ThZeal - The Zeal

DEF 14A 1 y30873def14a.txt DEFINITIVE PROXY STATEMENT ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE 14A PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-12 THE MAINSTAY FUNDS (Name of Registrant as Specified In Its Charter) ________________________________________________________________________ (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of filing fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 1) Title of each class of securities to which transaction applies: N/A 2) Aggregate number of securities to which transaction applies: N/A 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): N/A 4) Proposed maximum aggregate value of transaction: N/A 5) Total fee paid: N/A [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: N/A 2) Form, Schedule or Registration Statement No.: N/A 3) Filing Party: N/A 4) Date Filed: N/A ================================================================================ THE MAINSTAY FUNDS 51 MADISON AVENUE NEW YORK, NEW YORK 10010 SPECIAL MEETING OF SHAREHOLDERS TO BE HELD MAY 4, 2007 March 14, 2007 To Our Shareholders: I am writing to ask for your vote on an important matter concerning The MainStay Funds (the "Trust"). The Trust, a Massachusetts business trust, currently offers 19 separate series of funds (the "Funds"), which are listed in the accompanying Notice of Special Meeting and Proxy Statement. Please take note that the Special Meeting of Shareholders (the "Special Meeting") of the Funds will be held on May 4, 2007, beginning at 11:00 a.m., Eastern time, at the offices of New York Life Investment Management LLC ("NYLIM"), 169 Lackawanna Avenue, Parsippany, New Jersey 07054. At the Special Meeting, as explained in the accompanying proxy statement, you will be asked to vote on the following proposals: 1. To elect eight Trustees to the Board of Trustees of the Trust; and 2. To transact such other business as may properly come before the Special Meeting and any adjournments or postponements thereof. Proposal 1, which concerns all the Funds, is described in more detail in the accompanying Notice of Special Meeting and Proxy Statement. The Board of Trustees of the Trust recommends that you read the enclosed materials carefully and then submit a vote "FOR" the election of each nominee for Trustee. Your vote is very important to us regardless of the number of shares of the Funds you own. Whether or not you plan to attend the Special Meeting in person, please read the proxy statement and cast your vote promptly. It is important that your vote be received by no later than the time of the Special Meeting on May 4, 2007. You will receive a proxy card. There are several ways to vote your shares, including by mail, telephone, and the Internet. Please refer to the proxy card for more information on how to vote. If we do not receive a response from you by one of these methods, you may receive a telephone call from our proxy solicitor, Computershare Fund Services, reminding you to vote. If you have any questions regarding your vote, please contact the Trust by calling toll-free 1-800-MAINSTAY (1-800-624-6782). We will get you the answers that you need promptly. We appreciate your participation and prompt response in this matter, and thank you for your continued support. Sincerely, -s- Stephen P. Fisher ---------------------------------------- Stephen P. Fisher President Encl. THE MAINSTAY FUNDS 51 MADISON AVENUE NEW YORK, NEW YORK 10010 MAINSTAY CAPITAL APPRECIATION FUND MAINSTAY COMMON STOCK FUND MAINSTAY CONVERTIBLE FUND MAINSTAY DIVERSIFIED INCOME FUND MAINSTAY EQUITY INDEX FUND MAINSTAY GLOBAL HIGH INCOME FUND MAINSTAY GOVERNMENT FUND MAINSTAY HIGH YIELD CORPORATE BOND FUND MAINSTAY INTERNATIONAL EQUITY FUND MAINSTAY LARGE CAP GROWTH FUND MAINSTAY MAP FUND MAINSTAY MID CAP GROWTH FUND MAINSTAY MID CAP VALUE FUND MAINSTAY MONEY MARKET FUND MAINSTAY SMALL CAP GROWTH FUND MAINSTAY SMALL CAP VALUE FUND MAINSTAY TAX FREE BOND FUND MAINSTAY TOTAL RETURN FUND MAINSTAY VALUE FUND NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD MAY 4, 2007 TO THE SHAREHOLDERS OF THE MAINSTAY FUNDS: NOTICE IS HEREBY GIVEN that the Board of Trustees (the "Board" or the "Trustees") of The MainStay Funds (the "Trust"), which currently offers the 19 series listed above (the "Funds"), invites you to attend a Special Meeting of Shareholders ("Special Meeting") of the Trust. The Special Meeting will be held on May 4, 2007, at the offices of New York Life Investment Management LLC ("NYLIM"), 169 Lackawanna Avenue, Parsippany, New Jersey 07054, beginning at 11:00 a.m. Eastern time. At the Special Meeting, and as specified in greater detail in the Proxy Statement accompanying this Notice, shareholders of the Funds will be asked to consider and approve the following Proposals: 1. To elect eight Trustees to the Board of Trustees of the Trust; and 2. To transact such other business as may properly come before the Special Meeting and any adjournments or postponements thereof. Your attention is directed to the accompanying Proxy Statement for further information regarding the Special Meeting and Proposal 1 above. You may vote at the Special Meeting if you are the record owner of shares of one or more of the Funds as of the close of business on February 20, 2007. If you attend the Special Meeting, you may vote your shares in person. Even if you do not attend the Special Meeting, you may vote by proxy by completing, signing, and returning the enclosed proxy card by mail in the envelope provided or by submitting your vote via telephone or the Internet. Please refer to the proxy card for more information on how you may vote. You may revoke the proxy at any time prior to the date the proxy is to be exercised in the manner described in the Proxy Statement. Your vote is very important to us. Whether or not you plan to attend the Special Meeting in person, please vote the enclosed proxy. If you have any questions, please contact the Trust for additional information by calling toll-free 1-800-MAINSTAY (1-800-624-6782). By order of the Board of Trustees, -s- Marguerite E. H. Morrison ---------------------------------------- Marguerite E. H. Morrison Secretary March 14, 2007 ---------- IMPORTANT NOTICE: PLEASE VOTE USING THE ENCLOSED PROXY AS SOON AS POSSIBLE. YOUR VOTE IS VERY IMPORTANT TO US NO MATTER HOW MANY SHARES YOU OWN. YOU CAN HELP AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATIONS BY PROMPTLY VOTING THE ENCLOSED PROXY. ---------- INSTRUCTIONS FOR SIGNING PROXY CARDS The following general rules for signing proxy cards may be of assistance to you and may help avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly. 1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the registration on the proxy card. 2. JOINT ACCOUNTS: Both parties must sign: the names of the parties signing should conform exactly to the names shown in the registration on the proxy card. 3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy card should be indicated unless it is reflected in the form of registration. FOR EXAMPLE:

