<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 Section 240.14a-11(c) or Section 240.14a-12
Cellstar Corporation
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[CELLSTAR LOGO APPEARS HERE]
March 31, 1999
To CellStar Corporation Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Meeting") of CellStar Corporation (the "Company") to be held at the Omni
Dallas Hotel Park West, 1590 LBJ Freeway, Dallas, Texas, on Wednesday, May 5,
1999, at 10:00 a.m., Dallas time.
The attached Notice of Annual Meeting and Proxy Statement fully describe the
formal business to be transacted at the Meeting, which includes the election of
three Class I directors of the Company and a review of the affairs and progress
of the Company during the past fiscal year.
Directors and officers of the Company will be present to help host the
Meeting and to respond to any questions that our stockholders may have. I hope
you will be able to attend.
The Company's Board of Directors believes that a favorable vote on the matter
to be considered at the Meeting is in the best interests of the Company and its
stockholders and unanimously recommends a vote "FOR" such matter. Accordingly,
we urge you to review the accompanying material carefully and to return the
enclosed Proxy promptly.
Please sign, date and return the enclosed Proxy without delay. If you attend
the Meeting, you may vote in person even if you have previously mailed a Proxy.
I look forward to seeing you at the Meeting.
Sincerely,
/S/ ALAN H. GOLFFIELD
Alan H. Goldfield
Chairman of the Board and
Chief Executive Officer
WORLD HEADQUARTERS
1730 Briercroft Ct. . Carrollton, TX 75006 . 972.466.5000 . 800.723.9070
<PAGE>
CELLSTAR CORPORATION
1730 Briercroft Court
Carrollton, Texas 75006
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 5, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Meeting") of CellStar Corporation, a Delaware corporation (the "Company"),
will be held at the Omni Dallas Hotel Park West, Dallas, Texas, on Wednesday,
May 5, 1999, at 10:00 a.m., Dallas time, for the following purposes:
(1)To elect three Class I directors for terms expiring in 2002; and
(2) To transact such other business as may properly come before the Meeting
or any adjournment or adjournments thereof.
The close of business on March 16, 1999, has been fixed as the record date
for determining stockholders entitled to notice of and to vote at the Meeting
or any adjournment or adjournments thereof. For a period of at least ten days
prior to the Meeting, a complete list of stockholders entitled to vote at the
Meeting will be open to the examination by any stockholder during ordinary
business hours at the Company's offices located at 1870 Crown Drive, Suite
1510, Farmers Branch, Texas 75234.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
PROXIES FORWARDED BY OR FOR BROKERS OR FIDUCIARIES SHOULD BE RETURNED AS
REQUESTED BY THEM.
By Order of the Board of Directors,
/s/ Elaine Flud Rodriguez
Elaine Flud Rodriguez
Vice President, Secretary
and General Counsel
Carrollton, Texas
March 31, 1999
<PAGE>
CELLSTAR CORPORATION
1730 Briercroft Court
Carrollton, Texas 75006
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 5, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies ("Proxies") by the Board of Directors of CellStar Corporation, a
Delaware corporation (the "Company" or "CellStar"), for use at the Annual
Meeting of Stockholders (the "Meeting") of the Company to be held at the Omni
Dallas Hotel Park West, 1590 LBJ Freeway, Dallas, Texas, on Wednesday, May 5,
1999, at 10:00 a.m., Dallas time, or at such other time and place to which the
Meeting may be adjourned. The approximate date on which this Proxy Statement
and accompanying Proxy are first being sent or given to stockholders is March
31, 1999.
All shares represented by valid Proxies, unless the stockholder specifies
otherwise, will be voted FOR the election of the three persons named under
"Proposal I--Election of Directors" as nominees for election as Class I
directors. The Board of Directors knows of no other business to be presented
at the Meeting. If any other business is properly presented, the persons named
in the enclosed Proxy have authority to vote on such matters in accordance
with such persons' discretion. Where a stockholder has appropriately specified
how a Proxy is to be voted, it will be voted accordingly.
A stockholder executing a Proxy retains the right to revoke it at any time
prior to exercise at the Meeting. A Proxy may be revoked by delivery of
written notice of revocation to the Secretary of the Company, by execution and
delivery of a later Proxy, or by voting the shares in person at the Meeting.
RECORD DATE AND VOTING SECURITIES
The record date for determining the stockholders entitled to notice of and
to vote at the Meeting and any adjournments thereof is the close of business
on March 16, 1999 (the "Record Date"), at which time the Company had issued
and outstanding 59,612,346 shares of its common stock, par value $.01 (the
"Common Stock"). Common Stock is the only class of outstanding voting
securities of the Company.
QUORUM AND VOTING
The presence at the Meeting, in person or by proxy, of the holders of at
least a majority of the outstanding shares of Common Stock as of the Record
Date is necessary to constitute a quorum. Each share of Common Stock
represented at the Meeting in person or by Proxy will be counted toward a
quorum. If a quorum should not be present, the Meeting may be adjourned from
time to time until a quorum is obtained. Each share of Common Stock is
entitled to one vote with respect to any matter (including election of
directors) to be voted at the Meeting.
To be elected, each nominee for election as a Class I Director must receive
the affirmative vote of the holders of a plurality of the shares of Common
Stock present or represented at the Meeting and entitled to vote on such
proposal. Votes may be cast in favor or withheld with respect to each nominee.
Votes that are withheld will be counted toward a quorum, but will be excluded
entirely from the tabulation of votes for such proposal and, therefore, will
not affect the outcome of the vote on such proposal.
<PAGE>
"Broker non-votes" (i.e., shares held by brokers or nominees as to which the
brokers have no discretionary power to vote on a particular matter and have
received no instructions from the persons entitled to vote such shares), if
any, will be counted as present for purposes of determining the presence of a
quorum. However, for purposes of determining the outcome of any matter as to
which the broker has physically indicated on the Proxy that it does not have
discretionary authority to vote, those shares will be treated as not entitled
to vote with respect to that matter (even though those shares may be entitled
to vote on other matters). Broker non-votes will have no effect on Proposal I.
