**UNITED STATES**

**SECURITIES ANDEXCHANGE COMMISSION**

**Washington, D.C.20549**

**FORM 10-K/A**

**Amendment No. 1**

**x**                              ANNUALREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934

**For the fiscal year ended November 30, 2006**

**OR**

**o**                                 TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

**For the transition period from***            *to *            *

**Commission File Number**

**0-22972**

**CELLSTARCORPORATION**

(Exact name of registrantas specified in its charter)

| **Delaware**                             |   | **75-2479727**      |
|------------------------------------------|--------|---------------------|
| (State or other jurisdiction of          |   | (I.R.S. Employer    |
| incorporation or organization)           |   | Identification No.) |
|                                     |   |                |
|                                     |   |                |
| **601 S. Royal Lane**                    |   |                |
| **Coppell, Texas**                       |   | **75019**           |
| (Address of principal executive offices) |   | (Zip Code)          |

Registrant’s telephonenumber including area code: **(972) 462-2700**

Securities registeredpursuant to Section 12(b) of the Act: 

| **Title of each class** |   | **Name of  each exchange on which registered** |
|-------------------------|--------|------------------------------------------------|
| None                    |   | N/A                                            |

 

Securities registered pursuant to Section 12(g)of the Act:

**Common Stock, par value $0.01 per share**

(Title of Class)

Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 of theSecurities Act.Yes  o    No  x

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 orSection 15(d) of the Exchange Act.  Yes  o    No  x

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.  Yes  x    No  o

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K isnot contained herein, and will not be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form10-K.  o

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (check one)

| Large accelerated  filer   o |   | Accelerated  filer   x |   | Non-accelerated  filer   o |
|----------------------------------------|--------|----------------------------------|--------|--------------------------------------|

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).  Yes  o    No  x

The aggregate marketvalue of the registrant’s common stock held by non-affiliates of the registrantas of May 31, 2006, the last business day of the Company’s most recentlycompleted second fiscal quarter, based on the closing sale price of $3.23 asreported by the Pink Sheets on May 31, 2006, was approximately $56,379,198 (for purposes ofdetermination of the above stated amounts, only directors, executive officersand 10% or greater stockholders have been deemed affiliates).

OnFebruary 6, 2007, there were 21,158,740 outstanding shares ofcommon stock, $0.01 par value per share, and the closing sales price was $2.72as quoted on the Pink Sheets ® .

**DOCUMENTSINCORPORATED BY REFERENCE**

None.

 

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**CELLSTAR CORPORATION**

**INDEX TO FORM 10-K**

CellStarCorporation (the “Company” or “CellStar”) hereby amends and restates in itsentirety each of the following items of the Company’s Annual Report on Form10-K for the fiscal year ended November 30, 2006 (the “Original Form 10-K”)filed with the Securities and Exchange Commission (the “SEC”) onFebruary 12, 2007.

ThisAmendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K filed onFebruary 12, 2007, does not reflect any events occurring after the filingof the Original Form 10-K, and does not modify or update the disclosurestherein in any way other than as required to reflect the amendments describedabove and set forth below. Terms used but not defined herein have the meaningsgiven to them in the Original Form 10-K.
|                    |   |                                                                                            |   |   |
|--------------------|--------|-------------------------------------------------------------------------------------------------|--------|--------|
| **PART III.** |   |                                                                                            |   |   |
| Item 10.      |   | Directors and Executive Officers of the Registrant                                              |   | 1      |
| Item 11.      |   | Executive Compensation                                                                          |   | 3      |
| Item 12.      |   | Security Ownership of Certain Beneficial Owners and  Management and Related Stockholder Matters |   | 9      |
| Item 13.      |   | Certain Relationships and Related Transactions                                                  |   | 11     |
| Item 14.      |   | Principal Accounting Fees and Services                                                          |   | 11     |
|               |   |                                                                                            |   |   |
| **PART IV.**  |   |                                                                                            |   |   |
| Item 15.      |   | Exhibits, Financial Statement Schedules                                                         |   | 12     |
| Signatures         |   |                                                                                            |   | 18     |

 

