<PAGE> PAGE 1
000 A000000 04/30/97
000 C000000 0001031661
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 THIRD AVENUE TRUST
001 B000000 811-08039
001 C000000 2128886685
002 A000000 767 THIRD AVENUE
002 B000000 NEW YORK
002 C000000 NY
002 D010000 10017
002 D020000 2023
003 000000 Y
004 000000 N
005 000000 N
006 000000 N
007 A000000 Y
007 B000000 2
007 C010100 1
007 C020100 THIRD AVENUE VALUE FUND
007 C030100 N
007 C010200 2
007 C020200 THIRD AVENUE SMALL-CAP VALUE FUND
007 C030200 N
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A00AA01 EQSF ADVISERS, INC.
008 B00AA01 A
008 C00AA01 801-27792
008 D01AA01 NEW YORK
008 D02AA01 NY
008 D03AA01 10017
008 D04AA01 2023
010 A00AA01 FPS SERVICES, INC.
010 B00AA01 34910
010 C01AA01 KING OF PRUSSIA
010 C02AA01 PA
010 C03AA01 19406
010 C04AA01 0903
011 A00AA01 M.J. WHITMAN, INC.
<PAGE> PAGE 2
011 B00AA01 8-43018
011 C01AA01 NEW YORK
011 C02AA01 NY
011 C03AA01 10017
011 C04AA01 2023
012 A00AA01 FPS SERVICES, INC.
012 B00AA01 84-932
012 C01AA01 KING OF PRUSSIA
012 C02AA01 PA
012 C03AA01 19406
012 C04AA01 0903
013 A00AA01 PRICE WATERHOUSE LLP
013 B01AA01 NEW YORK
013 B02AA01 NY
013 B03AA01 10036
014 A00AA01 M.J. WHITMAN, INC.
014 B00AA01 8-43018
018 00AA00 Y
019 A00AA00 N
019 B00AA00 0
020 A000001 M.J. WHITMAN, INC.
020 B000001 13-3796763
020 C000001 245
020 A000002 RAYMOND JAMES & ASSOCIATES
020 B000002 59-1237041
020 C000002 25
020 A000003 PIPER, JAFFRAY & HOPWOOD, INC.
020 B000003 41-0953246
020 C000003 3
020 A000004 UNQUOWA
020 C000004 3
020 A000005 INSTINET
020 B000005 13-3443395
020 C000005 2
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 278
022 A000001 SMITH BARNEY SHEARSON
022 B000001 13-1912900
022 C000001 297198
022 D000001 54688
022 A000002 CLARK, GX & CO.
022 B000002 13-2969143
022 C000002 257433
022 D000002 5995
022 A000003 BEAR STEARNS & CO.
022 B000003 13-3299429
022 C000003 100000
<PAGE> PAGE 3
022 D000003 0
022 A000004 PRUDENTIAL BACHE SECURITIES, INC.
022 B000004 22-2347336
022 C000004 57726
022 D000004 0
022 A000005 MORGAN STANLEY & CO., INC.
022 B000005 13-2655998
022 C000005 22126
022 D000005 0
022 A000006 NOMORA SECURITIES INTERNATIONAL, INC.
022 B000006 13-2642206
022 C000006 16245
022 D000006 0
022 A000007 DEAN, WITTER REYNOLDS, INC.
022 B000007 94-1671384
022 C000007 0
022 D000007 15987
022 A000008 DONALDSON, LUFKIN & JENRETTE, INC.
022 B000008 13-2741729
022 C000008 8746
022 D000008 0
022 A000009 KNIGHT SECURITIES, LP
022 C000009 4169
022 D000009 518
022 A000010 MERRIL LYNCH, PEIRCE, FENNER & SMITH, INC.
022 B000010 13-5674085
022 C000010 3934
022 D000010 0
023 C000000 776345
023 D000000 77842
026 A000000 N
026 B000000 Y
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 Y
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
029 00AA00 N
030 A00AA00 0
030 B00AA00 0.00
030 C00AA00 0.00
031 A00AA00 0
031 B00AA00 0
032 00AA00 0
033 00AA00 0
034 00AA00 N
035 00AA00 0
036 B00AA00 0
<PAGE> PAGE 4
037 00AA00 N
038 00AA00 0
039 00AA00 N
040 00AA00 N
042 A00AA00 0
042 B00AA00 0
042 C00AA00 0
042 D00AA00 0
042 E00AA00 0
042 F00AA00 0
042 G00AA00 0
042 H00AA00 0
043 00AA00 0
044 00AA00 0
045 00AA00 Y
046 00AA00 N
047 00AA00 Y
048 00AA00 0.900
048 A01AA00 0
048 A02AA00 0.000
048 B01AA00 0
048 B02AA00 0.000
048 C01AA00 0
048 C02AA00 0.000
048 D01AA00 0
048 D02AA00 0.000
048 E01AA00 0
048 E02AA00 0.000
048 F01AA00 0
048 F02AA00 0.000
048 G01AA00 0
048 G02AA00 0.000
048 H01AA00 0
048 H02AA00 0.000
048 I01AA00 0
048 I02AA00 0.000
048 J01AA00 0
048 J02AA00 0.000
048 K01AA00 0
048 K02AA00 0.000
054 A00AA00 N
054 B00AA00 N
054 C00AA00 N
054 D00AA00 N
054 E00AA00 N
054 F00AA00 N
054 G00AA00 N
054 H00AA00 Y
054 I00AA00 N
054 J00AA00 Y
054 K00AA00 N
<PAGE> PAGE 5
054 L00AA00 N