PROPOSAL I
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides for a Board of Directors
divided into three classes, as nearly equal in number as possible, with the
term of office of one class expiring each year at the Company's Annual Meeting
of Stockholders. Each class of directors is elected for a term of three years,
except in the case of elections to fill vacancies or newly created
directorships.
There are three Class I directors to be elected for terms expiring at the
Company's Annual Meeting of Stockholders in 2002 or until their successors
have been elected and qualified. It is intended that the names of the nominees
indicated below will be placed in nomination and that the persons named in the
Proxy will vote for their election. Each of the nominees has indicated his
willingness to serve as a member of the Board of Directors if elected;
however, in case any nominee shall become unavailable for election to the
Board of Directors for any reason not presently known or contemplated, the
persons named in the Proxy will have discretionary authority in that instance
to vote the Proxy for a substitute. Proxies cannot be voted for more than
three nominees.
Information concerning the three nominees proposed by the Board of Directors
for election as Class I directors, along with information concerning the
present Class II and Class III directors, whose terms of office will continue
after the Meeting, is set forth below.
The nominees for election as Class I directors are as follows:
Class I Nominees--Terms Expiring in 2002
<TABLE>
<CAPTION>
Name Age Current Position
---- --- ----------------
<S> <C> <C>
Richard M. Gozia...... 54 President, Chief Operating Officer and Director
Sheldon I. Stein...... 45 Director
Dale V. Kesler........ 60 Director
The present directors whose terms will expire after 1999 are as follows:
Class II Directors--Terms Expiring in 2000
<CAPTION>
Name Age Current Position
---- --- ----------------
<S> <C> <C>
James L. Johnson...... 72 Director
John T. Stupka........ 49 Director
J.L. Jackson.......... 67 Director
Class III Directors--Terms Expiring in 2001
<CAPTION>
Name Age Current Position
---- --- ----------------
<S> <C> <C>
Alan H. Goldfield..... 55 Chairman of the Board and Chief Executive Officer
Terry S. Parker....... 54 Director
</TABLE>
2
<PAGE>
Set forth below is a description of the backgrounds of each of the directors
of the Company.
Alan H. Goldfield is a founder of the Company and has been the Chairman of
the Board and Chief Executive Officer of the Company since its formation. Mr.
Goldfield served as President of the Company from its formation until March
1995, when Terry S. Parker was appointed President, and from August 1996 until
December 1996, when Richard M. Gozia was appointed President. Mr. Goldfield
serves as an officer and director of the Company pursuant to his employment
agreement. See "Executive Compensation--Employment Contracts and Termination
of Employment and Change in Control Arrangements." Mr. Goldfield presently
serves on the Employee Stock Option Committee of CellStar's Board of
Directors.
Richard M. Gozia has been the President and Chief Operating Officer of the
Company since December 1996. Mr. Gozia joined CellStar as Executive Vice
President--Administration and Chief Financial Officer in June 1996. He has
been a member of the Board of Directors since June 1996. Mr. Gozia serves as
an officer and director of the Company pursuant to his employment agreement.
See "Executive Compensation--Employment Contracts and Termination of
Employment and Change in Control Arrangements." From 1994 to 1996, Mr. Gozia
served as Executive Vice President of SpectraVision, Inc. ("SpectraVision"), a
provider of in-room hotel movies. In June 1995, SpectraVision filed for
protection under the federal bankruptcy laws. From 1991 to 1994, Mr. Gozia was
Chairman and Chief Executive Officer of Wyatt Cafeterias, Inc. In June 1995,
Triangle Food Service Corporation, formerly Wyatt Cafeterias, Inc., filed for
protection under the federal bankruptcy laws. Mr. Gozia presently serves on
the Employee Stock Option Committee of CellStar's Board of Directors.
J.L. Jackson has served as a Director of the Company since March 1999. Mr.
Jackson is the former Chairman and Chief Executive Officer of GLOBAL
INDUSTRIAL TECHNOLOGIES, INC. (formerly, INDRESCO), where he served in that
capacity from 1993 to 1998. Prior to joining GLOBAL INDUSTRIAL TECHNOLOGIES,
Mr. Jackson was engaged in private executive business consulting from 1987 to
1993. From 1983 to 1987, Mr. Jackson served as President and Chief Operating
Officer of Diamond Shamrock Corporation and was a director and Executive Vice
President of Diamond Shamrock and President of its newly formed coal unit from
1979 to 1983. Mr. Jackson presently serves on the Audit and Compensation
Committees of CellStar's Board of Directors.
James L. Johnson has served as a director of the Company since March 1994.
Mr. Johnson has been Chairman Emeritus of GTE Corporation since May 1992 and
served as GTE's Chairman and Chief Executive Officer from April 1988 to April
1992. Mr. Johnson began his career with Southwestern Associated Telephone
Company (the predecessor company of GTE Central) in 1949. He has been a member
of GTE's Board of Directors since 1985 and is currently a director of Harte
Hanks Communications, Inc., M.O.N.Y. (Mutual of New York, Inc.), Valero Energy
Corp., Walter Industries Incorporated and Finova Group Incorporated (formerly
GFC Financial). Mr. Johnson is also past Chairman of the United States
Telephone Association. Mr. Johnson presently serves as the Chairman of the
Audit Committee and also serves on the Compensation Committee of CellStar's
Board of Directors.
Dale V. Kesler has served as a Director of the Company since March 1999. Mr.
Kesler retired as an active partner with the accounting firm of Arthur
Andersen LLP in 1996 and served as the Managing Partner of Arthur Andersen's
Dallas/Fort Worth office from 1983 to 1994. Mr. Kesler was responsible for
strategic planning on a world wide basis for Arthur Andersen in 1982 and 1983
and served as head of the Audit Practice in the firm's Dallas office from 1973
to 1982. Mr. Kesler also serves on the Boards of Elcor Corporation, American
Homestar Corporation, New Millennium Homes, Resource Services, Inc., Methodist
Hospitals of Dallas and Compass Bank--Dallas. Mr. Kesler presently serves on
the Audit and Compensation Committees of CellStar's Board of Directors.