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**PART III**

**Item 10. Directors and ExecutiveOfficers of the Registrant**

The Company’s Board ofDirectors (the “Board of Directors” or the “Board”) consists of five directors.Each director has been elected to serve for a specified term or until hissuccessor has been elected or qualified. The names of the current directors,along with their ages as of March 30, 2007, are as follows:

|                                     | ** ** | ** ** | ** ** | ** **                            |
|-------------------------------------|------------|------------|------------|---------------------------------------|
| **Name**                            | ** ** | ** ** | ** ** | **Age**                               | ** ** | **Current Position** |
| Robert A. Kaiser                    |       | 53         |       | Chairman and Chief  Executive Officer |
| Dale V. Kesler                      |       | 68         |       | Director                              |
| Jere W. Thompson                    |       | 75         |       | Director                              |
| John L. (“J.L.”)  Jackson |       | 75         |       | Director                              |
| Dr. Da Hsuan Feng              |       | 61         |       | Director                              |
|                                     |            |            |            |                                       |  |  |

Set forth below is adescription of the backgrounds of each of the directors of the Company.Mr. Kaiser’s background, along with the backgrounds of the Company’s otherexecutive officers, is described under the heading, “Item 1 Business—ExecutiveOfficers of the Registrant,” and is incorporated herein by reference.

**DaleV. Kesler** has served as a director of the Company since March1999. Mr. Kesler retired as an active partner of the professionalaccounting firm of Arthur Andersen LLP in 1996 and served as the ManagingPartner of Arthur Andersen’s Dallas/Fort Worth office from 1983 to 1994.Mr. Kesler was responsible for strategic planning on a world-wide basisfor the Audit and Business Advisory practices of Arthur Andersen in 1982 and1983 and served as the head of the Audit Practice in the firm’s Dallas officefrom 1973 to 1982. Mr. Kesler also serves on the Board of Directors of AlerisInternational, Inc., formerly IMCO Recycling Inc., Triad Hospitals, Inc. andthrough March 2007, ElkCorp, formerly known as Elcor Corporation.Mr. Kesler currently serves as Chairman of the Audit Committee and alsoserves on the Compensation and Nominating Committees of the Board of Directors.

**JereW. Thompson** has served as a director of the Company sinceOctober 1999. Mr. Thompson served as President and Chief Executive Officerof The Southland Corporation from 1986 to 1991. Mr. Thompson joinedSouthland in 1954 and was made Vice President of store operations in 1962. Hebecame Southland’s President in 1973 and was elected to Southland’s Board ofDirectors in 1961. Mr. Thompson was engaged in private business consultingfrom 1991 to 1996 when he became the President of The Williamsburg Corporation.Mr. Thompson serves on the Board of Directors and is the former Chairmanof The National Center for Policy Analysis. He is also a member of the Board ofVisitors of UT Southwestern University Hospitals, and a member and formerChairman of The Development Board and the College and Graduate School ofBusiness Foundation Advisory Council for The University of Texas at Austin.Mr. Thompson currently serves as Chairman of the Nominating Committee ofthe Board of Directors and also serves on the Audit and Compensation Committeesof the Board of Directors.

**JohnL. (“J.L.”) Jackson** has served as a director of the Companysince March 1999. Mr. Jackson served as Chairman and Chief ExecutiveOfficer of Global Industrial Technologies, Inc., formerly INDRESCO, from 1993to 1998. Before joining Global Industrial Technologies, Mr. Jackson wasengaged in private executive business consulting from 1987 to 1993. From 1983to 1987, Mr. Jackson served as a Director and as the President and ChiefOperating Officer of Diamond Shamrock Corporation, and was Executive VicePresident of Diamond Shamrock and President of its then newly-formed coal unitfrom 1979 to 1983. Mr. Jackson has served on numerous Boards of Directors,including the Fourth District Federal Reserve Bank of Cleveland, First RepublicBank, American Federal Bank, Hadson Energy Resources and National Gypsum Company.Mr. Jackson currently serves as Chairman of the Compensation Committee ofthe Board of Directors and also serves on the Audit and Nominating Committeesof the Board of Directors.

**Dr. DaHsuan Feng** has served as a director since January of2005.  Dr. Feng currently serves asVice President for Research and Graduate Education and Professor of Physics atthe University of Texas at Dallas. Prior to joining UTD in December 2000,Dr. Feng held numerous positions in the Physics Department of Philadelphia’sDrexel University from 1976 to 2000, rising from assistant professor to holdingthe prestigious M. Russell Wehr Chair. While at Drexel, Dr. Feng took aleave of absence and served as a Vice President at Science ApplicationsInternational Corporation, where he managed the HUBS program promoting the useof state-of-the-art information and communication technology to improveinformation transfer within hospitals, universities, businesses and schoolswithin Pennsylvania, Delaware, New Jersey and Maryland. Dr. Feng currentlyserves on the Audit, Compensation and Nominating Committees of the Board ofDirectors.