Please choose one of the following options to vote your shares: 1. VOTE BY TELEPHONE. You may cast your vote by telephone by calling the toll-free number located on your proxy card. Please make sure to have your proxy card available at the time of the call. 2. VOTE THROUGH THE INTERNET. You may cast your vote by logging into the Internet site located on your proxy card and following the instructions on the website. In order to log in you will need the control number found on your proxy card. 3. VOTE BY MAIL. You may cast your vote by signing, dating and mailing the enclosed proxy card in the postage-paid return envelope provided. 4. VOTE IN PERSON AT THE SPECIAL MEETING. THE MAINSTAY FUNDS 51 MADISON AVENUE NEW YORK, NEW YORK 10010 MAINSTAY CAPITAL APPRECIATION FUND MAINSTAY COMMON STOCK FUND MAINSTAY CONVERTIBLE FUND MAINSTAY DIVERSIFIED INCOME FUND MAINSTAY EQUITY INDEX FUND MAINSTAY GLOBAL HIGH INCOME FUND MAINSTAY GOVERNMENT FUND MAINSTAY HIGH YIELD CORPORATE BOND FUND MAINSTAY INTERNATIONAL EQUITY FUND MAINSTAY LARGE CAP GROWTH FUND MAINSTAY MAP FUND MAINSTAY MID CAP GROWTH FUND MAINSTAY MID CAP VALUE FUND MAINSTAY MONEY MARKET FUND MAINSTAY SMALL CAP GROWTH FUND MAINSTAY SMALL CAP VALUE FUND MAINSTAY TAX FREE BOND FUND MAINSTAY TOTAL RETURN FUND MAINSTAY VALUE FUND PROXY STATEMENT SPECIAL MEETING OF SHAREHOLDERS TO BE HELD MAY 4, 2007 INTRODUCTION This Proxy Statement is being furnished to shareholders of The MainStay Funds (the "Trust"), in connection with the solicitation of proxies relating to the Trust and its series listed above (each a "Fund"), by the Board of Trustees of the Trust (the "Board" or the "Trustees"), for a Special Meeting of Shareholders (the "Special Meeting") to be held at the offices of New York Life Investment Management LLC ("NYLIM"), 169 Lackawanna Avenue, Parsippany, New Jersey 07054, on May 4, 2007, beginning at 11:00 a.m. Eastern time. THE BOARD IS SOLICITING PROXIES FROM SHAREHOLDERS WITH RESPECT TO THE FOLLOWING PROPOSALS (THE "PROPOSALS"), AS THEY ARE DESCRIBED IN DETAIL IN THIS PROXY STATEMENT: PROPOSALS: 1. To elect eight Trustees to the Board of Trustees of the Trust; and 2. To transact such other business as may properly come before the Special Meeting and any adjournments or postponements thereof. Only shareholders of record who owned shares of one or more of the Funds at the close of business on February 20, 2007 ("Record Date") are entitled to vote at the Special Meeting and at any adjournments or postponements thereof. Each share of a Fund that you own entitles you to one (1) vote with respect to any Proposal on which that Fund's shareholders are entitled to vote (a fractional share has a fractional vote). Proposal 1 affects all Funds. Any business properly to come before the Special Meeting and any adjournments or postponements thereof may affect one or more of the Funds. The Board plans to distribute this Proxy Statement, the attached Notice of Special Meeting and the enclosed proxy card beginning on or about March 14, 2007 to all shareholders of record of the Funds as of the Record Date. The cost of the Special Meeting, including costs of solicitation of proxies and voting instructions, will be borne by NYLIM. 1 It is important for you to vote on each Proposal described in this Proxy Statement. We recommend that you read this Proxy Statement in its entirety as the explanations will help you to decide how to vote on the Proposals. PROPOSAL 1 ELECTION OF TRUSTEES AFFECTED FUNDS: ALL FUNDS WHAT ARE SHAREHOLDERS BEING ASKED TO APPROVE? The purpose of this Proposal is to elect the Trustees that will assume office at or prior to the Board of Trustees meeting currently scheduled for June 7, 2007 or upon such later date of the Trustees' election by shareholders. At a Board of Trustees meeting held on February 12, 2007, the current Trustees of the Trust unanimously nominated the eight persons described below for election as Trustees (each a "Nominee"). The Board currently is composed of seven members: Edward J. Hogan, Alan R. Latshaw, Terry L. Lierman, John B. McGuckian, Brian A. Murdock, Donald E. Nickelson, and Richard S. Trutanic. Three of the Nominees, Messrs. Latshaw, Murdock, and Trutanic, currently are members of the Board of Trustees; five are not, but serve as directors/trustees of other funds in the complex of funds managed by NYLIM or its affiliates (the "Fund Complex"). These nominations are the result of an effort on the part of the Board, the other boards in the Fund Complex and NYLIM to consolidate the membership of the boards so that the same members serve on each board. Over the course of several months, the Board and its members met with representatives of the other boards in the Fund Complex and NYLIM's senior management to consider NYLIM's proposal to consolidate the membership of these boards. In reaching the conclusion that a consolidation of the Board's members with the members of the other boards is in the best interests of the Funds and their shareholders, the Board considered the following factors: - the benefits from streamlining Board communications; - opportunities for enhanced efficiency of Board oversight; - potential cost savings from a consolidation of Board members and Board meetings; - the projected number and type of funds to be overseen by the Board members; and - the proposed process, timing and costs for implementing the consolidation. Additionally, the Board considered the opportunities for enhanced services from NYLIM as a result of the proposed consolidation. The Board also noted that the proposed Board structure would be consistent with other similarly situated fund groups. Members of the Board's Nominating Committee ("Committee") met with each Nominee prior to his or her nomination to the Board, and the Committee considered each Nominee's qualifications in accordance with the Committee's policies and procedures for the consideration of board member candidates and recommended his or her nomination to the Board. Based on this recommendation, the Board nominated each of the Nominees to the Board. Likewise, the boards of the other funds in the Fund Complex also have approved the consolidation proposal on behalf of their funds and have nominated the same eight Nominees to serve on their respective boards. As part of the consolidation proposal, certain of the current members of each board determined not to stand for reelection. NYLIM offered a one time payment to all current independent members of the boards in recognition of their services and contingent upon the approval by shareholders of a new slate of directors/trustees. The payment is based on a formula, including the number of years each member has served on his or her respective fund board. If this Proposal is approved, the following current members of the Board of Trustees have agreed to resign from the Board and accept the one time payment from NYLIM described above following their resignation: Edward J. Hogan, Terry L. Lierman, John B. McGuckian, and Donald E. Nickelson. Payments to these members of the Board will range approximately from $250,000 to $360,000. The Funds do not have a retirement plan and the Trustees that are not standing for reelection will not receive any payment from the Funds in connection with their resignation. All proxies will be voted in favor of the Nominees listed in this Proxy Statement unless a contrary indication is made. If, prior to the Special Meeting, any Nominee becomes unable to serve, the proxies that otherwise would have been voted for such Nominee will be voted for such substitute nominee as may be selected by the current Board of Trustees. WHO ARE THE NOMINEES TO THE BOARD? The table below lists the Nominees, their dates of birth, current positions held with the Trust, length of time served, term of office, principal occupations during the last five years, number of funds in the Fund Complex currently overseen by the Nominee, and other directorships held outside of the Trust. A table with similar information concerning the officers of the Trust is also set forth below. The business address of each Nominee is 51 Madison Avenue, New York, New York 10010. 2 Nominees who are not "interested persons" of the Trust (as that term is defined in the Investment Company Act of 1940, as amended (the "1940 Act")) are referred to herein as "Independent Trustees." Nominees who are deemed to be "interested persons" of the Trust under the 1940 Act are referred to as "Interested Trustees." TRUSTEE NOMINEES

4 ---------- * If elected/reelected a Trustee, each Nominee will serve an indefinite term of office. ** This Nominee is currently a Trustee of the Trust. *** Mr. Murdock is currently a Trustee of the Trust and may be deemed to be an Interested Trustee because of his affiliation with New York Life Insurance Company, New York Life Insurance and Annuity Corporation, NYLIM, Institutional Capital LLC, MacKay Shields LLC, McMorgan & Company LLC, and NYLIFE Distributors LLC, as described in detail in the column "Principal Occupation(s) During Past 5 Years." The Trust's Declaration of Trust does not provide for the annual election of Trustees. However, in accordance with the 1940 Act, the Trust will hold a shareholders' meeting for the election of Trustees at such times as (1) less than a majority of the Trustees holding office have been elected by shareholders, or (2) if, after filling a vacancy on the Board of Trustees, less than two-thirds of the Trustees holding office would have been elected by the shareholders. Except for the foregoing circumstances, and barring a Trustee's resignation, death or incapacity to perform his or her duties, a Trustee's term of office is indefinite. OFFICERS OF THE TRUST (WHO ARE NOT TRUSTEES)*