Terry S. Parker has served as a director of the Company since March 1995 and
served as President and Chief Operating Officer of the Company from March 1995
through July 1996. Mr. Parker served as Senior Vice President of GTE
Corporation and President of GTE's Personal Communications Services, GTE's
wireless division, from October 1993 until he joined the Company. From 1991 to
1993, Mr. Parker served as President of
3
<PAGE>
GTE Telecommunications Products and Services. Prior to 1991, Mr. Parker served
as President of GTE Mobile Communications. Mr. Parker serves on the Boards of
Directors for HighwayMaster Communications, Inc., Heartland Wireless
Corporation and Illinois Superconductor Corporation. Mr. Parker presently
serves on the Audit Committee of CellStar's Board of Directors.
Sheldon I. Stein has served as a director of the Company since August 1996.
Mr. Stein is a Senior Managing Director of and oversees United States regional
investment banking for Bear, Stearns & Co. Inc. Mr. Stein also serves on the
Boards of Directors of Fresh America Corp., The Men's Wearhouse, Inc., Home
Interiors and Gifts, Inc., Tandycrafts, Inc. and Precept Business Services,
Inc. Mr. Stein also serves as a trustee of Brandeis University. Mr. Stein
presently serves on the Audit Committee of CellStar's Board of Directors.
John T. Stupka has served as a director of the Company since January 1997.
Mr. Stupka has served as President, Chief Executive Officer and director of
Skytel Communications, Inc. since August 1996. From July 1995 to August 1996,
Mr. Stupka was Senior Vice President--Strategic Planning for SBC
Communications (formerly Southwestern Bell Telephone Company). From November
1985 to August 1995, Mr. Stupka was President and Chief Executive Officer of
Southwestern Bell Mobile Systems. Mr. Stupka also serves on the Boards of
Skytel and HighwayMaster Communications, Inc. Mr. Stupka presently serves as
Chairman of the Compensation Committee and also serves on the Audit Committee
of CellStar's Board of Directors.
The Board of Directors recommends a vote FOR the election of the nominees
for Class I Directors named above.
MEETINGS OF DIRECTORS AND COMMITTEES
The business of the Company is managed under the direction of the Board of
Directors. The Board meets on a regularly scheduled basis during its fiscal
year to review significant developments affecting the Company and to act on
matters requiring Board approval. It also holds special meetings when an
important matter requires Board action between scheduled meetings. The Board
of Directors met eight times and acted by unanimous written consent seven
times during the 1998 fiscal year. During the 1998 fiscal year, each member of
the Board participated in at least 75% of all Board and applicable committee
meetings held during the period for which he was a director.
The Board of Directors has established audit, compensation and employee
stock option committees to devote attention to specific subjects and to assist
it in the discharge of its responsibilities. The functions of those
committees, their current members and the number of meetings held during the
1998 fiscal year are described below.
Audit Committee. The Board of Directors has a standing Audit Committee,
which committee has the power to (i) recommend to the Board the appointment of
the firm selected to be independent certified public accountants for the
Company and monitor the performance of such firm; (ii) review and approve the
scope of the annual audit and evaluate with the independent certified public
accountants the Company's annual audit and annual consolidated financial
statements; (iii) review with management the status of internal accounting
controls; (iv) evaluate problem areas having a potential financial impact on
the Company that may be brought to its attention by management, the
independent certified public accountants or the Board; and (v) evaluate the
public financial reporting documents of the Company. Messrs. Johnson
(Chairman), Stein, Stupka, Parker, Kesler and Jackson are the current members
of the Audit Committee. The Audit Committee met five times during the 1998
fiscal year.
Compensation Committee. The Board of Directors has a standing Compensation
Committee, which committee has the power to establish the compensation
policies of the Company and the specific compensation of the executives of the
Company. The Compensation Committee also has the power to administer the 1993
Amended and Restated Long-Term Incentive Plan (the "1993 Incentive Plan"), the
Amended and Restated
4
<PAGE>
Annual Incentive Compensation Plan (the "Annual Incentive Plan") and the 1994
Amended and Restated Director Nonqualified Stock Option Plan (the "Directors'
Plan"). Messrs. Stupka (Chairman), Johnson, Kesler and Jackson are the current
members of the Compensation Committee. The Compensation Committee met two
times and acted by unanimous written consent four times during the 1998 fiscal
year.
Employee Stock Option Committee. The Board of Directors has a standing
Employee Stock Option Committee, which committee has authority under the 1993
Incentive Plan with respect to decisions regarding stock option awards of
10,000 shares or less to employees who are not executive officers. Messrs.
Goldfield and Gozia are the current members of the Employee Stock Option
Committee. The Employee Stock Option Committee acted by unanimous written
consent 23 times during the 1998 fiscal year.
The Board of Directors does not currently have a nominating committee
because the Board as a whole has functioned in this capacity in the past;
however, the Board intends to create such a committee at the appropriate time
in the future. The Certificate of Incorporation provides that a stockholder
may nominate a person for election to the Board of Directors at a meeting of
the Company's stockholders only if written notice of such nomination(s) (a
"Stockholder's Notice") is received by the Secretary of the Company no less
than 60 days prior to the meeting; provided, however, that, in the event that
less than 70 days notice or prior public disclosure of the date of the meeting
is given or made to stockholders, the Stockholder's Notice must be received by
the Company no later than the close of business on the tenth day following the
first to occur of the date on which such notice was mailed or the date that
public disclosure of the date of the meeting was made. In accordance with the
requirements of the Certificate of Incorporation, the Stockholder's Notice
must include certain specified information, including, for example, (i) the
name and address of the nominating stockholder, (ii) the name, address and
principal occupation of the nominee and (iii) any other information relating
to such nominee that is required to be disclosed in a proxy statement or
Schedule 13D filing.
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to the number of
shares of Common Stock beneficially owned as of March 16, 1999, by (i) each
person known by the Company to beneficially own more than five percent (5%) of
the outstanding shares of Common Stock; (ii) the Company's Chief Executive
Officer and each of the Company's four other most highly compensated executive
officers who were serving as such on November 30, 1998 (based on salary and
bonus earned during fiscal 1998) (collectively, the "Named Executive
Officers"); (iii) each director and nominee for director of the Company; and
(iv) all directors and executive officers of the Company as a group. Unless
otherwise noted, the persons named in the table have sole voting and
investment power with respect to all shares of Common Stock beneficially owned
by them.