054 M00AA00 Y
054 N00AA00 N
054 O00AA00 N
055 A00AA00 N
055 B00AA00 N
056 00AA00 N
057 00AA00 N
058 A00AA00 N
059 00AA00 Y
060 A00AA00 N
060 B00AA00 N
061 00AA00 1000
062 A00AA00 N
062 B00AA00 0.0
062 C00AA00 0.0
062 D00AA00 0.0
062 E00AA00 0.0
062 F00AA00 0.0
062 G00AA00 0.0
062 H00AA00 0.0
062 I00AA00 0.0
062 J00AA00 0.0
062 K00AA00 0.0
062 L00AA00 0.0
062 M00AA00 0.0
062 N00AA00 0.0
062 O00AA00 0.0
062 P00AA00 0.0
062 Q00AA00 0.0
062 R00AA00 0.0
063 A00AA00 0
063 B00AA00 0.0
077 A000000 Y
077 B000000 N
077 C000000 Y
077 D000000 Y
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 Y
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
<PAGE> PAGE 6
077 Q030000 N
078 000000 N
015 A000101 NORTH AMERICAN TRUST COMPANY
015 B000101 C
015 C010101 SAN DIEGO
015 C020101 CA
015 C030101 92101
015 C040101 4492
015 E010101 X
024 000100 Y
025 A000101 PIPER JAFFRAY COMPANIES, INC.
025 B000101 41-1233380
025 C000101 E
025 D000101 3630
025 A000102 RAYMOND JAMES FINANCIAL, INC.
025 B000102 59-1517485
025 C000102 E
025 D000102 18408
025 A000103 ALEX BROWN, INC.
025 B000103 52-1434118
025 C000103 E
025 D000103 11404
025 D000104 0
025 D000105 0
025 D000106 0
025 D000107 0
025 D000108 0
028 A010100 22066
028 A020100 0
028 A030100 0
028 A040100 5062
028 B010100 21265
028 B020100 15121
028 B030100 0
028 B040100 11495
028 C010100 83166
028 C020100 0
028 C030100 0
028 C040100 13966
028 D010100 103670
028 D020100 0
028 D030100 0
028 D040100 12004
028 E010100 70013
028 E020100 0
028 E030100 0
028 E040100 18876
028 F010100 68655
028 F020100 0
028 F030100 0
028 F040100 31475
<PAGE> PAGE 7
028 G010100 368835
028 G020100 15121
028 G030100 0
028 G040100 92878
028 H000100 0
049 000100 N
050 000100 N
051 000100 N
052 000100 N
053 A000100 N
066 A000100 Y
066 C000100 Y
067 000100 N
068 A000100 N
068 B000100 N
069 000100 N
070 A010100 Y
070 A020100 N
070 B010100 Y
070 B020100 N
070 C010100 Y
070 C020100 N
070 D010100 Y
070 D020100 N
070 E010100 N
070 E020100 N
070 F010100 N
070 F020100 N
070 G010100 N
070 G020100 N
070 H010100 N
070 H020100 N
070 I010100 N
070 I020100 N
070 J010100 Y
070 J020100 Y
070 K010100 Y
070 K020100 Y
070 L010100 Y
070 L020100 Y
070 M010100 Y
070 M020100 Y
070 N010100 N
070 N020100 N
070 O010100 N
070 O020100 N
070 P010100 Y
070 P020100 N
070 Q010100 N
070 Q020100 N
070 R010100 N
<PAGE> PAGE 8
070 R020100 N
071 A000100 108869
071 B000100 39427
071 C000100 485999
071 D000100 8
072 A000100 6
072 B000100 8641
072 C000100 3082
072 D000100 0
072 E000100 222
072 F000100 3309
072 G000100 51
072 H000100 117
072 I000100 238
072 J000100 47
072 K000100 34
072 L000100 63
072 M000100 31
072 N000100 107
072 O000100 0
072 P000100 0
072 Q000100 44
072 R000100 27
072 S000100 43
072 T000100 0
072 U000100 0
072 V000100 0
072 W000100 169
072 X000100 4280
072 Y000100 0
072 Z000100 7665
072AA000100 7016
072BB000100 0
072CC010100 63155
072CC020100 0
072DD010100 13987
072DD020100 0
072EE000100 3539
073 A010100 0.5700
073 A020100 0.0000
073 B000100 0.1500
073 C000100 0.0000
074 A000100 599
074 B000100 0
074 C000100 365803
074 D000100 56385
074 E000100 1233
074 F000100 498398
074 G000100 0
074 H000100 0
074 I000100 3611
<PAGE> PAGE 9
074 J000100 220
074 K000100 0
074 L000100 4961
074 M000100 137
074 N000100 931347
074 O000100 11466
074 P000100 675
074 Q000100 0
074 R010100 0
074 R020100 0
074 R030100 0
074 R040100 970
074 S000100 0
074 T000100 918236
074 U010100 34189
074 U020100 0
074 V010100 26.86
074 V020100 0.00
074 W000100 0.0000
074 X000100 27514
074 Y000100 52069
075 A000100 0
075 B000100 742106
076 000100 0.00
015 A000201 CUSTODIAL TRUST COMPANY
015 B000201 C
015 C010201 PRINCETON
015 C020201 NJ
015 C030201 08540
015 C040201 6231
015 E010201 X
024 000200 N