* The officers listed above are considered to be "interested persons" of the Trust within the meaning of the 1940 Act because of their affiliation with the Trust, New York Life Insurance Company, New York Life Investment Management LLC, MacKay Shields LLC, McMorgan & Company LLC, NYLIFE Securities Inc. and/or NYLIFE Distributors LLC, as described in detail in the column captioned "Principal Occupation(s) During Past 5 Years." OWNERSHIP OF SECURITIES As of December 31, 2006, the dollar range of equity securities owned beneficially by each Nominee in the Trust and in any registered investment companies overseen by the Nominee within the same family of investment companies as the Fund was as follows: 6

COMPENSATION The Independent Trustees of the Trust currently receive from the Trust an annual retainer of $45,000, a fee of $2,000 for each Board of Trustees meeting attended, a fee of $1,000 for each Board committee meeting attended and $500 for each Valuation Subcommittee meeting attended, and are reimbursed for all out-of-pocket expenses related to attendance at such meetings. In addition, the Lead Independent Trustee is also paid an annual fee of $20,000, the Chairman of the Audit and Compliance Committee receives $2,000 and the Chairmen of the Brokerage, Expense, and Performance Committees each receive $1,000 for each meeting of the respective committee. Also, each Independent Trustee is paid $1,000 for attending meetings of the Independent Trustees held in advance of or in connection with Board/Committee meetings. Trustees who are affiliated with NYLIM or its affiliates and the Trust's officers do not receive compensation from the Trust. The table below states the compensation received by the Trustees for the fiscal year ended October 31, 2006 from the Trust and from certain other investment companies (as indicated) in the Fund Complex. COMPENSATION TABLE