<TABLE>
<CAPTION>
Amount and Nature
Name of Beneficial Owner or Group of Beneficial Ownership(1) Percent of Class
--------------------------------- -------------------------- ----------------
<S> <C> <C>
George D. Bjurman & Associates(2). 2,964,960(3) 5.0%
George Andrew Bjurman(2)
Owen Thomas Barry III(2)
Alan H. Goldfield(4).............. 20,676,110(5) 34.7%
A.S. Horng........................ 2,711,250(6) 4.5%
Richard M. Gozia.................. 401,500(7) *
Gilbert Lee....................... 50,000(8) *
Simon J.G. Roper.................. 50,000(8) *
James L. Johnson.................. 21,250(9) *
Terry S. Parker................... 10,000(9) *
John T. Stupka.................... 10,000(9) *
Sheldon I. Stein.................. 50,300(9)(10) *
Dale V. Kesler.................... -- *
J.L. Jackson...................... -- *
Current Directors and Executive
Officers as a Group.............. 21,859,912(11) 36.7%
</TABLE>
- --------
* Less than 1%.
(1) Share information has been adjusted to reflect the Company's two-for-one
Common Stock split that was effected in the form of a stock dividend in
June 1998.
(2) The address for George D. Bjurman & Associates ("Bjurman & Associates"),
George Andrew Bjurman and Owen Thomas Barry III is 10100 Santa Monica
Boulevard, Suite 1200, Los Angeles, California 90067.
(3) Based on a Schedule 13G, dated February 13, 1995, which was jointly filed
with the Securities and Exchange Commission by Bjurman & Associates,
George Andrew Bjurman and Owen Thomas Barry III (collectively, the
"Bjurman Reporting Persons"). According to such Schedule 13G, Messrs.
Bjurman and Barry may, as a result of their ownership in and positions
with Bjurman & Associates, be deemed to be indirect beneficial owners of
the securities held by Bjurman & Associates. The Bjurman Reporting
Persons reported shared voting and dispositive power with respect to all
2,964,960 shares.
(4) The address for Mr. Goldfield is 1730 Briercroft Court, Carrollton, Texas
75006.
(5) Includes 17,506,110 held jointly with Mr. Goldfield's wife. Also includes
2,370,000 shares that are subject to a revocable (upon 90 days written
notice) proxy granted to Mr. Goldfield by Mr. A.S. Horng, which proxy
gives Mr. Goldfield the right to vote such shares, and 800,000 shares
subject to options granted under the 1993 Incentive Plan, which options
are exercisable within 60 days.
(6) Includes 2,370,000 shares that are subject to a revocable (upon 90 days
written notice) proxy to vote such shares held by Alan H. Goldfield. Also
includes 341,250 shares subject to options granted under the 1993
Incentive Plan, which options are exercisable within 60 days.
6
<PAGE>
(7) Includes 14,000 shares held jointly with Mr. Gozia's wife. Also includes
387,500 shares subject to options granted under the 1993 Incentive Plan,
which options are exercisable within 60 days.
(8) Represents 50,000 shares subject to options granted under the 1993
Incentive Plan, which options are exercisable within 60 days.
(9) Includes 7,500 shares subject to options granted under the Directors'
Plan and 2,500 shares subject to options granted under the 1993 Incentive
Plan, all of which options are exercisable within 60 days.
(10) Includes an aggregate of 6,300 shares held in three separate trusts for
the benefit of Mr. Stein's three children. Mr. Stein has no voting or
dispositive power with respect to the shares held in trust for his
children and, therefore, disclaims beneficial ownership of such shares.
(11) In addition to the ownership of the directors and executive officers
listed in the table and more fully described in footnotes 5 through 10
above, includes 249,502 shares subject to options granted under the 1993
Incentive Plan, which options are exercisable within 60 days.
7
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation
paid to the Named Executive Officers for each of the Company's last three
fiscal years.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
----------------------- ---------------------------
Other Securities All
Annual Restricted Underlying Other
Compen- Stock Options/ Compen-
Name and Principal Salary Bonus sation Award(s) SARs sation
Position Year ($) ($) ($) ($) (#)(1)(2) ($)
- ----------------------- ---- ------- ------- ------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Alan H. Goldfield 1998 850,000 -- -- -- 200,000 26,434(3)
Chairman of the Board 1997 850,000 850,000 -- -- -- 22,284(3)
and Chief Executive 1996 850,000 -- -- -- -- 22,484(3)
Officer
A.S. Horng 1998 800,000 -- 34,607(4) -- 200,000 --
Chairman and Chief 1997 666,662 800,000 -- -- 45,000 --
Executive Officer of 1996(5) -- -- -- -- -- --
CellStar (Asia)
Corporation Limited
Richard M. Gozia 1998 400,000 -- -- -- 200,000 7,683(6)
President, Chief 1997 392,115 397,655 -- -- 225,000 8,021(7)
Operating Officer and 1996(8) 125,000 -- -- -- 75,000 --
Director
Gilbert Lee 1998 300,000 48,642 108,000(4) -- 200,000 --
President of CellStar 1997(5) -- -- -- -- -- --
(Asia) Corporation Ltd 1996(5) -- -- -- -- -- --
Simon J.G. Roper 1998 300,000 15,385 180,000(4) -- 200,000 36,803(9)
President of CellStar 1997(5) -- -- -- -- -- --
Pacific PTE LTD 1996(5) -- -- -- -- -- --
</TABLE>
- -------
(1) Reflects options to acquire shares of Common Stock. The Company has not
granted stock appreciation rights.
(2) All figures in this column reflect an adjustment for the Company's two-
for-one Common Stock split that was effected in the form of a stock
dividend in June 1998.
(3) Consists of life insurance premiums paid by the Company.
(4) Represents $34,607, $108,000 and $180,000 paid or reimbursed by the
Company to Messrs. Horng, Lee and Roper, respectively, as an annual
housing allowance. See "--Employment Contracts and Termination of
Employment and Change in Control Arrangements."
