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Prospectus Supplement No. 2 Registration No. 333-41753
to Prospectus dated February 11, 1998 Rule 424(b)(3)Prospectus
$150,000,000 5% CONVERTIBLE SUBORDINATED NOTES DUE 2002
AND
2,882,635 SHARES OF COMMON STOCK
CELLSTAR CORPORATION
This Prospectus Supplement supplements information contained in that
certain Prospectus of CellStar Corporation, a Delaware corporation (the
"Company"), dated February 11, 1998, as supplemented by that certain Prospectus
Supplement No. 1, dated Febraury 20, 1998 (as supplemented, the "Prospectus"),
relating to the offer and sale (the "Offering) by certain selling
securityholders (the "Selling Securityholders") of (i) up to $150,000,000
aggregate principal amount of 5% Convertible Subordinated Notes due 2002 (the
"Notes") of the Company, (ii) up to 2,710,761 shares (subject to adjustment) of
Common Stock, par value $0.01 per share (the "Common Stock"), of the Company
issuable upon conversion of the Notes and (iii) up to 171,874 shares of Common
Stock currently held by a Selling Securityholder. This Prospectus Supplement is
not complete without, and may not be delivered or utilized except in connection
with, the Prospectus, including any amendments or supplements thereto.
Capitalized terms used but not defined herein have the meanings assigned to such
terms in the Prospectus.
The following table amends and supplements the information set forth in the
Prospectus in the table under the caption "Selling Securityholders" with respect
to the named Selling Securityholders and (i) the amount of Notes owned by the
named Selling Securityholders (assuming no Notes have been sold since the date
on which such securityholders provided such information to the Company), (ii)
the maximum amount of Notes which may be offered for the account of such Selling
Securityholders under the Prospectus, as amended and supplemented, (iii) the
amount of Common Stock owned by such Selling Securityholders (assuming no shares
of Common Stock have been sold since the date on which such securityholders
provided such information to the Company) and (iv) the maximum amount of Common
Stock which may be offered for the account of such Selling Securityholders under
the Prospectus, as amended and supplemented.
<TABLE>
- ------------------ ----------------- ------------- ------------ --------------
Principal Principal Common
Amount of Amount of Stock Owned Common Stock
Name of Selling Notes Owned Notes Offered Prior to Offered Hereby
Securityholder (1) Prior to Offering Hereby Offering (2) (3)
<S> <C> <C> <C> <C>
Lazard Freres & Co. LLC $ 4,850,000 $ 4,850,000 87,647 87,647
Shepard Investments
International Ltd. (4) $27,950,000 $27,950,000 505,105 505,105
Stark International (5) $ 5,625,000 $ 5,625,000 101,653 101,653
</TABLE>
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(1) The information set forth herein is as of (i) March 11, 1998 for Lazard
Freres & Co. LLC and (ii) March 5, 1998 for each of Shepard Investments
International Ltd. and Stark International.
(2) Includes the shares of Common Stock into which the Notes held by such
Selling Securityholder are convertible at the initial conversion price.
The conversion price and the number of shares of Common Stock issuable upon
conversion of the Notes are subject to adjustment under certain
circumstances. See "Description of Notes -- Conversion of Notes."
Accordingly, the number of shares of Common Stock issuable upon conversion
of the Notes may increase or decrease from time to time.
(3) Assumes conversion into Common Stock of the full amount of Notes held by
the Selling Securityholder at the initial conversion price and the offering
of such shares by such Selling Securityholder pursuant to the Registration
Statement of which this Prospectus forms a part. The conversion price and
the number of shares of Common Stock issuable upon conversion of the Notes
are subject to adjustment under certain circumstances. See "Description of
Notes -- Conversion of Notes." Accordingly, the number of shares of Common
Stock issuable upon conversion of the Notes may increase or decrease from
time to time. Fractional shares will not be issued upon conversion of the
Notes; rather, cash will be paid in lieu of fractional shares, if any.
(4) Staro Asset Management, L.L.C. is the investment manager for Shepard
Investment International Ltd. and has the power to vote and dispose of such
securities.
(5) Staro Asset Management, L.L.C. is the general partner of Stark
International and has the power to vote and dispose of such securities.
The date of this Prospectus Supplement is March 18, 1998