* Mr. Latshaw was elected to the Board of Trustees on March 27, 2006. Pursuant to the authority granted it by the Audit and Compliance Committee Charter, the Audit and Compliance Committee retained the services of Mr. Latshaw from November 1, 2004 until his election to the Board of Trustees on March 27, 2006 as an independent financial expert consultant to provide advice and other services similar to that provided by an "Audit Committee Financial Expert" under Section 407 of the Sarbanes-Oxley Act of 2002. Until March 27, 2006, Mr. Latshaw received an annual retainer of $45,000, as well $1,000 per meeting attended, which amounts are reflected in table above, plus reimbursements for travel and out-of-pocket expenses. If the shareholders approve this Proposal, it is expected that the compensation structure for the Trustees will change such that the members of each board of directors/trustees in the Fund Complex will be compensated under a new, unified compensation structure. It is further expected that the Funds will pay their pro rata share of these fees based on the net assets of the Funds. A Trustee's total compensation from the Fund Complex as a whole may increase because each Trustee will serve on the boards of directors/trustees of all of the funds in the Fund Complex, rather than the board(s) on which the Nominees currently serve. It is expected that the Board of Trustees will meet at least quarterly at regularly scheduled meetings. During the fiscal year ended October 31, 2006, the Board met 8 times. Each current Trustee attended at least 75% of the meetings of the Board held during the last 7 fiscal year, including the meetings of the Board's standing Committees on which such Trustee was a member. The Trust does not hold annual meetings, and therefore, the Board of Trustees does not have a policy with regard to Trustee attendance at such meetings. BOARD COMMITTEES The Board of Trustees oversees the Funds and the services provided to the Funds by NYLIM and the investment sub-advisors for the Funds having investment sub-advisors. The committees of the Board currently include the Audit and Compliance Committee, Brokerage Committee, Expense Committee, Performance Committee, and Nominating Committee. The Board has also established a Valuation Committee, Valuation Subcommittee, and a Dividend Committee, each of which include members who are not Trustees. Audit and Compliance Committee. The purposes of the Audit and Compliance Committee, which generally meets quarterly or more frequently as needed, are: (1) to oversee the Trust's accounting and financial reporting policies and practices, its internal controls and, as appropriate, the internal controls of certain service providers; (2) to oversee the quality and objectivity of the Trust's financial statements and the independent audit thereof; (3) to oversee the Trust's compliance program and the compliance monitoring, supervision, and reporting by, and overall performance of, the Trust's Chief Compliance Officer; and (4) to act as a liaison between the Trust's independent auditors and the full Board of Trustees. The current members of the Audit and Compliance Committee are Alan R. Latshaw (Chairman), Donald E. Nickelson, and Richard S. Trutanic. There were 5 Audit and Compliance Committee meetings held during the fiscal year ended October 31, 2006. Brokerage Committee.* The purpose of the Committee is to assist the Board in overseeing the policies and procedures of the Funds with respect to brokerage and other matters relating to transactions in portfolio securities and other instruments. The current members of the Brokerage Committee are Edward J. Hogan (Chairman), Terry L. Lierman, and John B. McGuckian. There were 3 Brokerage Committee meetings held during the fiscal year ended October 31, 2006. Expense Committee.* The purpose of the Committee is to assist the Board in requesting and evaluating necessary information in connection with fees and expenses of the Funds or their shareholders that may arise out of agreements and arrangements that may be submitted to the Board for its review or approval. The current members of the Expense Committee are Alan R. Latshaw, Terry L. Lierman, John B. McGuckian, and Richard S. Trutanic (Chairman). There were 4 Expense Committee meetings held during the fiscal year ended October 31, 2006. Dividend Committee. The purpose of the Dividend Committee is to calculate the dividends authorized by the Board and to set the record and payment dates. Currently, the members of the Dividend Committee, on which one or more Trustees may serve, are Alan Kirshenbaum and Christopher Feind. There were no Dividend Committee meetings held during the fiscal year ended October 31, 2006. Performance Committee. The purpose of the Performance Committee is to oversee the Funds' investment performance. The current members of the Performance Committee are Edward J. Hogan, and Donald E. Nickelson (Chairman). There were 4 Performance Committee meetings held during the fiscal year ended October 31, 2006. Nominating Committee. The purposes of the Nominating Committee are to: (1) evaluate the qualifications of candidates and make nominations for Independent Trustee membership on the Board; (2) nominate members of committees of the Board and periodically review committee assignments; and (3) make recommendations to the Board concerning the responsibilities or establishment of Board committees. For the fiscal year ended October 31, 2006, the members of the Nominating Committee were all the Independent Trustees: Alan R. Latshaw, Edward J. Hogan, Terry L. Lierman, John B. McGuckian, Donald E. Nickelson (Chairman), and Richard S. Trutanic. There were 2 Nominating Committee meetings held during the fiscal year ended October 31, 2006. As of November 20, 2006 the Nominating Committee was reconstituted to include only Richard S. Trutanic and Alan R. Latshaw. The Board of Trustees has adopted a Nominating Committee Charter, which was attached as an Appendix to the Trust's Proxy Statement dated February 8, 2006. The Nominating Committee has adopted Policies for Consideration of Board Member Candidates (the "Candidate Policy"), formal policies on the consideration of Board member candidates, including nominees recommended by shareholders, which are attached to this Proxy Statement as Appendix A and summarized below. The summary is qualified in its entirety by the Candidate Policy. The Nominating Committee may solicit suggestions for nominations from any source that it deems appropriate, including independent consultants engaged specifically for such a purpose. In assessing the qualifications of a candidate for membership on the Board, the Nominating Committee may consider the candidate's potential contribution to the operation of the Board and its committees, and such other factors as it may deem relevant. The Nominating Committee will consider potential candidates recommended by shareholders provided that: (i) the proposed candidates satisfy the trustee ---------- * Prior to March 16, 2006, these two committees were part of a single committee, the Brokerage and Expense Committee. The Brokerage and Expense Committee met 2 times prior to March 16, 2006. 8 qualification requirements; and (ii) the nominating shareholders comply with the Candidate Policy. Other than in compliance with the requirements mentioned in the preceding sentence, the Nominating Committee will not otherwise evaluate shareholder trustee nominees in a different manner than other nominees, and the standard of the Committee is to treat all equally qualified nominees in the same manner. Valuation Committee. The purposes of the Valuation Committee are to oversee the implementation of the Trust's valuation procedures and to make fair value determinations on behalf of the Board as specified in the valuation procedures. The current members of the Valuation Committee, on which one or more Trustees may serve, are Alan Kirshenbaum (Chairman), Alan R. Latshaw, Alison H. Micucci, Marguerite E. H. Morrison, and Donald E. Nickelson. The Committee meets as often as necessary to ensure that each action taken by the Valuation Subcommittee is reviewed within a calendar quarter of such action. There were 4 Valuation Committee meetings held during the fiscal year ended October 31, 2006. Valuation Subcommittee. The purpose of the Valuation Subcommittee, which meets on an as needed basis, is to establish prices of securities for which market quotations are not readily available or the prices of which are not readily determinable pursuant to the Trust's valuation procedures. Meetings may be held in person or by telephone conference call. The Subcommittee may also take action via electronic mail in lieu of a meeting pursuant to the guidelines set forth in the valuation procedures. The current members of the Valuation Subcommittee, on which one or more Trustees may serve, are Ravi Akhoury, Alan Kirshenbaum, Alan R. Latshaw, Alison H. Micucci, Marguerite E.H. Morrison, Donald E. Nickelson and Christopher Feind. There were 6 Valuation Subcommittee meetings held during the fiscal year ended October 31, 2006. SHAREHOLDER APPROVAL The Nominees for election as Trustees at the Special Meeting will be elected by a plurality of the total votes cast at the Special Meeting by the holders of shares present in person or by proxy and entitled to vote on such action. This Proposal applies on a Trust-wide basis, and all Funds and classes thereof will vote together on this Proposal. BOARD RECOMMENDATION THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES TO THE BOARD OF TRUSTEES OF THE TRUST VOTING INFORMATION Voting of Proxies. If you attend the Special Meeting you may vote your shares in person. If you do not plan to attend the Special Meeting, please cast your vote by completing, signing, and returning the enclosed proxy card by mail in the envelope provided or by submitting your vote via telephone or the Internet, as detailed in the proxy card. Timely and properly completed and submitted proxies will be voted as instructed by shareholders. A shareholder who executes and returns a proxy may revoke the proxy at any time prior to the date the proxy is to be exercised by (1) delivering to the Trust written notice of the revocation, (2) delivering to the Trust a proxy with a later date, or (3) voting in person at the Special Meeting. However, attendance at the Special Meeting will not, by itself, revoke a previously tendered proxy. In the event a shareholder signs and returns the proxy but does not indicate his or her vote as to a Proposal, such proxy will be voted FOR the election of each Nominee as a Trustee. Quorum Requirements. A quorum of shareholders is necessary to hold a valid meeting and to consider the Proposals. The holders of a majority of the outstanding shares on the Record Date present, in person or by proxy, at the Special Meeting shall constitute a quorum. A chart reflecting the number of shares outstanding of each class of each of the Funds as of the Record Date is attached to this Proxy Statement as Appendix B. Effect of Abstentions and Broker "Non-Votes." The Funds expect that, before the Special Meeting, broker-dealer firms holding shares of the Funds in "street name" for their customers will request voting instructions from their customers and beneficial owners. If a shareholder abstains from voting as to any matter, or if a broker returns a "non-vote" proxy indicating a lack of authority to vote on a matter, then the shares represented by such abstention or broker non-vote will be considered to be present at the Special Meeting for purposes of determining the existence of a quorum. Abstentions and broker non-votes will not, however, be counted as votes in favor of a 9 Proposal. Therefore, abstentions and broker non-votes will have no effect on Proposal 1, for which the required vote is a plurality of the shareholders voting at the meeting, in person or by proxy. Adjournments. If a quorum is not present at the Special Meeting or if a quorum is present but sufficient votes to approve one or more Proposals have not been received at the time of the Special Meeting, the persons named as proxies may propose one or more adjournments of the Special Meeting in accordance with applicable law to permit further solicitation of votes. The persons named as proxies will vote in favor of adjournment with respect to those proxies that may be voted in favor of a Proposal(s) and will vote against any such adjournment with respect to those proxies which have been voted against the Proposal(s). Payment of Solicitation Expenses. The cost of the Special Meeting, including costs of solicitation of proxies and voting instructions, will be borne by NYLIM. NYLIM may incur additional expenses as a result of this proxy solicitation. Proxies are solicited via regular mail and also may be solicited via telephone, e-mail or other personal contact by personnel of NYLIM, the Trust, their respective affiliates, or, in NYLIM's discretion, a commercial firm retained for this purpose. NYLIM has retained Computershare Fund Services, to provide proxy solicitation services in connection with