap Value Series 25.31 18.19 n/a (56 months) The DFA International Value -3.85 4.88 n/a Series (45 months) The Emerging Markets Series -16.88 .13 n/a (43 months) -72- The Emerging Markets Small Cap -22.20 n/a n/a Series (11 months)
As the following formula indicates, the average annual total return is determined by finding the average annual compounded rates of 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 price on the reinvestment dates during the period. The quotation 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 = average annual total 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). ITEM 23. FINANCIAL STATEMENTS The audited financial statements and financial highlights of the Trust for its fiscal year ended November 30, 1997, as set forth in the Trust's annual report to shareholders, and the report of Coopers & Lybrand L.L.P., independent accountants, also appearing therein, are incorporated herein by reference. The audited annual report does not contain any data regarding The U.S. 9-10 Small Company Series and The U.S. 4-10 Value Series because such Series had not commenced operations as of November 30, 1997. -73- THE DFA INVESTMENT TRUST COMPANY FORM N-1A PART C: OTHER INFORMATION ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements* (b) Exhibits: The following exhibits are attached hereto, except as otherwise noted: (1) (i) Agreement and Declaration of Trust INCORPORATED BY REFERENCE TO: Filing: Amendment No. 5 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: December 1, 1995 (ii) Certificate of Trust is filed herewith. (iii) Certificate of Amendment of Certificate of Trust is filed herewith. (2) By-Laws is filed herewith. (3) None (4) Not applicable (5) (i) Investment Management Agreement re: The U.S. 6-10 Small Company Series is filed herewith. (ii) Investment Management Agreement re: The U.S. Large Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 5 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: December 1, 1995 (iii) Investment Management Agreement re: The DFA One-Year Fixed Income Series is filed herewith. (iv) Investment Management Agreement re: The U.S. Large Cap Value Series (formerly The U.S. Large Cap High Book to Market Series) is filed herewith. -74- (v) Investment Management Agreement re: The U.S. 6-10 Value Series (formerly The U.S. Small Cap High Book to Market Series) is filed herewith. (vi) Investment Management Agreement re: The DFA International Value Series is filed herewith. (vii) Investment Management Agreement re: The Emerging Markets Series is filed herewith. (viii) Investment Management Agreement re: The Enhanced U.S. Large Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 6 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: February 7, 1996 (ix) Investment Management Agreement re: The DFA Two-Year Global Fixed Income Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 6 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: February 7, 1996 (x) Investment Management Agreement re: The Japanese Small Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 7 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: August 7, 1996 (xi) Investment Management Agreement re: The United Kingdom Small Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 7 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: August 7, 1996 (xii) Investment Management Agreement re: The Pacific Rim Small Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 7 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: August 7, 1996 (xiii) Investment Management Agreement re: The Continental Small Company Series -75- INCORPORATED BY REFERENCE TO: Filing: Amendment No. 7 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: August 7, 1996 (xiv) Sub-Advisory Agreement with DFA Australia Ltd. re: The Japanese Small Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 7 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: August 7, 1996 (xv) Sub-Advisory Agreement with Dimensional Fund Advisors Ltd. re: The United Kingdom Small Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 7 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: August 7, 1996 (xvi) Sub-Advisory Agreement with DFA Australia Ltd. re: The Pacific Rim Small Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 7 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: August 7, 1996 (xvii) Sub-Advisory Agreement with Dimensional Fund Advisors Ltd. re: The Continental Small Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 7 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: August 7, 1996 (xviii) Investment Management Agreement re: The Emerging Markets Small Cap Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 9 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: February 24, 1997 (xix) Investment Management Agreement re: The U.S. 9-10 Small Company Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 12 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 -76- Filing Date: November 28, 1997 -77- (xx) Investment Management Agreement re: The U.S. 4-10 Value Series INCORPORATED BY REFERENCE TO: Filing: Amendment No. 12 to the Registration Statement of Registrant on Form N-1A File No.: 811-7436 Filing Date: November 28, 1997 (6) Agreement with DFA Securities Inc. is filed herewith. (7) None (8) (i) Form of Custodian Agreement between Registrant and Provident National Bank is filed herewith. (ii) Form of Custodian Agreement between Registrant and Boston Safe Deposit and Trust Company is filed herewith. (iii) Form of Custodian Agreement between Registrant and The Chase Manhattan Bank, N.A. is filed herewith. (iv) Custodial Services Agreement with Citibank, N.A. is filed herewith. (9) (i) Form of Transfer Agency Agreement with Provident Financial Processing Corporation is filed herewith. (ii) Form of Administration and Accounting Services Agreement with Provident Financial Processing Corporation is filed herewith. (10) Not applicable (11) Consent of Coopers & Lybrand L.L.P. is filed herewith (12) Not applicable (13) Not applicable (14) Not applicable (15) Not applicable (16) Not applicable -78- (17) Financial Data Schedules (18) Not applicable - -------------------- * Audited financial statements of the Trust for the fiscal year ended November 30, 1997 were filed electronically via the EDGAR system on February 5, 1998 as the Fund's annual report to shareholders pursuant to Rule 30b2-1 under the 1940 Act and are incorporated in Part B by reference. ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT. If an investor beneficially owns more than 25% of the outstanding voting securities of a feeder fund that invests all of its investable assets in a Series of the Trust, then the feeder fund and its corresponding Series may be deemed to be under the common control of such investor. Accordingly, certain feeder portfolios of DFA Investment Dimensions Group ("DFA IDG") and Dimensional Investment Group ("DIG"), both Maryland corporations and registered investment companies, may be deemed to be under common control with their corresponding Series of the Trust. As of January 31, 1998, the following persons beneficially owned more than 25% of the outstanding voting securities of the feeder portfolios investing in the Trust:
DFA IDG - ------- JAPANESE SMALL COMPANY PORTFOLIO BellSouth Corporation 1155 Peachtree Street N.E. Atlanta, GA 30309-3610 52.94% UNITED KINGDOM SMALL COMPANY PORTFOLIO BellSouth Corporation (see above address) 51.75% CONTINENTAL SMALL COMPANY PORTFOLIO BellSouth Corporation (see above address) 55.14% PACIFIC RIM SMALL COMPANY PORTFOLIO
-79- BellSouth Corporation (see above address) 61.03% EMERGING MARKETS SMALL CAP PORTFOLIO Dimensional Fund Advisors Inc. 100% 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 INTERNATIONAL SMALL COMPANY PORTFOLIO San Diego County Employees Retirement Association 1495 Pacific Highway 350 San Diego, CA 92101 26.28% U.S. 6-10 SMALL COMPANY PORTFOLIO McKinsey & Company Master Retirement Trust 55 E. 52nd Street New York, NY 10055 25.87% ENHANCED U.S. LARGE COMPANY PORTFOLIO Misericordia Home Endowment Fund 6300 N. Ridge Avenue Chicago, IL 60660 25.90% U.S. 4-10 VALUE PORTFOLIO Dimensional Fund Advisors Inc. (see above address) 100%
DIG - --- 6-10 INSTITUTIONAL PORTFOLIO NI-GAS Trust Savings Investment and Thrift Plan P.O. Box 190 Aurora, IL 60507 69.53% Utah Retirement Systems 540 E. 200 South Salt Lake City, UT 84102 27.43% ONE-YEAR FIXED INCOME II PORTFOLIO Home Depot Future Builders c/o Wachovia Bank of N. Carolina 301 N. Main Street Winston-Salem, NC 27150 65.73% U.S. 6-10 VALUE PORTFOLIO II BellSouth Corporation 401(k) 1155 Peachtree Street N.E. Atlanta, GA 30309-3610 100%
-80- U.S. LARGE CAP VALUE PORTFOLIO II BellSouth Corporation 401(k) (see above address) 100% DFA INTERNATIONAL VALUE PORTFOLIO II BellSouth Corporation 401(k) (see above address) 100% EMERGING MARKETS PORTFOLIO II Citibank Savings Incentive Plan 153 E. 53rd Street New York, NY 10043 100% DFA INTERNATIONAL VALUE PORTFOLIO IV Citibank Savings Incentive Plan 153 E. 53rd Street New York, NY 10043 100%
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
Title of Class -------------- (Shares of Beneficial Interest, Number of Record Holders Par Value $.01) as of January 31, 1998 ------------------------ The U.S. 9-10 Small Company Series 2 The U.S. 6-10 Small Company Series 3 The U.S. Large Company Series 3 The DFA One-Year Fixed Income Series 3 The U.S. 6-10 Value Series 2 The U.S. 4-10 Value Series 1 The U.S. Large Cap Value Series 4 The DFA International Value Series 9 The Emerging Markets Series 3 The Emerging Markets Small Cap Series 3 The Enhanced U.S. Large Company Series 1 The DFA Two-Year Global Fixed Income Series 1 The Japanese Small Company Series 3 The United Kingdom Small Company Series 3 The Pacific Rim Small Company Series 3 The Continental Small Company Series 3
ITEM 27. INDEMNIFICATION. Reference is made to Article VII of the Registrant's Agreement and Declaration of Trust (Exhibit 24(b)(1)(i)) and to Article X of the Registrant's By-Laws (Exhibit 24(b)(2)), which are incorporated herein by reference. Pursuant to Rule 484 under the Securities Act of 1933, as amended, the Registrant furnishes the following undertaking: "Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees, officers -81- and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a trustee, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue." ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER. Dimensional Fund Advisors Inc., the investment manager for the Registrant, is also the investment manager for three other registered open-end investment companies, DFA Investment Dimensions Group Inc., Dimensional Emerging Markets Funds Inc. and Dimensional Investment Group Inc. The Advisor also serves as sub-advisor for certain other registered investment companies. For additional information, please see "Management of the Trust" in PART A and "Management of the Registrant" in PART B of this Registration Statement. Additional information as to the Advisor and the directors and officers of the Advisor is included in the Advisor's Form ADV filed with the Commission (File No. 801-16283), which is incorporated herein by reference and sets forth the officers and directors of the Advisor and information as to any business, profession, vocation or employment of a substantial nature engaged in by those officers and directors during the past two years. ITEM 29. PRINCIPAL UNDERWRITERS (a) Not applicable (b) Not applicable (c) Not applicable ITEM 30. LOCATIONS OF ACCOUNTS AND RECORDS. All accounts and records are maintained by PFPC Inc., 400 Bellevue Parkway, Wilmington, DE 19809. ITEM 31. MANAGEMENT SERVICES. There are no management-related service contracts not discussed in Part A or Part B. -82- ITEM 32. UNDERTAKING. (a) Not applicable (b) Not applicable (c) The Registrant undertakes to furnish each person to whom this Post-Effective Amendment is delivered a copy of its latest annual report to shareholders, upon request and without charge. (d) The Registrant hereby undertakes to promptly call a meeting of shareholders for the purpose of voting upon the question of removal of any trustee or trustees when requested in writing to do so by the record holders of not less than 10 per centum of the Registrant's outstanding shares and to assist its shareholders in accordance with the requirements of Section 16(c) of the Investment Company Act of 1940 relating to shareholder communications. -83- SIGNATURE Pursuant to the requirements of the Investment Company Act of 1940, as amended, the Registrant has duly caused this amendment to its Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Santa Monica, the State of California, as of the 2nd day of March, 1998. THE DFA INVESTMENT TRUST COMPANY By:/s/ Irene R. Diamant ---------------------------------------- Irene R. Diamant Vice President -84- EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 99(b)(1)(ii) Certificate of Trust 99(b)(1)(iii) Certificate of Amendment of Certificate of Trust 99(b)(2) Bylaws 99(b)(5)(i) Investment Management Agreement re: The U.S. 6-10 Small Company Series 99(b)(5)(iii) Investment Management Agreement re: The DFA One-Year Fixed Income Series 99(b)(5)(iv) Investment Management Agreement re: The U.S. Large Cap Value Series (formerly The U.S. Large Cap High Book to Market Series) 99(b)(5)(v) Investment Management Agreement re: The U.S. 6-10 Value Series (formerly The U.S. Small Cap High Book to Market Series) 99(b)(5)(vi) Investment Management Agreement re: The DFA International Value Series 99(b)(5)(vii) Investment Management Agreement re: The Emerging Markets Series 99(b)(6) Agreement with DFA Securities Inc. 99(b)(8)(ii) Form of Custodian Agreement between Registrant and Boston Safe Deposit and Trust Company 99(b)(8)(iii) Form of Custodian Agreement between Registrant and The Chase Manhattan Bank, N.A. 99(b)(8)(iv) Custodial Services Agreement with Citibank, N.A. 99(b)(9)(i) Form of Transfer Agency Agreement with Provident Financial Processing Corporation, dated January 15, 1993 99(b)(9)(ii) Transfer Agency Agreement, Amendment Number One, dated 12/1/93 99(b)(9)(iii) Form of Administration and Accounting Services Agreement with Provident Financial Processing Corporation, dated 12/15/93 99(b)(9)(iv) Form of Administration and Accounting Services Agreement Amendment Number One, dated 12/1/93 -85- 99(b)(11) Consent of Coopers & Lybrand L.L.P. Exh 27.1 Financial Data Schedule for U.S. 6-10 Small Company Series Exh 27.2 Financial Data Schedule for U.S. Small Cap Value Series Exh 27.3 Financial Data Schedule for DFA One-Year Fixed Income Series Exh 27.4 Financial Data Schedule for U.S. Large Company Series Exh 27.5 Financial Data Schedule for U.S. Large Cap Value Series Exh 27.6 Financial Data Schedule for DFA International Value Series Exh 27.7 Financial Data Schedule for DFA Emerging Markets Series Exh 27.8 Financial Data Schedule for DFA Two-Year Global Fixed Income Series Exh 27.9 Financial Data Schedule for DFA Two-Year Corporate Fixed Income Series Exh 27.10 Financial Data Schedule for DFA Two-Year Government Series Exh 27.11 Financial Data Schedule for Enhanced U.S. Large Company Series Exh 27.12 Financial Data Schedule for Japanese Small Company Series Exh 27.13 Financial Data Schedule for United Kingdom Small Company Series Exh 27.14 Financial Data Schedule for Continental Small Company Series Exh 27.15 Financial Data Schedule for Pacific Rim Small Company Series Exh 27.16 Financial Data Schedule for Emerging Markets Small Cap Series -86- EX-99.B1II 2 EXHIBIT 99.(B)(1)(II) CERTIFICATE OF TRUST OF THE DFA TRUST COMPANY a Delaware Business Trust This Certificate of Trust of THE DFA TRUST COMPANY (the "Trust"), dated as of this 11th day of September, 1992, is being duly executed and filed in order to form a business trust pursuant to the Delaware Business Trust Act (the "Act"), Del. Code Ann. tit. 12, Sections 3801-3819. 1. NAME. The name of the business trust formed hereby is "THE DFA TRUST COMPANY." 2. REGISTERED OFFICE AND REGISTERED AGENT. The Trust will become, prior to the issuance of beneficial interests, a registered investment company under the Investment Company Act of 1940, as amended. Therefore, in accordance with section 3807(b) of the Act, the Trust has and shall maintain in the State of Delaware a registered office and a registered agent for service of process. (a) REGISTERED OFFICE. The registered office of the Trust in Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801. (b) REGISTERED AGENT. The registered agent for service of process on the Trust in Delaware is The Corporation Trust Company. 3. LIMITATION ON LIABILITY. Pursuant to section 3804 of the Act, in the event that the Trust's governing instrument, as defined in section 3801(f) of the Act, creates one or more series as provided in section 3806(b)(2) of the Act, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series of the Trust shall be enforceable against the assets of such series only, and not against the assets of the Trust generally. IN WITNESS WHEREOF, the Trustees named below do hereby make and enter into this Declaration of Trust as of the 11th day of September, 1992. /s/ David G. Booth /s/ Rex A. Sinquefield - ------------------------------ ------------------------------ David G. Booth Rex A. Sinquefield 1299 Ocean Avenue, 11th Floor 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 Santa Monica, CA 90401 /s/ George M. Constantinides /s/ John P. Gould - ------------------------------ ------------------------------ George M. Constantinides John P. Gould 1101 East 58th Street 1101 East 58th Street Chicago, IL 60637 Chicago, IL 60637 /s/ Roger G. Ibbotson /s/ Merton H. Miller - ------------------------------ ------------------------------ Roger G. Ibbotson Merton H. Miller 135 Prospect Street 1101 East 58th Street New Haven, CT 06250 Chicago, IL 60637 /s/ Myron S. Scholes - ------------------------------ Myron S. Scholes 7 World Trade Center 42nd Floor New York, NY 10048 THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 EX-99.B1III 3 EXHIBIT 99.(B)(1)(III) CERTIFICATE OF AMENDMENT TO THE CERTIFICATE OF TRUST OF THE DFA TRUST COMPANY a Delaware Business Trust This Certificate of Amendment to the Certificate of Trust of THE DFA TRUST COMPANY (the "Trust"), dated as of this 15th day of January, 1993, is being duly executed and filed pursuant to Section 3810(b) of the Delaware Business Trust Act. 1. The name of the business trust is "THE DFA TRUST COMPANY." 2. The Trust filed a Certificate of Trust with the State of Delaware, Office of the Secretary of State, on October 27, 1992. 3. The Certificate of Trust inadvertently omitted the future effective date of the Certificate of Trust. This Certificate of Amendment amends the Certificate of Trust for accounting and tax purposes only to specify an effective date of the Certificate of Trust as January 15, 1993. 4. This Certificate of Amendment also amends the Certificate of Trust to change the name of the Trust to the following: The DFA Investment Trust Company. IN WITNESS WHEREOF, the Trustee named below does hereby make and enter into this Certificate of Amendment to the Certificate of Trust as of the 15th day of January, 1993. /s/ David G. Booth -------------------------------- David G. Booth Trustee EX-99.B2 4 EXHIBIT 99.(B)(2) THE DFA TRUST COMPANY A DELAWARE BUSINESS TRUST * * * * * * * * * BY-LAWS * * * * * * * * * ARTICLE I SECTION 1. DELAWARE OFFICE. The registered office of The DFA Trust Company (the "Trust") in Delaware shall be located at 1209 Orange Street, Wilmington, Delaware 19801, and the name and address of its Resident Agent for service of process is The Corporation Trust Company. SECTION 2. OTHER OFFICES. The Trust shall also have a place of business in Santa Monica, California, and the Trust shall have the power to open additional offices for the conduct of its business, either within or outside the States of Delaware and California, at such places as the Board of Trustees may from time to time designate. SECTION 3. FISCAL YEAR. Unless otherwise provided by resolution of the Board of Trustees the fiscal year of the Trust shall begin December 1 and end on the last day of November. ARTICLE II MEETINGS OF SHAREHOLDERS SECTION 1. PLACE OF MEETING. Meetings of shareholders shall be held at any place designated by the Board of Trustees. In the absence of any such designation, shareholders' meetings shall be held at the principal office in Santa Monica. SECTION 2. CALL OF MEETINGS. Meetings of the shareholders may be called at any time by the President, or by a majority of the Board of Trustees. The Board of Trustees shall call a meeting of shareholders for the purpose of voting upon the question of removal of one or more Trustees upon the written request of the holders of not less than ten percent of the outstanding shares. SECTION 3. VOTING. The holders of each share of beneficial interest of the Trust then issued and outstanding and entitled to vote, irrespective of the series, shall be voted in the aggregate and not by series, except: (1) when otherwise expressly provided by the Agreement and Declaration of Trust; and (2) when required by the Investment Company Act of 1940, as amended, shares shall be voted by series. A shareholder may cast his vote in person or by proxy, but no proxy shall be valid after eleven months from its date, unless otherwise provided in the proxy. At all meetings of shareholders, 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 4. INSPECTORS. At any election of Trustees, the Board of Trustees prior thereto may, or, if they have not so acted, the Chairman of the meeting may, and upon the request of the holders of ten percent of the shares entitled to vote at such election shall, appoint two inspectors of election who shall first subscribe an oath of affirmation to execute faithfully the duties of inspectors 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 Trustee shall be appointed such inspector. 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 ten percent of the shares entitled to vote on such election or matter. ARTICLE III TRUSTEES SECTION 1. PLACE OF MEETING. Meetings of the Board of Trustees, regular or special, may be held at any place in or out of the State of Delaware as the Board may from time to time determine. SECTION 2. TELEPHONE MEETING. Members of the Board of Trustees or a committee of the Board of Trustees may participate in a meeting by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. SECTION 3. QUORUM. At all meetings of the Board of Trustees a majority of the entire Board of Trustees shall constitute a quorum for the transaction of business and the action of a majority of the Trustees present at any meeting at which a quorum is present shall be the action of the Board of Trustees unless the concurrence of a greater or different proportion is required for such action by the Investment Company Act of 1940. If a quorum shall not be present at any meeting of Trustees, the Trustees present thereat may by a majority vote adjourn the meeting -2- from time to time, without notice other than announcement at the meeting, until a quorum shall be present. SECTION 4. REGULAR MEETINGS. Regular meetings of the Board of Trustees may be held without notice at such time and place as shall from time to time be determined by the Board of Trustees. SECTION 5. SPECIAL MEETINGS. Special meetings of the Board of Trustees may be called by the President on one day's notice to each Trustee; special meetings shall be called by the President or Secretary in like manner and on like notice on the written request of two Trustees. SECTION 6. INFORMAL ACTIONS. Any action required or permitted to be taken at any meeting of the Board of Trustees 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 7. COMMITTEES. The Board of Trustees may by resolution passed by a majority of the whole Board appoint from among its members an executive committee and other committees composed of two or more Trustees, and may delegate to such committees, in the intervals between meetings of the Board of Trustees, any or all of the powers of the Board of Trustees in the management of the business and affairs of the Trust. 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 Trustees to act in the place of such absent member. SECTION 8. ACTION OF COMMITTEE. A committee shall report its actions and recommendations to the Board of Trustees at the Board meeting next succeeding the committee meeting, and any action by a committee shall be subject to revision and alteration by the Board of Trustees, provided that no rights, of third persons shall be affected by any such revision or alteration. SECTION 9. COMPENSATION. Any Trustee, whether or not he is a salaried officer or employee of the Trust, may be compensated for his services as Trustee or as a member of a committee of Trustees, 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 Trustees may from time to time determine. ARTICLE IV NOTICES -3- SECTION 1. FORM. Notices to Trustees shall be oral or by telephone or telegram or in writing delivered personally or mailed to the Trustees at their addresses appearing on the books of the Trust. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to Trustees 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 Trustees or committee is required to be given under the provisions of 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 Trustees or committee in person, shall be deemed equivalent to the giving of such notice to such persons. ARTICLE V OFFICERS SECTION 1. NUMBER. The officers of the Trust shall be chosen by the Board of Trustees and shall include: a President who shall be the Chief Operating Officer of the Trust and a Trustee; a Secretary; and a Treasurer. The Board of Trustees may, from time to time, elect or appoint a Controller, one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. The Board of Trustees 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 Trust and who shall perform and execute such other duties and powers as the Board of Trustees 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 Agreement and Declaration of Trust or these By-Laws to be executed, acknowledged or verified by two or more officers. SECTION 2. ELECTION. The Board of Trustees shall choose a President, a Secretary and a Treasurer who shall each serve until their successors are chosen and shall qualify. SECTION 3. OTHER OFFICERS. The Board of Trustees 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 Trustees 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. -4- SECTION 4. COMPENSATION. The salaries or other compensation of all officers and agents of the Trust shall be fixed by the Board of Trustees, except that the Board of Trustees 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 3 of this Article V. SECTION 5. TENURE. The officers of the Trust shall serve until their successors are chosen and qualify. Any officer or agent may be removed by the affirmative vote of a majority of the Board of Trustees whenever, in its judgment, the best interests of the Trust will be served thereby. Any vacancy occurring in any office of the Trust by death, resignation, removal or otherwise shall be filled by the Board of Trustees. SECTION 6. PRESIDENT-CHIEF OPERATING OFFICER. The President shall be the chief operating officer of the Trust; 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 Trustees may from time to time prescribe. In the absence or disability of the President the Chairman-Chief Investment Officer shall perform the duties of the President. SECTION 7. VICE-PRESIDENTS. The Vice-Presidents, in the order of their seniority, shall in the absence or disability of the President and the Chairman-Chief Investment Officer, perform the duties and exercise the powers of the President and shall perform such other duties as the Board of Trustees may from time to time prescribe. SECTION 8. SECRETARY. The Secretary and/or an Assistant Secretary shall attend such meetings of the Board of Trustees as the Trustees shall determine and all meetings of the shareholders 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 shareholders and of the Board of Trustees, and shall perform such other duties as may be prescribed by the Board of Trustees or President, under whose supervision the Secretary shall be. SECTION 9. 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 Trustees shall prescribe. SECTION 10. TREASURER. The Treasurer, unless another officer of the Trust has been so designated, shall be the chief financial officer of the Trust. He shall be responsible for the maintenance of its accounting records and shall render to the Board of Trustees, at its regular meetings, or when the Board of Trustees -5- so requires, an account of all the Trust's financial transactions and a report of the financial condition of the Trust. SECTION 11. CONTROLLER. The Board of Trustees may designate a Controller who shall be under the direct supervision of, or may be the same person as, the Treasurer. He shall maintain adequate records of all assets, liabilities and transactions of the Trust, establish and maintain internal accounting control and, in cooperation with the independent public accountants selected by the Board of Trustees 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 Trustees. SECTION 12. 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 powers of the Treasurer and shall perform such other duties as the Board of Trustees may from time to time prescribe. ARTICLE VI NET ASSET VALUE SECTION 1. NET ASSET VALUE. The net asset value per share of beneficial interest of each Series of the Trust shall be determined by dividing the total current market value of the investments and other assets belonging to each Series, less any liabilities attributable to such Series, by the total outstanding shares of such Series. 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 Trustees. The net asset value per share of each Series 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 Trust filed under the Investment Company Act of 1940. Securities which are traded over-the-counter and on a stock exchange may be valued according to the broadest and most representative market for such securities. Securities may be valued on the basis of prices provided by a pricing service when -6- such prices are believed to reflect the current market value of such securities. SECTION 2. FAIR VALUE. If events which materially affect the value of the investments of The Asia-Australia Small Company Series occur subsequent to the close of the various foreign markets on which securities held by that series are traded, the investments affected thereby will be valued at fair value in good faith and in accordance with methods determined by the Board of Trustees. SECTION 3. OFFERING PRICE. The Board of Trustees may authorize the sale of shares of any Series at an offering price which includes the net asset value of the shares plus a reimbursement fee. ARTICLE VII SHARES OF BENEFICIAL INTEREST SECTION 1. CERTIFICATES. A certificate or certificates which shall certify the Series of shares and the number of shares of beneficial interest of such Series owned by a shareholder in the Trust will not be issued except as the Board of Trustees may otherwise determine from time to time. Any such certificate issued 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 Trust 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 Trust before the certificate is issued, the certificate may nevertheless be issued by the Trust 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. The Trust shall have full power to participate in any program approved by the Board of Trustees providing for the recording and transfer of ownership of shares of the Trust's shares of beneficial interest by electronic or other means without the issuance of certificates. SECTION 4. LOST CERTIFICATES. The Board of Trustees may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Trust -7- 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 Trustees 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 advertise the same in such manner as it shall require and to give the Trust a bond with sufficient surety, to the Trust to indemnify it against any loss or claim that may be made by reason of the issuance of a new certificate. SECTION 5. REGISTERED SHAREHOLDERS. The Trust 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 Delaware. SECTION 6. TRANSFER AGENTS AND REGISTRARS. The Board of Trustees may, from time to time, appoint or remove transfer agents and/or registrars of transfers of shares of beneficial interest of the Trust, and it may appoint the same person as both transfer agent and registrar. Upon any such appointment being made all certificates representing shares of beneficial interest thereafter issued shall be countersigned by one of such transfer agents or by one of such registrars of transfers 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. SHARE LEDGER. The Trust shall maintain an original share ledger containing the names and addresses of all shareholders and the number and Series of shares held by each shareholder. Such share 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 SHARES. Upon surrender to the Trust or the Transfer Agent of the Trust 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 Trust to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. -8- 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 Investment Company Act of 1940 or the Internal Revenue Code of 1986, as amended): (a) All dividends and distributions on shares shall be automatically reinvested solely in additional shares (or fractions thereof) of the Series of shares of beneficial interest in respect of which such dividends were declared at the net asset value on the reinvestment date; provided however, a shareholder may elect to receive dividends and distributions in cash to the extent provided in the Trust's registration statement filed under the Investment Company Act of 1940. (b) Dividends or distributions on shares of beneficial interest, whether payable in shares of beneficial interest or cash, shall be paid out of earnings, surplus or other lawfully available assets; provided that each dividend or distribution may be made wholly or partly from any source, 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) net profits from the sale of securities or other properties during the then current fiscal year; and (iv) paid-in surplus or other capital source. (c) In declaring dividends and in recognition that the one goal of the Trust is to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended, the Board of Trustees shall be entitled to rely upon estimates made in the last two months of the fiscal year (with the advice of the Trust's auditors) as to the amounts of distribution necessary for this purpose; and the Board of Trustees, acting consistently with good accounting practice and with the express provisions of these By-Laws, may credit receipts and charge payments to income or otherwise, as to it may seem proper. (d) Anything in these By-Laws to the contrary notwithstanding, the Board of Trustees may at any time declare and -9- distribute pro rata among the shareholders of a record date fixed as above provided, a "share dividend" out of either authorized but unissued or treasury shares of a Series or both. SECTION 2. RIGHTS IN SECURITIES. The Board of Trustees, on behalf of the Trust, shall have the authority to exercise all of the rights of the Trust 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 (including the right to authorize any officer or the investment manager to execute proxies), 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. CLAIMS AGAINST SERIES ASSETS. Each Series of the Trust shall provide in any loan agreement and any other agreement to pledge, mortgage or hypothecate any of its assets that such loan shall be repaid solely by the Series which borrowed funds, that to the extent such loan may be secured only by the assets of the Series which obtained the loan, no creditor of such Series shall have any rights to any assets of the Trust other than the specific assets which secure such loan. SECTION 4. REPORTS. The Trust shall furnish shareholders with reports of its financial condition as required by Section 30(d) of the Investment Company Act of 1940 and the rules thereunder. SECTION 5. BONDING OF OFFICERS AND EMPLOYEES. All officers and employees of the Trust shall be bonded to such extent, and in such manner, as may be required by law. ARTICLE X INDEMNIFICATION OF TRUSTEES AND OFFICERS SECTION 1. PROCEEDINGS AND EXPENSES. For the purpose of this Article, "proceeding" means any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative; and "expenses" includes all expenses and costs reasonably incurred in connection with such proceeding and any expenses of establishing a right to indemnification under this Article. SECTION 2. INDEMNIFICATION. The Trust may indemnify any Trustee or officer of the Trust who was or is a party or is threatened to be made a party to any proceeding or claim by reason -10- of the fact that such person is a Trustee or officer of the Trust, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such proceeding, if it is determined that such person acted in good faith and reasonably believed: (a) that his conduct was in the Trust's best interests and (b) in the case of a criminal proceeding, that he had no reasonable cause to believe his conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in the best interests of the Trust or that the person had reasonable cause to believe that his conduct was unlawful. SECTION 3. EXCLUSION OF INDEMNIFICATION. Notwithstanding any provision to the contrary contained herein, the Trust shall not indemnify any Trustee or officer for any liability arising by reason of willful misfeasance, bad faith, gross negligence, or the reckless disregard of the duties involved in the conduct of such person's office, or in respect of any claim or proceeding as to which such person shall have been adjudged to be liable on the basis that personal benefit was improperly received by him, whether or not the benefit resulted from an action taken in the person's official capacity. SECTION 4. SUCCESSFUL DEFENSE. Subject to Section 3 of this Article, to the extent that a Trustee or officer has been successful on the merits in defense of any proceeding referred to in Section 2 of this Article or in defense of any claim, issue or matter therein, before the court or other body before whom the proceeding was brought, such person shall be indemnified against expenses actually and reasonably incurred by him in connection therewith. SECTION 5. REQUIRED APPROVAL. Any indemnification under this Article may be made by the Trust only if authorized in the specific case on a determination that indemnification of the indemnitee is proper hereunder by: (a) A majority vote of Trustees who are not parties to the proceeding or subject to the claim or if there are no such Trustees; (b) By a written opinion of independent legal counsel. SECTION 6. ADVANCE OF EXPENSES. Expenses incurred in defending any proceeding may be advanced by the Trust before the final disposition of the proceeding upon (a) receipt of a written undertaking by or on behalf of an officer or Trustee, such undertaking being an unlimited general obligation to repay the amount of the advance if it is ultimately determined that he or she -11- is not entitled to indemnification hereunder. Authorizations of payments under this Section must be made in the manner specified in Section 5 of this Article. SECTION 7. INSURANCE. The Trust may purchase insurance for any liability that may be incurred by the Trust, the Trustees, officers and agents of the Trust. ARTICLE XI AMENDMENTS SECTION 1. These By-Laws may be altered or repealed at any Regular or Special Meeting of the Board of Trustees. -12- EX-99.B5I 5 EXHIBIT 99.