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EXHIBIT 99.5
MAXICARE HEALTH PLANS, INC.
INSTRUCTIONS AS TO USE OF SUBSCRIPTION CERTIFICATES
IMPORTANT -- To subscribe for shares, complete the appropriate SECTION and
delivery instructions on the reverse side of the Subscription Certificate, and
SIGN in the space provided. Subject to the provisions of the Prospectus, if the
instructions of the person completing this Certificate are insufficient to
delineate the proper action to be taken with respect to all of the Rights
evidenced hereby, such action as is clearly delineated in such instructions will
be taken.
THE RIGHTS REPRESENTED BY THE SUBSCRIPTION CERTIFICATE MAY BE EXERCISED
ONLY BY THE RECORD HOLDER OF THE COMPANY'S SHARES AS OF THE CLOSE OF BUSINESS ON
SEPTEMBER 14, 2000 (THE "RIGHTS RECORD DATE"), OR BY SOMEONE DESIGNATED BY THE
RECORD HOLDER AS THE BENEFICIAL OWNER OF THE SHARES. ACCORDINGLY, BY COMPLETING
THE SUBSCRIPTION CERTIFICATE, YOU CERTIFY THAT AS OF THE CLOSE OF BUSINESS ON
SEPTEMBER 14, 2000, YOU ARE THE RECORD HOLDER OF SUCH RIGHTS OR THAT YOU HAVE
BEEN DESIGNATED BY THE RECORD HOLDER (IN WRITING AS ATTACHED HERETO) AS THE
BENEFICIAL OWNER OF SUCH RIGHTS.
The Rights entitle the record or beneficial holder, as the case may be, to
subscribe for one and one-half shares of common stock of the Company at a
Subscription Price of $1.00 per Share for each Right evidenced hereby, under the
terms and subject to the conditions set forth in the Prospectus. Those
shareholders who fully subscribe to the Rights available to them in the Rights
Offering shall have over-subscription rights to purchase additional shares from
those shares which have not been purchased by other shareholders in the Rights
Offering (the "Unsubscribed Shares") up to a maximum of 50% of the shares which
are available to the over-subscribing shareholder pursuant to basic subscription
rights (the "Over-subscription Rights"). With the exercise of Over-subscription
Rights, each shareholder may purchase up to 2 1/4 shares of the Common Stock for
each share of Common Stock owned by such shareholder on the Rights Record Date.
In the event the number of Unsubscribed Shares is insufficient to meet the
exercise of all of the Over-subscription Rights, over-subscription shares will
be allocated on a pro-rata basis, based upon the ratio that the number of
Over-subscription shares requested by each over-subscribing shareholder on the
Rights Record Date bears to the total number requested by all over-subscribing
shareholders on such Rights Record Date. In order to preserve the Company's
outstanding net operating loss carryforwards, no shareholder may acquire 5% or
more of the outstanding shares of the Common Stock through its exercise of Over-
subscription Rights without the prior approval of the Board.
Payment of the full Basic Subscription Price for all Shares subscribed for
pursuant to the exercise of the Rights must accompany the properly completed and
duly executed Subscription Certificate, or in the alternative the form of
guaranteed delivery, payable in United States currency by personal check,
cashier's check, bank draft or money order drawn on a bank located in the United
States, payable to "American Stock Transfer & Trust Company, as Escrow Agent for
Maxicare Health Plans, Inc." PLEASE WRITE YOUR RIGHTS CERTIFICATE NUMBER, SET
FORTH ABOVE, ON YOUR CHECK, BANK DRAFT OR MONEY ORDER.
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Payment of the subscription price for shares subscribed for pursuant to the
exercise of Over-subscription Rights need not be remitted with the Subscription
Certificate. Should you choose to exercise your Over-subscription Rights, if
any, such exercise is irrevocable. However, your payment for such exercised
Over-subscription Rights may be remitted either (i) concurrently with your
payment owed under your Basic Subscription Rights or (ii) if you elect to defer
such payment, it must then be remitted to us within 10 days after our
transmittal to you of a letter of instructions you will receive if you choose to
defer your Over-subscription payment, which we will send to you as soon as
practicable after the expiration of the subscription period. This letter of
instructions shall set forth the necessary pro-ration, if any, to the number of
Over-subscription shares you will receive, calculated as described in the
Prospectus.