the Special Meeting at an estimated cost of $1,100,000 to $1,300,000 which will be paid by NYLIM. Other Matters to Come Before the Special Meeting. The Trust does not know of any matters to be presented at the Special Meeting other than those described in this Proxy Statement. If any other matters come before the Special Meeting, including any proposal to adjourn the Special Meeting to permit the continued solicitation of proxies in favor of the Proposals, it is the Trust's intention that proxies not containing specific restrictions to the contrary will be voted on such matters in accordance with the judgment of the persons named in the enclosed proxy. Future Shareholder Proposals. A shareholder may request inclusion in the Trust's proxy statement and on the Trust's proxy card for shareholder meetings certain proposals for action which the shareholder intends to introduce at such meeting. Shareholders wishing to submit proposals for inclusion in a proxy statement for a subsequent shareholders' meeting should send their written proposals to the Trust at 51 Madison Avenue, New York, NY 10010. Any shareholder proposals must be presented a reasonable time before the proxy materials for the next meeting are sent to shareholders to be considered for inclusion in the proxy materials. The timely submission of a proposal does not guarantee its inclusion in the proxy statement and is subject to limitations under the federal securities laws. The Trust is not required to hold regular meetings of shareholders, and in order to minimize its costs, does not intend to hold meetings of shareholders unless so required by applicable law, regulation, regulatory policy, or unless otherwise deemed advisable by the Board or the Trust's management. Therefore, it is not practicable to specify a date by which proposals must be received in order to be incorporated in an upcoming proxy statement for a meeting of shareholders. OTHER INFORMATION Investment Advisor and Administrator. NYLIM, 51 Madison Avenue, New York, New York 10010, serves as the investment advisor and administrator for each Fund. Distributor. NYLIFE Distributors LLC, 169 Lackawanna Avenue, Parsippany, New Jersey 07054, a limited liability company organized under the laws of Delaware, serves as the Trust's distributor and principal underwriter (the "Distributor") pursuant to an Amended and Restated Distribution Agreement, dated August 1, 2002. The Distribution Agreement provides that the Distributor will use its best efforts to distribute the Funds' shares. The Distributor is a wholly-owned subsidiary of NYLIM. Independent Registered Public Accounting Firm: KPMG LLP, 1601 Market Street, Philadelphia, Pennsylvania 19103-2499, has been selected as the Trust's independent registered public accounting firm. KPMG is responsible for auditing the annual financial statements of the Funds. Representatives of KPMG are not expected to be present at the Special Meeting, but have been given the opportunity to make a statement if they so desire and will be available should any matter arise requiring their presence. KPMG, in accordance with Independence Standards Board Standard No. 1 ("ISB No. 1"), has confirmed to the Audit and Compliance Committee that they are independent auditors with respect to the Funds. Certain information concerning the fees and services provided by KPMG to the Fund and to NYLIM and its affiliates for the most recent fiscal year of the Trust is attached at Appendix C. Shareholder Reports. The Trust will furnish, without charge, to any shareholder upon request, a printed version of the most recent annual reports to shareholders of the Funds (and any subsequent semi-annual reports). Such requests may be directed to the Trust by contacting the Distributor of the Funds' shares by writing NYLIFE Distributors LLC, attn: The MainStay Funds, 169 Lackawanna 10 Avenue, Parsippany, New Jersey 07054, or by calling toll-free 1-800-MAINSTAY (1-800-624-6782). Please include the name or names of the specific Fund or Funds for which you request reports. Shareholder Communications. Shareholders may transmit written communications to the Board or one or more of the Trustees by sending the communications to the attention of Marguerite E. H. Morrison, Secretary of the Trust, at the following address: 169 Lackawanna Avenue, Parsippany, New Jersey 07054. Beneficial Share Ownership of Trustees and Officers. As of the Record Date, the Trustees, the Trustee Nominees, and the officers of the Trust, as a group, beneficially owned less than 1% of the outstanding shares of each class of each Fund. Beneficial Share Ownership of Shareholders. As of the Record Date, the shareholders with respect to each Fund known by that Fund to beneficially own 5% or more of the outstanding interest of a class of that Fund's shares are identified at Appendix D. NYLIM and/or its affiliates have the discretion to vote some of the Funds' shares on this proposal. The Funds have been advised by NYLIM that these shares will be voted pursuant to established policies and procedures designed to address potential conflicts of interest. "Householding" of Proxy Statements. The Trust may furnish only one copy of this proxy statement to a household, even if more than one shareholder resides in the household, unless the Trust has received contrary instructions from one or more of the household's shareholders. If you are a shareholder and would like additional copies of this proxy statement, please contact the Distributor by writing NYLIFE Distributors LLC, attn: The MainStay Funds, 169 Lackawanna Avenue, Parsippany, New Jersey 07054, or by calling toll-free 1-800-MAINSTAY (1-800-624-6782). If in the future you do not want the mailing of your proxy statement to be combined with other members of your household, or if the Trust has furnished multiple proxy statements to your household and you would like the Trust to furnish only one statement to your household in the future, please inform the Distributor in writing or via telephone at the address or telephone number listed above. 11 APPENDIX A POLICIES FOR CONSIDERATION OF BOARD MEMBER CANDIDATES THE MAINSTAY FUNDS (ADOPTED AS OF DECEMBER 10, 2004) Pursuant to the Charter of the Nominating Committee of The MainStay Funds (the "Nominating Committee" of the "Trust"), the Nominating Committee is charged with evaluating the qualifications of candidates to serve on the Board of Trustees (the "Board") and with making nominations for members of the Board who are not "interested persons" of the Trust, as that term is defined in the Investment Company Act of 1940, as amended ("1940 Act") ("Independent Trustees"). These Policies shall apply to the Nominating Committee's consideration of Board member candidates. QUALIFICATION OF CANDIDATES In assessing the qualifications of a candidate for membership on the Board, the Nominating Committee may consider the candidate's potential contribution to the operation of the Board and its committees, and such other factors as it may deem relevant. The Nominating Committee may solicit suggestions for nominations from any source it deems appropriate. All qualified candidates will be treated equally in consideration by the Nominating Committee. No person shall be qualified to be a Board member unless the Nominating Committee, in consultation with legal counsel, has determined that such person, if selected or elected as a Board member, would not cause the Trust to be in violation of, or not in compliance with: (a) applicable law, regulation or regulatory interpretation; (b) the Trust's organizational documents; or (c) any policy adopted by the Board regarding either the retirement age of any Board member or the percentage of the Board that would be composed of Independent Trustees. NOMINATIONS FROM SHAREHOLDERS While the Nominating Committee is solely responsible for evaluating and nominating candidates to serve on the Board, the Nominating Committee may consider nominations from shareholders of the Trust. Shareholders may submit for the Nominating Committee's consideration recommendations regarding potential candidates for service on the Board. Each eligible shareholder or shareholder group may submit no more than one candidate each calendar year. In order for the Nominating Committee to consider shareholder submissions, the following requirements must be satisfied regarding the candidate: (a) The candidate must satisfy all qualifications provided herein and in the Trust's organizational documents, including qualification as a possible Independent Director if the candidate is to serve in that capacity. (b) The candidate may not be the nominating shareholder, a member of the nominating shareholder group or a member of the immediate family of the nominating shareholder or any member of the nominating shareholder group.(1) (c) Neither the candidate nor any member of the candidate's immediate family may be currently employed or employed within the year prior to the nomination by any nominating shareholder entity or entity in a nominating shareholder group. (d) Neither the candidate nor any immediate family member of the candidate is permitted to have accepted directly or indirectly, during the year of the election for which the candidate's name was submitted, during the immediately preceding calendar year, or during the year when the candidate's name was submitted, any ---------- (1) Terms such as "immediate family member" and "control" shall be interpreted in accordance with the federal securities laws. A-1 consulting, advisory, or other compensatory fee from the nominating shareholder or any member of a nominating shareholder group. (e) The candidate may not be an executive officer, director (or person fulfilling similar functions) of the nominating shareholder or any member of the nominating shareholder group, or of an affiliate of the nominating shareholder or any such member of the nominating shareholder group. (f) The candidate may not control the nominating shareholder or any member of the nominating shareholder group (or, in the case of a holder or member that is a fund, an interested person of such holder or member as defined by Section 2(a)(19) of the 1940 Act). (g) A shareholder or shareholder group may not submit for consideration a candidate which has previously been considered by the Nominating Committee. In order for the Nominating Committee to consider shareholder submissions, the following requirements must be satisfied regarding the shareholder or shareholder group submitting the candidate: (a) The Nominating Committee only will consider shareholder submissions that are received within the one year immediately preceding the Nominating Committee's consideration of Board member candidates. (b) Any shareholder or shareholder group submitting a candidate must beneficially own, either individually or in the aggregate, more than 5% of the securities of a series of the Trust that are eligible to vote both at the time of submission of the candidate and at the time of the Board member election. Each of the securities used for purposes of calculating this ownership must have been held continuously for at least two years as of the date of the nomination. In addition, such securities must continue to be held through the date of the meeting. The nominating shareholder or shareholder group must also bear the economic risk of the investment. Shareholders or shareholder groups submitting candidates to the Nominating Committee must substantiate compliance with the above requirements, at the time of submitting the candidate, to the attention of the Trust's Secretary, who will provide all submissions meeting the requirements stated herein to the Nominating Committee. This submission to the Secretary of the Trust must include: (a) Contact information for the nominating shareholder or shareholder group; (b) A certification from the nominating shareholder or shareholder group which provides the number of shares which the person or group has: (i) sole power to vote or direct the vote; (ii) shared power to vote or direct the vote; (iii) sole power to dispose or direct the disposition of such shares; and (iv) shared power to dispose or direct the disposition of such shares. In addition the certification shall provide that the shares have been held continuously for at least two years as of the date of the nomination. (c) The candidate's contact information and the number of applicable Fund shares owned by the candidate; (d) All information regarding the candidate that would be required to be disclosed in solicitations of proxies for elections of directors required by Regulation 14A under the Securities Exchange Act of 1934, as amended; and (e) A notarized letter executed by the candidate, stating his or her intention to serve as a candidate and be named in the Trust's proxy statement, if so designated by the Nominating Committee and the Trust's Board. It shall be in the Nominating Committee's sole discretion whether to seek corrections of a deficient submission or to exclude a candidate from consideration. A-2 APPENDIX B NUMBER OF SHARES OUTSTANDING IN EACH FUND AS OF THE RECORD DATE THE MAINSTAY FUNDS