**AuditCommittee**

The Board of Directorshas a standing Audit Committee, which has been charged with certain powers andduties including, among others, authority to (i) recommend to the Boardthe appointment of the firm selected to be independent registered publicaccountants for the Company and monitor the performance of such firm;(ii) review and approve the scope of the annual audit and evaluate withthe independent registered public accountants the Company’s annual audit andannual consolidated financial statements and the related opinion, and alsoincluding the disclosures and conclusions of the independent accountantsrelated to Management’s Report on Internal Control Over Financial Reporting;(iii) review with management the status of internal accounting controls;(iv) review with the internal auditor the status of internal audit proceduresand results; (v) evaluate problem areas having a potential financialimpact on the Company that may be brought to the Committee’s attention bymanagement, the independent registered public accountants or the Board and(vi) evaluate the public financial reporting documents of the Company.Although the Company is no longer listed on the Nasdaq National Market, theCompany follows the corporate governance 

1

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guidelines provided inthe Marketplace rules of the Nasdaq Stock Market. The Audit Committee isrequired to have at least three members, all of whom must be “independentdirectors” as defined in Rule 4200(a)(15) of the Marketplace Rules, as maybe modified or supplemented. Mr. Kesler, Mr. Thompson, Mr. Jackson andDr. Feng are the current members of the Audit Committee, all of whom havebeen determined by the Board to meet the independence requirements set forth inRule 4200(a)(15) of the Marketplace Rules of the Nasdaq Stock Market.Dr. Feng joined the Audit Committee in January of 2006. The AuditCommittee met twelve times during the 2006 fiscal year, including one telephonicmeeting.

Mr. Kesler has beendesignated by the Board of Directors as an audit committee financial expert.Mr. Kesler was formerly managing partner at Arthur Andersen’s Dallas/Ft.Worth office and has served on various boards and audit committees of publiclyheld companies; thus the Board believes Mr. Kesler has the requisiteunderstanding and experience to meet such standard. In addition, the Boarddetermined that Mr. Jackson, Mr. Thompson and Dr. Feng arefinancially literate in the areas that are of concern to the Company, and areable to read and understand fundamental financial statements. No member of theAudit Committee participated in the preparation of the financial statements ofthe Company or any current subsidiaries of the Company at any time during thepast three years. In addition, no member of the Audit Committee accepted anyconsulting, advisory or other compensatory fee from the Company, other than forservice on the Board or its committees, and no member of the Audit Committeewas an affiliate of the Company or any of its subsidiaries in fiscal 2006.

**Section 16(a)Beneficial Ownership Reporting Compliance**

Section 16(a) of theExchange Act requires the Company’s executive officers, directors, and personswho beneficially own more than 10% of a registered class of the Company’sequity securities to file with the SEC initial reports of ownership and reportsof changes in ownership of the Company’s common stock (“Common Stock”) andother equity securities of the Company. Such persons are required by SECregulations to furnish the Company with copies of all Section 16(a) formsthat they file.

Based solely on theCompany’s review of such forms furnished to the Company, the Company believesthat all filing requirements applicable to the Company’s executive officers,directors, and greater than 10% beneficial owners were complied with for theCompany’s 2006 fiscal year, except that Mr. Kaiser did not timely file a Form 4with respect to the withholding of shares to satisfy tax liability incurred uponthe vesting of his restricted stock on May 2, 2006, and Al Goldfield did nottimely file a Form 4 with respect to the sale of the Company’s stock  on March 10, 2006.

**Codeof Ethics**

The Company has adopted acode of ethics that applies to the Chief Executive Officer, the Executive VicePresident of Finance, the Chief Financial Officer and the Corporate Controller,as well as the Company’s directors, executive officers and all employees. TheCompany’s Business Ethics Policy can be found at its Internet website at www.cellstar.com.

2

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**Item 11. Executive Compensation**