(B)(5)(I) INVESTMENT MANAGEMENT AGREEMENT AGREEMENT made this 6th day of January, 1993, by and between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Trust") and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Manager"). 1. DUTIES OF ADVISOR The Trust hereby employs the Manager to manage the investment and reinvestment of the assets of The U.S. 6-10 Small Company Series of the Trust (the "Series"), to continuously review, supervise and administer the Series' investment program, to determine in its discretion the securities to be purchased or sold and the portion of the Series' assets to be uninvested, to provide the Trust with records concerning the Manager's activities which the Trust is required to maintain, and to render regular reports to the Trust's officers and the Board of Trustees of the Trust, all in compliance with the objectives, policies and limitations set forth in the Trust's registration statement and applicable laws and regulations. The Manager accepts such employment 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 on the terms and for the compensation provided herein. 2. PORTFOLIO TRANSACTIONS The Manager is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Series and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. It is understood that the Manager will not be deemed to have acted unlawfully, or to have breached a fiduciary duty to the Trust or in respect of the Series, or be in breach of any obligation owing to the Trust or in respect of the Series under this Agreement, or otherwise, solely by reason of its having caused the Series to pay a member of a securities exchange, a broker or a dealer a commission for effecting a securities transaction for the Series in excess of the amount of commission another member of an exchange, broker or dealer would have charged if the Manager determines in good faith that the commission paid was reasonable in relation to the brokerage or research services provided by such member, broker or dealer, viewed in terms of that particular transaction or the Manager's overall responsibilities with respect to its accounts, including the Trust, as to which it exercises investment discretion. The Manager will promptly communicate to the officers and directors of the Trust such information relating to transactions for the Series as they may reasonably request. 3. COMPENSATION OF THE MANAGER For the services to be rendered by the Manager as provided in Section 1 of this Agreement, the Trust shall pay to the Manager, at the end of each month, a fee equal to one-twelfth of .03 percent of the net assets of the Series. In the event that this Agreement is terminated at other than a month-end, the fee for such month shall be prorated. 4. OTHER SERVICES At the request of the Trust, the Manager, in its discretion, may make available to the Trust office facilities, equipment, personnel and other services. Such office facilities, equipment, personnel and service shall be provided for or rendered by the Manager and billed to the Trust at the Manager's cost and, where applicable, the cost thereof shall be apportioned among the several Series of the Trust proportionate to their respective utilization thereof. 5. REPORTS The Trust and the Manager agree to furnish to each other information with regard to their respective affairs as each may reasonably request. 6. STATUS OF THE MANAGER The services of the Manager to the Trust or in respect of the Series, are not to be deemed exclusive, and the Manager shall be free to render similar services to others as long as its services to the Trust or in respect of the Series, are not impaired thereby. The Manager shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. 7. LIABILITY OF MANAGER No provision of this Agreement shall be deemed to protect the Manager against any liability to the Trust 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. -2- 8. PERMISSIBLE INTERESTS Subject to and in accordance with the agreement and declaration of trust of the Trust and the charter of the Manager, trustees, officers, and shareholders of the Trust are or may be interested in the Manager (or any successor thereof) as directors, officers or shareholders, or otherwise; directors, officers, agents and shareholders of the Manager are or may be interested in the Trust as trustees, officers, shareholders or otherwise; and the Manager (or any successor) is or may be interested in the Trust as a shareholder or otherwise and the effect of any such interrelationships shall be governed by said agreement and declaration of trust and charter and the provisions of the Investment Company Act of 1940. 9. DURATION AND TERMINATION This Agreement shall become effective on February 2, 1993 (the "Effective Date") and shall continue in effect until December 22, 1995, and thereafter, only if such continuance is approved at least annually by a vote of the Trust's Board of Trustees, including the vote of a majority of the trustees who are not parties to this Agreement or interested persons of any such party, cast in person, at a meeting called for the purpose of voting such approval. In addition, the question of continuance of this Agreement may be presented to the shareholders of the Trust; in such event, such continuance shall be effected only if approved by the affirmative vote of the holders of a majority of the outstanding voting securities of the Series. This Agreement may at any time be terminated without payment of any penalty either by vote of the Board of Trustees of the Trust or by vote of the holders of a majority of the outstanding voting securities of the Series, on sixty days written notice to the Manager. This Agreement shall automatically terminate in the event of its assignment. This Agreement may be terminated by the Manager after ninety days written notice to the Trust. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the other party at any office of such party. As used in this Section 9, the terms "assignment," "interested persons," and a "vote of the holders of a majority of the outstanding securities" shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section 2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder. -3- 10. 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. IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed this 6th day of January, 1993. DIMENSIONAL FUND THE DFA INVESTMENT TRUST ADVISORS INC. COMPANY By: /s/ Rex A. Sinquefield By: /s/ David G. Booth --------------------------------- ---------------------------------- Chairman-Chief President Investment Officer -4- EX-99.B5III 6 EXHIBIT 99.(B)(5)(III) INVESTMENT MANAGEMENT AGREEMENT AGREEMENT made this 6th day of January, 1993, by and between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Trust") and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Manager"). 1. DUTIES OF ADVISOR The Trust hereby employs the Manager to manage the investment and reinvestment of the assets of The DFA One-Year Fixed Income Series of the Trust (the "Series"), to continuously review, supervise and administer the Series' investment program, to determine in its discretion the securities to be purchased or sold and the portion of the Series' assets to be uninvested, to provide the Trust with records concerning the Manager's activities which the Trust is required to maintain, and to render regular reports to the Trust's officers and the Board of Trustees of the Trust, all in compliance with the objectives, policies and limitations set forth in the Trust's registration statement and applicable laws and regulations. The Manager accepts such employment 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 on the terms and for the compensation provided herein. 2. PORTFOLIO TRANSACTIONS The Manager is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Series and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. It is understood that the Manager will not be deemed to have acted unlawfully, or to have breached a fiduciary duty to the Trust or in respect of the Series, or be in breach of any obligation owing to the Trust or in respect of the Series under this Agreement, or otherwise, solely by reason of its having caused the Series to pay a member of a securities exchange, a broker or a dealer a commission for effecting a securities transaction for the Series in excess of the amount of commission another member of an exchange, broker or dealer would have charged if the Manager determines in good faith that the commission paid was reasonable in relation to the brokerage or research services provided by such member, broker or dealer, viewed in terms of that particular transaction or the Manager's overall responsibilities with respect to its accounts, including the Trust, as to which it exercises investment discretion. The Manager will promptly communicate to the officers and directors of the Trust such information relating to transactions for the Series as they may reasonably request. 3. COMPENSATION OF THE MANAGER For the services to be rendered by the Manager as provided in Section 1 of this Agreement, the Trust shall pay to the Manager, at the end of each month, a fee equal to one-twelfth of .05 percent of the net assets of the Series. In the event that this Agreement is terminated at other than a month-end, the fee for such month shall be prorated. 4. OTHER SERVICES At the request of the Trust, the Manager, in its discretion, may make available to the Trust office facilities, equipment, personnel and other services. Such office facilities, equipment, personnel and service shall be provided for or rendered by the Manager and billed to the Trust at the Manager's cost and, where applicable, the cost thereof shall be apportioned among the several Series of the Trust proportionate to their respective utilization thereof. 5. REPORTS The Trust and the Manager agree to furnish to each other information with regard to their respective affairs as each may reasonably request. 6. STATUS OF THE MANAGER The services of the Manager to the Trust or in respect of the Series, are not to be deemed exclusive, and the Manager shall be free to render similar services to others as long as its services to the Trust or in respect of the Series, are not impaired thereby. The Manager shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. 7. LIABILITY OF MANAGER No provision of this Agreement shall be deemed to protect the Manager against any liability to the Trust 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. -2- 8. PERMISSIBLE INTERESTS Subject to and in accordance with the agreement and declaration of trust of the Trust and the charter of the Manager, trustees, officers, and shareholders of the Trust are or may be interested in the Manager (or any successor thereof) as directors, officers or shareholders, or otherwise; directors, officers, agents and shareholders of the Manager are or may be interested in the Trust as trustees, officers, shareholders or otherwise; and the Manager (or any successor) is or may be interested in the Trust as a shareholder or otherwise and the effect of any such interrelationships shall be governed by said agreement and declaration of trust and charter and the provisions of the Investment Company Act of 1940. 9. DURATION AND TERMINATION This Agreement shall become effective on February 2, 1993 (the "Effective Date") and shall continue in effect until December 22,1995, and thereafter, only if such continuance is approved at least annually by a vote of the Trust's Board of Trustees, including the vote of a majority of the trustees who are not parties to this Agreement or interested persons of any such party, cast in person, at a meeting called for the purpose of voting such approval. In addition, the question of continuance of this Agreement may be presented to the shareholders of the Trust; in such event, such continuance shall be effected only if approved by the affirmative vote of the holders of a majority of the outstanding voting securities of the Series. This Agreement may at any time be terminated without payment of any penalty either by vote of the Board of Trustees of the Trust or by vote of the holders of a majority of the outstanding voting securities of the Series, on sixty days written notice to the Manager. This Agreement shall automatically terminate in the event of its assignment. This Agreement may be terminated by the Manager after ninety days written notice to the Trust. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the other party at any office of such party. As used in this Section 9, the terms "assignment," "interested persons," and a "vote of the holders of a majority of the outstanding securities" shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section 2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder. -3- 10. 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. IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed this 6th day of January, 1993. DIMENSIONAL FUND THE DFA INVESTMENT TRUST ADVISORS INC. COMPANY By:/s/ Rex A. Sinquefield By:/s/ David G. Booth ---------------------- ------------------- Chairman-Chief President Investment Officer -4- EX-99.B5IV 7 EXHIBIT 99.(B)(5)(IV) INVESTMENT MANAGEMENT AGREEMENT AGREEMENT made this 6th day of January, 1993, by and between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Trust") and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Manager"). 1. DUTIES OF ADVISOR The Trust hereby employs the Manager to manage the investment and reinvestment of the assets of The U.S. Large Cap High Book to Market Series of the Trust (the "Series"), to continuously review, supervise and administer the Series' investment program, to determine in its discretion the securities to be purchased or sold and the portion of the Series' assets to be uninvested, to provide the Trust with records concerning the Manager's activities which the Trust is required to maintain, and to render regular reports to the Trust's officers and the Board of Trustees of the Trust, all in compliance with the objectives, policies and limitations set forth in the Trust's registration statement and applicable laws and regulations. The Manager accepts such employment 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 on the terms and for the compensation provided herein. 2. PORTFOLIO TRANSACTIONS The Manager is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Series and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. It is understood that the Manager will not be deemed to have acted unlawfully, or to have breached a fiduciary duty to the Trust or in respect of the Series, or be in breach of any obligation owing to the Trust or in respect of the Series under this Agreement, or otherwise, solely by reason of its having caused the Series to pay a member of a securities exchange, a broker or a dealer a commission for effecting a securities transaction for the Series in excess of the amount of commission another member of an exchange, broker or dealer would have charged if the Manager determines in good faith that the commission paid was reasonable in relation to the brokerage or research services provided by such member, broker or dealer, viewed in terms of that particular transaction or the Manager's overall responsibilities with respect to its accounts, including the Trust, as to which it exercises investment discretion. The Manager will promptly communicate to the officers and directors of the Trust such information relating to transactions for the Series as they may reasonably request. 3. COMPENSATION OF THE MANAGER For the services to be rendered by the Manager as provided in Section 1 of this Agreement, the Trust shall pay to the Manager, at the end of each month, a fee equal to one-twelfth of .10 percent of the net assets of the Series. In the event that this Agreement is terminated at other than a month-end, the fee for such month shall be prorated. 4. OTHER SERVICES At the request of the Trust, the Manager, in its discretion, may make available to the Trust office facilities, equipment, personnel and other services. Such office facilities, equipment, personnel and service shall be provided for or rendered by the Manager and billed to the Trust at the Manager's cost and, where applicable, the cost thereof shall be apportioned among the several Series of the Trust proportionate to their respective utilization thereof. 5. REPORTS The Trust and the Manager agree to furnish to each other information with regard to their respective affairs as each may reasonably request. 6. STATUS OF THE MANAGER The services of the Manager to the Trust or in respect of the Series, are not to be deemed exclusive, and the Manager shall be free to render similar services to others as long as its services to the Trust or in respect of the Series, are not impaired thereby. The Manager shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. 7. LIABILITY OF MANAGER No provision of this Agreement shall be deemed to protect the Manager against any liability to the Trust 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. -2- 8. PERMISSIBLE INTERESTS Subject to and in accordance with the agreement and declaration of trust of the Trust and the charter of the Manager, trustees, officers, and shareholders of the Trust are or may be interested in the Manager (or any successor thereof) as directors, officers or shareholders, or otherwise; directors, officers, agents and shareholders of the Manager are or may be interested in the Trust as trustees, officers, shareholders or otherwise; and the Manager (or any successor) is or may be interested in the Trust as a shareholder or otherwise and the effect of any such interrelationships shall be governed by said agreement and declaration of trust and charter and the provisions of the Investment Company Act of 1940. 9. DURATION AND TERMINATION This Agreement shall become effective on February 2, 1993 (the "Effective Date") and shall continue in effect until December 22, 1995, and thereafter, only if such continuance is approved at least annually by a vote of the Trust's Board of Trustees, including the vote of a majority of the trustees who are not parties to this Agreement or interested persons of any such party, cast in person, at a meeting called for the purpose of voting such approval. In addition, the question of continuance of this Agreement may be presented to the shareholders of the Trust; in such event, such continuance shall be effected only if approved by the affirmative vote of the holders of a majority of the outstanding voting securities of the Series. This Agreement may at any time be terminated without payment of any penalty either by vote of the Board of Trustees of the Trust or by vote of the holders of a majority of the outstanding voting securities of the Series, on sixty days written notice to the Manager. This Agreement shall automatically terminate in the event of its assignment. This Agreement may be terminated by the Manager after ninety days written notice to the Trust. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the other party at any office of such party. As used in this Section 9, the terms "assignment," "interested persons," and a "vote of the holders of a majority of the outstanding securities" shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section 2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder. -3- 10. 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. IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed this 6th day of January, 1993. DIMENSIONAL FUND THE DFA INVESTMENT TRUST ADVISORS INC. COMPANY By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------- ------------------------- Chairman-Chief President Investment Officer -4- EX-99.B5V 8 EXHIBIT 99.(B)(5)(V) INVESTMENT MANAGEMENT AGREEMENT AGREEMENT made this 6th day of January, 1993, by and between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Trust") and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Manager"). 1. DUTIES OF ADVISOR The Trust hereby employs the Manager to manage the investment and reinvestment of the assets of The U.S. Small Cap High Book to Market Series of the Trust (the "Series"), to continuously review, supervise and administer the Series' investment program, to determine in its discretion the securities to be purchased or sold and the portion of the Series' assets to be uninvested, to provide the Trust with records concerning the Manager's activities which the Trust is required to maintain, and to render regular reports to the Trust's officers and the Board of Trustees of the Trust, all in compliance with the objectives, policies and limitations set forth in the Trust's registration statement and applicable laws and regulations. The Manager accepts such employment 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 on the terms and for the compensation provided herein. 2. PORTFOLIO TRANSACTIONS The Manager is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Series and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. It is understood that the Manager will not be deemed to have acted unlawfully, or to have breached a fiduciary duty to the Trust or in respect of the Series, or be in breach of any obligation owing to the Trust or in respect of the Series under this Agreement, or otherwise, solely by reason of its having caused the Series to pay a member of a securities exchange, a broker or a dealer a commission for effecting a securities transaction for the Series in excess of the amount of commission another member of an exchange, broker or dealer would have charged if the Manager determines in good faith that the commission paid was reasonable in relation to the brokerage or research services provided by such member, broker or dealer, viewed in terms of that particular transaction or the Manager's overall responsibilities with respect to its accounts, including the Trust, as to which it exercises investment discretion. The Manager will promptly communicate to the officers and directors of the Trust such information relating to transactions for the Series as they may reasonably request. 3. COMPENSATION OF THE MANAGER For the services to be rendered by the Manager as provided in Section 1 of this Agreement, the Trust shall pay to the Manager, at the end of each month, a fee equal to one-twelfth of .20 percent of the net assets of the Series. In the event that this Agreement is terminated at other than a month-end, the fee for such month shall be prorated. 4. OTHER SERVICES At the request of the Trust, the Manager, in its discretion, may make available to the Trust office facilities, equipment, personnel and other services. Such office facilities, equipment, personnel and service shall be provided for or rendered by the Manager and billed to the Trust at the Manager's cost and, where applicable, the cost thereof shall be apportioned among the several Series of the Trust proportionate to their respective utilization thereof. 5. REPORTS The Trust and the Manager agree to furnish to each other information with regard to their respective affairs as each may reasonably request. 6. STATUS OF THE MANAGER The services of the Manager to the Trust or in respect of the Series, are not to be deemed exclusive, and the Manager shall be free to render similar services to others as long as its services to the Trust or in respect of the Series, are not impaired thereby. The Manager shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. 7. LIABILITY OF MANAGER No provision of this Agreement shall be deemed to protect the Manager against any liability to the Trust 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. -2- 8. PERMISSIBLE INTERESTS Subject to and in accordance with the agreement and declaration of trust of the Trust and the charter of the Manager, trustees, officers, and shareholders of the Trust are or may be interested in the Manager (or any successor thereof) as directors, officers or shareholders, or otherwise; directors, officers, agents and shareholders of the Manager are or may be interested in the Trust as trustees, officers, shareholders or otherwise; and the Manager (or any successor) is or may be interested in the Trust as a shareholder or otherwise and the effect of any such interrelationships shall be governed by said agreement and declaration of trust and charter and the provisions of the Investment Company Act of 1940. 9. DURATION AND TERMINATION This Agreement shall become effective on February 2, 1993 (the "Effective Date") and shall continue in effect until December 22, 1995, and thereafter, only if such continuance is approved at least annually by a vote of the Trust's Board of Trustees, including the vote of a majority of the trustees who are not parties to this Agreement or interested persons of any such party, cast in person, at a meeting called for the purpose of voting such approval. In addition, the question of continuance of this Agreement may be presented to the shareholders of the Trust; in such event, such continuance shall be effected only if approved by the affirmative vote of the holders of a majority of the outstanding voting securities of the Series. This Agreement may at any time be terminated without payment of any penalty either by vote of the Board of Trustees of the Trust or by vote of the holders of a majority of the outstanding voting securities of the Series, on sixty days written notice to the Manager. This Agreement shall automatically terminate in the event of its assignment. This Agreement may be terminated by the Manager after ninety days written notice to the Trust. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the other party at any office of such party. As used in this Section 9, the terms "assignment," "interested persons," and a "vote of the holders of a majority of the outstanding securities" shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section 2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder. -3- 10. 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. IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed this 6th day of January, 1993. DIMENSIONAL FUND THE DFA INVESTMENT TRUST ADVISORS INC. COMPANY By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------ ------------------------ Chairman-Chief President Investment Officer -4- EX-99.B5VI 9 EXHIBIT 99.(B)(5)(VI) INVESTMENT MANAGEMENT AGREEMENT AGREEMENT made this 1st day of December, 1993, by and between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Trust") and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Manager"). 1. DUTIES OF ADVISOR The Trust hereby employs the Manager to manage the investment and reinvestment of the assets of the DFA International Value Series of the Trust (the "Series"), to continuously review, supervise and administer the Series' investment program, to determine in its discretion the securities to be purchased or sold and the portion of the Series' assets to be uninvested, to provide the Trust with records concerning the Manager's activities which the Trust is required to maintain, and to render regular reports to the Trust's officers and the Board of Trustees of the Trust, all in compliance with the objectives, policies and limitations set forth in the Trust's registration statement and applicable laws and regulations. The Manager accepts such employment 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 on the terms and for the compensation provided herein. 2. PORTFOLIO TRANSACTIONS The Manager is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Series and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. It is understood that the Manager will not be deemed to have acted unlawfully, or to have breached a fiduciary duty to the Trust or in respect of the Series, or be in breach of any obligation owing to the Trust or in respect of the Series under this Agreement, or otherwise, solely by reason of its having caused the Series to pay a member of a securities exchange, a broker or a dealer a commission for effecting a securities transaction for the Series in excess of the amount of commission another member of an exchange, broker or dealer would have charged if the Manager determines in good faith that the commission paid was reasonable in relation to the brokerage or research services provided by such member, broker or dealer, viewed in terms of that particular transaction or the Manager's overall responsibilities with respect to its accounts, including the Trust, as to which it exercises investment discretion. The Manager will promptly communicate to the officers and directors of the Trust such information relating to transactions for the Series as they may reasonably request. 3. COMPENSATION OF THE MANAGER For the services to be rendered by the Manager as provided in Section 1 of this Agreement, the Trust shall pay to the Manager, at the end of each month, a fee equal to one-twelfth of .20 percent of the net assets of the Series. In the event that this Agreement is terminated at other than a month-end, the fee for such month shall be prorated. 4. OTHER SERVICES At the request of the Trust, the Manager, in its discretion, may make available to the Trust office facilities, equipment, personnel and other services. Such office facilities, equipment, personnel and service shall be provided for or rendered by the Manager and billed to the Trust at the Manager's cost and, where applicable, the cost thereof shall be apportioned among the several Series of the Trust proportionate to their respective utilization thereof. 5. REPORTS The Trust and the Manager agree to furnish to each other information with regard to their respective affairs as each may reasonably request. 6. STATUS OF THE MANAGER The services of the Manager to the Trust or in respect of the Series, are not to be deemed exclusive, and the Manager shall be free to render similar services to others as long as its services to the Trust or in respect of the Series, are not impaired thereby. The Manager shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. 7. LIABILITY OF MANAGER No provision of this Agreement shall be deemed to protect the Manager against any liability to the Trust 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. -2- 8. PERMISSIBLE INTERESTS Subject to and in accordance with the agreement and declaration of trust of the Trust and the charter of the Manager, trustees, officers, and shareholders of the Trust are or may be interested in the Manager (or any successor thereof) as directors, officers or shareholders, or otherwise; directors, officers, agents and shareholders of the Manager are or may be interested in the Trust as trustees, officers, shareholders or otherwise; and the Manager (or any successor) is or may be interested in the Trust as a shareholder or otherwise and the effect of any such interrelationships shall be governed by said agreement and declaration of trust and charter and the provisions of the Investment Company Act of 1940. 9. DURATION AND TERMINATION This Agreement shall become effective on __________, 1993 (the "Effective Date") and shall continue in effect until _______________, and thereafter, only if such continuance is approved at least annually by a vote of the Trust's Board of Trustees, including the vote of a majority of the trustees who are not parties to this Agreement or interested persons of any such party, cast in person, at a meeting called for the purpose of voting such approval. In addition, the question of continuance of this Agreement may be presented to the shareholders of the Trust; in such event, such continuance shall be effected only if approved by the affirmative vote of the holders of a majority of the outstanding voting securities of the Series. This Agreement may at any time be terminated without payment of any penalty either by vote of the Board of Trustees of the Trust or by vote of the holders of a majority of the outstanding voting securities of the Series, on sixty days written notice to the Manager. This Agreement shall automatically terminate in the event of its assignment. This Agreement may be terminated by the Manager after ninety days written notice to the Trust. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the other party at any office of such party. As used in this Section 9, the terms "assignment," "interested persons," and a "vote of the holders of a majority of the outstanding securities" shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section 2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder. -3- 10. 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. IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed this 1st day of December, 1993. DIMENSIONAL FUND THE DFA INVESTMENT TRUST ADVISORS INC. COMPANY By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ---------------------------- ---------------------------- Chairman-Chief President Investment Officer -4- EX-99.B5VII 10 EXHIBIT 99.(B)(5)(VII) INVESTMENT MANAGEMENT AGREEMENT AGREEMENT made as of this 18th day of October, 1996, by and between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Trust") and DIMENSIONAL FUND ADVISORS INC., a Delaware corporation (the "Manager"). 1. DUTIES OF ADVISOR The Trust hereby employs the Manager to manage the investment and reinvestment of the assets of THE EMERGING MARKETS SMALL CAP SERIES of the Trust (the "Series"), to continuously review, supervise and administer the Series' investment program, to determine in its discretion the securities to be purchased or sold and the portion of the Series' assets to be uninvested, to provide the Trust with records concerning the Manager's activities which the Trust is required to maintain, and to render regular reports to the Trust's officers and the Board of Trustees of the Trust, all in compliance with the objectives, policies and limitations set forth in the Trust's registration statement and applicable laws and regulations. The Manager accepts such employment 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 on the terms and for the compensation provided herein. 2. PORTFOLIO TRANSACTIONS The Manager is authorized to select the brokers or dealers that will execute the purchases and sales of portfolio securities for the Series and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. It is understood that the Manager will not be deemed to have acted unlawfully, or to have breached a fiduciary duty to the Trust or in respect of the Series, or be in breach of any obligation owing to the Trust or in respect of the Series under this Agreement, or otherwise, solely by reason of its having caused the Series to pay a member of a securities exchange, a broker or a dealer a commission for effecting a securities transaction for the Series in excess of the amount of commission another member of an exchange, broker or dealer would have charged if the Manager determines in good faith that the commission paid was reasonable in relation to the brokerage or research services provided by such member, broker or dealer, viewed in terms of that particular transaction or the Manager's overall responsibilities with respect to its accounts, including the Trust, as to which it exercises investment discretion. The Manager will promptly communicate to the officers and directors of the Trust such information relating to transactions for the Series as they may reasonably request. 3. COMPENSATION OF THE MANAGER For the services to be rendered by the Manager as provided in Section 1 of this Agreement, the Trust shall pay to the Manager, at the end of each month, a fee equal to one-twelfth of .20 percent of the net assets of the Series. In the event that this Agreement is terminated at other than a month-end, the fee for such month shall be prorated. 4. OTHER SERVICES At the request of the Trust, the Manager, in its discretion, may make available to the Trust office facilities, equipment, personnel and other services. Such office facilities, equipment, personnel and service shall be provided for or rendered by the Manager and billed to the Trust at the Manager's cost and, where applicable, the cost thereof shall be apportioned among the several Series of the Trust proportionate to their respective utilization thereof. 5. REPORTS The Trust and the Manager agree to furnish to each other information with regard to their respective affairs as each may reasonably request. 6. STATUS OF THE MANAGER The services of the Manager to the Trust or in respect of the Series, are not to be deemed exclusive, and the Manager shall be free to render similar services to others as long as its services to the Trust or in respect of the Series, are not impaired thereby. The Manager shall be deemed to be an independent contractor and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. 