(5) In accordance with Item 402 of Regulation S-K promulgated under the
Securities Exchange Act of 1934, as amended, no information is included
for fiscal years during which the Named Executive Officer did not serve
as an executive officer of the Company.
(6) Consists of $3,522 in life insurance premiums paid by the Company and
$4,161 of Company contributions to the Company's 401(k) plan.
(7) Consists of $3,271 in life insurance premiums paid by the Company and
$4,750 of Company contributions to the Company's 401(k) plan.
(8) Mr. Gozia first became an executive officer of the Company in June 1996.
(9) Consists of $27,835 as an automobile allowance and $8,968 in life
insurance premiums paid by the Company.
8
<PAGE>
Option Grants During 1998 Fiscal Year
The following table provides information related to options granted to the
Named Executive Officers during fiscal 1998.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates
of Stock Price
Appreciation for
Individual Grants Option Term(1)
- --------------------------------------------------------------------------------- ----------------------
Number of
Securities % of Total
Underlying Options/SARs
Options/SARs Granted to Exercise or
Granted Employees in Base Price
Name (#)(2) Fiscal Year ($/Sh)(3) Expiration Date 5% ($) 10% ($)
---- ------------ ------------ ----------- ----------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Alan H. Goldfield....... 200,000(4) 9.4 12.03 January 12, 2008 1,512,597 3,832,915
Richard M. Gozia........ 200,000(4) 9.4 12.03 January 12, 2008 1,512,597 3,832,915
A.S. Horng.............. 200,000(5) 9.4 10.48 January 21, 2008 1,317,707 3,339,064
Gilbert Lee............. 200,000(4) 9.4 10.38 January 20, 2008 1,304,530 3,305,674
Simon J.G. Roper........ 200,000(4) 9.4 10.38 January 20, 2008 1,304,530 3,305,674
</TABLE>
- --------
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options immediately
prior to the expiration of their term, assuming the specified compounded
rates of appreciation on the Company's Common Stock over the term of the
options. These numbers do not take into account provisions providing for
termination of certain options following termination of the recipient's
employment, nontransferability or vesting over periods of up to ten years.
(2) Reflects options to acquire shares of Common Stock. The Company has not
granted stock appreciation rights. All share numbers have been adjusted to
reflect the Company's two-for-one Common Stock split that was effected in
the form of a stock dividend in June 1998.
(3) Exercise prices have been adjusted to reflect the Company's two-for-one
Common Stock split that was effected in the form of a stock dividend in
June 1998. The option exercise price may be paid as follows: (a) in cash
or by certified check, bank draft or money order payable to the order of
the Company; (b) with Common Stock (including restricted stock), valued at
its fair market value on the date of exercise; (c) by delivery to the
Company or its designated agent of an executed irrevocable option exercise
form together with irrevocable instructions from the optionee to a broker
or dealer, reasonably acceptable to the Company, to sell certain of the
shares of Common Stock purchased upon exercise of the stock option or to
pledge such shares as collateral for a loan and promptly deliver to the
Company the amount of sale or loan proceeds necessary to pay such purchase
price; and/or (d) in any other form of valid consideration that is
acceptable to the Compensation Committee in its sole discretion.
(4) The options become exercisable with respect to 25% of the shares covered
thereby on each of the first four anniversaries of the date of grant. In
the event of a "change of control" (as defined in the 1993 Incentive Plan)
of the Company, any unexercisable portion of the options will become
immediately exercisable. The exercise price is equal to at least the fair
market value of the Common Stock on the date of grant.
(5) The options became exercisable with respect to 100% of the shares covered
thereby on January 21, 1999, the first anniversary of the date of grant.
9
<PAGE>
Option Exercises During 1998 Fiscal Year and Fiscal Year End Option Values
The following table provides information related to options exercised by the
Named Executive Officers during the 1998 fiscal year and the number and value
of options held at fiscal year end. The Company does not have any outstanding
stock appreciation rights.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
Shares Value at FY-End(#)(1) at FY-End ($)(2)
Acquired on Realized ------------------------- -------------------------
Name Exercise(#)(1) ($)(3) Exercisable Unexercisable Exercisable Unexercisable
---- -------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alan H. Goldfield....... 188,610 937,392 750,000 200,000 201,000 --
A. S. Horng............. 126,568 766,441 -- 305,000 -- --
Richard M. Gozia........ -- -- 187,500 612,500 306,750 479,550
Gilbert Lee............. -- -- -- 200,000 -- --
Simon J.G. Roper........ -- -- -- 200,000 -- --
</TABLE>
- --------
(1) Figures in this column reflect an adjustment for the Company's two-for-one
Common Stock split that was effected in the form of a stock dividend in
June 1998.
(2) The closing price for the Company's Common Stock as reported by the NASDAQ
National Market System on November 30, 1998 (the last trading day of
fiscal 1998) was $6.438. Value is calculated on the basis of the
difference between the option exercise price and $6.438 multiplied by the
number of shares of Common Stock underlying the option.
(3) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock on the date of
exercise multiplied by the number of shares to which the exercise related.
Compensation of Directors
During fiscal 1998, each director of the Company who was not an officer or
other employee of the Company (an "Independent Director") received an annual
retainer fee of $25,000, plus $1,500 for each meeting of the Board or
committee of the Board that he attended in person, but received only $750 for
each telephonic Board or committee meeting attended. In addition, to the
extent that any committee meeting was held on the same day as a full Board
meeting or another committee meeting, only one $1,500 or $750 fee (as
applicable) was paid.
Pursuant to the Directors' Plan, each Independent Director automatically
receives an option (the "Initial Option") to purchase 7,500 shares of Common
Stock upon becoming a director of the Company, which option becomes
exercisable with respect to 100% of the shares covered thereby six months
after the date of grant. In addition to the Initial Option, each Independent
Director will receive an annual grant pursuant to the Company's 1993 Incentive
Plan of an option (the "Annual Option") to purchase 5,000 shares of Common
Stock, which option will be automatically granted on the date of the first
full Board meeting following the end of each fiscal year. The Annual Option
for fiscal 1998 was adjusted to reflect the Company's two-for-one Common Stock
split that was effected in the form of a stock dividend in June 1998. The
Annual Option will vest with respect to 25% of the shares covered thereby on
the first four anniversaries of the date of grant and will expire on the tenth
anniversary of the date of grant. The exercise price of all options granted to
Independent Directors must be equal to the fair market value of the Company's
Common Stock on the date of grant.