028 A010200 0
028 A020200 0
028 A030200 0
028 A040200 0
028 B010200 0
028 B020200 0
028 B030200 0
028 B040200 0
028 C010200 0
028 C020200 0
028 C030200 0
028 C040200 0
028 D010200 0
028 D020200 0
028 D030200 0
028 D040200 0
028 E010200 0
028 E020200 0
028 E030200 0
<PAGE> PAGE 10
028 E040200 0
028 F010200 9603
028 F020200 0
028 F030200 0
028 F040200 1572
028 G010200 9603
028 G020200 0
028 G030200 0
028 G040200 1572
028 H000200 0
049 000200 N
050 000200 N
051 000200 N
052 000200 N
053 A000200 Y
053 B000200 Y
053 C000200 N
066 A000200 Y
066 C000200 Y
067 000200 N
068 A000200 N
068 B000200 N
069 000200 N
070 A010200 Y
070 A020200 N
070 B010200 Y
070 B020200 N
070 C010200 Y
070 C020200 N
070 D010200 Y
070 D020200 N
070 E010200 Y
070 E020200 N
070 F010200 Y
070 F020200 N
070 G010200 Y
070 G020200 N
070 H010200 Y
070 H020200 N
070 I010200 Y
070 I020200 N
070 J010200 Y
070 J020200 N
070 K010200 Y
070 K020200 N
070 L010200 Y
070 L020200 N
070 M010200 Y
070 M020200 N
070 N010200 Y
070 N020200 N
<PAGE> PAGE 11
070 O010200 N
070 O020200 N
070 P010200 Y
070 P020200 N
070 Q010200 N
070 Q020200 N
070 R010200 Y
070 R020200 N
071 A000200 6311
071 B000200 1664
071 C000200 4324
071 D000200 38
072 A000200 1
072 B000200 0
072 C000200 0
072 D000200 0
072 E000200 0
072 F000200 4
072 G000200 1
072 H000200 0
072 I000200 3
072 J000200 0
072 K000200 0
072 L000200 1
072 M000200 4
072 N000200 5
072 O000200 0
072 P000200 0
072 Q000200 2
072 R000200 3
072 S000200 0
072 T000200 0
072 U000200 1
072 V000200 0
072 W000200 0
072 X000200 24
072 Y000200 15
072 Z000200 -8
072AA000200 0
072BB000200 160
072CC010200 0
072CC020200 163
072DD010200 0
072DD020200 0
072EE000200 0
073 A010200 0.0000
073 A020200 0.0000
073 B000200 0.0000
073 C000200 0.0000
074 A000200 3147
074 B000200 0
<PAGE> PAGE 12
074 C000200 0
074 D000200 0
074 E000200 0
074 F000200 4324
074 G000200 0
074 H000200 0
074 I000200 0
074 J000200 0
074 K000200 0
074 L000200 405
074 M000200 92
074 N000200 7968
074 O000200 204
074 P000200 4
074 Q000200 0
074 R010200 0
074 R020200 0
074 R030200 0
074 R040200 60
074 S000200 0
074 T000200 7700
074 U010200 766
074 U020200 0
074 V010200 10.05
074 V020200 0.00
074 W000200 0.0000
074 X000200 304
074 Y000200 0
075 A000200 0
075 B000200 7579
076 000200 0.00
SIGNATURE MICHELLE WHALEN
TITLE COMPLIANCE ADMIN
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001031661
<NAME> THIRD AVENUE TRUST
<SERIES>
<NUMBER> 2
<NAME> THIRD AVENUE SMALL-CAP VALUE FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 1-MO
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> APR-01-1997
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 4486478
<INVESTMENTS-AT-VALUE> 4323781
<RECEIVABLES> 404630
<ASSETS-OTHER> 27069
<OTHER-ITEMS-ASSETS> 3212560
<TOTAL-ASSETS> 7968040
<PAYABLE-FOR-SECURITIES> 204413
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 63756
<TOTAL-LIABILITIES> 268169
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8031136
<SHARES-COMMON-STOCK> 766110
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (8291)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (160277)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (162697)
<NET-ASSETS> 7699871
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 8291
<NET-INVESTMENT-INCOME> (8291)
<REALIZED-GAINS-CURRENT> (160277)
<APPREC-INCREASE-CURRENT> (162697)
<NET-CHANGE-FROM-OPS> (331265)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 925231
<NUMBER-OF-SHARES-REDEEMED> 159121
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 7699871
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3927
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 23588
<AVERAGE-NET-ASSETS> 5670487
<PER-SHARE-NAV-BEGIN> 10.