7. LIABILITY OF MANAGER No provision of this Agreement shall be deemed to protect the Manager against any liability to the Trust 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. -2- 8. PERMISSIBLE INTERESTS Subject to and in accordance with the agreement and declaration of trust of the Trust and the charter of the Manager, trustees, officers, and shareholders of the Trust are or may be interested in the Manager (or any successor thereof) as directors, officers or shareholders, or otherwise; directors, officers, agents and shareholders of the Manager are or may be interested in the Trust as trustees, officers, shareholders or otherwise; and the Manager (or any successor) is or may be interested in the Trust as a shareholder or otherwise and the effect of any such interrelationships shall be governed by said agreement and declaration of trust and charter and the provisions of the Investment Company Act of 1940. 9. DURATION AND TERMINATION This Agreement shall become effective on October 18, 1996 (the "Effective Date") and shall continue in effect until December 23, 1996, and thereafter, only if such continuance is approved at least annually by a vote of the Trust's Board of Trustees, including the vote of a majority of the trustees who are not parties to this Agreement or interested persons of any such party, cast in person, at a meeting called for the purpose of voting such approval. In addition, the question of continuance of this Agreement may be presented to the shareholders of the Trust; in such event, such continuance shall be effected only if approved by the affirmative vote of the holders of a majority of the outstanding voting securities of the Series. This Agreement may at any time be terminated without payment of any penalty either by vote of the Board of Trustees of the Trust or by vote of the holders of a majority of the outstanding voting securities of the Series, on sixty days written notice to the Manager. This Agreement shall automatically terminate in the event of its assignment. This Agreement may be terminated by the Manager after ninety days written notice to the Trust. Any notice under this Agreement shall be given in writing, addressed and delivered, or mailed postpaid, to the other party at any office of such party. As used in this Section 9, the terms "assignment," "interested persons," and a "vote of the holders of a majority of the outstanding securities" shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19), Section 2(a)(42) of the Investment Company Act of 1940 and Rule l8f-2 thereunder. -3- 10. 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. IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be executed as of this 18th day of October, 1996. DIMENSIONAL FUND THE DFA INVESTMENT TRUST ADVISORS INC. COMPANY By: /s/ Rex A. Sinquefield By: /s/ David G. Booth ------------------------- --------------------------- Chairman-Chief President Investment Officer -4- EX-99.B6 11 EXHIBIT 99.(B)(6) AGREEMENT Agreement made this 6th day of January, 1993, between The DFA Investment Trust Company (the "Trust"), a Delaware Business Trust and DFA Securities Inc., an Illinois corporation ("DFA Securities"). In consideration of the mutual promises and undertakings herein contained, and intending to be legally bound, the parties agree as follows: (1) The Trust hereby authorizes DFA Securities to supervise the sale of shares issued by the Trust pursuant to the Registration Statement filed by the Trust with the U.S. Securities and Exchange Commission on Form N-1A (Registration No. 811- ), as amended from time to time, during the term of this Agreement. (2) Sales of Trust shares shall be effected in a manner to satisfy the exemption from registration set forth in section 4(2) of the Securities Act of 1933, as amended. (3) In carrying out its responsibilities under this Agreement, DFA Securities shall use its best efforts to ensure that persons engaged as Regional Directors and Regional Representatives of DFA Securities and/or Dimensional Fund Advisors Inc. ("DFA") comply with applicable Federal and State regulatory requirements regarding the sale of securities, and with the applicable rules of the National Association of Securities Dealers, Inc. ("NASD"). (4) DFA Securities will utilize its best efforts to encourage and promote the sale of Trust shares and, to this end, at its own expense may prepare and disseminate research and resource material as may be reasonably necessary or desirable to promote the sale of Trust shares. Any such material which refers to the Trust shall be approved in writing by an executive officer of the Trust prior to dissemination. (5) DFA Securities shall be responsible for, and shall bear the cost of, its own registration as a securities dealer under federal and state law and of its membership in the NASD and the cost of registration statements of the Trust provided to persons who are not shareholders of the Trust. (6) This Agreement shall become effective on the effective date of the registration statement of the Trust, provided that prior to such date this Agreement has been approved by a vote of a majority of the Trustees of the Trust, cast in person, including a majority of those trustees who are not parties to this Agreement or interested persons of any such party, as a meeting called for the purpose of voting on such approval, and shall continue in effective until December , 1993, and may be continued thereafter for consecutive terms each of one year, provided that any such continuance is approved in the manner provided above. (7) This Agreement shall terminate automatically in the event of its assignment and may be terminated by either party without penalty upon sixty days' written notice. (8) The terms "person", "interested person" and "assignment" shall have the meanings ascribed thereto, respectively, under the 1940 Act. (9) Any notice required or permitted to be given by either party to the other shall be deemed sufficient if sent by registered or certified mail, postage prepaid, addressed by the party giving notice to the other party at the last address furnished by the other party to the party giving notice: if to the Fund, at 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401, and if to DFA Securities, at 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401. IN WITNESS WHEREOF, and Trust and DFA Securities have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the day and year above written. THE DFA INVESTMENT TRUST COMPANY By _________________________________ DFA SECURITIES INC. By _________________________________ Date: EX-99.B8II 12 EXHIBIT 99.(B)(8)(II) [11/18/93 Draft] CUSTODY AGREEMENT AGREEMENT dated as of December 1, 1993, between THE DFA INVESTMENT TRUST COMPANY (the "Client"), a Delaware business trust, having its principal office and place of business at 1299 Ocean Avenue, 11th floor, Santa Monica, California 90401, and BOSTON SAFE DEPOSIT AND TRUST COMPANY (the "Custodian"), a Massachusetts trust company with its principal place of business at One Boston Place, Boston, Massachusetts 02108. W I T N E S S E T H: That for and in consideration of the mutual promises hereinafter set forth, the Client and the Custodian agree as follows: 1. DEFINITIONS. Whenever used in this Agreement or in any Schedules to this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings: (a) "Authorized Person" shall be deemed to include the President, and any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, or any other person, whether or not any such person is an officer or employee of the Client, duly authorized by the Board of Trustees of the Client to give Oral Instructions and Written Instructions on behalf of the Client and listed in the certification annexed hereto as Appendix A or such other certification as may be received by the Custodian on behalf of the Client from time to time; (b) "Book-Entry System" shall mean the Federal Reserve/Treasury book- entry system for United States and Federal agency Securities, its successor or successors and its nominee or nominees; (c) "Certificate" shall mean any notice, instruction or other instrument in writing, authorized or required by this Agreement, other than Written Instructions, to be given to the Custodian, which is actually received by the Custodian and signed on behalf of the Client by an officer of the Client; (d) "Declaration of Trust" shall mean the Agreement and Declaration of Trust of the Client as executed on September 11, 1992 and as it may be amended from time to time; (e) "Depository" shall mean The Depository Trust Company ("DTC") or any clearing agency registered with the Securities and Exchange Commission under Section 17(a) of the Securities Exchange Act of 1934, as amended, any successor or successors and its nominee or nominees, in which the Custodian is hereby specifically authorized to make deposits. The term "Depository" shall further mean and include any other person to be named in a Certificate authorized to act as a depository or clearing agency under the 1940 Act, including pursuant to rule 17f-5 thereunder, its successor or successors and its nominee or nominees; (f) "Money Market Security" shall be deemed to include, without limitation, short-term debt obligations issued or guaranteed as to interest and principal by the government of the United States or agencies or instrumentalities thereof, commercial paper, bank certificates of deposit, bankers' acceptances and short-term corporate obligations, where the purchase or sale of such securities normally requires settlement in federal funds on the same day as such purchase or sale, and repurchase and reverse repurchase agreements with respect to any of the foregoing types of securities; (g) "Oral Instructions" shall mean any instructions, other than Written Instructions, actually received by the Custodian from an Authorized Person or a person reasonably believed by the Custodian to be an Authorized Person; (h) "Registration Statement" shall mean the Client's current registration statement relating to the registration of the Client under the Investment Company Act of 1940, as amended; (i) "Series" refers to the Client's Series listed in Appendix C hereto, and any such other separate and distinct Series as may from time to time be created and designed by the Client in accordance with the provisions of the Declaration of Trust and which becomes subject to this Agreement by the mutual consent of the Client and the Custodian; (j) "Put Bond" shall mean a bond, the terms of which provide that, under certain circumstances and during certain time period, the holder of the bond has the option to sell the bond to the issuer at a mutually agreeable price; (k) "Shares" refers to the shares of beneficial interest of each Series of the Client; (l) "Security" or "Securities" shall be deemed to include bonds, debentures, notes, stocks, shares, evidences of indebtedness, and other securities and investments, including Money Market Securities, from time to time owned by each Series; -2- (m) "Transfer Agent" shall mean the person that performs the transfer agent, dividend disbursing agent and shareholder servicing functions for the Client; (n) "Written Instructions" shall mean a written communication actually received by the Custodian from a person reasonably believed by the Custodian to be an Authorized Person via any system, including transmissions via personal computer and/or any other electronic means as agreed by the parties, whereby the receiver of such communication is able to verify through codes or otherwise with a reasonable degree of certainty the authenticity of the sender of such communication; and (o) The "1940 Act" refers to the Investment Company Act of 1940, and the Rules and Regulations thereunder, all as amended from time to time. 2. APPOINTMENT OF CUSTODIAN. (a) The Client hereby constitutes and appoints the Custodian as custodian of all the Securities and moneys at the time owned by or in the possession of the Series during the period of this Agreement. (b) The Custodian hereby accepts appointment as such custodian for each Series and agrees to perform the duties thereof as hereinafter set forth. 3. COMPENSATION. (a) The Client will compensate the Custodian for its services rendered under this Agreement in accordance with the fees set forth in the Fee Schedule annexed hereto as Schedule A and incorporated herein for the existing Series. (b) The parties hereto will agree upon the compensation for acting as custodian for any Series hereafter established and designated, and at the time that the Custodian commences serving a such for said Series, such agreement shall be reflected in a Fee Schedule for that Series, dated and signed by an officer of each party hereto, which shall be attached to Schedule A of this Agreement. (c) Any compensation agreed to hereunder may be adjusted from time to time by attaching to Schedule A of this Agreement a revised Fee Schedule, dated and signed by a duly authorized officer of the Client and a duly authorized officer of the Custodian. (d) The Custodian will bill the Client for each Series as soon as practicable after the end of each calendar month, and -3- said billings will be detailed in accordance with the Fee Schedule for each Series. (e) The Custodian may charge against any moneys held on behalf of the Client its compensation pursuant to this Agreement. The Custodian shall also be entitled to charge against moneys held by it the amount of any loss, damage, liability or expenses incurred, including reasonable counsel fees for which it shall be entitled to reimbursement under the provisions of this Agreement. 4. CUSTODY OF CASH AND SECURITIES. (a) RECEIPT AND HOLDING OF ASSETS. The Client will deliver or cause to be delivered to the Custodian all Securities and moneys owned by the Series at any time during the period of this Agreement and shall specify the Series to which the Securities and moneys are to be specifically allocated. The Custodian will not be responsible for such Securities and moneys until actually received by it. The Client shall instruct the Custodian from time to time in its sole discretion, by means of Written Instructions, or, in connection with the purchase or sale of Money Market Securities, by means of Oral Instructions or Written Instructions, as to what amounts Securities and moneys of a Series are to be specifically allocated on the books of the Custodian to such Series; provided, however, that prior to the deposit of Securities of a Series in the Book-Entry System or the Depository, including a deposit in connection with the settlement of a purchase or sale, the custodian shall have received a Certificate specifically approving such deposits by the Custodian in the Book- Entry System or the Depository. (b) ACCOUNTS AND DISBURSEMENTS. The Custodian shall establish and maintain a separate account for each Series and shall credit to the separate account of each Series all moneys received by it for the account of such Series and shall disburse the same only; (1) In payment of Securities purchased for such Series, as provided in Section 5 hereof; (2) In payment of dividends or distributions with respect to the Shares of such Series, as provided in Section 7 hereof; (3) In payment of original issue or other taxes with respect to the Shares of such Series, as provided in Section 8 hereof; (4) In payment for Shares which have been redeemed by such Series, as provided in Section 8 hereof; -4- (5) Pursuant to Written Instruction, or with respect to Money Market Securities, Oral Instructions or Written Instructions, setting forth the name of such Series, the name and address of the person to whom the payment is to be made, the amount to be paid and the purpose for which payment is to be made; (6) In payment of fees and in reimbursement of the expenses and liabilities of the custodian attributable to such Series, as provided in Section 11(h) hereof; and (7) Upon the receipt of authorized instructions, for the payment of any expense or liability incurred by the Client or any Series; including, but not limited to, the following payments for the account of the Client or any Series: interest, taxes, management, accounting, transfer agent and legal fees and operating expenses of the Client or any Series, whether or not such expenses are, in whole or in part, to be capitalized or treated as deferred expenses. (c) CONFIRMATION AND STATEMENTS. Promptly after the close of business on each day, the Custodian shall furnish the Client or its duly delegated agent with confirmations and a summary of all transfers to or from the account of each Series during said day, such confirmations or accompanying documentation shall identify the entity, i.e. the Custodian, Subcustodian, or Depository that has physical possession of such Securities and money of the Series. In addition, the Custodian shall notify the Client on a timely basis of any fails with respect to Securities that have occurred during the day. When securities purchased by a Series are in a fungible bulk of securities registered in the name of the Custodian (or its nominee) or shown on the custodian's account on the books or the Depository or the Book-Entry System, the Custodian shall by book entry or otherwise identify on its own books of account the quantity of those securities belonging to such Series. At least monthly, the custodian shall furnish the Client with a detailed statement of the Securities and moneys held for each Series under this Agreement. The Custodian shall furnish the Client with such other daily and periodic reports as may be agreed to by the parties. (d) REGISTRATION OF SECURITIES AND PHYSICAL SEPARATION. All Securities held for a Series which are issued or -5- issuable only in bearer form, except such Securities as are held in the Book- Entry System, shall be held by the Custodian in that form; all other Securities held for a Series may be registered in the name of that Series, in the name of any duly appointed registered nominee of the Custodian as the Custodian may from time to time determine, or in the name of the Book-Entry System or the Depository or their successor or successors, or their nominee or nominees. The Client reserves the right to instruct the Custodian as to the method of registration and safekeeping of the Securities of each Series. The Client agrees to furnish to the Custodian appropriate instruments to enable the Custodian to hold or deliver in proper form for transfer, or to registered in the name of its registered nominee or in the name of the Book-Entry System or the Depository, any Securities which it may hold for the account of a Series and which may from time to time be registered in the name of a Series. Securities of a Series that are kept by the Custodian in an account with a Depository or the Book-Entry System shall be kept in accounts that hold only assets belonging to customers of the Custodian and not in any proprietary account of the Custodian. The Custodian shall hold all such Securities specifically allocated to a Series which are not held in the Book-Entry System or the Depository in a separate account for such Series in the name of such Series physically segregated at all times from those of any other person or persons. (e) COLLECTION OF INCOME AND OTHER MATTERS AFFECTING SECURITIES. Unless otherwise instructed to the contrary by Written Instruction, the Custodian by itself, or through the use of the Book-Entry System or the Depository with respect to Securities therein deposited, shall with respect to all Securities held for a Series in accordance with this Agreement: (1) Collect all income due or payable; (2) Present for payment and collect the amount payable upon all Securities which may mature or be called, redeemed or retired, or otherwise become payable. Notwithstanding the foregoing, the Custodian shall have no responsibility to the Client or the Series for monitoring or ascertaining any call, redemption or retirement dates with respect to Put Bonds which are owned by the Client or the Series and held by the Custodian or its nominees. Nor shall the Custodian have any responsibility or liability to the Client or the Series for any loss by the Client or the Series for any missed payments or other defaults resulting therefrom; unless the Custodian received timely notification from the Client specifying the time, place and -6- manner for the presentment of any such Put Bond owned by the Client for the Series and held by the Custodian or its nominee. The Custodian shall not be responsible and assumes no liability to the Client or the Series for the accuracy or completeness of any notification the Custodian may furnish to the Client with respect to Put Bonds; (3) Surrender Securities in temporary form for definitive Securities; (4) Execute any necessary declarations or certificates of ownership under the Federal income tax laws or the laws or regulations of any other taxing authority now or hereafter in effect including filing such documents as may be necessary to reclaim foreign withholding taxes paid by the Series; and (5) Hold directly, or through the Book-Entry System or the Depository with respect to securities therein deposited, for the account of each Series all rights and similar securities issued with respect to any Securities held by the Custodian hereunder for each Series. (f) DELIVERY OF SECURITIES AND EVIDENCE OF AUTHORITY. Upon receipt of Written Instructions and not otherwise, except for actions required by subparagraphs 5, 6, 7, and 8 upon Written Instructions or Oral Instructions confirmed by Written Instructions, the Custodian, directly or through the use of the Book-Entry System or the Depository, shall: (1) Execute and delivery or cause to be executed and delivered to such persons as may be designated in such Written Instruction proxies, consents, authorizations, and any other instruments whereby the authority of the Client as owner of any Securities may be exercised. The Custodian shall promptly forward to the Client or its duly delegated agent any and all proxies, proxy statements and similar documents received by the Custodian which documents relate to Securities held by any Series of the Client pursuant to written operating procedures between the parties; (2) Deliver or cause to be delivered any Securities held for a series in exchange for -7- other Securities or cash issued or paid in connection with the liquidation, reorganization, refinancing, merger, consolidation or recapitalization of any corporation, or the exercise of any conversion privilege; (3) Deliver or cause to be delivered any Securities held for a Series to any protective committee, reorganization committee or other person in connection with the reorganization or sale of assets of any corporation, and receive and hold under the terms of this Agreement in the separate account for each Series such certificates of deposit, interim receipts or other instruments or documents as may be issued to it to evidence such delivery; (4) Make or cause to be made such transfers or exchanges of the assets specifically allocated to the separate account of a Series and take such other steps as shall be stated in said Written Instruction to be for the purpose of effectuating any duly authorized plan of liquidation, reorganization, merger, consolidation or recapitalization of the Client; (5) Deliver Securities owned by any Series upon sale of such Securities for the account of such Series pursuant to Section 5; (6) Deliver Securities owned by any Series upon the receipt of payment in connection with any repurchase agreement related to such securities entered into by such Series; (7) Deliver Securities owned by any Series to the issuer thereof or its agent when such Securities are called, redeemed, retired or otherwise become payable; provided, however, that in any such case the cash or other consideration is to be delivered to the Custodian. Notwithstanding the foregoing, the Custodian shall have no responsibility to the Client or the Series for monitoring or ascertaining any call, redemption or retirement dates with respect to the put bonds which are owned by the Client or the Series and held by the Custodian or its nominee. Nor shall the Custodian have any -8- responsibility or liability to the Client or any Series for any loss by the Client or the Series for any missed payment or other default resulting therefrom; unless the Custodian received timely notification from the Client specifying the time, place and manner for the presentment of any such put bond owned by the Client or the Series and held by the Custodian or its nominee. The Custodian shall not be responsible and assumes no liability to the Client or the Series for the accuracy or completeness of any notification the Custodian may furnish to the Client with respect to Put Bonds; (8) Deliver Securities owned by any Series in connection with any loans of securities made by such Series but only against receipt of adequate collateral as determined from time to time by the Client which may be in the form of cash or obligations issued by or guaranteed the United States government, its agencies or instrumentalities, or an irrevocable letter of credit from a bank; (9) Deliver Securities owned by any Series as security in connection with any borrowings by such series requiring a pledge of Series assets, but only against receipt of amounts borrowed; (10) Deliver Securities owned by any Series upon receipt of instructions from such Series to the Transfer Agent or to the holders of Shares in connection with distributions in kind, as may be described from time to time in the Client's Registration Statement, in satisfaction of requests by holders of Shares for repurchase or redemption; and (11) Deliver Securities owned by any Series for any other proper business purpose, but only upon receipt of, in addition to Written Instructions, a certified copy of a resolution of the Board of Trustees signed by an Authorized Person and certified by the Secretary of the Client, specifying the Securities to be delivered, setting forth the purpose for which such delivery is to be made, declaring such purpose to be a proper business purpose, and naming the person or -9- persons to whom delivery of such Securities shall be made. (g) ENDORSEMENT AND COLLECTION OF CHECKS, ETC. The Custodian is hereby authorized to endorse and collect all checks, drafts or other orders for the payment of money received by the Custodian for the account of a Series. 5. PURCHASE AND SALE OF INVESTMENT OF THE SERIES. (a) Promptly after each purchase of Securities for a Series, the Client shall deliver to the Custodian (i) with respect to each purchase of Securities which are not Money Market Securities, Written Instruction, and (ii) with respect to each purchase of Money Market Securities, either a Written or Oral Instruction, in either case specifying with respect to each purchase: (1) the name of the Series to which such Securities are to be specifically allocated; (2) the name of the issuer and the title of the Securities; (3) the number of shares or the principal amount purchased and accrued interest, in any; (4) the date of purchase and settlement; (5) the purchase price per unit; (6) the total amount payable upon such purchase; and (7) the name of the broker through whom or the person to whom the sale was made. The Custodian shall deliver or cause to be delivered the Securities to the broker or other person designated by the Client upon receipt of the total amount payable to such Series upon such sale, provided that the same conforms to the total amount payable to such Series as set forth in such Written or Oral Instruction. Subject to be foregoing, the Custodian may accept payment in such form as shall be satisfactory to it, and may deliver Securities and arrange for payment in accordance with the customs prevailing among dealers in Securities. 6. LENDING OF SECURITIES. If a Series is permitted to lend Securities specifically allocated to that Series, within 24 hours after each loan of Securities, the Client shall deliver to the Custodian Written Instructions specifying with respect to each such loan: (1) the Series to which the loaned Securities are specifically allocated; (2) the name of the issuer and the title of the Securities; (3) the number of shares or the principal amount loaned; (4) the date of loan and delivery; (5) the total amount to be delivered to the Custodian, and specifically allocated to such Series against the loan of the Securities, including the amount of cash collateral and the premium, if any, separately identified; and (6) the name of the broker, dealer or financial institution to which the loan was made. It is understood that in connection with loans of securities the Client may appoint an agent to effect such loans pursuant to a written agreement, as to which the Custodian might be a party, providing, inter alia for -10- marking collateral to market, the call of such loans and such other terms as may be agreed upon. Promptly after each termination of a loan of Securities specifically allocated to a Series, the Client shall deliver to the Custodian Written Instruction specifying with respect to each such loan termination and return of Securities: (1) the name of the Series to which such loaned Securities are specifically allocated; (2) the name of the issuer and the title of the Securities to be returned; (3) the number of shares or the principal amount to be returned; (4) the date of termination; (5) the total amount to be delivered by the Custodian (including the cash collateral for such Securities minus any offsetting credits as described in said Written Instructions); and (6) the name of the broker, dealer or financial institution from which the Securities will be returned. The Custodian shall receive all Securities returned from the broker, dealer or financial institution to which such Securities were loaned and upon receipt thereof shall pay, out of the moneys specifically allocated to such Series, the total amount payable upon such return of Securities as set forth in such Written Instruction. Securities returned to the Custodian shall be held as they were prior to such loan. 7. PAYMENT OF DIVIDENDS OR DISTRIBUTIONS. (a) The Client shall furnish to the Custodian the resolution of the Board of Trustees of the Client certified by the Secretary or Assistant Secretary (i) authorizing the declaration of dividends with respect to a Series on a specified periodic basis and authorizing the Custodian to rely on Oral or Written Instructions specifying the date of the declaration of such dividend or distribution, the date or payment thereof, the record date as of which shareholders entitled to payment shall be determined, the amount payable per share to the shareholders of record as of the record date and the total amount payable to the Transfer Agent on the payment date, or (ii) setting forth the date of declaration of any dividend or distribution by a Series, the date of payment thereof, the record date as of which shareholders entitled to payment shall be determined, the amount payable per share to the shareholders of record as of the record date and the total amount payable to the Transfer Agent on the payment date. (b) Upon the payment date specified in such resolution, Oral Instruction, or Written Instruction, as the case may be, the Custodian shall pay out the moneys specifically allocated to and held for the account of the appropriate Series to the Transfer Agent of the Client. 8. SALE AND REDEMPTION OF SHARES OF THE SERIES. -11- (a) Whenever the Client shall sell any shares of a Series, the Client shall deliver or cause to be delivered to the Custodian Written Instruction duly specifying: (1) The name of the Series whose Shares were sold; (2) The number of Shares sold, trade date, and price; and (3) The amount of money and/or Securities to be received by the Custodian for the sale of such Shares and specifically allocated to such Series. (b) Upon receipt of such money and/or Securities from the Transfer Agent, the Custodian shall credit such money and/or Securities to the separate account of the Series specified in the Written Instruction specified in subparagraph (1) of paragraph (a) of this Section 8. (c) Upon issuance of any Shares of a series in accordance with the foregoing provisions of this Section 8, the Custodian shall pay, out of the moneys specifically allocated and held for the account of such Series, all original issue or other taxes required to be paid in connection with such issuance upon the receipt of Written Instruction specifying the amount to be paid. (d) Except as provided hereafter, whenever any Shares of a Series are redeemed, the Client shall cause the Transfer Agent to promptly furnish to the Custodian written notice, specifying: (1) The name of the Series whose Shares were redeemed, and if Securities are to be paid, the Client shall specify which Securities are to be delivered in redemption of such Shares; (2) The number of Shares redeemed; and (3) The amount in cash and/or Securities to be paid for the Shares redeemed. (e) Upon receipt from the Transfer Agent of written notice setting forth the number of Shares of a Series received by the Transfer Agent for redemption and that such Shares are valid and in good form for redemption, the Custodian shall make payment and/or deliver to the Transfer Agent out of the moneys and/or Securities specifically allocated to and held for the account of the Series specified in subparagraph (1) of paragraph (d) of this -12- Section 8 of the total amount specified in the Written Instruction issued pursuant to paragraph (d) of this Section 8. 9. INDEBTEDNESS. (a) The Client will cause to be delivered to the Custodian by any bank from which the Client borrows money for temporary or emergency or other purposes using Securities as collateral for such borrowings, a notice or undertaking in the form currently employed by any such bank setting forth the amount which such bank will loan to the Client against delivery of a stated amount of collateral. The Client shall promptly deliver to the Custodian Written Instruction stating with respect to each such borrowing: (1) the name of the Series for which the borrowing is to be made; (2) the name of the bank; (3) the amount and terms of the borrowing, which may be set forth by incorporating by reference an attached promissory note, duly endorsed by the Client, or other loan agreement; (4) the time and date, if known, on which the loan is to be entered into (the "Borrowing Date"); (5) the date on which the loan becomes due and payable; (6) the total amount payable to the Client for the separate account of the Series on the Borrowing Date; (7) the market value of Securities to be delivered as collateral for such loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities; and (8) a statement that such loan is in conformance with the 1940 Act and the Client's Registration Statement. (b) Upon receipt of the Written Instruction referred to in subparagraph (a) above, the Custodian shall deliver on the Borrowing Date the specified collateral the executed promissory note, if any, against delivery by the lending bank of the total amount of the loan payable, provided that the same conforms to the total amount payable as set forth in the Written Instruction. The Custodian may, at the option of the lending bank, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank by virtue of any promissory note or loan agreement. The Custodian shall deliver as additional collateral in the manner directed by the Client from time to time such Securities specifically allocated to such Series as may be specified in the Written Instruction to collateralize further any transaction described in this Section 9. The Client shall cause all Securities released from collateral status to be returned directly to the Custodian, and the Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that the Client fails to specify in Written Instruction all of the information required by this Section 9, the Custodian shall not be under any obligation to deliver any Securities. Collateral returned to the Custodian shall be held hereunder as it was prior to being used as collateral. -13- 10. PERSONS HAVING ACCESS TO ASSETS OF THE CLIENT. (a) No Trustee, officer, employee or agent of the Client, and no officer, director, employee or agent of the Client's investment adviser, shall have physical access to the assets of the Client held by the Custodian or be authorized or permitted to withdraw any investments of the Client, nor shall the Custodian deliver any assets of the Client to any such person. No officer, director, employee or agent of the Custodian who holds any similar position with the Client or the investment adviser shall have physical access to the assets of the Client. (b) Nothing in this Section 10 shall prohibit any officer, employee or agent of the Client, or any officer, director, employee or agent of the investment adviser or sub-adviser to a Series, from giving Oral Instructions or Written Instructions to the Custodian or executing a Certificate so long as it does not result in delivery of or access to assets of the Client prohibited by paragraph (a) of this Section 10. (c) A list of the individual employees of the Custodian duly authorized by the Custodian to have access to the assets of the Client will be supplied to the Client from time to time. The Custodian shall advise the Client of any change in the individuals authorized to have access to the assets of the Client by written notice to the Client. 