Directors who are also employees of the Company receive no additional
compensation for serving as directors. All directors of the Company are
entitled to reimbursement of their reasonable out-of-pocket expenses in
connection with their travel to, and attendance at, meetings of the Board of
Directors or committees thereof.
Employment Contracts and Termination of Employment and Change in Control
Arrangements
The Company has entered into employment agreements (collectively, the
"Employment Agreements" or individually, an "Employment Agreement") with
Messrs. Goldfield, Gozia, Horng, Lee and Roper (collectively, the "Executives"
and individually, an "Executive"), effective December 1, 1994, May 24, 1996,
January 22, 1998, October 13, 1997 and October 13, 1997, respectively. The
Employment Agreements of Messrs. Goldfield
10
<PAGE>
and Horng provide for annual base salaries of $850,000 and $800,000,
respectively, subject to increase by the Compensation Committee of the Board
of Directors. Mr. Gozia's Employment Agreement originally provided for an
annual base salary of $250,000, which salary was increased to $400,000 by the
Compensation Committee upon Mr. Gozia's promotion to President and Chief
Operating Officer in December 1996. The Employment Agreements of Messrs. Lee
and Roper provide for annual base salaries of $300,000 each, subject to
increase by the Compensation Committee. Each Employment Agreement provides
that the Executive is eligible to receive an annual bonus upon the achievement
of certain performance targets set by the Compensation Committee.
The Company is obligated under the Employment Agreements to provide to
Messrs. Goldfield, Gozia, Horng, Lee and Roper (i) life insurance policies
with face amounts of $5,000,000, $1,250,000, $4,000,000, $1,500,000 and
$1,500,000, respectively, and (ii) disability insurance policies with annual
disability benefits of $300,000, $200,000, $640,000, $240,000 and $240,000,
respectively, until attainment of age 65. In addition, the Company is
obligated to pay or reimburse each Executive for all medical and dental
expenses incurred by him or his spouse or dependents. The Company has in place
insurance to cover a portion of such expenses.
Mr. Goldfield's Employment Agreement expires on the fifth anniversary of the
date on which the Board of Directors notifies Mr. Goldfield that it has
determined to fix the expiration date of the Employment Agreement. The
Employment Agreements of Messrs. Gozia, Horng, Lee and Roper each have a five-
year term. All of the Employment Agreements are subject to earlier termination
as follows: (i) by the Company (a) due to the disability of the Executive, (b)
for "cause" or (c) without "cause"; or (ii) by the Executive (a) upon a
material breach by the Company of its obligations under the Employment
Agreement ("Company Breach"), (b) within twelve months of a "change in
control" or (c) without "good reason" (i.e., for any reason other than Company
Breach). If Mr. Goldfield terminates his employment due to Company Breach or
if he is terminated by the Company without "cause," he will be entitled to
receive his accrued but unpaid base salary and annual incentive payments
through the date of termination plus five times the sum of (a) his base salary
plus (b) the average of his annual incentive payments for the preceding two
years. If either Mr. Gozia or Mr. Horng terminates his employment due to
Company Breach or if either of them is terminated by the Company without
"cause," he will be entitled to receive his accrued but unpaid base salary and
annual incentive payments through the date of termination plus an amount equal
to the product of (i) the sum of (a) his base salary plus (b) the average of
his annual incentive payments for the preceding two years (one year for Mr.
Horng), and multiplied by (ii) the quotient of (x) the number of days
remaining in the term of his Employment Agreement, divided by (y) 365. If
either Mr. Lee or Roper terminates his employment due to Company Breach or if
either of them is terminated by the Company without "cause," he will be
entitled to receive his accrued but unpaid base salary and annual incentive
payments through the date of termination plus an amount equal to the product
of (i) the sum of (a) his base salary plus (b) the average of his annual
incentive payments for the preceding two years, multiplied by the quotient of
(x) by the lesser of (1) 730 or (2) the number of days remaining in the term
of his Employment Agreement, divided by (y) 365. In the event of termination
of employment after a "change in control," each of the Executives will be
entitled to receive an amount equal to $100 less than three times his
"annualized includable compensation," which is the maximum payment permitted
by the Internal Revenue Code that does not constitute an "excess parachute
payment."
Under the Employment Agreements, a termination will be deemed to be "without
cause" if it is for any reason other than due to the disability of the
Executive or for "cause." A termination will generally be considered to be for
"cause" if it is due to the Executive's (i) willful gross misconduct, (ii)
conviction of a felony or (iii) material breach of his Employment Agreement.
In addition, the Employment Agreements of Messrs. Gozia, Horng, Lee and Roper
provide that a termination will also be deemed to be for "cause" if it is due
to his gross incompetence or failure to follow the directions of the Board of
Directors. For purposes of the Employment Agreements, a "change in control"
will be deemed to occur upon the occurrence of any of the following: (1) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the
Company's Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger; (2) any sale, lease, exchange or other transfer
(in one
11
<PAGE>
transaction or a series of related transactions) of all or substantially all
of the assets of the Company; (3) any approval by the stockholders of the
Company of any plan or proposal for the liquidation or dissolution of the
Company; (4) the cessation of control (by virtue of their not constituting a
majority of directors) of the Company's Board of Directors by the Continuing
Directors (as defined in the Employment Agreements); (5) the acquisition of
beneficial ownership of 15% of the voting power of the Company's outstanding
voting securities by any person or group who beneficially owned less than 10%
of such voting power on the date of the Employment Agreement or the
acquisition of beneficial ownership of an additional 5% of the voting power of
the Company's outstanding voting securities by any person or group who
beneficially owned at least 10% of such voting power on the date of the
Employment Agreement, in each case subject to certain exceptions; or (6)
subject to applicable law, in a Chapter 11 bankruptcy proceeding, the
appointment of a trustee or the conversion of a case involving the Company to
a case under Chapter 7. In addition, the Employment Agreements of Messrs.