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> .06
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.05
<EXPENSE-RATIO> 1.90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0001031661
<NAME> THIRD AVENUE TRUST
<SERIES>
<NUMBER> 1
<NAME> THIRD AVENUE VALUE FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 755456402
<INVESTMENTS-AT-VALUE> 925429242
<RECEIVABLES> 5181311
<ASSETS-OTHER> 137199
<OTHER-ITEMS-ASSETS> 599130
<TOTAL-ASSETS> 931346882
<PAYABLE-FOR-SECURITIES> 11465793
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1645474
<TOTAL-LIABILITIES> 13111267
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 738700439
<SHARES-COMMON-STOCK> 34188530
<SHARES-COMMON-PRIOR> 23364688
<ACCUMULATED-NII-CURRENT> 4067022
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 5495314
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 169972840
<NET-ASSETS> 918235615
<DIVIDEND-INCOME> 3082004
<INTEREST-INCOME> 8641134
<OTHER-INCOME> 222193
<EXPENSES-NET> 4280353
<NET-INVESTMENT-INCOME> 7664978
<REALIZED-GAINS-CURRENT> 7015750
<APPREC-INCREASE-CURRENT> 63155662
<NET-CHANGE-FROM-OPS> 77836390
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 13987148
<DISTRIBUTIONS-OF-GAINS> 3539470
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13734836
<NUMBER-OF-SHARES-REDEEMED> 3495720
<SHARES-REINVESTED> 584726
<NET-CHANGE-IN-ASSETS> 351388274
<ACCUMULATED-NII-PRIOR> 10389192
<ACCUMULATED-GAINS-PRIOR> 2019034
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3309148
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4280353
<AVERAGE-NET-ASSETS> 742043411
<PER-SHARE-NAV-BEGIN> 24.26
<PER-SHARE-NII> .25
<PER-SHARE-GAIN-APPREC> 3.07
<PER-SHARE-DIVIDEND> .57
<PER-SHARE-DISTRIBUTIONS> .15
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 26.86
<EXPENSE-RATIO> 1.16
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Exhibit Sub-Item 77C
The Annual Meeting of Stockholders of Third Avenue Value Fund Inc. was held
December 13, 1996 for purposes of considering and acting upon the matters
set forth in the Proxy Statement and summarized below. A quorum was
represented at the Meeting and the voting results are also set forth below:
A. Election of a Board of Trustees:
For Withhold Authority
Phyllis W. Beck 18,401,834 122,305
Tibor Fabian 18,405,378 118,761
Gerald Hellerman 18,407,176 116,963
Marvin Moser, MD 18,399,554 124,585
Donald Rappaport 18,406,726 117,413
Myron M. Sheinfeld 18,396,429 127,710
Martin Shubik 18,405,150 118,989
Charles C. Walden 18,401,461 122,678
Martin J. Whitman 18,406,649 117,490
B. Selection by the Board of Trustees of Price Waterhouse LLP to audit
the accounts of the Trust for the fiscal year ending October 31, 1996:
For Against Abstain Not Voted
18,294,829 76,870 152,440 3,942,294
C. Approval of the proposed Agreement and Articles of Merger, which
provide for a conversion of the Fund from a Maryland corporation to a
Delaware business trust:
For Against Abstain Not Voted
11,291,740 208,284 594,898 10,371,511
Exhibit 77D April 14, 1997
THIRD AVENUE SMALL-CAP VALUE FUND
THIRD AVENUE VALUE FUND
The following information supplements the information contained in the
section entitled "Investment Philosophy and Approach" of the Funds'
Prospectus dated April 1, 1997.
Foreign Currency Transactions
Both Third Avenue Value Fund and Third Avenue Small-Cap Value Fund may,
from time to time, engage in foreign currency transactions in order to
hedge the value of their respective portfolio holdings denominated in
foreign currencies against fluctuations in foreign currency prices versus
the U.S. dollar. These transactions include forward currency contracts,
exchange listed and OTC options on currencies, currency swaps and other
swaps incorporating currency hedges.
The notional amount of a currency hedged by a Fund will be closely related
to the aggregate market value (at the time of making such sale) of the
securities held and reasonably expected to be held in its portfolio
denominated or quoted in or currently convertible into that particular
currency or a closely related currency. If a Fund enters into a hedging
transaction in which such Fund is obligated to make further payments, its
custodian will segregate cash or readily marketable securities having a
value at all times at least equal to such Fund's total commitments.