B-1 APPENDIX C PRINCIPAL ACCOUNTANT FEES AND SERVICES For purposes of the following information, NYLIM and any entity controlling, controlled by or under common control with NYLIM that provides ongoing services to the Trust, are referred to as "Service Affiliates." (1) Audit Fees. The aggregate fees billed for each of the last two fiscal years for the Trust (the "Reporting Periods") for professional services rendered by KPMG for the audit of the Trust's annual financial statements, or services that are normally provided by KPMG in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were as follows:

(2) Audit-Related Fees. The aggregate fees billed in the Reporting Periods for assurance and related services by KPMG to the Trust that are reasonably related to the performance of the audit or review of the Trust's financial statements and are not reported under paragraph (1) above were as follows:

These audit-related services included review of financial highlights for the Funds' registration statements and issuance of consents to use of the auditor's reports. (3) Tax Fees. The aggregate fees billed to the Trust in the Reporting Periods for professional services rendered by KPMG for tax compliance, tax advice and tax planning for the last two fiscal years were as follows:

These services primarily included preparation of federal, state and local income tax returns. Additionally, services included the preparation of excise tax returns and excise tax distribution requirements. (4) All Other Fees. The aggregate fees billed for products and services provided by KPMG, other than the services reported in paragraphs (1) through (3) of this Item were: (i) $0, during the fiscal year ended October 31, 2005, and (ii) $0, during the fiscal year ended October 31, 2006. All non-audit fees billed by KPMG for services rendered to the Trust for the fiscal years ended October 31, 2005 and October 31, 2006 are disclosed in paragraphs (2) through (4) above. The aggregate non-audit fees billed by KPMG for services rendered to the Service Affiliates for the last two fiscal years were approximately: (i) $15,000 for the year ended October 31, 2005 and (ii) $25,000, for the year ended October 31, 2006. The Trust's Audit and Compliance Committee has considered whether the provision of non-audit services that were rendered to the Trust's investment advisor (not including any investment sub-advisor whose role is primarily portfolio management and is subcontracted with or overseen by another investment advisor), and any entity controlling, controlled by, or under common control with the investment advisor that provides ongoing services to the Trust that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. Pursuant to the Trust's Audit and Compliance Committee Charter, the Audit and Compliance Committee has adopted Pre-approval Policies and Procedures (the "Procedures") to govern the pre-approval of (i) all audit services and permissible non-audit services to be provided to the Trust by its independent registered public accounting firm, C-1 and (ii) all permissible non-audit services to be provided by such independent accounting firm to any of the Trust's Service Affiliates if the engagement directly impacts the Trust's operations and financial reporting. In accordance with the Procedures, the Audit and Compliance Committee is responsible for the engagement, with the approval of a majority of the Independent Trustees, of the independent registered public accounting firm to certify the Trust's financial statements for each fiscal year. With respect to the pre-approval of non-audit services provided to the Trust and its Service Affiliates, the Procedures provide that the Committee may annually consider and/or pre-approve a list of the types of services the Trust may request from the independent registered public accounting firm in that fiscal year. In addition, the Committee may pre-approve non-audit services on a project-by-project basis as they arise. The Procedures also permit the Committee to delegate authority to one or more of its members who are Independent Trustees (the "Designated Member") to pre-approve or refer to the full Committee any proposed non-audit services that have not been previously approved by the Committee or any proposed material change in the nature or extent of any non-audit services previously approved by the Committee, subject to certain conditions. Any action by the Designated Member in approving a requested non-audit service shall be presented for ratification to the Committee not later than at its next scheduled meeting. If the Designated Member does not approve the independent registered public accounting firm's provision of a requested non-audit service, the matter may be presented to the full Committee for its consideration and action. C-2 APPENDIX D SHARE OWNERSHIP OF SHAREHOLDERS THE MAINSTAY FUNDS As of the Record Date, the shareholders with respect to each Fund were known by that Fund to own of beneficially 5% or more of the outstanding interest of a class of that Fund's shares are described below: MAINSTAY CAPITAL APPRECIATION FUND:

MAINSTAY COMMON STOCK FUND:

D-1

MAINSTAY CONVERTIBLE FUND:

D-2 MAINSTAY DIVERSIFIED INCOME FUND:

MAINSTAY EQUITY INDEX FUND:

MAINSTAY GLOBAL HIGH INCOME FUND:

D-3 C Merrill Lynch Pierce Fenner & Smith Inc. - 607,944.7610 15.85% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 C Citigroup Global Markets Inc. 554,261.0510 14.45% 333 W 34th St New York, NY 10001-2402

MAINSTAY GOVERNMENT FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- A Supplemental Income Plan Trust Fund 3,626,811.9360 12.70% PO Box 8338 Boston, MA 02266-8338 C Merrill Lynch Pierce Fenner & Smith Inc. - 34,051.8650 5.32% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 I NYLIFE Distributors, Inc. 130.4540 100.00% Al Leier- CVP Audit Account 169 Lackawanna Ave Parsippany, NJ 07054-1007
MAINSTAY HIGH YIELD CORPORATE BOND FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- B Citigroup Global Markets Inc. 12,525,922.783 7.91% 333 W 34th St New York, NY 10001-2402 C Citigroup Global Markets Inc. 10,876,445.621 15.87% 333 W 34th St New York, NY 10001-2402 C Merrill Lynch Pierce Fenner & Smith Inc. - 11,012,223.922 16.07% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 I New York Life Foundation 1,647,711.8230 6.14% c/o Mr. Charles Holek 51 Madison Ave Room 504 New York, NY 10010-1603 I Evergreen Investment Services, Inc. 2,301,252.2310 8.57% The Moderately Aggressive Portfolio c/o Jim Hall 18th Floor 200 Berkeley Street Boston, MA 02116-5022
D-4 I Raymond James & Associates Inc. 2,146,104.7350 8.00% FBO Helios Education 880 Carillon Pkwy St. Petersburg, FL 33716-1100 I MainStay Moderate Allocation Fund 1,515,629.9120 5.65% c/o Tony Elavia 470 Park Ave Room VM New York, NY 10016-6819 I Evergreen Investment Services, Inc. 1,656,411.2460 6.17% The Conservative Portfolio c/o Jim Hall 18th Floor 200 Berkeley Street Boston, MA 02116-5022 I Evergreen Investment Services, Inc. 2,022,019.5820 7.53% The Moderate Portfolio c/o Jim Hall 18th Floor 200 Berkeley Street Boston, MA 02116-5022 I Evergreen Investment Services, Inc. 1,506,116.3910 5.61% The Aggressive Portfolio c/o Jim Hall 18th Floor 200 Berkeley Street Boston, MA 02116-5022 I New York Life Trust Company 2,436,118.4620 9.08% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007 I Merrill Lynch Pierce Fenner & Smith Inc. - 2,189,900.5370 8.16% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 I MainStay Moderate Growth Allocation Fund 1,718,718.9790 6.40% c/o Tony Elavia 470 Park Ave Room VM New York, NY 10016-6819