11. CONCERNING THE CUSTODIAN. (a) STANDARD OF CONDUCT. Except as otherwise provided herein, neither the Custodian nor its nominee shall be liable for any loss or damage, including reasonable counsel fees, resulting from its action or omission to act or otherwise, except for any such loss or damage arising out of its own negligence or willful misconduct. The Custodian may, with respect to questions of law, apply for and obtain the advice and opinion of counsel to the Client at the expense of the Client, and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with such advice or opinion. The Custodian shall be liable to the Client for any loss or damage resulting from the use of the Book-Entry System or the Depository arising by reason of any negligence, misfeasance or misconduct on the part of the Custodian or any of its employees or agents. (b) LIMIT OF DUTIES. Without limiting the generality of the foregoing, the Custodian shall be under no duty or obligation to inquire into, and shall not be liable for: (1) The validity of the issue of any Securities purchased by any Series, the legality of the purchase thereof, or the propriety of the amount paid therefor; -14- (2) The legality of the sale of any Securities by any Series, or the propriety of the amount for which the same are sold; (3) The legality of the issue or sale of any Shares, or the sufficiency of the amount to be received therefor; (4) The legality of the redemption of any Shares, or the propriety of the amount to be paid therefor; (5) The legality of the declaration or payment of any dividend or other distribution of any Series; (6) The legality of any borrowing for temporary or emergency or other purposes. (c) NO LIABILITY UNTIL RECEIPT. The Custodian shall not be liable for, or considered to be the Custodian of, any money, whether or not represented by any check, draft, or other instrument for the payment of money, received by it on behalf of any Series until the Custodian actually receives and collects such money directly or by the final crediting of the account representing the Client's interest in the Book-Entry System or the Depository. The Custodian shall exercise diligence consistent with industry practice in pursuing payment on any such instrument, or any dividend, interest or other receivable of the Client. (d) AMOUNTS DUE FROM TRANSFER AGENT. Unless the Custodian and the Dividend and Transfer Agent shall be the same person or an affiliated person of each other as defined in the 1940 Act, action to effect collection of any amount due to any Series from the Transfer Agent nor to take any action to effect payment or distribution by the Transfer Agent of any amount payment by the Custodian to the Transfer Agent in accordance with this Agreement. (e) COLLECTION WHERE PAYMENT REFUSED. The Custodian shall not be under any duty or obligation to take action to effect collection of any amount, if the Securities upon which such amount is payable are in default, or if payment is refused after due demand or presentation, unless and until (a) it shall be directed to take such action by a Certificate and (b) it shall be assured to its satisfaction of reimbursement of its costs and expenses in connection with any such action. The Custodian shall promptly notify the Client in the event of any such default. (f) APPOINTMENT OF AGENTS AND SUB-CUSTODIANS. The Custodian may appoint one or more banking institutions, including -15- but not limited to banking or other qualified institutions located in foreign countries, to act as Depository or Depositories or as Sub-Custodian or as Sub- Custodians of Securities and moneys at any time owned by any Series, upon terms and conditions specified in a certificate; provided that any such appointment shall have been approved by a vote of the Board of Trustees of the Client. The Custodian shall use reasonable case in selecting a Depository and/or Sub- Custodian located in a country other than the United States ("Foreign Sub- Custodian"), and shall oversee the maintenance of any Securities or moneys of a Series by any Foreign Sub-Custodian. The Custodian shall be liable to the Client for any loss or damage to the Client resulting from the negligence or willful misconduct of any foreign Sub-Custodian to the same extent that the Custodian would be liable to the Client if the Custodian were holding such Securities or money in the Commonwealth of Massachusetts. Notwithstanding, the Custodian herein agrees to pursue at the expense of the Client, any claim which the Custodian may assert against any Foreign Sub-Custodian to recover any loss or damage arising under such arrangement. The Client shall have, at its election, the right to enforce Custodian's rights against any Sub-Custodian, agent or Depository for loss, damage or expenses caused the Client or any Series by such Sub-Custodian, agent or Depository which Custodian may have as a consequence of any such loss, damage or expenses if and to the extent that the Client or a Series has not been made whole for any such loss or damage. Any selection of and form of contract with a Foreign Custodian shall be subject to approval by the Client that such selection and contract are consistent with the requirements of Rule 17f-5 (and Rule 17f-4, if applicable) under the 1940 Act, and the Custodian warrants that such arrangement shall, among other things, provide that: (i) the Client will be adequately indemnified and its assets adequately insured in the event of loss; (ii) the Client's assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of the eligible Foreign Custodian or Sub-Custodian or its creditors except for a claim of payment for their safe custody or administration; (iii) beneficial ownership of the Client's assets will be freely transferable without the payment or value other than for safe custody or administration; (iv) adequate records will be maintained identifying the assets as belonging to the Client; -16- (v) the Client's independent public accountants will be given access to those records or confirmation of the contents of those records; (vi) the Client will receive periodic reports with respect to the safekeeping of its assets, including, but not necessarily limited to, notification of any transfer to or from the Client's account; and (vii) only foreign securities within the meaning of Rule 17f-5 shall be held by a Foreign Sub-Custodian. (g) The Custodian shall use its best efforts to provide the Client with information described in the "NOTES" to Rule 17f-5 and such other similar information as the Client may reasonably request to assist its Board of Trustees to satisfy their obligations under such Rule. In addition, the Custodian shall use its best efforts to provide the Client with prompt notice of any material change in information previously provided to the Client pursuant to this paragraph (g) or any material changes in the facts or circumstances upon which such information is based. (h) NO DUTY TO ASCERTAIN AUTHORITY. The Custodian shall not be under any duty or obligation to ascertain whether any Securities at any time delivered to or held by its for the Client and specifically allocated to a Series are such as may properly be held by the Client and specifically allocated to such Series under the provisions of the Declaration of Trust and the Registration Statement. (i) RELIANCE ON CERTIFICATES AND INSTRUCTIONS. The Custodian shall be entitled to rely upon Certificate, notice or other instrument in writing received by the Custodian and reasonably believed by the Custodian to be genuine. The Custodian shall be entitled to rely upon any Written Instructions or Oral Instructions actually received by the Custodian pursuant to the applicable Sections of this Agreement and reasonably believed by the Custodian to be genuine and to be given by an Authorized Person. The Client agrees to forward to the Custodian Written Instructions from an Authorized Person confirming such Oral Instructions in such manner so that such Written Instructions are received by the Custodian, whether by hand delivery, telex or otherwise, by the close of business on the same day that such Oral Instructions are given to the Custodian. The Client agrees that the fact that such confirming instructions are not received by the Custodian shall in no way affect the validity of the transactions or enforceability of the transactions hereby authorized by the Client. The Client agrees -17- that the Custodian shall incur no liability to the Client in acting upon Oral Instructions given to the Custodian hereunder concerning such transactions provided such instructions reasonably appear to have been received from an Authorized Person. (j) INSPECTION OF BOOKS AND RECORDS. The Custodian shall create and maintain all records relating to its activities and obligations under this Agreement in such manner as will meet the obligations of the Client under the 1940 Act, with particular attention to Section 31 thereof and Rule 3la-1 and 3la-2 thereunder, applicable federal and state tax laws and any other law or administrative rules or procedures which may be applicable to the Client. All such records shall be the property of the Client and shall be open to inspection and audit at reasonable times by officers and auditors employed by the Client and by employees of the Securities and Exchange Commission. The Custodian shall promptly provide the Client with any report obtained by the Custodian on the system of internal accounting control of the Book-Entry System or the Depository and with copies of any report issued by any regulatory agency concerning its own operations insofar as such report relates to the performance of its duties as Custodian to the Client and will promptly furnish the Client with copies of any report prepared by an independent accountant regarding its system of internal accounting control or that of any Subcustodian or Depository insofar as such report relates to the performance of its duties as Custodian to the Client and any similar reports regarding the Custodian, any Subcustodian or Depository as the Client may reasonably request. (k) The Custodian agrees to maintain adequate insurance and fidelity bond coverage for its operation located in New York City, New York. 12. TERM AND TERMINATION. (a) This Agreement shall become effective after approval by the Client's Board of Trustees and shall continue in effect from year to year thereafter subject to the provisions of Section 12(b). (b) Either of the parties hereto may terminate this Agreement with respect to any Series by giving to the other party a notice in writing specifying the date of such termination. In the event such notice is given by the Custodian, the date of termination shall be not less than 120 days after the date of receipt of such notice by the Client. In the event such notice is given by the Client, the date of termination shall be not less than 30 days after the date of receipt of such notice by the Custodian. In the event such notice is given by the Client, it -18- shall be accompanied by a certified resolution of the Board of Trustees of the Client, electing to terminate this Agreement with respect to any Series and designating a successor custodian or custodians, which shall be a person qualified to so act under the 1940 Act. In the event such notice is given by the Custodian, the Client shall, on or before the termination date, deliver to the Custodian a certified resolution of the Board of Trustees of the Client, designating a successor custodian or custodians. In the absence of such designation by the Client, the Custodian may designate a successor custodian, which shall be a person qualified to so act under the 1940 Act. If the Client fails to designate a successor custodian for any Series, the Client shall upon the date specified in the notice of termination of this Agreement and upon deliver by the Custodian of all Securities (other than Securities held in the Book-Entry System which cannot be delivered to the Client) and money and then owned by such Series be deemed to be its own custodian and the Custodian shall thereby be relieved of all duties and responsibilities pursuant to this Agreement, other than the duty with respect to Securities held in the Book-Entry System which cannot be delivered to the Client. (c) Upon the date set forth in such notice under Paragraph (b) of this Section 12, this Agreement shall terminate to the extent specified in such notice, and the Custodian shall upon receipt of a notice of acceptance by the successor custodian on that date deliver directly to the successor custodian all Securities and moneys then held by the Custodian and specifically allocated to the Series specified, after deducting all fees and other amounts for the payment of reimbursement of which it shall then be entitled with respect to the Series and otherwise cooperate in the transfer of its duties and responsibilities hereunder. (d) In the event that the Custodian terminates this Agreement the Custodian shall not charge Transaction Fees (as described in Schedule A) to the Client in connection with the transfer of assets to a successor custodian. In the event that the Client terminates this Agreement for a reason other than a breach of the Custodian's covenants under this agreement, including its fees as set forth in Schedule A, the Client shall pay the Transaction Fees imposed on a transfer of assets to a successor custodian. 13. MISCELLANEOUS. (a) Annexed hereto as Appendix A is a certification signed by the Secretary of the Client setting forth the names and the signatures of the present Authorized Persons. The Client agrees to furnish to the Custodian a new certification in similar form in the event that any such present Authorized Person ceases to be such an Authorized Person. Until such new certification -19- shall be received, the Custodian shall be fully protected in acting under the provisions of this Agreement upon Oral Instructions or signatures of the Present Authorized Persons as set forth in the last delivered certification. (b) Annexed hereto as Appendix B is a certification signed by the Secretary of the Client setting forth the names and the signatures of the present officers of the Client. The Client agrees to furnish to the Custodian a new certification in similar form in the event any such present officer ceases to be an officer of the Client. Until such new certification shall be received, the Custodian shall be fully protected in acting under the provisions of this Agreement upon the signature of the officers as set forth in the last delivered certification. (c) Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Custodian, shall be sufficiently given if addressed to the Custodian and mailed or delivered to it at its offices at Princess House, Bush Lane, London, ECAR OAN, England, Attn: Paul Sarosy, or at such other place as the Custodian may from time to time designated in writing. (d) Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Client, shall be sufficiently given if addressed to the Chief Administrative Officer of the Client and mailed or delivered to it at its offices at 1299 Ocean Avenue, 1lth Floor, Santa Monica, California 90401 or at such other place as the Client may from time to time designate in writing. (e) Notwithstanding any provision of this Agreement to the contrary, as long as the Custodian and the Dividend and Transfer Agent shall be the same person or affiliated persons of each other as defined in the 1940 Act, then nothing contained in this Agreement shall cause the Client to be liable to the Custodian for any loss or damage occasioned by information supplied by the Client to the Custodian if such information was furnished to the Client or based upon information furnished to the Client by the Dividend and Transfer Agent. (f) This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties. (g) The Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by the Client without the written consent of the Custodian, or by the Custodian without the written consent of the Client authorized or approved by a resolution of the Board of -20- Trustees of the Client, and any attempted assignment without such written consent shall be null and void. (h) This Agreement shall be construed in accordance with the laws of the Commonwealth of Massachusetts. (i) The captions of the Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof or otherwise effect their construction or effect. (j) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunder duly authorized as of the date and year first above written. THE DFA INVESTMENT TRUST COMPANY By: /s/ David G. Booth ----------------------------------------- BOSTON SAFE DEPOSIT AND TRUST COMPANY By: /s/ Vincent Nave ----------------------------------------- -21- SCHEDULE A - FEE SCHEDULE Following is the total fee schedule of Boston Safe Deposit and Trust Company ("Boston Safe") for global custody services for the Series of The DFA Investment Trust Company (the "Fund") listed in Appendix C to the Custody Agreement between Boston Safe and the Fund. The fee schedule will be capped at these levels for a two year period beginning with the date that Boston Safe first earns a fee from the Series under this schedule. The fees may be decreased by Boston Safe. After the first two years, the transaction based fees will not increase more than 10% in total over the subsequent two year period. The asset based fees will not increase in the first four years. Fees for any additional Series are to be negotiated, but should not exceed the rates in this schedule for assets similar in type and domicile. Upon termination of the agreement for services, Boston Safe will waive the Transaction Fees, as listed in the table below, for the transfer of assets to a successor custodian, if Boston Safe declines to renew the terms of the agreement or if the agreement is terminated because Boston Safe is seeking an increase in Transaction Fees in excess of a total of 10% over a two year period. The fees are all inclusive. They include, but are not limited to the following services: all costs associated with online communication services to the administrative agent for the Series, costs associated with maintenance of demand deposit accounts associated with the Series, all dividend and income collection, trade affirmation services, tax reclaims, subcustodian processing charges such as corporation action, reporting, settlements and custody charges or other out-of-pocket expenses. Transaction Fee Asset Fee Country (per buy-sell) (basis pts./yr) ------- --------------- --------------- DFA International Value Series - ------------------------- Australia $100 6 Belgium $75 9 -22- Transaction Fee Asset Fee Country (per buy-sell) (basis pts./yr) ------- --------------- --------------- France $ 55 5 Germany $ 45 5 Hong Kong $120 10 Italy $ 75 5 Japan $ 45 5 Netherlands $ 25 6 Singapore $150 15 Spain $ 40 5 Sweden $ 50 7 Switzerland $ 75 6 United Kingdom $ 45 5 Transaction Repair $25 Funds Transfer $25 -23- APPENDIX C - SERIES I, Irene R. Diamant, Secretary of The DFA Investment Trust Company, a Delaware business trust (the "Client"), do hereby certify that: The following Series of the Client are subject to this Agreement: The DFA International Value Series /s/ Irene R. Diamant ----------------------------------- Secretary EX-99.B8III 13 EXHIBIT 99.(B)(8)(III) [LOGO]CHASE GLOBAL CUSTODY AGREEMENT This AGREEMENT is effective January 18, 1994, and is between THE CHASE MANHATTAN BANK, N.A. (the "Bank") and ______________________________ (the "Customer"). The Emerging Markets Series of The DFA Investment Trust Company 1. CUSTOMER ACCOUNTS. The Bank agrees to establish and maintain the following accounts ("Accounts"): (a) a custody account in the name of the Customer ("Custody Account") for any and all stocks, shares, bonds, debentures, notes, mortgages or other obligations for the payment of money, bullion, coin and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same or evidencing or representing any other rights or interests therein and other similar property whether certificated or uncertificated as may be received by the Bank or its Subcustodian (as defined in Section 3) for the account of the Customer ("Securities"); and (b) a deposit account in the name of the Customer ("Deposit Account") for any and all cash in any currency received by the Bank or its Subcustodian for the account of the Customer, which cash shall not be subject to withdrawal by draft or check. The Customer warrants its authority to: 1) deposit the cash and Securities ("Assets") received in the Accounts and 2) give Instructions (as defined in Section 11) concerning the Accounts. The Bank may deliver securities of the same class in place of those deposited in the Custody Account. Upon written agreement between the Bank and the Customer, additional Accounts may be established and separately accounted for as additional Accounts under the terms of this Agreement. 2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS. Unless Instructions specifically require another location acceptable to the Bank: (a) Securities will be held in the country or other jurisdiction in which the principal trading market for such Securities is located, where such Securities are to be presented for payment or where such Securities are acquired; and (b) cash will be credited to an account in a country or other jurisdiction in which such cash may be legally deposited or is the legal currency for the payment of public or private debts. Cash may be held pursuant to Instructions in either interest or non- interest bearing accounts as may be available for the particular currency. To the extent Instructions are issued and the Bank can comply with such Instructions, the Bank is authorized to maintain cash balances on deposit for the Customer with itself or one of its affiliates at such reasonable rates of interest as may from time to time be paid on such accounts, or in non-interest bearing accounts as the Customer may direct, if acceptable to the Bank. If the Customer wishes to have any of its Assets held in the custody of an institution other than the established Subcustodians or their securities depositories, such arrangement must be authorized by a written agreement, signed by the Bank and the Customer. 3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. The Bank may act under this Agreement through the subcustodians listed in Schedule A of this Agreement with which the Bank has entered into subcustodial agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets in the Accounts in accounts which the Bank has established with one or more of its branches or Subcustodians. The Bank and Subcustodians are authorized to hold any of the Securities in their account with any securities depository in which they participate. The Bank reserves the right to add new, replace or remove Subcustodians. The Customer will be given reasonable notice by the Bank of any amendment to Schedule A. Upon request by the Customer, the Bank will identify the name, address and principal place of business of any Subcustodian of the Customer's Assets and the name and address of the governmental agency or other regulatory authority that supervises or regulates such Subcustodian. 4. USE OF SUBCUSTODIAN. (a) The Bank will identify Assets on its books as belonging to the Customer. (b) A Subcustodian will hold Assets together with assets belonging to other customers of the Bank in accounts identified on such Subcustodian's books as special custody accounts for the exclusive benefit of customers of the Bank. (c) Any Assets in the Accounts held by a Subcustodian will be subject only to the instructions of the Bank or its agent. Any Securities held in a securities depository for the account of a Subcustodian will be subject only to the instructions of such Subcustodian. (d) Any agreement the Bank enters into with a Subcustodian for holding its customer's assets shall provide that such assets will not be subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian except for safe custody or administration, and that the beneficial ownership of such assets will be freely transferable without the payment of money or value other than for safe custody or administration. The foregoing shall not apply to the extent of any special agreement or arrangement made by the Customer with any particular Subcustodian. 5. DEPOSIT ACCOUNT TRANSACTIONS. (a) The Bank or its Subcustodians will make payments from the Deposit Account upon receipt of Instructions which include all information required by the Bank. (b) In the event that any payment to be made under this Section 5 exceeds the funds available in the Deposit Account, the Bank, in its discretion, may advance the Customer such excess amount which shall be deemed a loan payable on demand, bearing interest at the rate customarily charged by the Bank on similar loans. (c) If the Bank credits the Deposit Account on a payable date, or at any time prior to actual collection and reconciliation to the Deposit Account, with interest, dividends, redemptions or any other amount due, the Customer will promptly return any such amount upon oral or written notification: (i) that such amount has not been received in the ordinary course of business or (ii) that such amount was incorrectly credited. If the Customer does not promptly return any amount upon such notification, the Bank shall be entitled, upon oral or written notification to the Customer, to reverse such credit by debiting the Deposit Account for the amount previously credited. The Bank or its Subcustodian shall have no duty or obligation to institute legal proceedings, file a claim or a proof of claim in any insolvency proceeding or take any other action with respect to the collection of such amount, but may act for the Customer upon Instructions after consultation with the Customer. 6. CUSTODY ACCOUNT TRANSACTIONS. (a) Securties will be transferred, exchanged or delivered by the Bank or its Subcustodian upon recreipt by the Bank of Instructions which include all information required by the Bank. Settlement and payment for Securities received for, and delivery of Securities out of, the Custody Account may be made in accordance with the customary or established securities trading or securities processing practices and procedures in the jurisdiction or market in which the transaction occurs, including, without limitation, delivery of Securities to a purchaser, dealer or their agents against a receipt with the expectation of receiving later payment and free delivery. Delivery of Securities out of the Custody Account may also be made in any manner specifically required by Instructions acceptable to the Bank. (b) The Bank, in its discretion, may credit or debit the Accounts on a contractual settlement date with cash or Securities with respect to any sale, exchange or purchase of Securities. Otherwise, such transactions will be credited or debited to the Accounts on the date cash or Securities are actually received by the Bank and reconciled to the Accounts. (i) The Bank may reverse credits or debits made to the Accounts in its discretion if the related transaction fails to settle within a reasonable period, determined by the Bank in its discretion, after the contractual settlement date for the related transaction. (ii) If any Securities delivered pursuant to this Section 6 are returned by the recipient thereof, the Bank may reverse the credits and debits of the particular transaction at any time. 7. ACTIONS OF THE BANK. The Bank shall follow Instructions received regarding Assets held in the Accounts. However, until it receives Instructions to the contrary, the Bank will perform the following functions. (a) Present for payment any Securities which are called, redeemed or retired or otherwise become payable and all coupons and other income items which call for payment upon presentation, to the extent that the Bank or Subcustodian is actually aware of such opportunities. (b) Execute in the name of the Customer such ownership and other certificates as may be required to obtain payments in respect of Securities. (c) Exchange interim receipts or temporary Securities for definitive Securities. (d) Appoint brokers and agents for any transaction involving the Securities, including, without limitation, affiliates of the Bank or any Subcustodian. (e) Issue statements to the Customer, at times mutually agreed upon, identifying the Assets in the Accounts. The Bank will send the Customer an advice or notification of any transfers of Assets to or from the Accounts. Such statements,advices or notifications shall indicate the identity of the entity having custody of the Assets. Unless the Customer sends the Bank a written exception or objection to any Bank statement within sixty days of receipt, the Customer shall be deemed to have approved such statement. In such event, or where the Customer has otherwise approved any such statement, the Bank shall, to the extent permitted by law, be released, relieved and discharged with respect to all matters set forth in such statement or reasonably implied therefrom as though it had been settled by the decree of a court of competent jurisdiction in an action where the Customer and all persons having or claiming an interest in the Customer or the Customer's Accounts were parties. All collections of funds or other property paid or distributed in respect of Securities in the Custody Account shall be made at the risk of the Customer. The Bank shall have no liability for any loss occasioned by delay in the actual receipt of notice by the Bank or by its Subcustodians of any payment, redemption or other transaction regarding Securities in the Custody Account in respect of which the Bank has agreed to take any action under this Agreement. 8. CORPORATE ACTIONS; PROXIES. Whenever the Bank receives information concerning the Securities which requires discretionary action by the beneficial owner of the Securities (other than a proxy), such as subscription rights, bonus issues, stock repurchase plans and rights offerings, or legal notices or other material intended to be transmitted to securities holders ("Corporate Actions"), the Bank will give the Customer notice of such Corporate Actions to the extent that the Bank's central corporate actions department has actual knowledge of a Corporate Action in time to notify its customers. When a rights entitlement or a fractional interest resulting from a rights issue, stock dividend, stock split or similar Corporate Action is received which bears an expiration date, the Bank will endeavor to obtain Instructions from the Customer or its Authorized Person, as defined in Section 10, but if Instructions are not received in time for the Bank to take timely action, or actual notice of such Corporate Action was received too late to seek Instructions, the Bank is authorized to sell such rights entitlement or fractional interest and to credit the Deposit Account with the proceeds or take any other action it deems, in good faith, to be appropriate in which case it shall be held harmless for any such action. The Bank will deliver proxies to the Customer or its designated agent pursuant to special arrangements which may have been agreed to in writing. Such proxies shall be executed in the appropriate nominee name relating to Securities in the Custody Account registered in the name of such nominee but without indicating the manner in which such proxies are to be voted; and where bearer Securities are involved, proxies will be delivered in accordance with Instructions. 9. NOMINEES. Securities which are ordinarily held in registered form may be registered in a nominee name of the Bank, Subcustodian or securities depository, as the case may be. The Bank may, without notice to the Customer, cause any such Securities to cease to be registered in the name of any such nominee and to be registered in the name of the Customer. In the event that any Securities registered in a nominee name are called for partial redemption by the issuer, the Bank may allot the called portion to the respective beneficial holders of such class of security in any manner the Bank deems to be fair and equitable. The Customer agrees to hold the Bank, Subcustodians, and their respective nominees harmless from any liability arising directly or indirectly from their status as a mere record holder of Securities in the Custody Account. 10. AUTHORIZED PERSONS. As used in this Agreement, the term "Authorized Person" means employees or agents including investment managers as have been designated by written notice from the Customer or its designated agent to act on behalf of the Customer under this Agreement. Such persons shall continue to be Authorized Persons until such time as the Bank receives Instructions from the Customer or its designated agent that any such employee or agent is no longer an Authorized Person. 11. INSTRUCTIONS. The term "Instructions" means instructions of any Authorized Person received by the Bank, via telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess or electronic instruction or trade information system acceptable to the Bank which the Bank believes in good faith to have been given by Authorized Persons or which are transmitted with proper testing or authentication pursuant to terms and conditions which the Bank may specify. Unless otherwise expressly provided, all Instructions shall continue in full force and effect until cancelled or superseded. Any Instructions delivered to the Bank by telephone shall promptly thereafter be confirmed in writing by an Authorized Person (which confirmation may bear the facsimile signature of such Person), but the Customer will hold the Bank harmless for the failure of an Authorized Person to send such confirmation in writing, the failure of such confirmation to conform to the telephone instructions received or the Bank's failure to produce such confirmation at any subsequent time. Either Party may electronically record any Instructions given by telephone, and any other telephone discussions with respect to the Custody Account. The Customer shall be responsible for safeguarding any testkeys, identification codes or other security devices which the Bank shall make available to the Customer or its Authorized Persons. 12. STANDARD OF CARE; LIABILITIES. (a) The Bank shall be responsible for the performance of only such duties as are set forth in this Agreement or expressly contained in Instructions which are consistent with the provisions of this Agreement. (i) The Bank will use reasonable care with respect to its obligations under this Agreement and the safekeeping of Assets. The Bank shall be liable to the Customer for any loss which shall occur as the result of the failure of a Subcustodian to exercise reasonable care with respect to the safekeeping of such Assets to the same extent that the Bank would be liable to the Customer if the Bank were holding such Assets in New York. In the event of any loss to the Customer by reason of the failure of the Bank or its Subcustodian to utilize reasonable care, the Bank shall be liable to the Customer only to the extent of the Customer's direct damages, to be determined based on the market value of the property which is the subject of the loss at the date of discovery of such loss and without reference to any special conditions or circumstances. (ii) The Bank will not be responsible for any act, omission, default or for the solvency of any broker or agent which it or a Subcustodian appoints unless such appointment was made negligently or in bad faith. (iii) The Bank shall be indemnified by, and without liability to the Customer for any action taken or omitted by the Bank whether pursuant to Instructions or otherwise within the scope of this Agreement if such act or omission was in good faith, without negligence. In performing its obligations under this Agreement, the Bank may rely on the genuineness of any document which it believes in good faith to have been validly executed. (iv) The Customer agrees to pay for and hold the Bank harmless from any liability or loss resulting from the imposition or assessment of any taxes or other governmental charges, and any related expenses with respect to income from or Assets in the Accounts. (v) The Bank shall be entitled to rely, and may act upon the advice of counsel (who may be counsel for the Customer) on all matters, and shall be without liability for any action reasonably taken or omitted pursuant to such advice. (vi) The Bank need not maintain any insurance for the benefit of the Customer. (vii) Without limiting the foregoing, the Bank shall not be liable for any loss which results from: 1) the general risk of investing, or 2) investing or holding Assets in a particular country including, but not limited to, losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities industry; currency restrictions, devaluations or fluctuations; and market conditions which prevent the orderly execution of securities transactions or affect the value of Assets. (viii) Neither party shall be liable to the other for any loss due to forces beyond their control including, but not limited to strikes or work stoppages, acts of war or terrorism, insurrection, revolution, nuclear fusion, fission or radiation, or acts of God. (b) Consistent with and without limiting the first paragraph of this Section 12, it is specifically acknowledged that the Bank shall have no duty or responsibility to: (i) question instructions or make any suggestions to the Customer or an Authorized Person regarding such Instructions; (ii) supervise or make recommendations with respect to investments or the retention of Securities; (iii) advise the Customer or an Authorized Person regarding any default in the payment of principal or income of any security other than as provided in Section 5(c) of this Agreement; (iv) evaluate or report to the Customer or an Authorized Person regarding the financial condition of any broker, agent or other party to which Securities are delivered or payments are made pursuant to this Agreement; or (v) review or reconcile trade confirmations received from brokers. The Customer or its Authorized Persons issuing Instructions shall bear any responsibility to review such confirmations against Instructions issued to and statements issued by the Bank. (c) The Customer authorizes the Bank to act under this Agreement notwithstanding that the Bank or any of its divisions or affiliates may have a material interest in a transaction, or circumstances are such that the Bank may have a potential conflict of duty or interest including the fact that the Bank or any of its affiliates may provide brokerage services to other customers, act as financial advisor to the issuer of Securities, act as a lender to the issuer of Securities, act in the same transaction as agent for more than one customer, have a material interest in the issue of Securities, or earn profits from any of the activities listed herein. 13. FEES AND EXPENSES. The Customer agrees to pay the Bank for its services under this Agreement such amount as may be agreed upon in writing, together with the Bank's reasonable out-of-pocket or incidental expenses, including, but not limited to legal fees. The Bank shall have a lien on and is authorized to charge any Accounts of the Customer for any amount owing to the Bank under any provision of this Agreement. 