GENERAL INSTRUCTIONS: To exercise all or part of the Rights, including, if
applicable, all or part of the Over-subscription Rights, evidenced by the
Subscription Certificate, please complete Section 1. In order to have the
Subscription Agent deliver Shares issued upon the exercise of Rights to another
person or delivered to an address other than the one listed on the face of the
Subscription Certificate, please complete Section 2. The Subscription
Certificate must be delivered to American Stock Transfer & Trust Company, as
subscription agent, on or prior to 5:00 p.m., New York City time, on September
29, 2000, unless the subscription period is extended by the Company, in its sole
discretion, for up to an additional 30 days. YOU MAY DELIVER THE SUBSCRIPTION
CERTIFICATE AND PAYMENT BY HAND, U.S. MAIL OR OVERNIGHT COURIER TO AMERICAN
STOCK TRANSFER & TRUST COMPANY, 59 MAIDEN LANE, NEW YORK, NEW YORK 10007, ATTN:
REORGANIZATION DEPARTMENT.
If you wish to exercise all or part of your Rights, but you or your broker
do not have the time to deliver the Rights Certificate before the time your
Rights expire, you may exercise your Rights by delivering your payment in full
and completing the notice of guaranteed delivery.
YOUR EXERCISE OF BASIC OR USER-SUBSCRIPTION RIGHTS IS IRREVOCABLE ONCE YOU
HAVE SUBMITTED THE SUBSCRIPTION CERTIFICATE (OR YOUR RETAINED PHOTOCOPY THEREOF
WITH RESPECT TO OVER-SUBSCRIPTION RIGHTS, IF APPLICABLE) OR THE NOTICE OF
GUARANTEED DELIVERY TO AMERICAN STOCK TRANSFER & TRUST COMPANY AS SUBSCRIPTION
AGENT. HOWEVER, THE COMPANY RESERVES THE RIGHT TO POSTPONE, MODIFY OR CANCEL THE
RIGHTS OFFERING AT ANY TIME PRIOR TO THE EXPIRATION OF THE SUBSCRIPTION PERIOD
OF THE RIGHTS OFFERING IF IT DETERMINES THAT SUCH POSTPONEMENT, MODIFICATION OR
CANCELLATION IS IN THE BEST INTERESTS OF THE COMPANY.
INSTRUCTIONS FOR SECTION 1 ON THE BACK OF THE SUBSCRIPTION CERTIFICATE:
A. If you wish to exercise ALL of your Basic Subscription Rights, complete
Section 1(i)(a). The dollar figure you enter is your basic subscription
price, payment for which must be remitted concurrently with the Subscription
Certificate.
B. If you do NOT wish to exercise all of your Basic Subscription Rights,
complete Section 1(ii). The dollar figure you enter is your basic
subscription price, payment for which must be remitted concurrently with the
Subscription Certificate.
C. If and only if you chose to exercise ALL of your Basic Subscription Rights,
you are entitled to exercise Over-subscription Rights. If you fully exercised
ALL of your Basic Subscription Rights by completing Section 1(i)(a) and you
wish to exercise all or some portion of your Over-subscription Rights, please
complete Section 1(i)(b).
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If you would like to exercise ALL of your Over-subscription Rights, please
complete Section 1(i)(b)(A).
If you would like to exercise only a PORTION of your Over-subscription
Rights, please complete Section 1(i)(b)(B). The number of Over-subscription
shares you indicate may not be more than .75 times the number of Rights held by
you.
If you choose to exercise all or some of your Over-subscription Rights by
completing either Section 1(i)(b)(a) or Section 1(i)(b)(B), the dollar figure
you enter is your over-subscription price, payment for which need not be
remitted concurrently with the Subscription Certificate; however, your election
to exercise your Over-subscription Rights does commit you to remit your
Over-subscription payment either (i) concurrently with the Subscription
Certificate or (ii) if you elect to defer such payment, it must then be remitted
to us within 10 days after our transmittal to you of a letter of instructions
you will receive if you choose to defer your Over-subscription payment, which we
will send to you as soon as practicable after the expiration of the subscription
period, and which will set forth the necessary pro-rations, if any, to your
Over-subscription election. If you remit your Over-subscription payment prior to
the expiration of the subscription period, and a pro-ration is necessary, the
escrow agent will return to you any unutilized portion of your over-subscription
payment, without interest.
** PLEASE ALSO NOTE that in lieu of immediately electing to exercise all or some
portion of your Over-subscription Rights at the time you remit your
Subscription Certificate, you may instead make a photocopy of the
Subscription Certificate after you have completed it with respect to your
Basic Subscription Rights. Then, after having remitted the original
Subscription Certificate completed in full with respect to your Basic
Subscription Rights, you may at a later date complete your Over-subscription
request on the photocopy and submit it at such later date, but still on or
prior to 5:00 p.m., New York City time, September 29, 2000, or such later
date to which we may extend the subscription period, in our sole discretion.
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