Gozia, Horng, Lee and Roper each provide that a "change in control" will be
deemed to occur (subject to certain exceptions) upon the execution by the
Company and a stockholder of a contract that by its terms grants such
stockholder (in its, his or her capacity as a stockholder) or such
stockholder's affiliate, including, without limitation, such stockholder's
nominee to the Board of Directors (in its, his or her capacity as an affiliate
of such stockholder), the right to veto or block decisions or actions of the
Board of Directors.
The Employment Agreements also provide that the Executives will be
indemnified by the Company to the fullest extent permitted by law. The right
of Mr. Goldfield and Mr. Gozia to indemnification is protected by a right to
require the Company to establish and fund a trust for their indemnification
after a change in control or a potential change in control. The Employment
Agreements also include non-competition and confidentiality provisions.
Effective March 5, 1999, Mr. Roper's employment agreement with the Company
terminated.
Report of the Compensation Committee on Executive Compensation
General. Subject to existing contractual obligations, the Compensation
Committee of the Board of Directors is primarily responsible for the Company's
executive compensation policies and practices, and administers executive
awards under the 1993 Incentive Plan and Annual Incentive Plan. The
Compensation Committee is composed of Messrs. John T. Stupka (Chairman), James
L. Johnson, Dale V. Kesler and J.L. Jackson.
Compensation Philosophy. The Company's executive compensation philosophy
reflects its belief that the compensation of executives (i) should be linked
to achievement of the Company's business and strategic goals; (ii) should be
aligned with the interests of stockholders through awards of stock options and
other stock-based compensation; (iii) should recognize individual
contributions, as well as overall business results; and (iv) should result in
attracting, motivating and retaining highly-talented executives to serve the
Company. To achieve these objectives, the Company's current compensation
program consists of the following elements:
. Base salary;
. Annual incentive compensation, the receipt of which is based on (i) the
financial performance of the Company from year to year and/or (ii)
significant individual contributions; and
. Long-term incentive compensation, primarily in the form of stock
options.
Chief Executive Officer's Fiscal 1998 Compensation. The structure of Mr.
Goldfield's fiscal 1998 compensation was based in large part on the
recommendations of an outside consulting firm hired by the Company in 1994. In
accordance with such recommendations, the Company entered into an employment
agreement with Mr. Goldfield, effective December 1, 1994. The agreement
provides for an annual base salary of $850,000 or such greater amount as may
be approved by the Compensation Committee. In addition, the agreement provides
that Mr. Goldfield is eligible for an annual bonus upon the achievement of
certain performance targets established by the Compensation Committee. Mr.
Goldfield's base salary has not been raised from the $850,000 base amount
established in 1994; however, during fiscal 1998, Mr. Goldfield was eligible
to receive a cash bonus under the Annual Incentive Plan of up to 100% of his
base salary (the "Maximum Bonus"), if the Company achieved certain earnings
thresholds specified by the Compensation Committee. The percentage
12
<PAGE>
of the Maximum Bonus that Mr. Goldfield was eligible to receive was based on a
range of earnings per share targets established by the Compensation Committee.
Because the Company did not achieve the specified earnings threshold, Mr.
Goldfield did not receive a bonus for fiscal 1998. Thus, a significant
percentage of Mr. Goldfield's fiscal 1998 compensation was tied to the
performance of the Company. The Compensation Committee believes that the
structure of Mr. Goldfield's compensation, with its strong emphasis on Company
performance, is in the best interests of the Company's stockholders because it
more closely aligns the interests of Mr. Goldfield and the Company's
stockholders. Mr. Goldfield received an award of 200,000 stock options under
the 1993 Incentive Plan for fiscal 1998.
Compensation of Other Executive Officers. In fiscal 1998, the compensation
package received by other executives of the Company consisted of base salary,
stock options and bonus awards. Each element is consistent with the
compensation philosophy set forth above, and the determinations of the
Compensation Committee regarding the appropriate form and level of executive
compensation were based in part on the recommendations of management. Such
recommendations reflected each individual's level of responsibility,
experience and contribution to the Company's business objectives, as well as
the Compensation Committee's ongoing assessment of the Company's operations.
Rather than increasing base salaries for the majority of the Company's
executives, the Compensation Committee placed its emphasis on compensation
that would more closely align the executives' interests with the stockholders'
interest. Therefore, as with the Chief Executive Officer, a significant
percentage of each executive's total compensation was tied to performance of
the Company through (i) bonus eligibility, based on a combination of Company
performance and individual achievement, and (ii) stock option awards.
Subject to achievement by the Company of an earnings threshold specified by
the Compensation Committee, the Company's executives were eligible to receive
incentive bonuses of up to 100% percent of their base salaries. Other than Mr.
Goldfield, only Mr. Gozia is eligible to receive an annual incentive bonus
under the Annual Incentive Plan. The percentage of any bonus awarded would be
based in part on a range of earnings per share targets established by the
Compensation Committee and (in most cases) on achievement of individual goals.
Since the Company did not achieve its earnings per share targets for fiscal
1998, no bonuses were awarded to the other executive officers of the Company.
In granting stock options to the Company's executives, the Compensation
Committee, with the input of management, considered each executive's current
and future ability to impact achievement of strategic goals and objectives, as
well as internal equity within the executive's peer group. The Compensation
Committee believes this emphasis on equity compensation is in the best
interests of the Company's stockholders because it more closely aligns the
interests of the executives and the Company's stockholders for both near and
long-term. All options granted during fiscal 1998 to the Company's executives
were granted at not less than fair market value on the date of grant. All of
such options, except the options granted to Mr. Horng, vest at a rate of 25%
per year, beginning on the first anniversary of the date of grant. The options
granted to Mr. Horng vest 100% on the first anniversary of the date of grant.
See "Executive Compensation--Option Grants During Fiscal 1998." Therefore, the
Company's executives will receive full benefits from the option grant only if
the Company's stock price appreciates and only if the executive remains with
the Company for the full term of vesting.