14. MISCELLANEOUS. (a) FOREIGN EXCHANGE TRANSACTIONS. To facilitate the administration of the Customer's trading and investment activity, the Bank is authorized to enter into spot or forward foreign exchange contracts with the Customer or an Authorized Person for the Customer and may also provide foreign exchange through its subsidiaries, affiliates or Subcustodians. Instructions, including standing instructions, may be issued with respect to such contracts but the Bank may establish rules or limitations concerning any foreign exchange facility made available. In all cases where the Bank, its subsidiaries, affiliates or Subcustodians enter into a foreign exchange contract related to Accounts, the terms and conditions of the then current foreign exchange contract of the Bank, its subsidiary, affiliate or Subcustodian and, to the extent not inconsistent, this Agreement, shall apply to such transaction. (b) CERTIFICATION OF RESIDENCY, ETC. The Customer certifies that it is a resident of the United States and agrees to notify the Bank of any changes in residency. The Bank may rely upon this certification or the certification of such other facts as may be required to administer the Bank's obligations under this Agreement. The Customer will indemnify the Bank against all losses, liability, claims or demands arising directly or indirectly from any such certifications. (c) ACCESS TO RECORDS. The Bank shall allow the Customer's independent public accountants reasonable access to the records of the Bank relating to the Assets as is required in connection with their examination of books and records pertaining to the Customer's affairs. Subject to restrictions under applicable law, the Bank shall also obtain an undertaking to permit the Customer's independent public accountants reasonable access to the records of any Subcustodian which has physical possession of any Assets as may be required in connection with the examination of the Customer's books and records. (d) GOVERNING LAW; SUCCESSORS AND ASSIGNS. This Agreement shall be governed by the laws of the State of New York and shall not be assignable by either party, but shall bind the successors in interest of the Customer and the Bank. (e) ENTIRE AGREEMENT; APPLICABLE RIDERS. Customer represents that the Assets deposited in the Accounts are (check one): employee benefit plan or other assets subject to the Employee ---- Retirement Income Security Act of 1974, as amended ("ERISA"); X mutual fund assets subject to Securities and Exchange Commission ---- ("SEC") rules and regulations; neither of the above. ---- This Agreement consists exclusively of this document together with Schedule A, Exhibits I - _______ and the following rider(s) [check applicable rider(s)]: ERISA ---- X MUTUAL FUND ---- X SPECIAL TERMS AND CONDITIONS ---- There are no other provisions of this Agreement and this Agreement supersedes any other agreements, whether written or oral, between the parties. Any amendment to this Agreement must be in writing, executed by both parties. (f) SEVERABILITY. In the event that one or more provisions of this Agreement are held invalid, illegal or unenforceable in any respect on the basis of any particular circumstances or in any jurisdiction, the validity, legality and enforceability of any such provision and the remaining provisions, under other circumstances or in other jurisdictions will not in any way be affected or impaired. (g) WAIVER. Except as otherwise provided in this Agreement, no failure or delay on the part of either party in exercising any power or right under this Agreement operates as a waiver, nor does any single or partial exercise of any power or right preclude any other or further exercise thereof, or the exercise of any other power or right. No waver by a party of any provision of this Agreement, or waiver of any breach or default, is effective unless in writing and signed by the party against whom the waiver is to be enforced. (h) NOTICES. All notices under this Agreement shall be effective when actually received. Any notices or other communications which may be required under this Agreement are to be sent to the parties at the following addresses or such other addresses as may subsequently be given to the other party in writing: Bank: The Chase Manhattan Bank 3 Chase MetroTech Center - 6th Floor Brooklyn, NY 11245 Attn: Global Custody Division Customer: The Emerging Markets Series of the DFA Investment Trust Co. --------------------------------------------------------------- 1299 Ocean Avenue, 11th Floor --------------------------------------------------------------- Santa Monica, CA 90401 --------------------------------------------------------------- --------------------------------------------------------------- (i) TERMINATION. This Agreement may be terminated by the Customer or the Bank by giving sixty days written notice to the other, provided that such notice to the Bank shall specify the names of the persons to whom the Bank shall deliver the Assets in the Accounts. If notice of termination is given by the Bank, the Customer shall, within sixty days following receipt of the notice, deliver to the Bank Instructions specifying the names of the persons to whom the Bank shall deliver the Assets. In either case the Bank will deliver the Assets to the persons so specified, after deducting any amounts which the Bank determines in good faith to be owed to it under Section 13. If within sixty days following receipt of a notice of termination by the Bank, the Bank does not receive Instructions from the Customer specifying the names of the persons to whom the Bank shall deliver the Assets, the Bank, at its election, may deliver the Assets to a bank or trust company doing business in the State of New York to be held and disposed of pursuant to the provisions of this Agreement, or to Authorized Persons, or may continue to hold the Assets until Instructions are provided to the Bank. CUSTOMER - The DFA Investment Trust Company By: /s/ Irene R. Diamant ----------------------------------------- Vice President ----------------------------------------- Title THE CHASE MANHATTAN BANK, N.A. By: /s/ Jennifer Royes ----------------------------------------- Second Vice President ----------------------------------------- Title STATE OF CALIFORNIA ) : SS. COUNTY OF LOS ANGELES ) On this 24th day of January, 1994, before me personally came Irene R. Diamant, to me known, who being by me duly sworn, did depose and say that she resides in Pacific Palisades at California; that she is V.P. and Director of Operations of the Emerging Markets Series of the DFA Investment Trust Company ("Customer"), the Customer which executed the foregoing Agreement; that she knows the seal of the Customer; that the seal affixed to the Agreement is such seal; that it was affixed by order of the Customer, and that she signed her name thereto by like order. /s/ Irene R. Diamant ------------------------------- Sworn to before me this 24th day of January, 1994. /s/ Christine Wai-Ling Ho - ------------------------- [SEAL] Notary STATE OF NEW YORK ) : SS. COUNTY OF KINGS ) On this 19th day of January, 1994, before me personally came Jennifer Royes, to me known, who being by me duly sworn, did depose and say that he/she resides in Manhattan at _________________; that he/she is a Vice President of THE CHASE MANHATTAN BANK, N.A. ("Bank"), the Bank which executed the foregoing Agreement; that he/she knows the seal of the Bank; that the seal affixed to the Agreement is such corporate seal; that it was so affixed by order of the Board of Directors of the Bank, and that he/she signed his/her name thereto by like order. /s/ Jennifer Royes ------------------------------- Sworn to before me this 19th day of January, 1994. /s/ Laiyee Ng - ----------------- [SEAL] Notary Mutual Fund Rider to Global Custody Agreement Between The Chase Manhattan Bank, N.A. and The Emerging Markets Series of The DFA Investment Trust Company _____________, effective January 18, 1994 Customer represents that the Assets being placed in the Bank's custody are subject to the Investment Company Act of 1940 (the "Act"), as the same may be amended from time to time. Except to the extent that the Bank has specifically agreed to comply with a condition of a rule, regulation or interpretation promulgated by or under the authority of the SEC or the Exemptive Order applicable to accounts of this nature issued to the Bank (Investment Company Act of 1940, Release No. 12053, November 20, 1981), as amended, or unless the Bank has otherwise specifically agreed, the Customer shall be solely responsible to assure that the maintenance of Assets under this Agreement complies with such rules, regulations, interpretations or exemptive order promulgated by or under the authority of the Securities Exchange Commission. The following modifications are made to the Agreement: SECTION 3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES. Add the following language to the end of Section 3: The terms Subcustodian and securities depositories as used in this Agreement shall mean a branch of a qualified U.S. bank, an eligible foreign custodian or an eligible foreign securities depository, which are further defined as follows: (a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined in Rule 17f-5 under the Act; (b) "eligible foreign custodian" shall mean (i) a banking institution or trust company incorporated or organized under the laws of a country other than the United States that is regulated as such by that country's government or an agency thereof and that has shareholders' equity in excess of $200 million in U.S. currency (or a foreign currency equivalent thereof), (ii) a majority owned direct or indirect subsidiary of a qualified U.S. bank or bank holding company that is incorporated or organized under the laws of a country other than the United States and that has shareholders' equity in excess of $100 million in U.S. currency (or a foreign currency equivalent thereof), (iii) a banking institution or trust company incorporated or organized under the laws of a country other than the United States or a majority owned direct or indirect subsidiary of a qualified U.S. bank or bank holding company that is incorporated or organized under the laws of a country other than the United States which has such other qualifications as shall be specified in Instructions and approved by the Bank or (iv) any other entity that shall have been so qualified by exemptive order, rule or other appropriate action of the SEC; and (c) "eligible foreign securities depository" shall mean a securities depository or clearing agency, incorporated or organized under the laws of a country other than the United States, which operates (i) the central system for handling securities or equivalent book-entries in that country or (ii) a transnational system for the central handling of securities or equivalent book-entries. The Customer represents that its Board of Directors has approved each of the Subcustodians listed in Schedule A to this Agreement and the terms of the subcustody agreements between the Bank and each Subcustodian, which are attached as Exhibits I through ___ of Schedule A, and further represents that its Board has determined that the use of each Subcustodian and the terms of each subcustody agreement are consistent with the best interests of the Customer's fund(s) and its (their) shareholders. The Bank will supply the Customer with any amendment to Schedule A for approval. The Customer has supplied or will supply the Bank with certified copies of its Board of Directors resolution(s) with respect to the foregoing prior to placing Assets with any Subcustodian so approved. SECTION 11. INSTRUCTIONS. Add the following language to the end of Section 11: Account transactions made pursuant to Sections 5 and 6 of this Agreement may be made only for the purposes listed below. Instructions must specify the purpose for which any transaction is to be made and the Customer shall be solely responsible to assure that Instructions are in accord with any limitations or restrictions applicable to the Customer by law or as may be set forth in its prospectus. (a) In connection with the purchase or sale of Securities at prices as confirmed by Instructions. (b) When Securities are called, redeemed or retired, or otherwise become payable. (c) In exchange for or upon conversion into other securities alone or other securities and cash pursuant to any plan or merger, consolidation, reorganization, recapitalization or readjustment. (d) Upon conversion of Securities pursuant to their terms into other securities. (e) Upon exercise of subscription, purchase or other similar rights represented by Securities. (f) For the payment of interest, taxes, management or supervisory fees, distributions or operating expenses. (g) In connection with any borrowings by the Customer requiring a pledge of Securities, but only against receipt of amounts borrowed. (h) In connection with any loans, but only against receipt of adequate collateral as specified in Instructions which shall reflect any restrictions applicable to the Customer. (i) For the purpose of redeeming shares of the capital stock of the Customer and the delivery to, or the crediting to the account of the Bank, its Subcustodian or the Customer's transfer agent, such shares to be purchased or redeemed. (j) For the purpose of redeeming in kind shares of the Customer against delivery of the shares to be redeemed to the Bank, its Subcustodian or the Customer's transfer agent. (k) For delivery in accordance with the provisions of any agreement among the Customer, the Bank and a broker-dealer registered under the Securities Exchange Act of 1934 (the "Exchange Act") and a member of the National Association of Securities Dealers, Inc., relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organization or organizations, regarding escrow or other arrangements in connection with transactions by the Customer. (l) For release of Securities to designated brokers under covered call options, provided, however, that such Securities shall be released only upon payment to the Bank of monies for the premium due and a receipt for the Securities which are to be held in escrow. Upon exercise of the option, or at expiration, the Bank will receive the Securities previously deposited from brokers. The Bank will act strictly in accordance with Instructions in the delivery of Securities to be held in escrow and will have no responsibility or liability for any such Securities which are not returned promptly when due other than to make proper request for such return. (m) For spot or forward foreign exchange transactions to facilitate security trading, receipt of income from Securities or related transactions. (n) For other proper purposes as may be specified in Instructions issued by an officer of the Customer which shall include a statement of the purpose for which the delivery or payment is to be made, the amount of the payment or specific Securkies to be delivered, the name of the person or persons to whom delivery or payment is to be made, and a certification that the purpose is a proper purpose under the instruments governing the Customer. (o) Upon the termination of this Agreement as set forth in Section 14(i). SECTION 12. STANDARD OF CARE; LIABILITIES. Add the following subsection (d) to Section 12: (d) The Bank hereby warrants to the Customer that in its opinion, after due inquiry, the established procedures to be followed by each of its branches, each branch of a qualified U.S. bank, each eligible foreign custodian and each eligible foreign securities depository holding the Customer's Securities pursuant to this Agreement afford protection for such Securities at least equal to that afforded by the Bank's established procedures with respect to similar securities held by the Bank and its securities depositories in New York. SECTION 14. ACCESS TO RECORDS. Add the following language to the end of Section 14(c): Upon reasonable request from the Customer, the Bank shall furnish the Customer such reports (or portions thereof) of the Bank's system of internal accounting controls applicable to the Bank's duties under this Agreement. The Bank shall endeavor to obtain and furnish the Customer with such similar reports as it may reasonably request with respect to each Subcustodian and securities depository holding the Customer's assets. CHASE [LOGO]CHASE GLOBAL CUSTODY AGREEMENT with The Emerging Markets Series of The DFA Investment Trust Company -------------------------------- (Customer) dated January 18, 1994 ---------------- SPECIAL TERMS AND CONDITIONS These Special Terms and Conditions amend and supplement the global custody agreement between The Chase Manhattan Bank, N.A. ("Bank") and The Emerging Markets Series of the DFA Investment Trust Company ("Fund"), dated January 18, 1994 ("Agreement"), as amended by the mutual fund rider ("Rider") thereto. To the extent any term or provision of the Agreement or Rider is inconsistent with these Special Terms and conditions shall govern. It is agreed as follows: (1) Add the following as a new subparagraph (c) at the end of Section l of the Agreement: "When instructed by the Customer, the Bank is authorized to maintain accounts in the name of, and on behalf of, wholly-owned or substantially wholly-owned subsidiaries of the Customer (or on behalf of other entities established and wholly-owned by the Customer) (collectively "Entities") for the purpose of conducting the Customer's investment operations. The Customer acknowledges and agrees that the establishment of any such account is contingent upon: (i) the Entity executing such agreements, account opening documentation, powers of attorney and proof of authority (collectively "Documentation") as Chase may require for the establishment of the account; and (ii) the Entity meeting such criteria as Chase may establish from time to time in connection with opening and maintaining such an account. The Customer shall cooperate to assure that Chase obtains Documentation from an Entity." (2) On line 3 of the second subparagraph of Section 7 of the Agreement, delete the word "sixty" and insert, in lieu thereof, the word "ninety". (3) On line 4 of the first subparagraph of Section 8 of the Agreement, insert the word "prompt" before the word "notice". (4) On line 2 of Section 13 of the Agreement, insert the phrase "incurred on behalf of Customer" after the word "fees". [LOGO]CHASE GLOBAL CUSTODY AGREEMENT with The Emerging Markets Series of The DFA Investment Trust Company -------------------------------- (Customer) dated January 18, 1994 ---------------- SPECIAL TERMS AND CONDITIONS (5) Add the following at the end of Section l4(c) of the Agreement: "At the request of the Fund, the Bank shall deliver to the Fund a written report prepared by the Bank's independent certified public accountants with respect to the services provided by the Bank under this Agreement, including, without limitation, the Bank's accounting system, internal accounting control and procedures for safeguarding cash, securities and other assets, including cash, securities and other assets deposited and/or maintained with a Subcustodian. Such report shall be of sufficient scope and in sufficient detail as may reasonably be required by the Fund and as may reasonably be obtained by the Bank. At Fund's reasonable request in connection with Fund's compliance with Securities and Exchange Commission Rule 17f-5, the Bank shall request from any Subcustodian holding Fund assets a similar report with respect to the practices of such Subcustodian, it being understood that the Bank may not in any given case be successful in obtaining such a report and that the Bank shall have no liability in any such events." (6) Add the following as a new subparagraph at the end of Section 3 of the Rider: "The Bank shall furnish annually to the Customer information concerning the Subcustodians employed by the Bank. Such information shall be similar in kind and scope to that furnished to the Customer in connection with the initial approval of Subcustodians by the Customer. The Bank shall promptly inform the Customer in the event that the Bank learns of any material adverse change in the condition of a Subcustodian that could result or has resulted in a Subcustodian not being an eligible foreign custodian. Nothing contained in this subparagraph shall be construed to impose on the Bank any fiduciary duty imposed upon the Customer by law, regulation or otherwise. The Bank shall supply periodically, as mutually agreed upon, a statement in respect of any Securities and cash, including identification of the foreign entities having custody of the Securities and cash and descriptions thereof." page 2 of 2 EX-99.B8IV 14 EXHIBIT 99.(B)(8)(IV) CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- CUSTODIAL SERVICES AGREEMENT CUSTODIAL SERVICES AGREEMENT, dated as of January 13, 1998 between CITIBANK, N.A., a national banking association, having an office at 111 Wall Street, New York, New York, 10005 and acting through such office in New York (the "Bank"), and The DFA Investment Trust Company, a Delaware business trust, having an office at 1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401 (the "Customer"). W I T N E S S E T H: THAT WHEREAS, the Customer represents that it is authorized to (a) open and maintain custody accounts (the "Custody Accounts") with the Bank to hold certain property ("Property") including, but not limited to, stocks, bonds, or other securities ("Securities"), funds and other property owned or held by the Customer, (b) enter into this Agreement, and (c) direct all actions and transactions contemplated hereunder. The Customer further represents that it is duly organized and in good standing under the laws of the state or country of its organization and the consummation of transactions contemplated hereby or directed by it hereunder will not violate any applicable laws, regulations or orders. NOW, THEREFORE, in consideration of the premises and of the agreements hereinafter set forth, the parties hereby agree as follows: 1. APPOINTMENT AND ACCEPTANCE. The Customer hereby appoints the Bank as custodian of the Property and as its agent hereunder, and the Bank agrees to act as such upon the terms and conditions hereinafter provided. 2. DELIVERY; SAFEKEEPING. The Customer has heretofore delivered, or will deliver or cause to be delivered, Property to the Bank, which Property the Bank agrees to keep safely as custodian for the Customer. The Bank shall not surrender possession of Property except upon properly authorized Instructions (as hereinafter defined) of the Customer or as may be required by due process of applicable law. 3. IDENTIFICATION AND SEGREGATION OF ASSETS. WITH RESPECT TO PROPERTY IN THE CUSTODY ACCOUNT: (a) Except as otherwise provided in this Agreement, the Bank will separately identify on its books and segregate all Property held pursuant to this Agreement by the Bank or any other entity authorized to hold Property in accordance with Section 6 or 7 hereof. The Bank understands that the Customer is an open-end management investment company, registered with the SEC under the Investment Company Act of 1940 ("1940 Act"). The Customer issues several separate series of shares and the Customer's Property, as well as its liabilities, are, and shall be, allocated to each such series in accordance with the Customer's instructions. "Series", as used herein, refers to the Customer's Series listed in Appendix X hereto, and any other separate Series that may be created, from time to time, under the Customer's Declaration of Trust, and which become subject to this Agreement by the mutual consent of the Customer and the Bank. The Bank shall establish and maintain a separate Custody Account for each Series and shall credit the Custody Account of each Series with -1- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- all Property received by it for the account of such Series and shall charge such account with the liabilities of such Series. No Series shall be charged with any liability of another Series. (b) The Bank shall supply to the Customer from time to time as mutually agreed upon a written statement with respect to all Property in the Custody Accounts. In the event that the Customer or its agent does not inform the Bank in writing of any exceptions or objections within ninety (90) days after the date of such statement, the Customer shall be deemed to have approved such statement with respect to the information contained therein but not with respect to any omission; provided, however, that if the Customer or its agent sends such written exception or objection more than ninety (90) days from the statement date, the Bank's obligations to the Customer in regard to any transactions covered thereby shall be reduced to the extent that the Bank's ability to mitigate any damages in connection with such transaction is compromised. Further, in no event shall the Bank be responsible after such 90 days for any subsequent increase in the fair market value of any Property or any interest with regard to any Property where the Customer reasonably should have informed the Bank of any exception or objection based on the information contained in any statement. 4. STANDARD OF CARE. The Bank shall exercise the same standard of care that it exercises over its own assets in the safekeeping, handling, servicing and disposition of Property in accordance with this Agreement. The Bank will exercise the due care expected of a professional custodian for hire with respect to Property in its possession or control. Except as otherwise provided in this Agreement, the Bank shall not be responsible for any loss or damage suffered by the Customer unless such loss or damage results from an act of negligence or willful misconduct on the part of the Bank or on the part of (i) a branch, affiliate or subsidiary of the Bank acting as its agent or as a foreign custodian hereunder pursuant to the terms of this Agreement or (ii) any other foreign custodian appointed by the Bank pursuant to the terms of this Agreement; PROVIDED THAT, the liability of the Bank in connection with any Property shall not exceed the market value of the Property, to which such loss or damage relates, at the time such negligence or willful misconduct was discovered or should reasonably have been discovered, plus compensatory interest at prevailing rates. In no event shall the Bank be liable to the Customer for indirect, special or consequential damages. In selecting and appointing U.S. depositories, foreign securities depositories and clearing agencies, the Bank shall exercise reasonable care, prudence and diligence. Subject to compliance with the obligations stated in the preceding sentence, the Bank shall not be responsible for any loss or damage suffered by the Customer for any act or omission of a U.S. Depository, a foreign securities depository or clearing agent not caused by the act or omission of the Bank or its agent or a foreign custodian appointed by the Bank. Any Property held by a foreign custodian or a foreign securities depository or clearing agency shall be subject to applicable laws, regulations, decrees, order, government acts, restrictions, customs, procedures and market practices ("Laws") (i) to which such a foreign custodian or securities depository or clearing agency, is subject (ii) as exist in the country in which such Property is held and (iii) of the country of the currency in which the Property is denominated. In the event the Law change in a way that would prevent or limit the performance of duties and obligations by a foreign custodian or securities depository or clearing agency, such duties and obligations shall be superseded and neither the Bank nor its -2- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- parent nor any other of its branches, subsidiaries or affiliates shall be liable therefor or for any damages in any way resulting from such prevented or limited performance; provided, however, the Bank shall give prompt notice to the Customer of any such event. Notwithstanding the above, neither (i) the Bank or its parent or any of its branches, subsidiaries nor affiliates nor (ii) the Customer is responsible for any losses or damages resulting from reasons or causes beyond its control, including, without limitation, nationalization, expropriation, currency restrictions, acts of war, terrorism, insurrection, revolution, civil unrest, riots or strikes, nuclear fusion or fission or acts of God. The Bank is not under any duty to supervise the investments of the Customer, or to advise or make any recommendation to the Customer with respect to the purchase or sale of any Securities or the investment of any funds. The Customer shall have the sole and exclusive responsibility for the investment of Property held hereunder. The Bank agrees to maintain insurance and fidelity bond coverage as appropriate for its activities located in New York City; provided, however, nothing in this Section 4 shall require the Bank to insure any Property. 5. PERFORMANCE BY THE BANK. (a) GENERAL: The Bank's performance of its duties hereunder and the day-to-day operations of the Custody Accounts shall be in accordance with written service standards as may be furnished to the Customer by the Bank from time to time. Such service standards, as may be amended from time to time, are incorporated herein by reference; provided, however, no amendment shall be effective until the Customer shall have received thirty (30) days prior written notice thereof. (b) RECEIPT, DELIVERY AND DISPOSAL OF SECURITIES: The Bank shall, or shall instruct any other entity authorized to hold Property in accordance with Section 6 or 7 hereof to, receive or deliver Securities and the Bank shall credit or debit the appropriate Custody Accounts, in accordance with properly authorized Instructions from the Customer. The Bank or such authorized entity shall also receive in custody all stock dividends, rights and similar securities issued in connection with Securities held hereunder, shall surrender for payment, in a timely manner, all items maturing or called for redemption and shall take such other action as the Customer may direct in properly authorized Instructions. (c) TRADE EXECUTION: Promptly after each purchase of securities, the Customer shall deliver to the Bank with respect to each purchase: (i) the name of the issuer and the title of the Securities; (ii) the number of shares or the principal amount purchased and accrued interest, if any; (iii) the date of purchase settlement; (iv) the purchase price per unit; (v) the total amount payable upon such purchase; (vi) the name of the broker through whom or the person to whom the sale was made; and (vii) the Series to which such Securities are allocated. The Bank shall deliver or cause to be delivered the Securities to the broker or other person designated by the Customer upon receipt of the total amount payable to the Custodian upon such sale; provided that, the same conforms to the total amount payable as set forth in Instructions from the Customer. Subject to the foregoing, the Bank may accept payment in such form as shall be satisfactory to it, and may deliver Securities and arrange for payment in accordance with the customs prevailing among dealers in securities. All transactions in regard to Securities will be settled upon actual receipt or in accordance with best market practices. -3- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- The Bank shall send the Customer a written confirmation of any transfer of Property to or from the Custody Accounts. (d) REGISTRATION: Securities held hereunder may be registered in the name of the Bank, any entity authorized to hold Property in accordance with Section 6 or 7 hereof or a nominee of the Bank or any such authorized entity, and the Customer shall be informed upon request of all such registrations. Securities in registered form will be transferred upon request of the Customer into such names or registrations as it may specify in properly authorized Instructions. (e) CASH ACCOUNTS: (i) All cash received or held by the Bank or by any entity authorized to hold Property in accordance with Section 7 hereof as interest, dividends, proceeds from transfer, and other payments for or with respect to Securities or in consideration of the sale of Series shares shall be (x) held in the cash account of each Series and paid out in accordance with properly authorized Instructions of the Customer received by the Bank or (y) if specified in the Customer's Instructions, converted to or from U.S. dollars and held by the Bank hereunder or remitted to the Customer. The Customer shall bear any foreign exchange risk in connection with such conversion. In effecting any currency conversions hereunder, the Bank or such entity may use such methods or agencies as it may see fit including the Bank's facilities, to the extent allowed by law, at customary rates. (ii) The Customer agrees, with respect to the payment for all purchases of Securities for a Series to be deposited in the Custody Account of such Series, that funds of such Series for settlement will be on deposit by the settlement date at the location of settlement, in good available funds and in the currency of settlement. The Customer acknowledges that nothing in this Agreement shall obligate the Bank to extend credit, grant financial accommodation or otherwise advance moneys to the Customer for the purpose of making any such payments or part thereof or otherwise carrying out any Instructions. (iii) The Customer authorizes the Bank from time to time to cause the branch of the Bank located in London, England ("Citibank London") to establish multicurrency cash accounts reflecting cash received by any Foreign Custodian on the Customer's behalf. Citibank London will maintain such cash accounts in accordance with the requirements of Section 7 hereof applicable to an entity authorized to hold Property hereunder. (f) REPORTS: (i) If the Bank has in place a system for providing telecommunication access or other means of electronic access by customers to the Bank's reporting system for Property in a Custody Account, then, at the Customer's election, the Bank may agree to provide the Customer with such instructions and passwords as may be necessary in order for the Customer to have such direct access through the Customer's terminal device. Such electronic access shall be restricted to information relating to the Custody Account. If electronic access to such reporting system is requested by the Customer, the Customer agrees to assume full responsibility for the consequences of the use, including any misuse or unauthorized use of the terminal device, instructions or passwords referred to above by the Customer or any of its employees or agents, but not for the unauthorized use resulting from negligent or wrongful acts of the Bank or its employees or agents, and agrees to defend and indemnify the Bank and hold the Bank harmless from and against any and all liabilities, losses, damages, costs, counsel fees, and other expenses of every nature suffered or incurred by the Bank by reason of, or in connection with, such use by the Customer or -4- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- losses, damages, costs, counsel fees, and other expenses of every nature suffered or incurred by the Bank by reason of, or in connection with, such use by the Customer or others of such terminal device, unless such liabilities, losses, damages, costs, counsel fees and other expenses can be shown to be the result of negligent or wrongful acts of the Bank. Further, in the event the Customer elects to have electronic access, the Bank shall provide the Customer on each business day a report of the preceding business day's transactions relating to the Custody Account and of the closing or net balances of each business day. If the Customer should not choose to have electronic access, the Bank shall provide the Customer with such reports of transactions in the Custody Account by such means as may be mutually agreed upon. (ii) The Bank agrees to use reasonable efforts to furnish the Customer with such information regarding Property held hereunder as the Customer may reasonably request in connection with its complying with requests of any regulatory authorities having jurisdiction over the Customer. The Bank shall maintain and keep current all records, books and other documents relating to its activities and obligations under this Agreement to fully record all transactions effected with regard to the Custody Accounts and any relevant cash accounts and in each instance sufficient to provide to the Customer the information or reports specified on Schedule 1, annexed hereto. All such records shall be the property of Customer; provided, however, the Bank may retain duplicate originals which shall be the property of the Bank. The Bank shall preserve such records as provided in Rule 31a-2 under the 1940 Act. All such records shall be open to inspection and audit at reasonable times by offices and auditors employed by Customer and by employees of the SEC. (iii) The Bank shall also, subject to restrictions under applicable law, seek to obtain from any entity with which the Bank maintains the physical possession of any Property in a Custody Account such records of such entity relating to the Custody Account as may be required by the Customer or its agents in connection with an internal examination by the Customer of its own affairs or requests of regulatory authorities. Upon a reasonable request from the Customer, the Bank shall use its best efforts to furnish to the Customer such reports (or portions thereof) of the external auditors of each such entity as relate directly to such entity's system of internal accounting controls applicable to its duties under its agreement with the Bank. The Bank shall promptly send to the Customer reports the Bank receives from any depository or clearing agency on its respective system of internal accounting control and shall sent to the Customer such reports on the Bank's own systems of internal accounting control as the Customer may reasonably request from time to time. (g) ACCESS: During the Bank's regular banking hours and upon receipt of reasonable notice directly from the Customer, any officer or employee of the Customer, any independent accountant(s) selected by the Customer, and any person designated by any regulatory authority having jurisdiction over the Customer shall be entitled to examine on the Bank's premises Property held by the Bank on its premises and the Bank's records regarding Property held hereunder or deposited with entities authorized to hold Property in accordance with Section 6 or 7 hereof, but only upon furnishing the Bank with properly authorized Instructions to that effect, PROVIDED, such examination shall be consistent with the Bank's obligations of confidentiality to other parties. (h) VOTING AND OTHER ACTION: (i) The Bank will transmit to the Customer upon receipt, and will instruct any entities authorized to hold Property in accordance with Section 6 or 7 hereof to transmit to the -5- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- Customer upon receipt, all financial reports, stockholder communications, notices, proxies and proxy soliciting materials received from issuers of Securities, and all information relating to exchanges or tender offers or other corporate actions received from offerors with respect to Securities. Proxies will be executed by the registered holder if the registered holder is other than the Customer, but the manner in which the Securities are to be voted will be indicated by the Customer. Neither the Bank nor any such authorized entity shall vote any Securities or authorize the voting of any Securities or give any consent or take any other action with respect thereto, except as otherwise provided herein. (ii) In the event of tender offers, the Customer shall hand deliver, telecopy or transmit via tested telex Instructions to the Bank as to the action to be taken with respect thereto designating such Instructions as being related to a tender offer. The Customer shall hold the Bank harmless from any adverse consequences of the Customer's use of any other method of transmitting Instructions relating to a tender offer. (iii) The Customer agrees that if it gives an Instruction for the performance of an act on the last permissible date of a period established by the tender offer or to otherwise act, the Customer shall hold the Bank harmless from any adverse consequences in connection with acting upon or failing to act upon such Instructions unless the Bank negligently delayed delivering such materials to the Customer. (iv) The Bank is authorized to accept and open on the Customer's behalf all mail or communications received by it or directed in its care. 6. AUTHORIZED USE OF U.S. DEPOSITORIES. The Customer authorizes the Bank, either directly or through one or more agents which, under the 1940 Act, are qualified to act as custodians for registered investment companies for any U.S. Securities held hereunder, to use the services of any United States central securities depository authorized under Rule 17f-4 under the 1940 Act including, but not limited to, The Depository Trust Company, The Participants Trust Company and the Federal Reserve Book Entry System ("U.S. Depositories"). The Bank will deposit Securities held hereunder with a U.S. Depository only in an account which holds exclusively the assets of customers of the Bank. The Bank shall promptly provide the Customer with any report obtained by Bank on the system of internal accounting control of any U.S. Depository in which Property is deposited, and with copies of any report regarding its own system of internal accounting control or that of any agent through which it deposits Property in any U.S. Depository, as Customer may reasonably request. The Bank shall send the Customer a notice or advice of any transfers of Securities to or from the Custody Account of a Series. Where Securities are transferred to the Custody Account of a Series, the Bank shall also, by book-entry or otherwise, identify as belonging to such Series a quantity of Securities in a fungible bulk of securities (i) registered in the name of the Bank (or its nominee) or (ii) shown on the Bank's account on the books of the U.S. Depository. 