SC TO-C

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE TO

(RULE 14d-100)

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) or 13(e)(1)

OF THE SECURITIES EXCHANGE ACT OF 1934

CELLSTAR CORPORATION

(Name of Subject Company (Issuer))

CELLSTAR CORPORATION

(Name of Filing Person (Issuer))

OPTIONS TO PURCHASE COMMON STOCK,

PAR VALUE $0.01 PER SHARE,

ISSUED UNDER THE CELLSTAR CORPORATION

1993 AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN

(Title of Class of Securities)

ELAINE FLUD RODRIGUEZ

SENIOR VICE PRESIDENT, GENERAL COUNSEL, AND SECRETARY

CELLSTAR CORPORATION

1730 BRIERCROFT COURT

CARROLLTON, TEXAS 75006

TELEPHONE: 972-466-5000

(Name, address and telephone number of person authorized to receive

notices and communications on behalf of Filing Person)

COPY TO:

WILLIAM R. HAYS, III

HAYNES AND BOONE, LLP

901 MAIN STREET, SUITE 3100

DALLAS, TEXAS 75202

214-651-5000

CALCULATION OF FILING FEE*

TRANSACTION VALUATION	AMOUNT OF FILING FEE
Not Applicable	Not Applicable

*    No filing fee is required because this filing relates solely to preliminary communications made before the commencement of a tender offer.

¨ Check the box if any part of the fee is offset as provided by Rule 0-11(A)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount previously paid:	Not applicable	Filing party:	Not applicable
Form or Registration No.:	Not Applicable	Date Filed:	Not Applicable

x Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

¨ third-party tender offer subject to Rule 14d-1.

x issuer tender offer subject to Rule 13e-4.

¨ going-private transaction subject to Rule 13e-3.

¨ amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer:    ¨

CellStar Corporation has not commenced the offer to exchange that is referred to in this communication. Upon commencement of such offer, CellStar Corporation will file with the Securities and Exchange Commission a Schedule TO and related exhibits, including the offer to exchange, letter of transmittal and other related documents. Employees of CellStar Corporation who are option holders are strongly encouraged to read the Schedule TO and related exhibits, including the offer to exchange, letter of transmittal and other related documents, when these become available as they will contain important information about the offer. The Schedule TO and related exhibits will be available without charge at the Securities and Exchange Commission website at www.sec.gov and will be delivered without charge to all employees of CellStar Corporation who are option holders. Additional copies of these documents may be obtained without charge by employees of CellStar Corporation who are option holders by contacting the person specified in these documents when they become available.

ITEM 12.    EXHIBITS.

EXHIBIT NO.	DESCRIPTION
1	Excerpt from the Preliminary Proxy Statement for the 2002 Annual Meeting of Stockholders of CellStar Corporation, filed with the Securities and Exchange Commission on March 14, 2003.

INDEX TO EXHIBITS

1 Excerpt from the Preliminary Proxy Statement for the 2002 Annual Meeting of Stockholders of CellStar Corporation, filed with the Securities and Exchange Commission on March 14, 2003.

2 Transcript of e-mail to employees on March 14, 2003.

-2-

EX-1

Exhibit 1

Excerpt from the Preliminary Proxy Statement for the 2002 Annual Meeting of Stockholders of CellStar Corporation,

filed with the Securities and Exchange Commission on March 14, 2003.