The cost to a Fund of engaging in currency hedging transactions varies with
factors such as (depending upon the nature of the hedging transaction) the
currency involved, the length of the contract period, interest rates in
foreign countries for prime credits relative to U.S. interest rates for
U.S. Treasury obligations, the market conditions then prevailing and
fluctuations in the value of such currency in relation to the U.S. dollar.
Transactions in currency hedging contracts usually are conducted on a
principal basis, in which case no fees or commissions are involved. The
use of currency hedging contracts does not eliminate fluctuations in the
prices in local currency of the securities being hedged. The ability of a
Fund to realize its objective in entering into currency hedging
transactions is dependent on the performance of its counterparties on such
contracts, which may in turn depend on the absence of currency exchange
interruptions or blockage by the governments involved, and any failure on
their part could result in losses to a Fund. The requirements for
qualification as a regulated investment company under the Internal Revenue
Code of 1986, as amended (the "Code"), may cause a Fund to restrict the
degree to which it engages in currency hedging transactions.
Exhibit 77M
AGREEMENT AND ARTICLES OF MERGER
between
Third Avenue Value Fund, Inc.
(a Maryland Corporation)
and
Third Avenue Trust
(a Delaware Business Trust)
AGREEMENT AND ARTICLES OF MERGER, dated as of the 15th day of January, 1997
(hereinafter referred to as the "Agreement"), by and between Third Avenue
Trust, a Delaware business trust having its principal office in Wilmington,
Delaware (hereinafter referred to as "Third Avenue Delaware" or the
"Surviving Trust"), and Third Avenue Value Fund, Inc., a Maryland
corporation having its principal office in Baltimore, Maryland (hereinafter
referred to as "Third Avenue Maryland"), said business entities being
hereinafter sometimes collectively referred to as the "Constituent Funds."
BACKGROUND
1.1 Authorized Shares. Third Avenue Delaware is a business trust duly
organized and existing under the laws of the State of Delaware,
having been formed on October 31 , 1996 under Title 12, Delaware
Code, Part V, Chapter 38, the Delaware Business Trust Law (1988), and
has authorized an unlimited number of shares of beneficial interest,
par value $.001 per share.
Third Avenue Delaware has authorized and allocated an unlimited
number of shares of beneficial interest to one series, and may in the
future create additional series of beneficial interest.
Third Avenue Maryland is a corporation duly organized and existing
under the law of the State of Maryland, having been incorporated on
November 27, 1989 under the General Corporation Law of the State of
Maryland, and has authorized capital stock consisting of 200 million
shares of common stock, par value $.001 per share with an aggregate
par value of two million dollars ($2,000,000).
Third Avenue Delaware has one share of beneficial interest issued and
outstanding which is held by Third Avenue Maryland.
1.2 Offices. The principal office of Third Avenue Maryland in the State
of Maryland is located at The Corporation Trust Incorporated, 32
South Street, Baltimore, Maryland 21202. The resident agent of Third
Avenue Maryland in the State of Maryland is The Corporation Trust
Incorporated.
The principal office of Third Avenue Delaware in the State of Delaware
is located in C/O The Corporation Trust Company, 1209 Orange Street,
Wilmington, Delaware 19801. The resident agent of Third Avenue
Delaware in the State of Delaware is The Corporation Trust Company.
Neither Third Avenue Maryland nor Third Avenue Delaware own any
interests in real property located in Maryland.
The address and principal place of business of Third Avenue Delaware
and Third Avenue Maryland is 767 Third Avenue, New York, New York
10017.
1.3 Authorization. The terms and conditions of the transaction set
forth in this Agreement were advised, authorized, and approved by
Third Avenue Maryland in the manner and by the vote required by its
Articles of Incorporation and the laws of the State of Maryland and
by Third Avenue Delaware in the manner and by the vote required by
its Agreement and Declaration of Trust and the laws of the State of
Delaware. The Board of Directors of Third Avenue Maryland and the
Board of Trustees of Third Avenue Delaware have, by resolutions
duly adopted, approved this Agreement and the merger of Third Avenue
Maryland into the Surviving Trust as being advisable and in the best
interests of their respective business entities and shareholders.
The Board of Directors of Third Avenue Maryland and the Board of
Trustees of Third Avenue Delaware directed the submission of this
Agreement to their respective shareholders. Under the terms of the
Merger, as set forth herein, on the Effective Date of the Merger,
Third Avenue Delaware will distribute shares to the shareholders of
Third Avenue Maryland.
The Board of Directors of Third Avenue Maryland and the Board of
Trustees of Third Avenue Delaware have adopted this Agreement as a Plan
of Reorganization intended to qualify as such under the provisions of
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended.