7. AUTHORIZED USE OF FOREIGN CUSTODIANS. (a) Authorization: In carrying out its duties with respect to non-U.S. Securities and foreign currencies ("foreign investments") the Bank shall place and maintain the Customer's foreign investments with, and use the services of, (i) any branch of the Bank or (ii) any other person that is an Eligible Foreign Custodian (as defined in Rule 17f-5(a)(1) under the 1940 Act) selected by the Bank as provided in Section 7(b). -6- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- (b) Foreign Custody Manager: (i) The Customer's board of trustees (hereinafter "Board") hereby delegates to the Bank, and the Bank hereby accepts the delegation to it, of the obligation to serve as the Customer's "Foreign Custody Manager" (as that term is defined in Rule 17f-5(a)(2), as amended from time to time, under the 1940 Act). (ii) As Foreign Custody Manager, the Bank shall: (1) select Eligible Foreign Custodians as defined in Rule 17f-5(a)(1) under the 1940 Act, to serve as foreign custodians and place and maintain the Customer's foreign investments with such foreign custodians; (2) in selecting a foreign custodian, first determine that foreign investments placed and maintained in the safekeeping of each Eligible Foreign Custodian shall be subject to reasonable care, based on the standards applicable to custodians in the relevant market, after having considered all factors relevant to the safekeeping of such investments, including, without limitation, those factors set forth in Rule 17f-5(c)(1)(i)-(iv) under the 1940 Act; (3) enter into written agreements with each Eligible Foreign Custodian selected by the Bank hereunder; (4) determine that the written contract with each Eligible Foreign Custodian (or, in the case of an Eligible Foreign Custodian that is a securities depository or clearing agency such contract [which may be between the Bank and the securities depository or clearing agency or between an Eligible Foreign Custodian selected by the Bank and the securities depository or clearing agency], the rules or established practices or procedures of the depository, or any combination of the foregoing) requires that the Eligible Foreign Custodian will provide reasonable care for the foreign investments, based on the standards applicable to custodians in the relevant market, and that all such contracts, rules, practices and procedure satisfy the requirements of Rule 17f-5(c)(2) under the 1940 Act; (5) provide written reports (x) notifying the Board of the placement of foreign investments with each Eligible Foreign Custodian, such reports to be provided at such time as they deem reasonable and appropriate, but not less than quarterly, and (y) promptly notifying the Board of the occurrence of any material change in the arrangements with a Eligible Foreign Custodians; (6) monitor the continued appropriateness of (x) maintaining the foreign investments with Eligible Foreign Custodians selected hereunder and (y) the governing contractual arrangements; it being understood, however, that in the event the Bank shall determine that any Eligible Foreign Custodian would no longer afford the foreign investments reasonable care, the Bank shall promptly so advise the Customer and shall then act in accordance with the Instructions of the Customer with respect to the disposition of the affected foreign investments; and (7) exercise such reasonable care, prudence and diligence in serving as the Foreign Custody Manager as a person having responsibility for the safekeeping of the Customer's assets would exercise. (iii) Nothing in this paragraph shall relieve the Bank of any responsibility otherwise provided in this Agreement for loss or damage suffered by the Customer from an act of negligence or willful misconduct on the part of the Bank, or any of its agents or any foreign custodian as provided in Section 4 of this Agreement. (iv) Nothing in this Agreement shall require the Bank to make any selection on behalf to the Customer that would entail consideration of any factor reasonably related to the -7- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- systemic risk of holding assets in a particular country including, but not limited to, such country's financial infrastructure and prevailing settlement practices. The Bank agrees to provide to the Customer such information relating to such risk as the Customer shall reasonably request from time to time and such other information as the Bank generally makes available to customers with regard to such countries and risk. (c) Compulsory Depositories: (i) Notwithstanding the provisions of Section 7(b) above, the Bank shall not serve as Foreign Custody Manager in respect of any Compulsory Depository, as defined below. The Bank, throught its branches or an Eligible Foreign Custodian shall be entitled to deposit and maintain the foreign investments in Compulsory Depositories as the Bank deems prudent and appropriate, unless otherwise instructed by the Customer or its delegate; (ii) Prior to depositing the foreign investments in any Compulsory Depository, the Bank shall notify the Customer that such Depository will be used and provide the Customer, in respect of such Depository, with current information of the type the Bank provided to the Customer in the Bank's booklets entitled, "SEC Rule 17f-5 Package". The Bank, upon request, shall make its representatives available to consult, in good faith, with such of the Customer's delegates as the Customer shall designate regarding the advisability of depositing the Customer's foreign investments with any Compulsory Depository; (iii) The Bank shall provide the Customer with reports regarding Compulsory Depositories as provided in Section 7(b)(5), above and shall provide the Customer with such other information with regard to any Compulsory Depository as the Customer shall reasonably request; and (iv) A "Compulsory Depository" shall mean a non-U.S. securities depository or clearing agency the use of which is mandatory (x) by law or regulation (y) because securities cannot be withdrawn from the depository or clearing agency or (z) because maintaining securities outside the securities depository or clearing agency is not consistent with prevailing local custodial practices. (d) SEGREGATION AND IDENTIFICATION OF ASSETS: The Bank will deposit Property of the Customer with a foreign custodian or a non-U.S. depository or clearing agency only in an account which holds exclusively the assets of customers of the Bank. In the event that the Bank authorizes a foreign custodian to hold any foreign investments placed in its care in a non-U.S. depository or clearing agency, the Bank will direct such foreign custodian to identify on its books such foreign investments as being held for the account of the Bank as custodian for its customers. (e) INSTRUCTIONS TO FOREIGN CUSTODIANS: Any Property in a Custody Account deposited by the Bank with a foreign custodian or non-U.S. depository or clearing agency will be subject only to the instructions of the Bank or its agents; and any foreign investments held in a non-U.S. depository or clearing agency for the account of a foreign custodian will be subject only to the instructions of such foreign custodian as subcustodian for the Bank. (f) PROCEDURES OF FOREIGN CUSTODIANS: In utilizing any foreign custodian, the Bank warrants that the established procedures to be followed by each foreign custodian holding Property pursuant to this Agreement address relevant control issues for such Property and provide internal controls and procedures that are adequate to provide reasonable protection of the Property. In addition to, and not in amplification of, the provisions of Section 4 and the last sentence of Section 7(c) of this Agreement, in utilizing any non-U.S. depository or clearing agency, the Bank -8- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- complies with the guidelines of OCC Banking Circular BC - 235 with respect to such non-U.S. depository or clearing agency and has in place and utilizes its own internal controls and procedures to assess whether the non-U.S. depository or clearing agency is appropriately safekeeping the Property. 8. USE OF AGENTS. The Bank may, subject to applicable laws, rules and regulations and the provisions of this Agreement, appoint agents, whether in its name or that of the Customer, to perform any of the duties of the Bank hereunder, and the Bank may delegate to any such agent so appointed any of its functions under this Agreement; provided, however, no such delegation shall relieve the Bank of any obligation hereunder. 9. INSTRUCTIONS. (a) The Bank is authorized to rely and act upon written instructions ("Instructions") which are signed by persons ("Authorized Persons") named in a list provided to the Bank from time to time, which list must be certified by the Customer's Secretary or Assistant Secretary and include authenticated specimen signatures of all Authorized Persons. Such list shall separately designate those Authorized Persons who may authorize the withdrawal of Securities free of payment, those Authorized Persons who may authorize the unconditional transfer of funds and those Authorized Persons who may give Instructions by electronic access as provided hereunder. (b) The Customer agrees that the Bank is authorized to rely and act upon such Instructions in accordance with this Section 9 and the Manual Transmission Authorization attached hereto and incorporated herein by reference (including each Manual Transmission Procedures attached thereto) to this Agreement and to debit or credit the applicable account(s) of the Customer accordingly and that such Manual Transmission Authorization and method(s) of transmission are commercially reasonable. (c) The Bank shall be entitled to rely upon the continued authority of any Authorized Person to give Instructions until the Bank receives notice from the Customer to the contrary; and the Bank shall be entitled to rely upon any Instructions it reasonably believes in good faith to have been given by an Authorized Person. (d) The Bank is further authorized to rely upon any Instructions received by any other means and identified as having been given or authorized by any Authorized Person, regardless of whether such Instructions shall in fact have been authorized or given by any of such Authorized Persons, PROVIDED that the Bank and the Customer shall have agreed upon the means of transmission and the method of identification for such Instructions and such means of transmissions is actually used. Instructions received by any other means shall include but shall not be limited to verbal Instructions only in connection with delivery against payment or receipt against payment transactions and transfers from one account within a Custody Account to another account within a Custody Account and provided that such verbal Instructions are promptly confirmed in writing by the Customer. Notwithstanding the foregoing in the event that verbal Instructions are not subsequently confirmed in writing as provided above, the Customer agrees to hold the Bank harmless and without liability for any claims or losses in connection with such verbal Instructions except as may arise from the Bank's own negligence, bad faith or willful misconduct in carrying out the same. (e) The Customer agrees to be bound by any Instruction, whether or not authorized, given to the Bank in its name and accepted by the Bank in accordance with the provisions hereof (including but not limited to the Funds Transfer Procedures and each Schedule A -9- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- hereto) and further agrees to indemnify and hold the Bank harmless from and against any loss, liability, claim or expense (including legal fees and expenses) associated with the Bank's acting upon such Instructions as provided herein, except such as may arise from the Bank's own negligence, bad faith or willful misconduct. (f) The Customer may appoint one or more investment managers ("Investment Managers") with respect to the Custody Accounts. The Bank is authorized to act upon instructions received from any Investment Manager to the same extent that the Bank would act upon the Instructions of an Authorized Person, PROVIDED that the Bank has received written evidence of the Investment Manager's appointment, written confirmation from the Investment Manager evidencing his acceptance of such appointment and written certification from the Investment Manager of the names of individuals together with specimen signatures of those authorized to give Instructions hereunder. (g) If the Customer should choose to have telecommunication or other means of electronic access to the Bank's reporting system for Property in the Custody Accounts, pursuant to paragraph (f) of Section 5, the Bank is also authorized to rely and act upon any Instructions received by it through a terminal device, PROVIDED that such Instructions are accompanied by code words which the Bank has furnished to the Customer or an Authorized Person by any method mutually agreed to by the Bank and the Customer, and PROVIDED that the Bank has not been notified by the Customer or any such Authorized Person to cease to recognize such code words, regardless of whether such Instructions shall in fact have been given or authorized by the Customer or any such Authorized Person. 10. ASSURED INCOME PAYMENT SERVICE. The Bank may, at its absolute discretion, offer the Customer an Assured Income Payment Service in respect of specific Securities, as may be notified by the Bank to the Customer from time to time. In relation to any such Securities, the Bank may, at its absolute discretion, cause the Customer's cash account to be credited with an Assured Payment on the Assured Payment Date relevant thereto; PROVIDED that the Bank shall be entitled to reverse any credit on notice to Customer (in whole or in part) made in respect of that Assured Payment if the Bank fails to receive the full amount corresponding to such Assured Payment within a reasonable time, as determined by the Bank in its absolute discretion, after the relevant Assured Payment Date, for any reason whatsoever other than as a result of the negligence or willful default of the Bank. The Assured Income Payment Service shall be provided by the Bank in accordance with the Assured Income Payment Standards. "Assured Income Payment Service" means the Bank's services in which interest, dividends or other such periodic income, to which the Customer is entitled, on Securities specified by the Bank from time to time at its absolute discretion, are credited to the Customer's cash account in respect of such Securities. "Assured Income Payment Standards" means the terms and conditions governing the Assured Income Payment Service, as such terms and conditions are amended and/or supplemented from time to time by, and at the absolute discretion of, the Bank. "Assured Payment" means, in relation to those Securities specified by the Bank under the Assured Income Payment Service, an amount equal to the interest, dividends or periodic income that is due to the Customer in respect of such Securities less any taxes, duties, levies, charges or any other withholding payments payable in respect of such interest, dividends or periodic income. "Assured Payment Date" means, in relation to the payment of any interest, dividend or periodic income of any particular Securities specified by the Bank under the Assured -10- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- Income Payment Service, the date on which such interest, dividend or periodic income is normally payable in respect of such Securities or such other date as may be notified by the Bank to the Customer from time to time. 11. MEETINGS. Representatives of the Bank will meet with the Customer at Customer's headquarters in Santa Monica, California at least semi-annually, and at other offices as requested from time to time by the Customer. 12. FEES AND EXPENSES. Fees and expenses for the services rendered under this Agreement shall be mutually agreed upon by the parties in writing and attached hereto as a fee schedule. The Bank shall be entitled to debit the Custody Account of the appropriate Series for such fees and expenses. 13. LIENS. The Bank shall have a lien on the Property in the Custody Account of each Series to secure payment of such fees and expenses for the services rendered under this Agreement in respect of such Series. If the Bank advances cash or Securities for the benefit of a Series for any purpose or in the event that the Bank or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of its duties for a Series hereunder, except such as may arise from its or its nominee's negligent action, negligent failure to act or willful misconduct, any Property at any time held for such Series shall be security therefor and the Customer hereby grants to the Bank a security interest therein. The Customer shall promptly reimburse the Bank from the Property allocated to such Series for any such advance of cash or Securities or any such taxes, charges, expenses, assessments, claims or liabilities upon request for payment, but should the Customer fail to so reimburse the Bank, the Bank shall be entitled to dispose of such Property to the extent necessary to obtain reimbursement. The Bank shall be entitled to debit and/or charge the Custody Account of a Series, in connection with any such advance and any interest on such advance made to a Series as the Bank deems reasonable. 14. TAX STATUS/WITHHOLDING TAXES. (a) The Customer's U.S. Tax Identification Number of each Series is listed in Appendix X. If the Series does not have a U.S. Tax Identification Number, the Customer will provide the Bank with information as to its tax status as reasonably requested by the Bank from time to time. (b) The Customer may be required from time to time to file such proof of taxpayer status or residence, to execute such certificates and to make such representations and warranties, or to provide any other information or documents, as the Bank and/or a Foreign Custodian may deem necessary or proper to fulfill the Bank's and/or Foreign Custodian's obligations under applicable law. The Customer shall provide the Bank and/or Foreign Custodian, in a timely manner, with copies of originals if necessary and appropriate, or any such proofs of residence, taxpayer status, beneficial ownership and any other information or documents which the Bank and/or a Foreign Custodian may reasonably request. (c) If any tax or other governmental charge or assessment shall become payable with respect to any payment due to the Customer ("Taxes"), such Taxes shall be withheld from such payment in accordance with applicable law. The Bank and/or a Foreign Custodian may withhold any interest, any dividends or other distributions or securities receivable in respect of Securities, proceeds from the sale or distribution of Securities ("Payments"), or may sell for the account of the Customer any part thereof or all of the Securities, and may apply -11- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- such Payment in satisfaction of such Taxes, the Customer/s appropriate Series remaining liable for any deficiency. If any Taxes shall become payable with respect to any payment made to the Customer by the Bank or a Foreign Custodian in a prior year, the Bank and the Foreign Custodian may withhold Payments in satisfaction of such prior year's Taxes. The Customer shall indemnify and hold harmless the Bank and the Foreign Custodian, its officers, employees, agents and affiliated companies against any Taxes, penalties, additions to tax, and interest, and costs and expenses related thereto, arising out of claims against the Bank and/or the Foreign Custodian by any governmental authority for failure to withhold Taxes or arising out of any reclaim or refund of taxes or other tax benefit obtained by the Bank or the Foreign Custodian for the Customer. (d) The Bank shall apply for a reduction of withholding tax and refund of any tax paid or tax credits which apply in each foreign country in respect of income payments on Securities for the benefit of a Series which the Bank believes may be available to such Customer. (i) The provision of tax reclaim services by Bank is conditional upon the Bank receiving from the beneficial owner of Securities (A) a declaration of its identity and place of residence and (B) certain other documentation (pro forma) copies of which are available from the Bank. The Customer shall provide the Bank with such documentation and information as the Bank may require in connection with taxation, and warrants that, when given, this information shall be true and correct and contain all material information requested. The Customer undertakes to update any such information which requires updating or amendment as the Bank may request; (ii) Except to the extent caused by the Bank's own negligence or willful misconduct, the Bank shall not be liable to Customer or any third party for any taxes, fines, or penalties payable by the Bank on behalf of the Customer, and shall by indemnified accordingly, whether these result from (x) inaccurate completion of documents, provision to the Bank or any third party of inaccurate or misleading information or the withholding of material information, in any of the foregoing cases by the Customer or a third party on behalf of Customer, (y) as a result of any delay of any revenue authority, or (z) any other matter beyond the control of Bank; (iii) Customer confirms that Bank is authorized to deduct from any cash received or credited to a Series' cash account any taxes or levies required by any revenue or governmental authority for whatever reason in respect of the Securities of such Custody Account and the Customer shall be furnished periodic reports of such deductions. In connection with the foregoing, the Customer shall, to the extent of any such payment by the Bank, be subrogated to, and the Bank shall assign and be deemed to have assigned to the Customer, all of its rights in, to and against any such revenue or governmental authority in respect of such payment; (iv) The Bank shall perform tax reclaim services only with respect to taxation levied by the revenue authorities of the countries notified to the Customer from time to time and the Bank may, by notification in writing, at its absolute discretion, change the countries in which the tax reclaim services are offered; provided that the Bank shall afford the Customer advance notice of any such change where reasonably practicable. Other than as expressly provided in this Agreement, Bank shall have no responsibility with regard to Customer's tax position or status in any such jurisdiction; (v) The Customer confirms that the Bank is authorized to disclose any information requested by any revenue authority or any governmental body in relation to the Customer or -12- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- the Securities and/or cash held for a Series which Bank, in good faith, concludes is in connection with the tax services contemplated hereby. Bank shall furnish Customer with notice of such requests where the same are, in the Bank's reasonable judgment, not made in the ordinary course; and (vi) Tax reclaim services may be provided by the Bank or, in whole or in part, by one or more third parties appointed by the Bank (which may be affiliates of Bank); provided that the Bank shall be liable for the performance of any such third party to the same extent as the Bank would have been if it performed such services itself. (e) This Section 14 shall survive the termination of this Agreement and continue in force until the time for assessment of all Taxes expires. 15. AMENDMENT. This Agreement may not be amended except by mutual written agreement between both parties hereto. 16. TERMINATION. Either of the parties hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination. In the event such notice is given by the Bank, the date of termination shall be not less than 120 days after the date of receipt of such notice by the Customer. In the event such notice is given by the Customer the date of termination shall be not less than 30 days after the date of receipt of such notice by the Bank. 17. CONFIDENTIALITY. Subject to the foregoing provisions of this Agreement and subject to any applicable law, the Customer and the Bank shall each use best efforts to maintain the confidentiality of matters concerning Property in the Custody Account. 18. NOTICES. All notices and other communications hereunder, except for Instructions and reports relating to the Property which are transmitted through the Bank's reporting system for Property in the Custody Account, shall be in writing, or if oral shall be promptly confirmed in writing, and shall be hand-delivered, telexed, faxed, telecopied or mailed by prepaid first class mail (except that notice of termination, if mailed, shall be by prepaid registered or certified mail) to each party at its address set forth above, if to the Customer, marked "Attention: LEGAL DEPARTMENT " and if to the Bank, marked "Citibank as Custodian for The DFA Investment Trust Company", or at such other address as each party may give written notice of to the other party. 19. ASSIGNMENT. Neither party may assign, transfer or change all or any of its rights and benefits hereunder without the written consent of the other. Any purported assignments made in contravention of this Section shall be null and void and of no effect whatsoever. 20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED ACCORDING TO, THE LAWS OF THE STATE OF NEW YORK AND THE PARTIES AGREE THAT THE COURTS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT PREEMPTED BY APPLICABLE FEDERAL LAW, SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY SUIT, ACTION OR PROCEEDING AND TO SETTLE ANY DISPUTES WHICH MAY ARISE OUT OF OR IN CONNECTION WITH THIS AGREEMENT, AND, FOR SUCH PURPOSES, EACH IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS. -13- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- 21. MISCELLANEOUS. (a) This Agreement may be executed in several counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument. (b) This Agreement contains the entire agreement between the Customer and the Bank relating to custody of Property and supersedes all prior agreements on this subject. (c) The captions of the various sections and subsections of this Agreement have been inserted only for the purposes of convenience, and shall not be deemed in any manner to modify, explain, enlarge or restrict any of the provisions of this Agreement. 22. TRANSFER OF PROPERTY The Bank agrees that it shall be responsible for the reasonable costs that the Customer incurs to effect transfer of the Property from the Customer's current custodian and no fee will be charged by the Bank in receipt of the Property. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized. CITIBANK, N.A.: CLIENT NAME: THE DFA INVESTMENT TRUST COMPANY By: /s/ Joe Linhares By: /s/ Michael T. Scardina ------------------------------ ------------------------------------ Name: Joe Linhares Name: Michael T. Scardina ---------------------------- ---------------------------------- Title: V.P. Title: VP & CFO --------------------------- --------------------------------- Attest: /s/ [ILLEGIBLE] Attest: /s/ Irene R. Diamant, VP & Sec'y -------------------------- -------------------------------- JOSEPH M. LINHARES, VP Worldwide Securities Services 111 Wall Street, 20th Fl./Zone 2 New York, NY 10043 (212) 657-9586 CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- SCHEDULE 1 Asset Statement Settled Transactions Pending and Failed Transactions Corporate Action Notice Board Corporate Actions New and Amended Events Projected Income Paid Income Ledger Balance Account Statement Transaction Payment Incoming Payment Outgoing Available & Ledger Balance Consolidated Available Balance Consolidated Projected Balances Projected Balances Projected Account Statement Projected Transaction Interest Accrued CITIBANK SECURITIES SERVICES--------------------------------------------------- - --------------------------------------------------------------------------------
APPENDIX X THE DFA INVESTMENT TRUST COMPANY - -------------------------------------------------------------------------------- SERIES TAX IDENTIFICATION NUMBER - -------------------------------------------------------------------------------- The Enhanced U.S. Large Company Series 95-4563143 - -------------------------------------------------------------------------------- The Japanese Small Company Series 95-4592098 - -------------------------------------------------------------------------------- The Pacific Rim Small Company Series 95-4592104 - -------------------------------------------------------------------------------- The United Kingdom Small Company Series 95-4592101 [SEAL] - -------------------------------------------------------------------------------- The DFA International Value Series 95-4452730 - -------------------------------------------------------------------------------- The Continental Small Company Series 95-4592105 - -------------------------------------------------------------------------------- The DFA Two-Year Global Fixed Income Series 95-4563632 - --------------------------------------------------------------------------------
CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- MANUAL TRANSMISSION AUTHORIZATION Customer Name: The DFA Investment Trust Company, a Delaware business trust ----------------------------------------------------------- Relationship Name and/or Account Number(s): ------------------------------------ Citibank Entity accepting instructions: Citibank, N.A. New York (the "Bank") --------------------------------------- 1. The Bank will offer the Customer an automated electronic access transmission method with security procedures for transmitting information, instructions, orders and other communications, including communications with respect to the delivery of securities (each, a "Communication") from the Customer's officers, employees, investment managers or other agents ("Authorized Persons") to the Bank or to an entity designated by the Bank as authorized to receive Communications on its behalf. The Customer and the Bank acknowledge the risk associated with transmitting Communications by a non-automated transmission method and, fully aware of the associated risk, the Customer has requested the Bank to accept Communications transmitted by the methods and in accordance with the procedures attached hereto (the "Procedures"). The Customer accepts the Procedures as commercially reasonable and will comply with them in connection with each Communication sent by an Authorized Person to the Bank or its designees using a non-automated transmission method. If the Bank takes any action not provided in the Procedures to verify the authenticity or content of any Communication, such additional action shall not be deemed to become part of the Procedures no matter how often the Bank takes such additional action. 2. If the Bank complies with the Procedures in respect of a Communication, the Bank shall be entitled to act on that Communication and shall not be obliged to verify the accuracy of the information contained in such Communication. The Customer agrees to be bound by any Communication, whether or not authorized, issued in its name and acted on by the Bank in compliance with the Procedures, unless the Bank reasonably believes that such communication was not authorized. The Bank is not obliged to act on a Communication which is not transmitted in accordance with the Procedures. 3. Notwithstanding any other provision, the Bank shall have the right, in its sole discretion, to refuse to execute any Communication, provided the Bank, acting in good faith, doubts its authorization or authenticity. The Bank shall provide prompt notice, which may be by telephone, to an Authorized Person (as set forth in the Procedures) of any such rejected Communication. CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- 4. If the Bank acts on any Communication sent by telephone, telex or telefax, the Bank shall not, provided it complies with the Procedures, be responsible if that Communication is not an authorized or authentic Communication of the Customer or is not in the form the Customer sent or intended to send (whether due to fraud, distortion or otherwise) unless Bank reasonably believes that such communication was not authorized, and the Customer shall indemnify the Bank against any loss, liability, claim or expense (including legal fees) it may incur in connection with its acting in accordance with that Communication. 5. Nothing contained herein shall require the Bank to violate any applicable laws, rules or regulations on the transfer of funds or data transmission. 6. This Authorization may be terminated by either party hereto upon ten (10) days' prior written notice to the other; provided, however, that the Bank's agreement may be terminated immediately without notice in the event the Bank deems that the security of the Procedures established hereby have been compromised or breached; and provided, further, that termination by the Bank shall not affect the Bank's rights or the Customer's obligations with respect to communications and instructions received by the Bank prior to termination. 7. The unenforceability or invalidity of any provision of this Authorization shall not render any other provision unenforceable or invalid. This Authorization may not be amended except in a writing executed by the Customer and accepted by the Bank.' This Authorization shall in all respects be construed in accordance with and governed by the laws of the State of New York. The DFA Investment Trust Company By: /s/ Michael T. Scardina ---------------------------- (Authorized Signature) Name and Title: Michael T. Scardina VP & CFO ---------------------------- Date: January 13, 1998 ---------------------------- Address for Notices: 1299 Ocean Avenue, 11th Floor Santa Monica, CA 90401 Attention: Legal Department ACCEPTED: Citibank, N.A. By: /s/ Joseph M. Linhares ------------------------- JOSEPH M. LINHARES, VP (Authorized Signature) Worldwide Securities Services 111 Wall Street, 20th Fl./Zone 2 Name and Title: Joe Linhares, VP New York, NY 10043 ----------------------- (212) 657-9586 Date: 1/16/98 ----------------------- Address for Notices: ----------------------- 111 Wall Street ----------------------- New York, New York 10043 ----------------------- Attention: ----------------------- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- MANUAL TRANSMISSION PROCEDURES dated 1/13, 1998 Customer: The DFA Investment Trust Company --------------------------------------------------------------------- Legal Name Name and date of Customer Agreement or Authorization (if applicable) ----------- - ------------------------------------------------------------------------------- List each account number included in the authorization: Account Number Account Name -------------- ------------ --------------- -------------------------- --------------- -------------------------- --------------- -------------------------- --------------- -------------------------- --------------- -------------------------- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- The Bank is hereby authorized to act upon instructions transmitted in the name of each Authorized Person listed below in accordance with the following Procedures (please indicate each primary transmission method):