MAINSTAY INTERNATIONAL EQUITY FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- C Merrill Lynch Pierce Fenner & Smith Inc. - 163,068.7030 12.19% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 C Citigroup Global Markets Inc. 93,773.4350 7.01% 333 W 34th St New York, NY 10001-2402
D-5 I Dengel & Co. 2,302,162.7140 7.12% c/o Fiduciary Trust Company International PO Box 3199 New York, NY 10008-3199 I David Bowen & Co. 5,178,607.6560 16.01% PO Box 55806 Boston, MA 02205-5806 I New York Life Progress-Sharing 3,658,945.647 11.31% Investment Plan Program c/o Maria Mauceri 51 Madison Ave, Room 1305 New York, NY 10010-1603 I Charles Schwab & Company Inc 3,139,381.176 9.71% 101 Montgomery Street San Francisco, CA 94104-4151 R1 New York Life Trust Company 246,016.1910 99.93% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007 R2 Water Technology, Inc. 401(K) 1,014.7560 5.87% Mary M Aranda 619 S Andover Dr Anaheim, CA 92807-4607 R2 Water Technology, Inc. 401(K) 1,063.3320 6.15% Ervin W Loest, Jr. 102 S Grove St Waupun, WI 53963-2219 R2 Water Technology, Inc. 401(K) 2,166.1990 12.52% Brian W Freber 613 E South St Beaver Dam, WI 53916-3005 R2 Lichte Insurance Agency, Inc MPP 1,600.1400 9.25% Donald A Lichte 1400 Lancer Ct Reedsburg, WI 53959-1422 R2 Lichte Insurance Agency, Inc MPP 4,133.1510 23.90% Donald H Lichte 610 N Webb Ave Reedsburg, WI 53959-1267 R3 NYLIFE Distributors Inc. 703.4510 100.00% Attn: Al Leier 169 Lackawanna Ave Parsippany, NJ 07054-1007

D-6 MAINSTAY LARGE CAP GROWTH FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- A Merrill Lynch Pierce Fenner & Smith Inc. - 14,514,771.411 37.94% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 C Merrill Lynch Pierce Fenner & Smith Inc. - 1,163,329.5100 28.14% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 C Citigroup Global Markets Inc. 903,177.7990 21.85% 333 W 34th St New York, NY 10001-2402 I JP Morgan Chase TTEE 3,564,139.6000 6.84% Int'l Truck & Engine 401k Plan for Represented Employees 9300 Ward Pkwy. Kansas City, MO 64114-3317 I JP Morgan Chase TTEE 3,986,533.3810 7.66% FBO International Truck & Engine 401(K) Retirement Savings Plan 9300 Ward Pkwy. Kansas City, MO 64114-3317 I New York Life Trust Company 4,452,857.0950 8.55% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007 I MainStay Moderate Growth Allocation Fund 7,028,109.2610 13.50% c/o Tony Elavia 470 Park Ave Room VM New York, NY 10016-6819 I MainStay Moderate Allocation Fund 5,139,416.2190 9.87% c/o Tony Elavia 470 Park Ave Room VM New York, NY 10016-6819 I MainStay Growth Allocation Fund 5,091,701.5340 9.78% c/o Tony Elavia 470 Park Ave Room VM New York, NY 10016-6819 I Evergreen Investment Services, Inc. 3,049,799.0290 5.86% The Moderately Aggressive Portfolio c/o Jim Hall 18th Floor 200 Berkeley Street Boston, MA 02116-5022 I Evergreen Investment Services, Inc. 4,474,435.1560 8.59% The Aggressive Portfolio c/o Jim Hall 18th Floor 200 Berkeley Street Boston, MA 02116-5022
D-7 I Charles Schwab & Company Inc. 3,262,835.9810 6.27% 101 Montgomery Street San Francisco CA 94104-4122 R1 Wells Fargo Bank NA FBO 344,950.3430 40.57% Retirement Plan Services PO Box 1533 Minneapolis, MN 55480-1533 R1 New York Life Trust Company 346,946.5410 40.81% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007 R1 NFS LLC FEBO FIIOC as Agent for Qualified 157,799.7350 18.56% Benefit Plans (401K) FINOPS-IC Funds 100 Magellan Way R2 New York Life Trust Company 332,887.5990 99.46% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007 R3 NYLIFE Distributors Inc. 1,742.1600 100.00% Attn: Al Leier 169 Lackawanna Ave Parsippany, NJ 07054-1007

MAINSTAY MAP FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- A Citigroup Global Markets Inc. 769,693.1060 5.13% 333 W 34th St New York, NY 10001-2402 A Merrill Lynch Pierce Fenner & Smith Inc. - 916,985.3900 6.11% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 B Citigroup Global Markets Inc. 583,122.1310 5.58% 333 W 34th St New York, NY 10001-2402 C Citigroup Global Markets Inc. 1,573,430.175 20.35% 333 W 34th St New York, NY 10001-2402 C Merrill Lynch Pierce Fenner & Smith Inc. - 1,589,348.906 20.56% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484
D-8 R1 New York Life Trust Company 443,629.6360 99.35% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007 R2 New York Life Trust Company 155,204.9810 89.77% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007 R3 NYLIFE Distributors Inc. 289.3630 100.00% Attn: Al Leier 169 Lackawanna Ave Parsippany, NJ 07054-1007 I New York Life Trust Company 5,567,830.8870 56.23% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007 I Raymond James & Associates Inc. 616,053.9480 6.22% FBO Helios Education 880 Carillon Pkwy St. Petersburg, FL 33716-1100 I New York Life Progress-Sharing Investment 1,831,437.5920 18.50% Plan Program c/o Maria Mauceri 51 Madison Ave RM 513 New York, NY 10010-1603

MAINSTAY MID CAP GROWTH FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- A Merrill Lynch Pierce Fenner & Smith Inc. - 988,563.6280 10.63% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 C Citigroup Global Markets Inc. 355,707.0530 10.35% 333 W 34th St New York, NY 10001-2402 C Merrill Lynch Pierce Fenner & Smith Inc. - 1,397,794.5930 40.65% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 I Mass Mutual Life Insurance Co 19,070.7890 11.54% 1295 State St. Springfield MA 01111-0001 I Prudential Investment Management Service 21,798.2310 13.19% Fbo Mutual Fund Clients 100 Mulberry St 3 Gateway Ctr Fl 11 Mail Stop NJ 05-11-20 Newark, NJ 07102-4000
D-9 I EGAP & Co. 41,881.2810 25.34% Two Burlington Square Po Box 820 Burlington VT 05402-0820 I New York Life Trust Company 77,257.7570 46.74% Client Accounts 169 Lackawanna Ave Parsippany NJ 07054-1007 R3 Trust Lynx & Co. 34,915.3350 97.80% PO Box 173736 Denver, CO 80217-3736