NOW THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter contained, and intending to be
legally bound, the parties hereto agree as follows:
ARTICLE I - THE MERGER
1.1 Third Avenue Maryland and Third Avenue Delaware agree that Third
Avenue Maryland shall be merged into Third Avenue Delaware
(hereinafter the "Merger"). Third Avenue Delaware shall be the
Surviving Trust and shall be governed by the laws of the State of
Delaware. The terms and conditions of the merger and the mode of
carrying the same into effect are as set forth in this Agreement.
1.2 The Agreement and Declaration of Trust of Third Avenue Delaware as it
shall exist on the Effective Date of the Merger (as hereinafter
defined) shall constitute the Agreement and Declaration of Trust of
the Surviving Trust.
1.3 The Bylaws of Third Avenue Delaware as they exist on the Effective
Date of the Merger shall constitute the Bylaws of the Surviving
Trust.
1.4 The Trustees of Third Avenue Delaware on the Effective Date of the
Merger shall constitute the Board of Trustees of Third Avenue
Delaware and shall hold office until their successors are elected and
shall qualify or until their earlier resignation, death or removal.
1.5 Price Waterhouse LLP shall continue as auditors to report upon the
financial statements of the Surviving Trust.
ARTICLE II - CONVERSION OF SHARES AND EXCHANGE RATIO
2.1 Upon the effective date of the Merger, shareholders of Third Avenue
Maryland will receive shares of Third Avenue Delaware in exchange for
their shares in Third Avenue Maryland. The manner and basis of
converting the issued and outstanding shares of the common stock of
Third Avenue Maryland into the shares of beneficial interest of Third
Avenue Delaware shall be as follows:
(a) Immediately following the Effective Date, as defined in
Article III herein, Third Avenue Delaware will establish
open accounts on its stock records for the Initial Series
in the names of the shareholders of record of Third
Avenue Maryland as of the close of business on the
Effective Date and credit to such accounts the exact
number of full and fractional shares of the Initial
Series such shareholder held in Third Avenue Maryland on
the Effective Date. Fractional shares of the Initial
Series will be carried to the third decimal place. On
the Effective Date, the net asset value per share of the
Initial Series shall be deemed to be the same as the net
asset value per share of Third Avenue Maryland. As
promptly as practicable after the Effective Date, each
stockholder of record of Third Avenue Maryland shall be
sent at that stockholder's address of record, a statement
indicating the number of shares of the Initial Series
which have been credited to his or her account.
Simultaneously with the crediting of the shares of the
Initial Series to the shareholders of record of Third
Avenue Maryland, the shares of the Third Avenue Maryland
held by such shareholders shall be canceled.
(b) On the Effective Date, the share of the Initial Series
heretofore held by Third Avenue Maryland shall be redeemed and
canceled by Third Avenue Delaware.
2.2 Each of the shares of beneficial interest of the Initial Series of
Third Avenue Delaware issued and outstanding on the Effective Date of
the Merger shall remain issued and outstanding and unaltered by the
terms of this Agreement.
2.3 On the Effective Date, each share of Third Avenue Maryland which has
been authorized but is unissued and not outstanding, will become a
share of the Initial Series of Third Avenue Delaware.
ARTICLE III - EFFECTIVE DATE OF THE MERGER
3.1 The Merger shall become effective when, subject to the terms and
conditions hereof, the following actions shall have in all respects
been completed:
(i) this Agreement shall have been adopted by the shareholders of
Third Avenue Maryland in accordance with the requirements of
the laws of the State of Maryland, which adoption shall have
been certified thereon by the Secretary or an Assistant
Secretary of Third Avenue Maryland;
(ii) this Agreement, certified as aforesaid, shall have been
executed, acknowledged and filed in accordance with the
requirements of the laws of the State of Maryland;
(iii) this Agreement shall have been approved and adopted by Third
Avenue Delaware in accordance with the requirements of the laws
of the State of Delaware; and
(iv) Third Avenue Maryland, as sole shareholder of Third Avenue
Delaware, shall have elected the Trustees of Third Avenue
Delaware with outstanding shareholders on the record date
relating to approval of the Agreement.
The effective time of the Merger shall be the close of business of
Third Avenue Delaware on the date this Agreement is filed in
accordance with the requirements of the law of the State of Maryland.
The date and time when the Merger shall become effective as aforesaid
is herein referred to as the "Effective Date of the Merger."
3.2 On the Effective Date of the Merger, the separate existence of Third
Avenue Maryland shall cease, except to the extent, if any, continued
by Statute. All the assets, rights, privileges, powers and
franchises of Third Avenue Maryland and all debts due on whatever
account to it, shall be taken and deemed to be transferred to and
vested in Third Avenue Delaware without further act or deed; and all
such assets, rights, privileges, powers and franchises shall be
thereafter as completely the property of Third Avenue Delaware as
they were of Third Avenue Maryland; and the title to and interest in
any real estate vested by deed, lease or otherwise, unto either of
the Constituent Funds, shall not revert or be in any way impaired.