Courier Phone US Mail Fax Other (e.g. Telex, Electronic Mail) Authorized Persons - ------- ----- ------- --- ----------------------------------- ------------------ -specify Printed Name & Title: ------------------ Specimen Signature: - ------ ----- ------ --- ---------------- -------------------- Printed Name & Title: ------------------ Specimen Signature: - ------ ----- ------ --- ---------------- -------------------- Printed Name & Title: ------------------ Specimen Signature: - ------ ----- ----- --- ---------------- ------------------ Printed Name & Title: ------------------ Specimen Signature: - ------ ----- ----- --- ---------------- --------------------
Security Procedures: Transactions requiring a Security Procedure: Security Procedure: Select One: - ------------------------------------------- ------------------------------ - - Funds Transfer or other Payment -Telephone callback Instructions (mandatory) - - Deliver Free (mandatory) - Standing or Pre-defined Instructions - - Other (Please specify): - Other (Please specify): -------------- --- If telephone callback is chosen, instructions for the transactions noted above received by the Bank pursuant to these Procedures, will be acted upon by the Bank only after a confirming telephone call to one of the telephone numbers listed below: NAME TELEPHONE ---- --------- ---------------- ------------------- ---------------- ------------------- ---------------- ------------------- CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- *If additional space is required, please attach a separate page, label, sign and date it. CITIBANK SECURITIES SERVICES--------------------------------------------------- - -------------------------------------------------------------------------------- The Bank shall be entitled to rely on the names as set forth above until receipt by the Bank, at least ____ days prior to the effective date thereof, of written notice of revocation or modification of these Procedures, dated and signed by an authorized signatory. Executed this 13th day of January, 1998 DFA Investment Trust Company ------------------------------------------ (Customer) By: /s/ Michael T. Scardina --------------------------------- (Authorized Signature) Name and Title: Michael T. Scardina, VP & CFO ---------------------------------- EX-99.B9I 15 EXHIBIT 99.(B)(9)(I) TRANSFER AGENCY AGREEMENT THIS AGREEMENT is made as of the 15th day of January 1993, between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Fund"), and PROVIDENT FINANCIAL PROCESSING CORPORATION, a Delaware corporation which is an indirect wholly-owned subsidiary of PNC Financial Corp (the "Transfer Agent" or "PFPC"). W I T N E S S E T H WHEREAS, the Fund is registered as a management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund desires to retain the Transfer Agent to serve as the Fund's transfer agent, registrar, and dividend disbursing agent, and the Transfer Agent is willing to furnish such services; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. APPOINTMENT. The Fund hereby appoints the Transfer Agent to serve as transfer agent, registrar and dividend disbursing agent for the Fund with respect to the Fund's shares of beneficial interest, $.01 par value ("Shares"), for the period and on the terms set forth in this Agreement. The Fund presently issues five separate series of Shares which are described in the registration statement delivered to the Transfer Agent herewith and the Fund may from time to time issue additional series of Shares. Hereinafter each such series shall be referred to as a "Series." The Transfer Agent shall identify to each Series property belonging to such Series and in such reports, records, confirmations and notices to the Fund and other services provided hereunder shall promptly identify the Series to which such property, record, report, confirmation or service pertains and shall issue shares on a per Series basis as provided in the registration statement of the Fund. The Transfer Agent accepts such appointment and agrees to furnish the services herein set forth in return for the compensation as provided in Paragraph 16 of this Agreement. Any Series of Shares created by the Fund after the date hereof shall be included hereunder upon the mutual agreement of the Fund and the Transfer Agent. 2. DELIVERY OF DOCUMENTS. The Fund has furnished the Transfer Agent with copies properly certified or authenticated of each of the following: (a) Resolutions of the Fund's Board of Trustees authorizing the appointment of the Transfer Agent as transfer agent and registrar and dividend disbursing agent for the Fund and approving this Agreement; (b) Appendix A identifying and containing the signatures of the Fund's officers and other persons authorized to issue Oral Instructions and to sign Written Instructions, as hereinafter defined, on behalf of the Fund and to execute share certificates representing Shares; (c) The Fund's Certificate of Trust filed with the Delaware Secretary of State on October 17, 1992 and all amendments thereto; (d) The Fund's Agreement and Declaration of Trust and all amendments thereto (such Agreement and Declaration of Trust, as presently in effect and as it shall from time to time be amended, is herein called the "Declaration of Trust"); (e) The Fund's By-Laws and all amendments thereto (such By-Laws, as presently in effect and as they shall from time to time be amended, are herein called "By-Laws"); (f) The Custodian Agreement between Provident National Bank and the Fund dated as of January 15, 1993; (g) The Administration and Accounting Services Agreement between the Transfer Agent and the Fund dated as of January 15, 1993; and (h) The Fund's most recent registration statement on Form N-1A under the 1940 Act (File No. 811-7436), as filed with the U.S. Securities and Exchange Commission (the "SEC") on January 15, 1993 and all amendments thereto (hereinafter the "Registration Statement"). The Fund will furnish the Transfer Agent from time to time with copies, properly certified or authenticated, of all amendments of or supplements to the foregoing, if any. 3 3. DEFINITIONS. (a) "AUTHORIZED PERSON". As used in this Agreement, the term "Authorized Person" means any officer of the Fund and any other person, whether or not any such person is an officer or employee of the Fund, duly authorized by the Board of Trustees of the Fund to give Oral and Written Instructions on behalf of the Fund and listed on the Certificate annexed hereto as Appendix A or any amendment thereto as may be received by the Transfer Agent from time to time. (b) "AFFILIATE". As used herein, "Affiliate" means any company that controls, is controlled by, or is under common control with PFPC. (c) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral Instructions" means oral instructions actually received by the Transfer Agent from an Authorized Person or from a person reasonably believed by the Transfer Agent to be an Authorized Person. The Fund agrees to deliver to the Transfer Agent, at the time and in the manner specified in Paragraph 4(b) of this Agreement, Written Instructions confirming Oral Instructions. (d) "PFPC". As used in this Agreement "PFPC" means Provident Financial Processing Corporation. (e) "WRITTEN INSTRUCTIONS". As used in this Agreement, the term "Written Instructions" means written instructions delivered by hand, mail, tested telegram, cable, telex or facsimile sending device, and received by the Transfer Agent and signed by an 4 Authorized Person. Written Instructions include an electronic transmission properly originated and confirmed by the Fund. (f) "SHARES". As used in this Agreement the term "Shares" means each separate Series of shares of beneficial interest issued by the Fund that are subject to this Agreement and as to which the services provided hereunder relate. 4. INSTRUCTIONS CONSISTENT WITH DECLARATION OF TRUST, ETC. (a) Unless otherwise provided in this Agreement, the Transfer Agent shall act only upon Oral or Written Instructions. Although the Transfer Agent may know of the provisions of the Declaration of Trust and By-Laws of the Fund, the Transfer Agent may assume that any Oral or Written Instructions received hereunder are not in any way inconsistent with any provisions of such Declaration of Trust or By-Laws or any vote, resolution or proceeding of the Fund's shareholders, or of the Board of Trustees, or of any committee thereof. (b) The Transfer Agent shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by the Transfer Agent pursuant to this Agreement. The Fund agrees to forward to the Transfer Agent Written Instructions confirming Oral Instructions in such manner that the Written Instructions are received by the Transfer Agent by the close of business of the same day that such Oral Instructions are given to the Transfer Agent. The Fund agrees that the fact that such confirming Written Instructions are not received by the Transfer Agent shall in no way affect the validity of the transactions or 5 enforceability of the transactions authorized by the Fund by giving Oral Instructions. The Fund agrees that the Transfer Agent shall incur no liability to the Fund in acting upon Oral Instructions given to the Transfer Agent hereunder concerning such transactions, provided such instructions reasonably appear to have been received from an Authorized Person and provided further, if such Oral or Written Instructions were received from an Affiliate, that such Affiliate has acted without negligence (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate). (c) In the case of any action by the Fund requiring a change in the form of Share certificates, the Transfer Agent will, at the Fund's expense, issue Share certificates in the new form in exchange for, or upon transfer of, outstanding Share certificates in the old form, upon receiving: (i) A Certificate authorizing the issuance of Share certificates in the new form; (ii) A certified copy of any amendment to the Declaration of Trust with respect to the change; (iii) Specimen Share certificates for each Series of Shares in the new form approved by the Board of Trustees of the Fund, with a Certificate signed by the Secretary of the Fund as to such approval; and (iv) An opinion of counsel for the Fund with respect to the validity of the Shares in the new form and the status of such Shares under the Securities Act of 1933, as amended 6 (the "1933 Act"), the 1940 Act and any other applicable federal law or regulation (i.e., if subject to registration, that the Shares have been registered and that the Registration Statement has become effective or, if exempt, the specific grounds therefor). 5. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. In the absence of contrary Written Instructions, the Transfer Agent is authorized to take the following actions: (a) ISSUANCE OF SHARES. Upon receipt of (i) a purchase order from the Fund, an investor or in accordance with Written or Oral Instructions for the purchase of Shares and (ii) sufficient information to enable the Transfer Agent to establish a shareholder account, and after confirmation of receipt or crediting of Federal funds for such order or receipt of such other consideration for such Shares as may be described in the Registration Statement from the Fund's Custodian, the Transfer Agent shall issue and credit the account of such investor with Shares based on the current net asset value or offering price of such Shares as described in the Registration Statement. (b) TRANSFER OF SHARES; UNCERTIFICATED SECURITIES. Where a shareholder does not hold a certificate representing the number of Shares in his account and does provide the Transfer Agent with instructions for the transfer of such Shares which include appropriate documentation to permit a transfer, then the Transfer Agent shall register such Shares and shall deliver them pursuant to instructions received from the transferor, pursuant to 7 applicable law relating to the transfer of shares of beneficial interest. (c) SHARE CERTIFICATES. If at any time the Fund decides to issue share certificates, the following provisions will apply: (i) The Fund will supply the Transfer Agent with a sufficient supply of share certificates representing Shares, in the form approved from time to time by the Board of Trustees of the Fund, and, from time to time, shall replenish such supply upon request of the Transfer Agent. Such share certificates shall be properly signed, manually or by facsimile signature, by the duly authorized officers of the Fund, whose names and positions shall be set forth as indicated on Appendix A, and notwithstanding the death, resignation or removal of any officer of the Fund, such executed certificates bearing the manual or facsimile signature of such officer shall remain valid and may be issued to shareholders until the Transfer Agent is otherwise directed by Written Instructions. (ii) In the case of the loss or destruction of any certificate representing Shares, no new certificate shall be issued in lieu thereof, unless there shall first have been furnished an appropriate bond of indemnity issued by the surety company approved by the Transfer Agent, except upon the receipt by the Transfer Agent of Written Instructions from the Fund. 8 (iii) Upon receipt of signed share certificates in proper form for transfer, and upon cancellation or destruction thereof, the Transfer Agent shall countersign, register and issue new certificates for the same number of Shares in the name of the transferee and shall deliver them pursuant to instructions received from the transferor. (iv) Upon receipt of the share certificates, which shall be in proper form for transfer, together with the shareholder's instructions to hold such share certificates for safekeeping, the Transfer Agent shall reduce such Shares to uncertificated status, while retaining the appropriate registration in the name of the shareholder upon the transfer books. (v) Upon receipt of written instructions from a shareholder of uncertificated securities for a certificate in the number of Shares in his account, the Transfer Agent will issue such share certificates and deliver them to the shareholder or other appropriate party in accordance with applicable law. (d) REDEMPTION OF SHARES. Upon receipt of a redemption order from a shareholder in a Series that is an open-end investment company and/or in accordance with Written Instructions, the Transfer Agent shall promptly notify PFPC, in its capacity as administration and accounting services agent, and the custodian of that Series of the amount necessary to pay such redemption and shall redeem the number of Shares indicated thereon from the 9 redeeming shareholder's account pursuant to the procedures set forth in the Registration Statement or pursuant to Written Instruction amending such procedures of the Fund. When the Transfer Agent receives funds from the custodian of that Series, it shall disburse to the redeeming shareholder the redemption proceeds therefor, or arrange for direct payment of redemption proceeds to such shareholder by such custodian, by wire transfer or otherwise as provided in Written Instructions, all in accordance with such procedures and controls as are provided in the Registration Statement or as may be mutually agreed upon from time to time by and among the Fund, the Transfer Agent and the Fund's custodians. 6. AUTHORIZED SHARES. The Fund and the Series have an unlimited number of authorized Shares. The Transfer Agent shall record issues of all Shares. 7. DIVIDENDS AND DISTRIBUTIONS. The Fund shall furnish the Transfer Agent with appropriate evidence of action by the Fund's Board of Trustees authorizing the declaration and payment of dividends and distributions as described in the Registration Statement. The Transfer Agent shall notify the custodians of the amount of cash necessary to pay such dividend or distribution and, after deducting any amount required to be withheld by any applicable tax laws, rules and regulations or other applicable laws, rules and regulations, the Transfer Agent shall in accordance with the instructions in proper form from a shareholder, the provisions of the Fund's Declaration of Trust and the procedures set forth in the Registration Statement or Written Instructions 10 amending such procedures, issue and credit the account of the shareholder with Shares, or, if the shareholder so elects, pay such dividends or distribution in cash to the shareholder and in either case, in accordance with the procedures set forth in the Registration Statement or Written Instructions amending such procedures. In lieu of receiving from the custodian for a Series and paying to shareholders cash dividends or distributions, the Transfer Agent may arrange for the direct payment of cash dividends and distributions to shareholders by the custodian for that Series, in accordance with such procedures and controls as are mutually agreed upon from time to time by and among the Fund, the Transfer Agent and such custodian. The Transfer Agent shall prepare, file with the Internal Revenue Service and other appropriate taxing authorities, and address and mail to shareholders such returns and information relating to dividends and distributions paid by the Fund as are required to be so prepared, filed and mailed by applicable laws, rules and regulations, or such substitute form of notice as may from time to time be permitted or required by the Internal Revenue Service. On behalf of the Fund, the Transfer Agent shall process and confirm shareholder address changes, recording new addresses, and shall mail certain requests for shareholders' certifications under penalties of perjury and pay on a timely basis to the appropriate Federal authorities any taxes to be withheld on dividends and distributions paid by the Fund, all as required by applicable Federal tax laws and regulations. 11 In accordance with the procedures set forth in the Registration Statement or Written Instructions amending such procedures, and such procedures and controls as are mutually agreed upon from time to time by and among the Fund, the Transfer Agent and the Fund's custodians, the Transfer Agent shall (a) arrange for issuance of Shares obtained through (1) transfers of funds from shareholders' accounts at financial institutions, including securities brokers and dealers and (2) exchange of Shares for eligible portfolio securities. 8. COMMUNICATIONS WITH SHAREHOLDERS. (a) COMMUNICATIONS TO SHAREHOLDERS. The Transfer Agent will address and mail all communications by the Fund to its shareholders, with copies to such persons as may be designated in Written Instructions from the Fund. Without limiting the foregoing, PFPC will prepare, address and mail confirmations of purchases and sales of Fund Shares, account changes, dividends and distributions, 1099's and other tax information, and monthly statements, and will address and mail dividend and distribution notices, reports to shareholders and proxy material for meetings of shareholders. The Transfer Agent will receive and tabulate the proxy cards for the meetings of the Fund's shareholders and notify the Fund of the results of such tabulations. (b) CORRESPONDENCE. The Transfer Agent will answer such correspondence from shareholders, securities brokers and others relating to its duties hereunder and such other correspondence as 12 may from time to time be mutually agreed upon between the Transfer Agent and the Fund. 9. RECORDS. The Transfer Agent shall maintain records of the accounts for each shareholder showing the following information: (a) name, address and United States Tax Identification or Social Security number; (b) number and Series of Shares held and number and Series of Shares for which certificates, if any, have been issued, including certificate numbers and denominations; (c) historical information regarding the account of each shareholder, including dividends and distributions paid and the date and price for all transactions on a shareholder's account; (d) any stop or restraining order placed against a shareholder's account; (e) any correspondence relating to the current maintenance of a shareholder's account; (f) information with respect to withholdings; and, (g) any information required in order for the Transfer Agent to perform any calculations contemplated or required by this Agreement. The books and records pertaining to the Fund which are in the possession of the Transfer Agent shall be the property of the Fund and shall be returned to the Fund or its designee upon request. Such books and records shall be prepared and maintained as required by the 1940 Act and other applicable laws and rules and regulations. The Fund, or the Fund's authorized representatives, 13 shall have access to such books and records at all times during the Transfer Agent's normal business hours. Upon the request of the Fund, copies of any such books and records shall be provided by the Transfer Agent to the Fund or the Fund's authorized representative or designee at the Fund's expense. 10. ONGOING FUNCTIONS. The Transfer Agent will perform the following functions on an ongoing basis: (a) provide the Fund with duplicate confirmations of shareholder activity, whether executed through a dealer or directly with the Transfer Agent; (b) provide shareholder lists and statistical information concerning accounts to the Fund; and (c) provide timely notification of Fund activity and such other information as may be agreed upon from time to time between the Transfer Agent and the Fund's custodians, to the Fund or the custodians and such reports to the Fund as provided in Schedule A hereto. 11. COOPERATION WITH ACCOUNTANTS. The Transfer Agent shall cooperate with the Fund's independent public accountants and shall take all reasonable action in the performance of its obligations under this Agreement to assure that the necessary information is made available to such accountants for the expression of their opinion as such may be required by the Fund from time to time. 12. CONFIDENTIALITY. The Transfer Agent agrees on behalf of itself and its employees to treat confidentially all records and other information relative to the Fund and its prior, present or 14 potential shareholders, except after prompt prior notification to and approval in writing by the Fund, which approval may not be withheld where the Transfer Agent reasonably believes that it may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. 13. EQUIPMENT FAILURES. In the event of equipment failures beyond the Transfer Agent's control, the Transfer Agent shall, at no additional expense to the Fund, promptly notify the Fund and take prompt, reasonable steps to minimize service interruptions but shall have no liability with respect thereto except, at its own expense, to reconstruct any records of the Fund that PFPC is required to prepare and maintain hereunder. The foregoing obligation shall not extend to computer terminals located outside of premises maintained by the Transfer Agent; provided, that this exception shall not apply to equipment dedicated solely for use of PFPC and that PFPC has agreed to maintain as long as such equipment has not been altered by the Fund, or any of its affiliates. The Transfer Agent shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable provision for emergency use of electronic data processing equipment to the extent appropriate equipment is available. An equipment failure shall be beyond PFPC's control if it results from one or more of the events described in the last sentence of the first paragraph of Paragraph 18 hereunder. 15 14. RIGHT TO RECEIVE ADVICE. PFPC shall be protected in any action or inaction PFPC takes in reliance on PFPC's counsel. PFPC shall notify the Fund of the receipt of such advice within a reasonable time. 15. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. PFPC agrees to perform its duties hereunder in accordance with applicable law; however, PFPC assumes no responsibility for ensuring that the Fund complies with the applicable requirements of the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the Commodities Exchange Act, as amended (the "CEA") and any laws, rules and regulations of governmental authorities having jurisdiction. 16. COMPENSATION. As compensation for the services rendered by PFPC during the term of this Agreement, the Fund will pay to PFPC an annual fee calculated daily and payable monthly, as may be agreed to in writing from time to time by the Fund and PFPC. 17. INDEMNIFICATION. (a) The Fund agrees to indemnify and hold harmless the Transfer Agent from all taxes, charges, expenses (except expenses that are inherent to its duties hereunder), assessments, claims and liabilities (including, without limitation, liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act, the CEA, and any state or foreign securities laws, all as or to be amended from time to time) including (without limitation) reasonable attorneys' fees and disbursements, arising directly or indirectly from any action or thing which the Transfer Agent takes or does or omits to take or 16 do (i) at the request or on the direction of or in reliance on the advice of the Fund or the Fund's counsel on behalf of the Fund or (ii) upon Oral or Written Instructions provided by the Fund, the Advisor or any Sub-Advisor designated in writing by the Advisor and any Affiliate, provided that such Affiliate has not acted negligently (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate), and provided further, that the Transfer Agent shall not be indemnified against any liability (or any expenses incident to such liability) arising out of the Transfer Agent's own misfeasance, bad faith or negligence or disregard of its duties or responsibilities described in this Agreement. (b) PFPC shall not pay or settle any claim, demand, expense or liability to which it may seek indemnity pursuant to paragraph (a) above an ("Indemnifiable Claim") without the express written consent of the Fund. The Transfer Agent shall notify the Fund promptly of receipt of notification of an Indemnifiable Claim. Unless the Fund notifies PFPC within 30 days of receipt of Written Notice of such Indemnifiable Claim that the Fund does not intend to defend such Indemnifiable Claim, the Fund shall defend PFPC from such Indemnifiable Claim. The Fund shall have the right to defend any Indemnifiable Claim at its own expense, such defense to be conducted by counsel selected by the Fund. Further, the Transfer Agent may join the Fund in such defense at the Transfer Agent's own expense, but to the extent that it shall so desire, the Fund shall direct such defense. If the Fund shall fail or refuse to defend, 17 pay or settle an Indemnifiable Claim, the Transfer Agent, at the Fund's expense consistent with limitations concerning attorney's fees expressed in Paragraph 17(a) hereof, may provide its own defense. 18. RESPONSIBILITY OF THE TRANSFER AGENT. PFPC hereby represents that it is experienced in the provision of the services covered by this Agreement. In the performance of its duties hereunder, the Transfer Agent 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. PFPC shall be under no duty to take any action on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by PFPC in writing. PFPC 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 PFPC'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. Notwithstanding the foregoing, PFPC shall not be responsible for losses beyond its control, provided that PFPC has acted in accordance with the provisions of this Agreement and the standard of care set forth above; and provided further that the Transfer Agent shall only be responsible for that portion of losses or damages suffered by the Fund attributable to the negligence of PFPC. Losses shall be beyond PFPC's control if they result from or 18 occur because of delays or errors or loss of data provided by persons other than the Transfer Agent, its Affiliates or their respective employees or agents, or acts of civil or military authority, national emergencies, labor difficulties (other than those of PFPC or its Affiliates), fire, equipment failure caused from forces external to the premises of PFPC or its Affiliates, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply and such other circumstances beyond PFPC's control. Without limiting the generality of the foregoing or of any other provision of this Agreement, PFPC in connection with its duties under this Agreement shall not be under any duty or obligation to inquire into and shall not be liable for or in respect of the validity or invalidity or authority or lack thereof of any Oral or Written Instruction received from the Fund, or an Affiliate, provided such Affiliate has not acted without negligence (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate), notice or other instrument which conforms to the applicable requirements of this Agreement, and which PFPC reasonably believes to be genuine. PFPC shall have no liability to the Fund for any losses or damages the nature of which is or was remote, unforeseen, unforeseeable or beyond the scope of reasonable anticipation at the time this Agreement was executed. 19 19. DURATION AND TERMINATION. This Agreement shall continue in effect from the date hereof until terminated by either party upon not less than 180 days prior written notice to the other party. The foregoing provision notwithstanding, either party may terminate this Agreement in the event of a material breach of the terms hereof after written notice to the other party of such breach and a reasonable time for cure of such breach, unless such breach is not curable and, in such circumstances, this Agreement shall terminate, at the option of the injured party, three months after the date such notice is given. 20. REGISTRATION AS A TRANSFER AGENT. The Transfer Agent represents that it is currently registered with the appropriate Federal agency for the registration of transfer agents, and that it will remain so registered for the duration of this Agreement. The Transfer Agent agrees that it will promptly notify the Fund in the event of any material change in its status as a registered transfer agent. Should the Transfer Agent fail to be registered with the appropriate Federal agency as a transfer agent at any time during this Agreement, the Fund may, on written notice to the Transfer Agent, immediately terminate this Agreement. 21. NOTICES. All notices and other communications, including Written Instructions (collectively referred to as "Notice" or "Notices" in this Paragraph), hereunder shall be in writing or by confirming telegram, cable, telex or facsimile sending device. Notices shall be addressed (a) if to the Transfer Agent at Provident Financial Processing Corporation, 103 Bellevue Parkway, 20 Wilmington, Delaware 19809; (b) if to the Fund, at the address of the Fund; or (c) if to neither of the foregoing, at such other address as shall have been notified to the sender of any such Notice or other communication. All postage, cable, telegram, telex and facsimile sending device charges arising from the sending of a Notice hereunder shall be paid by the sender. 22. FURTHER ACTIONS. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. 23. 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. 24. DELEGATION OF DUTIES. On thirty (30) days prior written notice to the Fund, the Transfer Agent may assign its rights and delegate its duties hereunder to any wholly-owned direct or indirect subsidiary of Provident National Bank or PNC Financial Corp, provided that (i) the delegate agrees with the Transfer Agent to comply with all relevant provisions of this Agreement and applicable law; and (ii) the Transfer Agent and such delegate shall promptly provide such information as the Fund may request, and respond to such questions as the Fund may ask, relative to the delegation, including (without limitation) the capabilities of the delegate. In the event of such delegation, PFPC shall remain liable under this Agreement. 21 25. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 26. 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, provided that the parties hereto may embody in one or more separate documents their agreement, if any, any agreements with respect to Written and/or Oral Instructions. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof of otherwise affect their construction or effect. This Agreement shall be deemed to be a contract made in Delaware and governed by Delaware law. 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. This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors. 22 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below on the day and year first above written. THE DFA INVESTMENT TRUST COMPANY By: /s/ Michael T. Scardina, VP & CFO ------------------------------------- PROVIDENT FINANCIAL PROCESSING CORPORATION By: /s/ Joseph Gramlich ------------------------------------- 23 INDEX Paragraph Page - --------- ---- 1. Appointment 2. Delivery of Documents 3. Definitions 4. Instructions Consistent with Declaration of Trust, etc. 5. Transactions Not Requiring Instructions 6. Authorized Shares 7. Dividends and Distributions 8. Communications with Shareholders 9. Records 10. Ongoing Functions 11. Cooperation with Accountants 12. Confidentiality 13. Equipment Failures 14. Right to Receive Advice 15. Compliance with Government Rules and Regulations 16. Compensation 17. Indemnification 18. Responsibility of the Transfer Agent 19. Duration and Termination 20. Registration as a Transfer Agent 21. Notices 22. Further Actions 23. Amendments 24. Delegation of Duties 25. Counterparts 26. Miscellaneous 24 APPENDIX A I, Irene R. Diamant, Secretary of The DFA Emerging Markets Fund Inc., a Maryland Corporation (the "Fund") do hereby certify that: The following individuals are duly authorized as Authorized Persons to give Oral Instructions and Written Instructions on behalf of the Fund: NAME SIGNATURE - ---- --------- David G. Booth /s/ David G. Booth ----------------------------- Rex A. Sinquefield /s/ Rex A. Sinquefield ----------------------------- Jeanne C. Sinquefield /s/ Jeanne C. Sinquefield ----------------------------- Michael T. Scardina /s/ Michael T. Scardina ----------------------------- Irene R. Diamant /s/ Irene R. Diamant ----------------------------- Deborah J. Ferris /s/ Deborah J. Ferris ----------------------------- Richard Eustice /s/ Richard Eustice ----------------------------- Yvette Horne /s/ Yvette Horne ----------------------------- Jeffrey Cieslak /s/ Jeffrey Cieslak ----------------------------- /s/ Irene R. Diamant ----------------------------- Secretary 25 SCHEDULE A PURSUANT TO PARAGRAPH 10(c) OF THE AGREEMENT, THE TRANSFER AGENT WILL PROVIDE THE FOLLOWING REPORTS TO THE FUND: Statistic or Special Request Frequency ---------------------------- --------- a. Prepare mailing labels As requested b. Data transmission of transactions, Monthly new clients, address changes, etc. c. Statistical package 1. By Series - purchase and redemption Monthly statistics 2. By Series - analysis of type and size Monthly of investor 3. Listing of 5% shareholders for proxy As requested and registration statement purposes 4. Listing of purchases and redemptions by Daily Series 5. Shareholder listing Monthly 6. Sales report Monthly 7. Year to date daily net asset value per Monthly share listing by Series 26 APPENDIX A I, Irene R. Diamant, Secretary of The DFA Investment Trust Company, a Delaware business trust (the "Fund"), do hereby certify that: The following individuals are duly authorized as Authorized Persons to give Oral Instructions and Written Instructions on behalf of the Fund: NAME SIGNATURE ---- --------- David G. Booth ----------------------------- Rex A. Sinquefield ----------------------------- Jeanne C. Sinquefield ----------------------------- Michael T. Scardina ----------------------------- Irene R. Diamant ----------------------------- Deborah J. Ferris ----------------------------- Ramakrishnan Chandraseker ----------------------------- Cem Severoglu ----------------------------- Carl Snyder ----------------------------- Byron B. Snider ----------------------------- David Plecha ----------------------------- Arthur Barlow /s/ Arthur Barlow ----------------------------- -20- Christopher Sullivan ----------------------------- Robert Deere ----------------------------- Scott Thorton ----------------------------- David Price ----------------------------- Kamyab Hashemi-Nejad ----------------------------- Richard Eustice ----------------------------- With respect to any international equity Series of the Fund: Garrett Quigley /s/ Garrett Quigley ----------------------------- ----------------------------- Secretary -21- EX-99.B9II 16 EXHIBIT 99.