Internal Revenue Code Section 162(m). In August 1993, as part of the Omnibus
Budget Reconciliation Act of 1993, Section 162(m) of the Internal Revenue Code
(the "Code") was enacted, which section provides for an annual one million
dollar limitation (the "Deduction Limitation") on the deduction that an
employer may claim for Compensation of certain executives. Section 162(m) of
the Code provides an exception (the "Performance-Based Compensation
Exception") to the Deduction Limitation for certain performance-based
compensation, and it is the intent of the Compensation Committee to qualify
executive compensation for such exception to the extent necessary, feasible
and in the best interests of the Company.
John T. Stupka
James L. Johnson
Dale V. Kesler
J.L. Jackson
13
<PAGE>
Comparative Performance Graph
The following chart compares the cumulative total stockholder return on the
Company's Common Stock with the cumulative total return on the stocks
comprising The Nasdaq Market Value Index (the "Nasdaq Index") and the Media
General Financial Services Retail--Miscellaneous--Radio--TV Distributors
Industry Group Index (the "MG Group Index") over the period commencing
December 7, 1993 (the first day after the effective date of the Company's
initial public offering) and ending November 30, 1998. The comparison assumes
$100 was invested on December 7, 1993 in the Company's Common Stock and in
each of the foregoing indices and assumes reinvestment of dividends.
Comparison of Cumulative Total Return
of CellStar Corporation, Nasdaq Index and MG Group Index
[Comparative Performance Graph Appears Here]
14
<PAGE>
CERTAIN TRANSACTIONS
During fiscal 1998, the Company sold approximately $88,700 in inventory to
National Tape, a sole proprietorship owned by Mr. Goldfield, Chairman and
Chief Executive Officer of the Company. The Company's cost of sales for such
inventory was approximately $88,400. National Tape, a retailer of cellular
telephones and related products in Dallas, was formerly a subagent of the
Company which received the Company's activation commission from Southwestern
Bell Mobile Systems ("SBMS") when it performed activations for customers who
subscribed for cellular service. The Company would receive residual payments
from SBMS for subscriber usage. In connection with the disposition of its
Dallas-Fort Worth area retail stores in December 1998, the Company no longer
maintains a subagent relationship with National Tape and does not receive any
residual payments from SBMS for subscriber usage by customers activated by
National Tape. The Company believes that the terms of these transactions
between National Tape and the Company are not substantially less favorable to
the Company than terms given to unrelated parties.
The Company leased a 16,500 square foot facility with retail and warehouse
space from Mr. Goldfield in Irving, Texas. The lease agreement, which was
entered into in October 1993, had a five-year term and provides for a monthly
rental payment of $11,500, subject to an annual adjustment based on changes in
the consumer price index. The lease terminated on September 30, 1998. Lease
payments from the beginning of fiscal year 1998 through the date of
termination totaled $100,500. The Company believes that the terms of the lease
were no less favorable than terms available from unrelated parties for
comparable retail/warehouse premises.
In January 1998, the Company loaned Mr. Horng, Chairman and Chief Executive
Officer of CellStar (Asia) Corporation Limited, $499,260, which Mr. Horng used
to pay the exercise price for employee stock options that would have expired
in January. The loan did not bear interest and was repaid in full on July 14,
1998.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and officers, and persons
who own more than 10% of a registered class of the Company's equity
securities, to file initial reports of ownership and reports of changes in
ownership with the Securities and Exchange Commission (the "SEC"). Such
persons are required by SEC regulation to furnish the Company with copies of
all Section 16(a) reports that they file.
To the Company's knowledge, based solely on its review of the copies of such
reports received by it with respect to fiscal 1998, or written representations
from certain reporting persons, the Company believes that all filing
requirements applicable to its directors, officers and persons who own more
than 10% of a registered class of the Company's equity securities have been
complied with.
INDEPENDENT AUDITORS
The Board of Directors has selected KPMG LLP as the independent auditors of
the Company for the fiscal year ending November 30, 1999. Representatives of
KPMG LLP are expected to be present at the Meeting and shall have the
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
STOCKHOLDER PROPOSALS
Stockholders of the Company may submit proposals on matters appropriate for
stockholder action at subsequent annual meetings of the Company consistent
with Rule 14a-8 promulgated under the Exchange Act and the Company's
Certificate of Incorporation. For such proposals to be considered for
inclusion in the Proxy Statement and Proxy relating to the 2000 Annual Meeting
of Stockholders, such proposals must be received by the Company no later than
December 4, 1999. Such proposals should be directed to CellStar Corporation,
1730 Briercroft Court, Carrollton, Texas 75006, Attention: General Counsel.
15
<PAGE>
OTHER BUSINESS
The Board of Directors knows of no matters other than those described herein
that will be presented for consideration at the Meeting. However, should any
other matter(s) properly come before the Meeting or any adjournment thereof,
it is the intention of the persons named in the accompanying Proxy to vote in
accordance with their best judgment in the interest of the Company.
MISCELLANEOUS
All costs incurred in the solicitation of proxies will be borne by the
Company. In addition to solicitation by mail, directors, officers and
employees of the Company may solicit proxies personally or by telephone or
telegram, without additional compensation. The Company may also make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries for forwarding of solicitation materials to the beneficial owners
of shares of Common Stock held by such persons, and the Company may reimburse
such brokerage houses and other custodians, nominees and fiduciaries for
reasonable expenses incurred in connection therewith.
Accompanying this Proxy Statement is a copy of the Company's Annual Report
on Form 10-K for the fiscal year ended November 30, 1998 (the "Annual
Report"). The Annual Report is not to be deemed a part of this Proxy
Statement.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 1998, INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL
STATEMENT SCHEDULES, IF ANY, BUT NOT INCLUDING EXHIBITS, WILL BE FURNISHED AT
NO CHARGE TO EACH PERSON TO WHOM A PROXY STATEMENT IS DELIVERED UPON THE
WRITTEN REQUEST OF SUCH PERSON ADDRESSED TO CELLSTAR CORPORATION, ATTN:
DIRECTOR OF INVESTOR RELATIONS, 1730 BRIERCROFT COURT, CARROLLTON,
TEXAS 75006.
By Order of the Board of Directors,
/s/ Elaine Flud Rodriguez
Elaine Flud Rodriguez
Vice President,
Secretary and
General Counsel
March 31, 1999
16