Third Avenue Delaware shall be responsible for all the liabilities
and obligations of Third Avenue Maryland, but the liabilities of the
Constituent Funds or of their shareholders, directors, trustees, or
officers shall not be affected by the Merger, nor shall the right of
the creditors thereof or any persons dealing with such business
entities, or any liens upon the property of such business entities,
be impaired by the Merger, and any claim existing or action or
proceeding pending by or against either of such business entities may
be prosecuted to judgment as if the Merger had not taken place, or
Third Avenue Delaware may be proceeded against or substituted in
place of Third Avenue Maryland. Except as otherwise specifically set
forth in this Agreement, the identity, existence, purposes, powers,
franchise, rights, immunities and liabilities of Third Avenue
Delaware and of Third Avenue Maryland shall continue unaffected and
unimpaired by the Merger. Unless otherwise agreed to by the parties
thereto, all contractual obligations to which Third Avenue Maryland
is subject prior to the merger shall become contractual obligations
of the Initial Series of Third Avenue Delaware.
3.3 Prior to the Effective Date of the Merger, the Constituent Funds
shall take such action as shall be necessary or appropriate in order
to effect the Merger. In case at any time after the Effective Date
of the Merger, Third Avenue Delaware shall determine that any further
conveyance, assignment or other documents or any further action is
necessary or desirable to vest in or confirm to Third Avenue Delaware
full title to all the properties, assets, rights, privileges, and
franchises of the Constituent Funds, the officers, directors and
trustees of the Constituent Funds, at the expense of the Initial
Series of Third Avenue Delaware, shall execute and deliver all such
instruments and take all such action as Third Avenue Delaware may
determine to be necessary or desirable in order to vest in and
confirm to Third Avenue Delaware title to and possession of all such
cash and securities and other properties, assets, rights, privileges
and franchises, and otherwise to carry out the purpose of this
Agreement.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
4.1 Each of the Constituent Funds represents and warrants to the other
that:
(a) Such Fund is duly organized and existing in good standing under
the laws of its jurisdiction of incorporation or organization,
respectively.
(b) Such Fund is duly registered as an open-end management company
under the Investment Company Act of 1940 or in the case of Third
Avenue Delaware, will be so registered no later than the
Effective Date of the Merger.
(c) It has full power and authority to carry on its business as it is
presently being conducted and to enter into the Merger.
(d) There is no suit, action, or legal or administrative proceeding
pending, or to its knowledge threatened, against it which, if
adversely determined, might materially and adversely affect its
financial condition or the conduct of its business.
(e) At the Effective Date of the Merger, consummation of the
transactions contemplated hereby will not result in the breach of
or constitute a default under any agreement or instrument by
which it is bound.
(f) All of its presently outstanding shares are validly issued, fully
paid and non-assessable.
(g) Immediately prior to the Effective Date of the Merger, Third
Avenue Maryland will have valid and unencumbered title to its
cash, securities, and other assets, if any, except to the extent
the Initial Series consents to taking to the subject to any
encumbrance.
(h) The audited financial statements of Third Avenue Maryland for its
most recent fiscal year, appearing in its registration statement
on Form N-1A, and interim unaudited financial statements, fairly
present the financial position of such Corporation as of the
respective dates indicated thereon, and the results of its
operations and changes in net assets for the respective periods
indicated, in conformity with generally accepted accounting
principles applied on a consistent basis.
ARTICLE V - CONDITIONS
5.1 The obligations of each of the Constituent Funds to consummate the
Merger shall be subject to the following conditions:
(a) The representations and warranties of the other Fund contained
herein shall be true as of and at the Effective Date of the
Merger and with the same effect as though made at such date and
such other Constituent Fund shall have performed all obligations
required by this Agreement to be performed by it prior to the
Effective Date;
(b) Such authority and orders from the Securities and Exchange
Commission (the "Commission") and state securities commissions
as may be necessary to permit the parties to carry out the
transactions contemplated by this Agreement shall have been
received;
(c) A post-effective amendment to the Registration Statement of Third
Avenue Maryland on Form N-1A under the Securities Act of 1933,
relating to the shares of the Initial Series of Third Avenue
Delaware issuable hereunder, shall have been filed by Third
Avenue Delaware with the Commission and such Registration
Statement shall have become effective, and no stop-order
suspending the effectiveness of the Registration Statement shall
have been issued, and no proceeding for that purpose shall have
been initiated or threatened by the Commission (other than any
such stop-order, proceeding or threatened proceeding which shall
have been withdrawn or terminated);
(d) The Commission shall not have issued an unfavorable advisory
report under Section 25(b) of the Investment Company Act of 1940
nor instituted any proceeding seeking to enjoin consummation of
the reorganization under Section 25(c) of the Investment Company
Act of 1940.
(e) Third Avenue Maryland has mailed to each shareholder of record of
Third Avenue Maryland entitled to vote at the meeting of
shareholders at which action on this Agreement is to be
considered, a Proxy Statement which complies in all material
respects with the applicable provisions of the Federal securities
laws and the rules and regulations thereunder.