(B)(9)(II) TRANSFER AGENCY AGREEMENT AMENDMENT NUMBER ONE THIS AGREEMENT is made as of the 1st day of December, 1993 by and between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (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 January 15, 1993 (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PFPC presently provides such services to the five Series of the Fund that were in existence on January 15, 1993; and WHEREAS, the Fund has since organized a new series, designated "The DFA International Value Series" (the "New Series") , and the parties hereto desire that PFPC shall provide the New Series with the same services that PFPC provides to the other five Series of the Fund pursuant to the Agreement; and WHEREAS, Section 1 of the Agreement provides that PFPC shall provide such services to any Series 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) Amendment Number 1 to the registration statement of the Fund, as effective with the U.S. Securities and Exchange Commission on December 1, 1993, wherein the New Series is described; (b) The exhibits to such amendment consisting of the form of investment management agreement which pertains to the New Series; and (c) Amendment Number One dated December 1, 1993 of the Administration and Accounting Services Agreement between the parties dated as of January 15, 1993. 2. The Agreement hereby is amended effective December 1, 1993 by: (a) adding the following sentence immediately after the second sentence of Section 1 therein, "As of December 1, 1993, the Fund delivered to PFPC a registration statement dated December -2- 1, 1993 wherein a new series of Fund shares designated "The DFA International Value Series" is described and the parties agree that the terms of this Agreement shall apply to the six Series described in such registration statement."; and (b) adding a new Section 2(i) as follows: "The Custodian Agreement between Boston Safe Deposit and Trust Company and the Fund dated as of December 1, 1993.". 3. The Fee Schedule of PFPC applicable to the New Series 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- IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number one to the Agreement to be executed by their duly authorized officers designated below on the day and year first above written. THE DFA INVESTMENT TRUST COMPANY By: /s/ Irene R. Diamant, VP ----------------------------- PFPC INC. By: /s/ Joseph Gramlich ----------------------------- EX-99.B9III 17 EXHIBIT 99.(B)(9)(III) ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT THIS AGREEMENT is made as of the 15th day of January 1993, by and between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (the "Fund"), and 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 a management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund wishes to retain PFPC to provide certain administrative and accounting services, and PFPC is willing to furnish such services; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. APPOINTMENT. The Fund hereby appoints PFPC to provide certain administrative and accounting services to the Fund for the period and on the terms set forth in this Agreement. PFPC accepts such appointment and agrees to furnish the services herein set forth in return for the compensation as provided in Paragraph 12 of this Agreement. The Fund presently issues five series of shares ("Shares") which are described in the registration statement delivered to PFPC herewith, and may from time to time issue additional series of shares. Hereinafter each such series shall be referred to as a "Series". The records, notices, reports and services provided by PFPC hereunder shall be prepared, kept, maintained and furnished by PFPC in respect of each Series of the Fund existing on the date hereof, and any Series organized by the Fund after the date hereof as agreed in writing by the Fund and PFPC. 2. DELIVERY OF DOCUMENTS. The Trustee has furnished PFPC with copies properly certified or authenticated of each of the following: (a) Resolutions of the Fund's Board of Trustees authorizing the appointment of PFPC to provide certain administration and accounting services for the Fund and approving this Agreement; (b) Appendix A identifying and containing the signatures of the Fund's officers and other persons authorized to issue Oral Instructions and to sign Written Instructions, as hereinafter defined, on behalf of the Fund; (c) The Fund's Certificate of Trust filed with the Delaware Secretary of State on October 17, 1992 and all amendments thereto; (d) The Fund's Agreement and Declaration of Trust and all amendments thereto (such Agreement and Declaration of Trust as -2- presently in effect and as it may from time to time be amended, is herein called the "Declaration of Trust"); (e) The Fund's By-Laws and all amendments thereto (such By-Laws, as presently in effect and as they shall from time to time be amended, are herein called "By-Laws"); (f) The current investment advisory agreements between Dimensional Fund Advisors Inc. (the "Advisor") and the Fund; (g) The Custodian Agreement between Provident National Bank and the Fund dated as of January 15, 1993; (h) The Transfer Agency Agreement between Provident Financial Processing Corporation and the Fund dated as of January 15, 1993; and (i) The Fund's most recent registration statement on Form N-1A under the 1940 Act (File No. 811-7436), as filed with the U.S. Securities and Exchange Commission ("the SEC") on January 15, 1993 and all amendments thereto (such registration statement as presently effective and as it shall from time to time be amended, is herein called the "Registration Statement"). The Fund will furnish PFPC from time to time with copies, properly certified or authenticated, of all amendments of or supplements to the foregoing, if any. 3. DEFINITIONS. (a) "AUTHORIZED PERSON". As used in this Agreement, the term "Authorized Person" means any officer of the Fund and any other person, whether or not any such person is an officer or employee of the Fund, duly authorized by the Board of Trustees of -3- the Fund to give Oral and Written Instructions on behalf of the Fund and listed on Appendix A listing persons duly authorized to give Oral or Written Instructions on behalf of the Fund as may be received by PFPC from time to time. (b) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral Instructions" means oral instructions actually received by PFPC from an Authorized Person or from a person reasonably believed by PFPC to be an Authorized Person. The Fund agrees to deliver to PFPC, at the time and in the manner specified in Paragraph 4(b) of this Agreement, Written Instructions confirming Oral Instructions. (c) "WRITTEN INSTRUCTIONS". As used in this Agreement, the term "Written Instructions" means written instructions delivered by hand, mail, tested telegram, cable, telex or facsimile sending device, and received by PFPC, signed by two Authorized Persons. Written Instructions include electronic transmissions properly originated and confirmed by the Fund. (d) "AFFILIATE". As used herein, "Affiliate" means any company that controls, is controlled by, or is under common control with PFPC. 4. INSTRUCTIONS CONSISTENT WITH DECLARATION OF TRUST, ETC. (a) Unless otherwise provided in this Agreement, PFPC shall act only upon Oral or Written Instructions. Although PFPC may know of the provisions of the Declaration of Trust and By-Laws of the Fund, PFPC may assume that any Oral or Written Instructions received hereunder are not in any way inconsistent with any -4- provisions of such Declaration of Trust or By-Laws, or any vote, resolution or proceeding of the Shareholders, or of the Board of Trustees, or of any committee thereof. (b) PFPC shall be entitled to rely upon any Oral Instructions and any Written Instructions actually received by PFPC from the Fund and any Affiliate, provided such Affiliate has not acted negligently (unless such an Affiliate has received and transmitted erroneous instructions received from an Authorized Person who is not an Affiliate) pursuant to this Agreement. The Fund agrees to forward to PFPC Written Instructions confirming Oral Instructions in such manner that the Written Instructions are received by PFPC, whether by hand delivery, telex, facsimile sending device or otherwise, by the close of business of the same day that such Oral Instructions are given to PFPC. The Fund agrees that the fact that such confirming Written Instructions are not received by PFPC shall in no way affect the validity of the transactions or enforceability of the transactions authorized by the Fund by giving Oral Instructions. The Fund agrees that PFPC shall incur no liability to the Fund in acting upon Oral Instructions given to PFPC by the Fund hereunder concerning such transactions, provided such instructions reasonably appear to have been received from an Authorized Person. 5. SERVICES ON A CONTINUING BASIS. (a) In preparing the accounting records of the Fund, PFPC shall comply with generally accepted accounting principles (GAAP) or with an alternative method described in Written -5- Instructions provided that such alternative method is not unreasonable and would not be burdensome to PFPC. PFPC will perform the following accounting services for the Fund on an ongoing or a daily basis, as appropriate, it being understood that the services provided hereunder shall be provided on a per Series basis in a manner that properly identifies the Series as to which such services relate: (1) On a daily basis, journalize the Fund's investment, capital Share and income and expense activities and post to the general ledger; (2) Verify with the Fund's custodians, investment buy/sell trade tickets which may be sent electronically via modem from the Advisor and which may include securities acquired for Fund shares when received from the Advisor, transmit verified trades to the Fund's custodians for proper settlement, and PFPC shall promptly notify the Advisor of any trades received which have not been so verified; (3) Maintain individual ledgers for investment securities; (4) Maintain historical tax lots for each security; -6- (5) Reconcile cash and investment balances with the custodian of each Series, and provide the Advisor with the beginning cash balances available for investment purposes; (6) Update the cash availability and projected receivables/ payables throughout the day as required by the Advisor and direct the custodians to invest idle cash in repurchase agreements and/or in other liquid investments as mutually agreed upon in accordance with the Written Instructions of the Advisor; (7) Post to and prepare the Statement of Assets and Liabilities and the Statement of Operations; (8) Calculate various contractual expenses (e.g., advisory and custody fees) and confirm to the Fund the amounts paid by the Fund in respect of such contracts as provided for therein; (9) Monitor the expense accruals and notify Fund management of any proposed adjustments; (10) Control all disbursements and authorize such disbursements upon Written Instructions; (11) Calculate capital gains and losses; (12) Determine net income; (13) Obtain security market quotes from independent pricing services approved by the Fund, or if -7- such quotes are unavailable, then obtain such prices from, or in accordance with the directions of, the Advisor, and in either case calculate the market value of the Fund's investments; (14) Transmit or mail a copy of the daily portfolio valuations and a listing of acquisitions and dispositions of securities of the Fund and, as of each month-end, transmit or mail a floppy diskette reflecting securities holdings to the Advisor; (15) Consistent with the requirements of the Registration Statement or Written Instructions which change those requirements, compute the net asset values and, where applicable, the offering prices of the Series and promptly report thereon to the transfer agent of each Series; (16) Compute, and report to the Fund, each Series' yields, expense ratios, portfolio turnover rate, and portfolio average dollar-weighted maturity; and (17) Compute amounts of foreign currency needed to settle foreign securities transactions, and in accordance with Written Instructions, enter into forward currency contracts with banks and brokers. -8- (b) In addition to the accounting services described in the foregoing Paragraph 5(a), PFPC will: (1) Prepare monthly financial statements, which will include the following items (the form and content of such statements shall be in accordance with GAAP): Statement of Assets and Liabilities Statement of Shareholders' Equity Statement of Operations Statement of Changes in Net Assets Cash Statement Schedule of Capital Gains and Losses; PFPC will also prepare a Schedule of Investments for those Series and at those times designated by the parties upon mutual agreement (the form and content of such schedule shall be in accordance with GAAP). (2) Prepare quarterly broker security transactions summaries, including monthly reports of brokerage commissions paid setting forth such information as the Fund may reasonably request and as to which the parties may agree; (3) Prepare monthly security transaction listings; (4) Supply various Fund statistical data and reports as requested by the Fund on an ongoing basis including the reports set forth on Schedule A hereto; (5) Prepare for execution and file the Fund's Federal and state income tax returns, Federal Excise Tax returns, tax returns for the States of Delaware and California and any supporting schedules to such returns and assist the Fund in determining the amount, types and timing of dividend and capital gains distributions necessary for each Series to -9- avoid being required to pay Federal Income or Excise taxes on its income and gains; (6) Assist in the preparation of and file the Fund's Semi-Annual Reports with the SEC on Form N-SAR; (7) Assist in the preparation of and file with the SEC the Fund's annual and semi-annual Shareholder reports; (8) Assist in the preparation of registration statements on Form N-1A and other filings relating to the registration of the Fund; (9) Monitor each Series' status as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and if there is a change in such status, alert the Fund as soon as practicable of such change; (10) In the event that any securities transaction of the Fund fails to settle in accordance with Written or Oral Instructions, PFPC shall promptly notify the Fund; and (11) Monitor each Series' securities positions to determine whether, with respect to 75 percent of the value of each Series' total assets, more than 5 percent of the value of each Series' total assets are invested in any one issuer and, if so, alert the Fund as soon as practicable of such circumstances. 6. RECORDS. PFPC shall keep the following records: (a) all books and records with respect to the Fund's books of account, including without limitation those required by -10- rule 31a-1 under the 1940 Act (except paragraphs b(4) and (9)) and records necessary to support each Series' tax returns; and (b) records of the Fund's securities and exchange listed financial futures and forward currency transactions. The books and records pertaining to the Fund which are in the possession of PFPC shall be the property of the Fund and shall be returned to the Fund or its designee upon request. Such books and records shall be prepared and maintained as required by the 1940 Act and other applicable laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records at all times during PFPC's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by PFPC to the Fund or the Fund's authorized designee or representative at the Fund's expense. 7. LIAISON WITH ACCOUNTANTS. PFPC shall act as liaison with the Fund's independent public accountants and shall provide them with account analyses, fiscal year summaries, and such other information, including audit related schedules, as may be necessary to assure that the necessary information is made available to such accountants for the expression of their opinion, as such may be required by the Fund from time to time. 8. CONFIDENTIALITY. PFPC agrees on behalf of itself and its employees to treat confidentially all records and other information relative to the Fund and its prior, present or potential Shareholders or relative to the Advisor, except, after prior notification to and approval in writing by the Fund, which approval -11- may not be withheld where PFPC may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. 9. EQUIPMENT FAILURES. In the event of equipment failures beyond PFPC's control, PFPC shall, at no additional expense to the Fund, promptly notify the Fund and take prompt, reasonable steps to minimize service interruptions but shall have no liability with respect thereto except, at its own expense, to reconstruct any records of the Fund that PFPC is required to prepare and maintain hereunder. PFPC shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable provision for emergency use of electronic data processing equipment to theextent appropriate equipment is available. An equipment failure shall be beyond PFPC's control if it results from one or more of the events described in the last sentence of the first paragraph of Paragraph 14 hereunder. 10. RIGHT TO RECEIVE ADVICE. PFPC shall be protected in any action or inaction PFPC takes in reliance on advice of PFPC's counsel. PFPC shall promptly notify the Fund of the receipt of such advice within reasonable time. 11. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. PFPC agrees to perform its duties hereunder in accordance with applicable law; however, PFPC assumes no responsibility for ensuring that the Fund complies with the applicable requirements of -12- the Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940 Act, the Commodities Exchange Act, as amended (the "CEA"), and any laws, rules and regulations of governmental authorities having jurisdiction. 12. COMPENSATION. As compensation for the services rendered by PFPC during the term of this Agreement, the Fund will pay to PFPC an annual fee calculated daily and payable monthly, as may be agreed to in writing from time to time by the Fund and PFPC. 13. INDEMNIFICATION. (a) The Fund agrees to indemnify and hold harmless PFPC and its sub-contractors from all taxes, charges, expenses (except expenses that are inherent to its duties hereunder), assessments, claims and liabilities (including, without limitation, liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act, the CEA, and any state or foreign securities laws, all as or to be amended from time to time) including (without limitation) reasonable attorneys' fees and disbursements, arising directly or indirectly from any action or thing which PFPC takes or does or omits to take or do (i) at the request or on the direction of or in reliance on the advice of the Fund or the Fund's counsel on behalf of the Fund or (ii) upon Oral or Written Instructions provided by the Fund, or an Affiliate, provided such Affiliate has not acted negligently (unless such Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate) PROVIDED, that neither PFPC nor any of its sub-contractors shall be indemnified against any -13- liability (or any expenses incident to such liability) arising out of PFPC's own misfeasance, bad faith, negligence or disregard of its duties or responsibilities described in this Agreement. (b) PFPC shall not pay or settle any claim, demand, expense or liability in respect of which PFPC is entitled to be indemnified pursuant to paragraph (a) above an ("Indemnifiable Claim") without the express written consent of the Fund. PFPC shall notify the Fund promptly of receipt of notification of an Indemnifiable Claim. Unless the Fund notifies PFPC within 30 days of receipt of Written Notice of such Indemnifiable Claim that the Fund does not intend to defend such Indemnifiable Claim, the Fund shall defend PFPC from such Indemnifiable Claim. The Fund shall have the right to defend any Indemnifiable Claim at its own expense, such defense to be conducted by counsel selected by the Fund. Further, PFPC may join the Fund in such defense at PFPC's own expense, but to the extent that it shall so desire, the Fund shall direct such defense. If the Fund shall fail or refuse to defend, pay or settle an Indemnifiable Claim, PFPC, at the Fund's expense consistent with limitations concerning attorney's fees expressed in Paragraph 13(a) hereof, may provide its own defense. 14. RESPONSIBILITY OF PFPC. PFPC hereby represents that it is experienced in the provision of the services covered by this Agreement. In the performance of its duties hereunder, PFPC 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. PFPC -14- shall be under no duty to take any action on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by PFPC in writing. PFPC 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 PFPC'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. Notwithstanding the foregoing, PFPC shall not be responsible for losses beyond its control, provided that PFPC has acted in accordance with the provisions of this Agreement and the standard of care set forth above and provided further that PFPC shall only be responsible for that portion of losses or damages suffered by the Fund attributable to the negligence of PFPC. Losses shall be beyond PFPC's control if they result from or occur because of delays or errors or loss of data provided by a person other than PFPC or its Affiliates, or their respective employees or agents, or acts of civil or military authority, national emergencies, labor difficulties (other than those of PFPC or its Affiliates), fire, equipment failure resulting from forces external to the premises of PFPC or its Affiliates, flood or catastrophe, acts of God, insurrection, war, riots or failure of the mails, transportation, communication or power supply external to the premises of PFPC or its Affiliates and such other circumstances beyond PFPC's control. -15- Without limiting the generality of the foregoing or of any other provision of this Agreement, PFPC in connection with its duties under this Agreement shall not be under any duty or obligation to inquire into and shall not be liable for or in respect of the validity or invalidity or authority or lack thereof of any Oral or Written Instruction received from the Fund, or an Affiliate, provided such Affiliate has not acted negligently (unless such an Affiliate has received and transmitted erroneous instructions received from an Authorized Person that is not an Affiliate), notice or other instrument which conforms to the applicable requirements of this Agreement, and which PFPC reasonably believes to be genuine. PFPC shall have no liability to the Fund for any losses or damages, the nature of which is or was remote, unforeseen, unforeseeable or beyond the scope of reasonable anticipation at the time this Agreement was executed. 15. DURATION AND TERMINATION. This Agreement shall continue in effect from the date hereof until terminated by either party upon not less than 180 days prior written notice to the other party. The foregoing provision notwithstanding, either party may terminate this Agreement in the event of a material breach of the terms hereof after written notice to the other party of such breach and a reasonable time for cure of such breach, unless such breach is not curable and, in such circumstances, this Agreement shall terminate, at the option of the injured party, three months after the date such notice is given. -16- 16. NOTICES. All notices and other communications, including Written Instructions (collectively referred to as "Notice" or "Notices" in this Paragraph), hereunder shall be in writing or by confirming telegram, cable, telex or facsimile sending device. Notices shall be addressed (a) if to PFPC at PFPC's address, Bellevue Corporate Center, 103 Bellevue Parkway, Wilmington, Delaware 19809; (b) if to the Fund, at the address of the Fund; or (c) if to neither of the foregoing, at such other address as shall have been notified to the sender of any such Notice or other communication. All postage, cable, telex and facsimile sending device charges arising from the sending of a Notice hereunder shall be paid by the sender. 17. FURTHER ACTIONS. Each party agrees to perform such further acts and execute such further documents as are necessary to effectuate the purposes hereof. 18. 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. 19. DELEGATION. On thirty (30) days prior written notice to the Fund, PFPC may assign its rights and delegate its duties hereunder to any wholly-owned direct or indirect subsidiary of PFPC National Bank or PNC Financial Corp provided that (i) the delegate agrees with PFPC to comply with all relevant provisions of this Agreement and applicable law; and (ii) PFPC and such delegate shall promptly provide such information as the Fund may request, and respond to such questions as the Fund may ask, relative to the -17- delegation, including (without limitation) the capabilities of the delegate. In the event of such delegation, PFPC shall remain liable under this Agreement. 20. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 21. 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, provided that the parties hereto may embody in one or more separate documents their agreement, if any, with respect to Written and/or Oral Instructions. The captions in this Agreement are included for convenience of reference only and in no way define or delimit any of the provisions hereof of otherwise affect their construction or effect. This Agreement shall be deemed to be a contract made in Delaware and governed by Delaware law. 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. This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective successors. -18- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below on the day and year first above written. THE DFA INVESTMENT TRUST COMPANY By: /s/ Michael T. Scardina, VP & CFO ---------------------------------- PROVIDENT FINANCIAL PROCESSING CORPORATION By: /s/ Joseph Gramlich ---------------------------------- -19- APPENDIX A I, Irene R. Diamant, Secretary of The DFA Emerging Markets Fund Inc., a Maryland Corporation (the "Fund"), do hereby certify that: The following individuals are duly authorized as Authorized Persons to give Oral Instructions and Written Instructions on behalf of the Fund: NAME SIGNATURE David G. Booth /s/ David G. Booth ----------------------------- Rex A. Sinquefield /s/ Rex A. Sinquefield ----------------------------- Jeanne C. Sinquefield /s/ Jeanne C. Sinquefield ----------------------------- Michael T. Scardina /s/ Michael T. Scardina ----------------------------- Irene R. Diamant /s/ Irene R. Diamant ----------------------------- Deborah J. Ferris /s/ Deborah J. Ferris ----------------------------- Ramakrishnan Chandraseker /s/ Ramakrishnan Chandraseker ----------------------------- Cem Severoglu /s/ Cem Severoglu ----------------------------- Carl Snyder /s/ Carl Snyder ----------------------------- Byron B. Snider /s/ Byron B. Snider ----------------------------- David Plecha /s/ David Plecha ----------------------------- Arthur Barlow /s/ Arthur Barlow ----------------------------- -20- Christopher Sullivan /s/ Christopher Sullivan ----------------------------- Robert Deere /s/ Robert Deere ----------------------------- Scott Thorton /s/ Scott Thorton ----------------------------- David Price /s/ David Price ----------------------------- Kamyab Hashemi-Nejad /s/ Kamyab Hashemi-Nejad ----------------------------- Richard Eustice /s/ Richard Eustice ----------------------------- With respect to any international equity Series of the Fund: Garrett Quigley /s/ Garrett Quigley ----------------------------- /s/ Irene R. Diamant ----------------------------- Secretary -21- SCHEDULE A PURSUANT TO PARAGRAPH (5) (b) (4) OF THE AGREEMENT, PFPC WILL PROVIDE THE FOLLOWING REPORTS: REPORT OR STATISTIC FREQUENCY a. Expense ratio analysis Monthly b. Brokerage commission report and affiliated Quarterly/ brokerage report Annually c. Listing of securities for which quotations Quarterly are not readily available (for Board meetings) d. Split bill report Quarterly e. Information necessary for completion of N-SAR Semi-annually -22- EX-99.B9IV 18 EXHIBIT 99.(B)(9)(IV) ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT AMENDMENT NUMBER ONE THIS AGREEMENT is made as of the 1st day of December, 1993 by and between THE DFA INVESTMENT TRUST COMPANY, a Delaware business trust (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 January 15, 1993 (the "Agreement") which, as of the date hereof, is in full force and effect; and WHEREAS, PFPC presently provides such services to the five Series of the Fund that were in existence on January 15, 1993, WHEREAS, the Fund has since organized one new Series, designated "The DFA International Value Series" (the "New Series"), and the parties hereto desire that PFPC shall provide the New Series with the same services that PFPC provides to the other five Series of the Fund pursuant to the Agreement; and WHEREAS, Section 1 of the Agreement provides that PFPC shall provide such services to any Series 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 to follows: 1. The Fund has delivered to PFPC copies of: (a) Amendment Number 1 of the registration statement of the Fund, as effective with the U.S. Securities and Exchange Commission on December 1, 1993 wherein the New Series is described; (b) The exhibits to such amendment consisting of the form of investment management agreement which pertains to the New Series; and (c) Amendment Number One dated December 1, 1993 of the Transfer Agency Agreement between the parties dated as of January 15, 1993. -2- 2. The Agreement hereby is amended effective December1, 1993 by: (a) adding the following sentence immediately after the third sentence of Section 1 therein, "As of December 1, 1993, the Fund delivered to PFPC a Registration Statement dated December 1, 1993 wherein one new series of shares designated "The DFA International Value Series" are described and the parties agree that the terms of this Agreement shall apply to the six series described in such Registration Statement."; and (b) adding a new Section 2(j) as follows: "The Custodian Agreement between Boston Safe Deposit and Trust Company and the Fund dated as of December 1, 1993."; 3. The Fee Schedule of PFPC applicable to the New Series 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. IN WITNESS WHEREOF, the parties hereto have caused this Amendment Number One to the Agreement to be executed by their -3- duly authorized officers designated below on the day and year first above written. THE DFA INVESTMENT TRUST COMPANY By: /s/ Irene R. Diamant, VP ---------------------------------- PFPC INC. By: /s/ Joseph Gramlich ---------------------------------- -4- EX-99.B11 19 EXHIBIT 99.(B)(11) CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in Post-Effective Amendment No. 14 under the Securities Act of 1940 to the Registration Statement of The DFA Investment Trust Company on Form N-1A (File No. 811-7436) of our report dated February 26, 1998 on our audits of the financial statements and financial highlights of The DFA Investment Trust Company, which report is included in the Annual Report to Shareholders for the year ended November 30, 1997 which is incorporated by reference in the Post-Effective Amendment to the Registration Statement. We also consent to the reference to our firm under the heading "Financial Statements" in Form N-1A. COOPERS & LYBRAND L.L.P. 2400 Eleven Penn Center Philadelphia, Pennsylvania February 26, 1998 EX-27.1 20 EXHIBIT 27.1
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 01 U.S. 6-10 SMALL COMPANY SERIES 6-MOS NOV-30-1997 NOV-30-1997 346796115 438993893 1474858 915 0 440469666 7556963 0 79859 7636822 0 308440070 31308841 21373173 410431 0 31784565 0 92197778 432832844 3000322 369463 250263 361067 3258981 31886153 42884851 78029985 0 2965724 30079946 0 12630470 5446193 2751391 164431520 117174 29978358 0 0 102004 0 361067 340015151 12.56 .11 2.81 (.10) (1.56) 0 13.82 .11 0 0
EX-27.2 21 EXHBIT 27.2
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 02 U.S. SMALL CAP VALUE SERIES 6-MOS NOV-30-1997 NOV-30-1997 1723001818 2244446034 5812989 2441 0 2250261464 25299333 0 693717 25993050 0 1498366552 105405078 75301072 3500546 0 200957100 0 521444216 2224268414 17468490 2069544 612068 4874891 15275211 201107117 300802426 517184754 0 12191773 57267282 0 32036669 5730522 3797859 976055866 417108 57117265 0 0 3534356 0 4874891 1767178037 16.58 .15 5.23 (.12) (.74) 0 21.10 .28 0 0
EX-27.3 22 EXHIBIT 27.3
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 03 DFA ONE-YEAR FIXED INCOME SERIES 6-MOS NOV-30-1997 NOV-30-1997 771122423 772098466 10302986 3030 0 782404482 0 0 168403 168403 0 779326080 78107985 85666560 3808494 0 (1874538) 0 976043 782236079 0 46692444 0 767057 45925387 1165084 (2454166) 44636305 0 46320887 0 0 28307326 39644381 3778480 (77056968) 4203994 (3039622) 0 0 0 0 767057 784833777 10.03 .59 (.02) (.59) 0 0 10.01 .10 0 0
EX-27.4 23 EXHIBIT 27.4
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 04 U.S. LARGE COMPANY SERIES 6-MOS NOV-30-1997 NOV-30-1997 529757685 824986309 1481274 4392 0 826471975 3724306 0 254846 3979152 0 822492823 0 0 0 0 0 0 0 822492823 11452435 141280 40721 455089 11179347 974607 147978927 160132881 0 11179347 974607 0 0 0 0 356051790 0 0 0 0 0 0 455089 640624057 0 0 0 0 0 0 0 .07 0 0
EX-27.5 24 EXHIBIT 27.5
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 05 U.S. LARGE CAP VALUE SERIES 6-MOS NOV-30-1997 NOV-30-1997 1157386750 1476531799 18220130 1394 0 1494753323 4491144 0 266031 4757175 0 1086556309 82384104 63666881 1747814 0 82546976 0 319145049 1489996148 25960736 745802 132486 2217137 24621887 82623375 172273457 279518719 0 23401384 52565794 0 19550645 5069302 4235880 502054455 527311 52489395 0 0 1255135 0 2217137 1255135045 15.52 .32 3.38 (.31) (.82) 0 18.09 .18 0 0
EX-27.6 25 EXHIBIT 27.6
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 06 DFA INTERNATIONAL VALUE SERIES 6-MOS NOV-30-1997 NOV-30-1997 1602156186 1596084448 5735617 23978 0 1601844043 19102780 0 655150 19757930 0 1581338078 145202648 115124686 2525817 0 5976457 0 6071738 1582086113 33237912 1577158 1235872 4746194 31304748 6022911 (107773522) (72155413) 0 29073667 27255393 0 34790033 9587487 4875416 225234387 376836 27208939 0 0 2996561 0 4746194 1498279828 11.79 .24 (.67) (.22) (.24) 0 10.90 .32 0 0
EX-27.7 26 EXHIBIT 27.7
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 07 DFA EMERGING MARKETS SERIES 6-MOS NOV-30-1997 NOV-30-1997 285216466 227456268 191212 555940 0 228203420 6987055 0 275848 7262903 0 220940517 0 0 0 0 0 0 0 220940517 4421517 489956 0 1230467 3681006 152779 (61200931) (56692569) 0 0 0 0 0 0 0 58865372 0 0 0 0 225820 0 1230467 225820291 0 0 0 0 0 0 0 .54 0 0
EX-27.8 27 EXHIBIT 27.8
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 08 DFA TWO-YEAR GLOBAL FIXED INCOME SERIES 6-MOS NOV-30-1997 NOV-30-1997 417059062 408984677 11613137 3671785 0 424269599 5284626 0 78413 5363039 0 413779073 40996217 30862945 (4892281) 0 852365 0 (8074385) 418906560 0 17829769 0 652933 17176836 861672 (11785332) 21198493 0 25358579 250801 0 11943191 4088286 2278367 99634300 2762143 241494 0 0 185000 0 652933 370001895 10.34 .48 .12 (.71) (.01) 0 10.22 .18 0 0
EX-27.9 28 EXHIBIT 27.9
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 09 DFA TWO-YEAR CORPORATE FIXED INCOME SERIES 6-MOS NOV-30-1997 NOV-30-1997 0 0 0 0 0 0 0 0 0 0 0 0 0 12146971 0 0 0 0 0 0 0 0 8483272 314793 8168479 487668 (669049) 7987098 0 8337842 651059 0 3810359 16266015 308685 (122786318) 169363 163391 0 0 210437 0 314793 140290728 10.11 .57 (.04) (.59) (.05) 0 10.00 .22 0 0
EX-27.10 29 EXHIBIT 27.10
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 10 DFA TWO-YEAR GOVERNMENT SERIES 6-MOS NOV-30-1997 NOV-30-1997 0 0 0 0 0 0 0 0 0 0 0 0 0 10092880 0 0 0 0 182510 0 0 6900624 0 268864 6631760 133713 (182510) 6582963 0 0 0 0 0 0 0 (104647250) 0 0 0 0 175486 0 268864 116889968 0 0 0 0 0 0 0 .23 0 0
EX-27.11 30 EXHIBIT 27.11
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 11 ENHANCED U.S. LARGE COMPANY SERIES 6-MOS NOV-30-1997 NOV-30-1997 46370655 46048851 1466633 222828 0 47738312 95876 0 26225 122101 0 41282303 3791304 2484528 (20255) 0 5681261 0 672902 47616211 3133 1608375 0 82970 1528538 8976905 (3235884) 7269559 0 1590577 3437619 0 2322641 1330353 314488 18403377 41784 141975 0 0 16679 0 82970 33270050 11.76 .51 2.25 (.54) (1.42) 0 12.56 .25 0 0
EX-27.12 31 EXHIBIT 27.12
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 12 JAPANESE SMALL COMPANY SERIES 6-MOS NOV-30-1997 NOV-30-1997 397556982 179926371 837666 0 0 180764037 0 0 5421602 5421602 0 175342435 0 0 0 0 0 0 0 175342435 2228902 264847 648313 750065 2391997 (1551405) (180902203) (180074778) 0 0 0 0 0 0 0 (154339224) 0 0 0 0 258323 0 750065 258322683 0 0 0 0 0 0 0 .29 0 0
EX-27.13 32 EXHIBIT 27.13
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 13 UNITED KINGDOM SMALL COMPANY SERIES 6-MOS NOV-30-1997 NOV-30-1997 140620929 170723060 1543198 6780 0 172273038 377776 0 44393 422169 0 171850869 0 0 0 0 0 0 0 171850869 5435010 178480 0 460151 5153339 13056167 (3301541) 15043860 0 0 0 0 0 0 0 (10774475) 0 0 0 0 180467 0 460151 180467660 0 0 0 0 0 0 0 .25 0 0
EX-27.14 33 EXHIBIT 27.14
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 14 CONTINENTAL SMALL COMPANY SERIES 6-MOS NOV-30-1997 NOV-30-1997 283900862 334271788 6092836 755667 0 341120291 179023 0 17331573 17510596 0 323609695 0 0 0 0 0 0 0 323609695 6966519 371222 115719 1001463 6451997 17533695 20900809 44229247 0 0 0 0 0 0 0 (12272722) 0 0 0 0 350950 0 1001463 350950364 0 0 0 0 0 0 0 .29 0 0
EX-27.15 34 EXHIBIT 27.15
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 15 PACIFIC RIM SMALL COMPANY SERIES 6-MOS NOV-30-1997 NOV-30-1997 227639788 157153917 566263 120575 0 157840755 3646792 0 6399038 10045830 0 147794925 0 0 0 0 0 0 0 147794925 6042478 334692 178470 911397 5644243 3120343 (101331690) (93045647) 0 0 0 0 0 0 0 (83686540) 0 0 0 0 230391 0 911397 230390531 0 0 0 0 0 0 0 .40 0 0
EX-27.16 35 EXHIBIT 27.16
6 0000896162 THE DFA INVESTMENT TRUST COMPANY 16 EMERGING MARKETS SMALL CAP SERIES 6-MOS NOV-30-1997 NOV-30-1997 25679432 19688323 14236 34093 0 19736652 16178 0 271242 287420 0 19449232 0 0 0 0 0 0 0 19449232 607868 55788 0 212319 451337 50200 (5991109) (5490357) 0 0 0 0 0 0 0 19449232 0 0 0 0 47548 0 212319 23773753 0 0 0 0 0 0 0 .90 0 0
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