MAINSTAY MID CAP VALUE FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- C Citigroup Global Markets Inc. 535,822.2910 22.02% 333 W 34th St New York, NY 10001-2402 C Merrill Lynch Pierce Fenner & Smith Inc. - 296,284.2340 12.18% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 I Pattie A Clay Infirmary Association Inc 65,607.5570 98.12% c/o Robert J Hudson Eastern By-Pass PO Box 1600 Richmond, KY 40476-2603 R1 Counsel Trust DBA Mid Atlantic Trust 14.6260 14.79% FBO Ambiotec C Engineering Group 401K 336 4th Ave The Times Building Pittsburgh PA 15222-2011 R1 NYLIFE Distributors, Inc. 84.2920 85.21% Al Leier- CVP Audit Account 169 Lackawanna Ave Parsippany, NJ 07054-1007 R2 NYLIFE Distributors, Inc. 84.4460 9.63% Al Leier- CVP Audit Account 169 Lackawanna Ave Parsippany, NJ 07054-1007 R2 MG Trust Company Custodian FBO Pinnacle 76.9240 8.78% Engineering Inc. 401K P&T 700 17th St Suite 300 Denver, CO 80202-3531 R2 New York Life Trust Company 715.1420 81.59% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007
D-10 MAINSTAY MONEY MARKET FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- ~~A New York Life Trust Company 16,273,201.440 5.94% Client Accounts 169 Lackawanna Ave Parsippany, NJ 07054-1007~~
MAINSTAY SMALL CAP GROWTH FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- I New York Life Foundation 189,663.6720 86.01% c/o Mr. Charles Holek 51 Madison Ave RM 504 New York, NY 10010-1603 I EGAP & CO 30,245.8590 13.72% Two Burlington Square PO Box 820 Burlington, VT 05402-0820
MAINSTAY SMALL CAP VALUE FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- C Citigroup Global Markets Inc. 70,875.0290 8.56% 333 W 34th St New York, NY 10001-2402 C Merrill Lynch Pierce Fenner & Smith Inc. - 129,250.0740 15.61% for the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville, FL 32246-6484 I New York Life Trust Company 376.1160 48.17% Cust For The Rollover IRA of Michael P Kachmer 1209 IH 35 South #100 New Braunfels TX 78130-5918 I Russell W. Stigall III 236.2470 30.25% PO Box 4466 Greenville, MS 38704-4466 I NYLIFE Distributors, Inc. 168.5250 21.58% Al Leier- CVP Audit Account 169 Lackawanna Ave Parsippany, NJ 07054-1007
MAINSTAY TAX FREE BOND FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- ~~C NFS LLC FEBO 35,974.8320 5.56% R Locke Bell PO Box 481 Gastonia NC 28053-0481~~
D-11 C Merrill Lynch Pierce Fenner & 166,264.1780 25.71% Smith Inc - For the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville FL 32246-6484

MAINSTAY TOTAL RETURN FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- C Citigroup Global Markets Inc. 42,366.6960 24.12% 333 W 34th St New York NY 10001-2402 C Theresa Collins USUFRUCT 9,083.6750 5.17% James N Collins & Gene M Collins Karen T Collins & John W Collins 4006 Walnut Dr New Iberia LA 70563-3342 I NYLIFE Distributors Inc. 66.7560 16.56% Al Leier - CVP Audit Account 169 Lackawanna Ave Parsippany NJ 07054-1007 I F&M Bank No Virginia Cust 336.4290 83.44% fbo IPC Prototype Plan C/O John Ames Po Box 8095 Virginia Beach, VA 23450-8095
MAINSTAY VALUE FUND:
TITLE OF AMOUNT OF BENEFICIAL PERCENT CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS -------- ------------------------------------ -------------------- -------- C Merrill Lynch Pierce Fenner & Smith Inc - 242,568.2430 40.03% For the Sole Benefit of its Customers 4800 Deer Lake Drive East 3rd Fl Jacksonville FL 32246-6484 I MainStay Moderate Allocation Fund 254,611.6970 22.01% c/o Tony Elavia 51 Madison Ave 2nd Fl - EIG Group Attn: Maggie Goodman New York NY 10010-1603 I MainStay Growth Allocation Fund 359,610.2830 31.08% c/o Tony Elavia 51 Madison Ave 2nd Fl - EIG Group Attn: Maggie Goodman New York NY 10010-1603
D-12 I MainStay Moderate Growth Allocation Fund 530,360.8960 45.84% c/o Tony Elavia 51 Madison Ave EIG - 2nd Fl Attn: Maggie Goodman New York NY 10010-1603 R1 Nylife Distributors Inc 64.7130 100.00% Al Leier - CVP Audit Account 169 Lackawanna Ave Parsippany NJ 07054-1007 R2 New York Life Trust Company 223,310.8350 36.42% Client Accounts 169 Lackawanna Ave Parsippany NJ 07054-1007

D-13 FORM OF PROXY CARD THE MAINSTAY FUNDS SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 4, 2007 The undersigned shareholder of the [Funds owned] hereby constitutes and appoints Marguerite E.H. Morrison, Jeffrey Engelsman. and Thomas C. Humbert, Jr. or any one of them, as proxy of the undersigned, with full power of substitution, to vote all shares of the Fund(s) held in his or her name on the books of the Fund(s) and which he or she is entitled to vote at the Special Meeting of Shareholders to be held at the offices of New York Life Investment Management LLC ("NYLIM"), 169 Lackawanna Avenue, Parsippany, New Jersey 07054 on May 4, 2007, beginning at 11:00 a.m. Eastern time, and at any adjournments or postponements of the Special Meeting, with all the powers that the undersigned would possess if personally present, as designated on the reverse hereof. The undersigned hereby revokes any prior proxy, and ratifies and confirms all that the proxies, or any one of them, may lawfully do. The undersigned acknowledges receipt of the Notice of the Special Meeting of Shareholders of the Funds and the Proxy Statement dated March 14, 2007. The undersigned hereby instructs the said proxies to vote in accordance with the instructions provided below with respect to the Proposal. The undersigned understands that if he or she does not provide an instruction, that the proxies will vote his or her shares in favor of the Proposal. The proxies will also vote on any other matter that may arise at the Special Meeting according to their best judgment. Please mark, sign, date and return the Proxy Card promptly using the enclosed envelope. DATE: [ADDRESS LINE 1] ---------------------------------- [ADDRESS LINE 2] [ADDRESS LINE 3] SIGNATURE(S): [ADDRESS LINE 4] [ADDRESS LINE 5] [ADDRESS LINE 6] ---------------------------------------- [ADDRESS LINE 7] NOTE: Please sign exactly as your name [ADDRESS LINE 8] appears on the account. When shares are [ADDRESS LINE 9] held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee or guardian, please provide full title as such. If a corporation, please sign in full corporate name by president or other authorized officer and if a partnership, please sign in full partnership name by authorized person. [ ] Please check this box if you plan to attend the Special Meeting. -------------------------------------------------------------------------------- - PLEASE FOLD HERE - THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE MAINSTAY FUNDS (THE "TRUST"), WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL. Unless a contrary direction is indicated, the shares represented by this proxy will be voted FOR approval of the Proposal; if specific instructions are indicated, this proxy will be voted in accordance with such instructions. PLEASE CHOOSE ONE OF THE FOLLOWING OPTIONS TO VOTE YOUR SHARES: - TOUCHTONE: To vote by phone call toll free 1-866-704-4464 and follow the recorded instructions. - INTERNET: Vote on the internet VOTING CONTROL ID: [123456789101] at https://vote.proxy-direct.com and follow the simple CHECK DIGIT ID: [123] instructions. - MAIL: Return the signed proxy card in the enclosed envelope. IF YOU WOULD LIKE TO VOTE OVER THE PHONE, PLEASE CALL 1-800-821-2712. REPRESENTATIVES ARE AVAILABLE TO RECORD YOUR VOTING INSTRUCTION QUICKLY OVER THE PHONE. THEY ALSO ARE AVAILABLE TO ANSWER ANY QUESTIONS YOU MAY HAVE REGARDING THE PROXY MATERIALS. PLEASE VOTE TODAY. D-1 SEE THE REVERSE SIDE FOR THE PROPOSAL. D-2 THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST, WHICH UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL. To elect the following eight individuals as Trustees of the Board: 1. Susan B. Kerley 2. Alan R. Latshaw 3. Peter Meenan 4. Richard H. Nolan, Jr. 5. Brian A. Murdock 6. Richard S. Trutanic 7. Roman L. Weil 8. John A. Weisser, Jr. [ ] FOR ALL [ ] WITHHOLD ALL [ ] FOR ALL EXCEPT [ ] ABSTAIN To withhold authority to vote for one or more nominees, write the nominee's number(s) on the line below. ---------------------------------------- PLEASE BE SURE TO SIGN ON THE REVERSE SIDE BEFORE MAILING THIS PROXY D-3