(f) Each party shall have received an opinion of Skadden, Arps,
Slate, Meagher & Flom, New York, New York, to the effect that the
Merger contemplated by this Agreement qualifies as a
"reorganization" under Section 368(a)(1) of the Internal Revenue
Code of 1986, as amended, and as such: (1) no gain or loss will
be recognized by either Constituent Fund or to the shareholders
thereof; (2) the basis of the shares of beneficial interest of
the Initial Series of Third Avenue Delaware received by Third
Avenue Maryland shareholders will be the same as the basis of the
shares of Third Avenue Maryland surrendered in exchange therefor;
and (3) the holding period of the shares of beneficial interest
of the Initial Series of Third Avenue Delaware received by Third
Avenue Maryland shareholders will include the holding period of
Third Avenue Maryland stock surrendered in exchange therefor,
provided that Third Avenue Maryland stock was held as a capital
asset on the date of the exchange.
(g) Each party shall have received an opinion from Skadden, Arps,
Slate, Meagher & Flom or Miles & Stockbridge in form and
substance satisfactory to it, relating to its authority to engage
in the transactions contemplated hereby and to the effect (i)
that this Agreement and the merger contemplated thereby and the
execution thereof have been duly authorized and approved by all
requisite action of Third Avenue Maryland and Third Avenue
Delaware, respectively, and this Agreement has been duly executed
and delivered by Third Avenue Maryland and Third Avenue Delaware,
respectively, and is a legal, valid and binding agreement of each
such party in accordance with its terms; (ii) the shares of
beneficial interest of the Initial Series of Third Avenue
Delaware to be issued pursuant to the terms of this Agreement,
have been duly authorized and, when issued and delivered as
provided in this Agreement, will have been validly issued and
fully paid and will be nonassessable; (iii) Third Avenue Maryland
is duly organized, validly existing and in good standing under
the laws of the State of Maryland and Third Avenue Delaware is
duly organized and validly existing under the laws of the State
of Delaware.
(h) The shares of beneficial interest of the Initial Shares of Third
Avenue Delaware shall have been duly qualified for offering to
the public in those states of the United States and jurisdictions
in which they are presently qualified, so as to permit the
transfers contemplated by this Agreement to be consummated.
(i) The holders of at least a majority of the outstanding shares of
common stock of Third Avenue Maryland shall have voted in favor
of the adoption of this Agreement and the Merger at an annual or
special meeting or any adjournment thereof.
ARTICLE VI - COVENANTS
6.1 Third Avenue Maryland shall distribute all declared but unpaid
dividends to its shareholders prior to the Effective Date of the
Merger.
ARTICLE VII - TERMINATION
7.1 Anything contained in this Agreement to the contrary notwithstanding,
this Agreement may be terminated and the Merger abandoned at any time
(whether before or after adoption hereof by the shareholders of the
Constituent Funds) prior to the Effective Date of the Merger:
(a) by mutual consent of the Constituent Funds; or
(b) on and after January 1, 1997, by either of the Constituent Funds
if any condition set forth in Article V hereof has not been
fulfilled or waived by it.
7.2 An election by a Constituent Fund to terminate this Agreement and
abandon the Merger shall be exercised by a majority vote of its Board
of Directors or Board of Trustees, respectively.
7.3 At any time prior to the filing of this Agreement, any of the terms
or conditions of this Agreement may be waived by the Constituent Fund
entitled to the benefit thereof by action taken by its Board of
Directors or Board of Trustees, respectively, or its President if, in
the good faith judgment of such Board, such waiver will not have a
material adverse effect on the benefits intended under this agreement
to the shareholders of the Constituent Fund on behalf of which such
action is taken.
7.4 The respective representations and warranties of the Constituent Funds
contained in Article IV hereof shall expire with, and be terminated
by, the Merger, and neither the respective Constituent Funds nor any
of their directors or trustees, respectively, or officers shall be
under any liability with respect to any such representations or
warranties after the Effective Date of the Merger. This provision
shall not protect any director or trustee, respectively, or officer
of either of the Constituent Funds against any liability to such Fund
or to its shareholders to which he would otherwise by subject.
ARTICLE VIII - MISCELLANEOUS
8.1 This Agreement constitutes the entire agreement between the parties
and there are no agreements, understandings, restrictions or
warranties between the parties other than those set forth herein or
herein provided for.
8.2 This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original but all of such counterparts
together shall constitute but one instrument.
IN WITNESS THEREOF, each of the Constituent Funds has caused this
Agreement and Articles of Merger to be executed on its behalf by its
President and its corporate seal to be affixed thereto and attested by its
Secretary all as of the day and year first above written.
Attest: THIRD AVENUE VALUE FUND, INC.
a Maryland corporation
By:
Ian M. Kirschner, Secretary Martin J. Whitman, President
Attest: __________________________
a Delaware business trust
By:
Ian M. Kirschner, Secretary Martin J. Whitman, President