There are currently outstanding under the 1993 Plan options covering approximately 1,860,000 shares, approximately 700,000 of which have exercise prices that are significantly higher than the current market price of the Common Stock. In an effort to provide the intended motivation and retention for employees, the Company intends to implement, during the summer of 2003, a stock option exchange program under the terms of which eligible holders of outstanding options with an exercise price of $24.00 or more per share will be allowed to exchange such options for new options with an exercise price equal to the market value of the Common Stock as of a date at least six months and one day after acceptance of the outstanding options into the exchange program. The number of shares of Common Stock subject to the new options will be equal to one-third of the shares subject to the options tendered and accepted by the Company for cancellation pursuant to the exchange program. The new options will be issued under the 2003 Incentive Plan. The Company estimates that, as of March 7, 2003, holders of outstanding options to purchase approximately 180,000 shares of Common Stock would be eligible to participate in the stock option exchange program and that new options to purchase approximately 60,000 shares of Common Stock would be issued if all outstanding options eligible for the exchange program participate in the exchange program. All holders of outstanding options will be eligible to participate in the exchange program, excluding directors, executive officers, certain key employees and consultants. Options that are tendered for exchange, accepted and cancelled will not be reissued. WHEN CELLSTAR BEGINS THE STOCK OPTION EXCHANGE PROGRAM, IT WILL FILE A TENDER OFFER STATEMENT AND OTHER RELATED DOCUMENTS WITH THE SECURITIES AND EXCHANGE COMMISSION. ELIGIBLE HOLDERS OF OUTSTANDING OPTIONS ARE STRONGLY ADVISED TO READ THESE DOCUMENTS WHEN THEY ARE AVAILABLE BECAUSE THEY CONTAIN IMPORTANT INFORMATION. OPTIONHOLDERS MAY OBTAIN A FREE COPY OF THESE DOCUMENTS, WHEN THEY ARE AVAILABLE, FROM CELLSTAR OR AT WWW.SEC.GOV.

If the proposed Spinoff of the Company’s Greater China Operations, which is the subject of Proposal III of this Proxy Statement, is approved by the Company’s stockholders and completed, options granted under the 1993 Plan to employees of those subsidiaries that are included in the Greater China Operations will terminate, and those employees will have 30 days from such termination to exercise any vested options. Many of those options will be ineligible for the exchange program and have exercise prices that are significantly higher than the current market price of the Common Stock, and consequently are not expected to be exercised. Therefore, the Company estimates that options to purchase an aggregate of approximately 600,000 shares subject to those options will be cancelled. The Company will not reissue any options that are so cancelled.

EX-2

Exhibit 2

[TRANSCRIPT OF EMAIL TO EMPLOYEES ON MARCH 14, 2003]

[CELLSTAR LETTERHEAD]

To:    CellStar Employees

Today CellStar is announcing an important and exciting opportunity for many salaried employees who have CellStar stock options. The management of CellStar recognizes that our stock option program is valuable for our employees. However, with the recent stock market volatility, especially with respect to the wireless sector, many of you hold CellStar stock options with an exercise price that is significantly higher than the current trading price of CellStar’s common stock.

In light of this situation, we are pleased to announce that the Board of Directors of CellStar has authorized a stock option exchange program. This is a voluntary program that will allow CellStar employees to cancel their current stock options with exercise prices of $24.00 or more per share in exchange for new options to be granted by CellStar no earlier than six months and one day after the options are cancelled. CellStar intends to implement the program during the summer of 2003.

The new options will be issued for one-third of the number of shares of the current options, rounded to the nearest share, and will have an exercise price equal to the market value of CellStar common stock on the date of grant. If you choose to participate in this program, you will also be required to exchange all options granted to you within six months prior to the cancellation of your current options, regardless of the exercise price.

You will be receiving detailed information about this program in the summer, including a list of questions and answers about the program. In addition, we will conduct meetings to review the program and address any other issues.

We are excited about this program and hope that it will appropriately align the incentives of our employees by giving them a real stake in CellStar’s future success. Thanks and keep up the great work.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

CellStar Corporation has not commenced the offer to exchange that is referred to in this communication. Upon commencement of such offer, CellStar Corporation will file with the Securities and Exchange Commission a Schedule TO and related exhibits, including the offer to exchange, letter of transmittal and other related documents. Employees of CellStar Corporation who are option holders are strongly encouraged to read the Schedule TO and related exhibits, including the offer to exchange, letter of transmittal and other related documents, when these become available as they will contain important information about the offer. The Schedule TO and related exhibits will be available without charge at the Securities and Exchange Commission website at www.sec.gov and will be delivered without charge to all employees of CellStar Corporation who are option holders. Additional copies of these documents may be obtained without charge by employees of CellStar Corporation who are option holders by contacting the person specified in these documents when they become available.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Sincerely,

Elaine Flud Rodriguez

Senior Vice President and General Counsel