**SummaryCompensation Table**

The following table setsforth certain information regarding compensation paid to each individual actingas the Company’s Chief Executive Officer, or in a similar capacity, duringfiscal 2006, and each of the Company’s four other most highly compensatedexecutive officers who were serving as such on November 30, 2006, based onsalary and bonus earned during fiscal 2006 (collectively, the “Named ExecutiveOfficers”), for each of the Company’s last three fiscal years.
|                                      | ** ** | ** ** | ** ** | ** **       | ** ** | ** **       | ** ** | **Long Term** | ** ** | ** **     | ** ** | ** **         | ** ** | ** **       | ** ** |
|--------------------------------------|------------|------------|------------|------------------|------------|------------------|------------|--------------------|------------|----------------|------------|--------------------|------------|------------------|------------|
| ** **                           | ** ** | ** ** | ** ** | ** **       | ** ** | ** **       | ** ** | **Compensation**   | ** ** | ** **     | ** ** | ** **         | ** ** | ** **       | ** ** |
| ** **                           | ** ** | ** ** | ** ** | **Annual**       | ** ** | **Awards**       | ** ** | **Restricted**     | ** ** | **Securities** | ** ** | ** **         | ** ** |
| ** **                           | ** ** | ** ** | ** ** | **Compensation** | ** ** | **Other Annual** | ** ** | **Stock**          | ** ** | **Underlying** | ** ** | **All Other** | ** ** |
| **Name and**                    | ** ** | ** ** | ** ** | **Salary**       | ** ** | **Bonus***       | ** ** | **Compensation**   | ** ** | **Awards**     | ** ** | **Options/**       | ** ** | **Compensation** | ** ** |
| **Principal Position**          | ** ** | ** ** | ** ** | **Year**         | ** ** | **($)**          | ** ** | **($)**            | ** ** | **($)**        | ** ** | **($)**            | ** ** | **SARs**         | ** ** | **($)** | ** ** |
| Robert A. Kaiser                     |       | 2006       |       | 650,000          |       | 390,000          |       | —             |       | 657,000        | (1)(2)     | —             |       | 22,661           | (3)        |
| Chairman and Chief                   |       | 2005       |       | 591,987          | (4)(5)     | 262,500          |       | —             |       | 328,078   | (1)        | 142,025            | (6)        | 24,632           | (3)(7)     |
| Executive Officer                    |       | 2004       |       | 450,000          |       | 180,000          |       | —             |       | —         |       | 5,000              |       | 15,953           | (3)        |
|                                 |       |       |       |             |       |             |       |               |       |           |       |               |       |             |       |
| Michael J. Farrell                   |       | 2006       |       | 250,000          |       | 90,000           |       | —             |       | 140,160        | (1)(8)     | —             |       | 7,331            | (3)        |
| Executive Vice President             |       | 2005       |       | 11,378           | (9)        | 10,000           |       | —             |       | 43,050         | (1)        | —             |       | —           |       |
| of Finance, Chief                    |       | 2004       |       | —           |       | —           |       | —             |       | —         |       | —             |       | —           |       |
| Administrative Officer and Treasurer |       |       |       |             |       |             |       |               |       |           |       |               |       |             |       |
|                                 |       |       |       |             |       |             |       |               |       |           |       |               |       |             |       |
| Elaine Flud Rodriguez                |       | 2006       |       | 285,000          |       | 79,800           |       | —             |       | 65,700         | (1)(10)    | —             |       | 6,979            | (3)        |
| Senior Vice President,               |       | 2005       |       | 290,481          | (5)        | 57,000           |       | —             |       | 30,750         | (1)        | —             |       | 15,611           | (3)(11)    |
| Secretary and General      |       | 2004       |       | 285,000          |       | 100,000          |       | —             |       | —         |       | 4,000              |       | 5,735            | (3)        |
| Counsel                              |       |       |       |             |       |             |       |               |       |           |       |               |       |             |       |
|                                 |       |       |       |             |       |             |       |               |       |           |       |               |       |             |       |
| Raymond L. Durham                    |       | 2006       |       | 200,000          |       | 64,000           |       | —             |       | 65,700         | (1)(12)    | —             |       | 5,813            | (3)        |
| Senior Vice President                |       | 2005       |       | 203,846          | (5)        | 50,000           |       | —             |       | 30,750         | (1)        | —             |       | 6,977            | (3)(13)    |
| and Chief (Financial                 |       | 2004       |       | 191,500          | (14)       | 72,000           |       | —             |       | —         |       | 2,500              |       | 5,809            | (3)        |
| Officer                              |       |       |       |             |       |             |       |               |       |           |       |               |       |             |       |
|                                 |       |       |       |             |       |             |       |               |       |           |       |               |       |             |       |
| Juan Martinez Jr.                    |       | 2006       |       | 130,000          |       | 31,200           |       | —             |       | 30,660         | (1)(15)    | —             |       | 4,291            | (3)        |
| Vice President and                   |       | 2005       |       | 128,323          | (5)        | 29,200           |       | —             |       | 9,840          | (1)        | —             |       | 4,140            | (3)        |
| Corporate Controller                 |       | 2004       |       | 116,200          | (16)       | 25,100           |       | —             |       | —         |       | 1,000              |       | 3,691            | (3)        |
|                                      |            |            |            |                  |            |                  |            |                    |            |                |            |                    |            |                  |            |  |  |

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(*)            Bonusinformation includes payments earned in the stated fiscal year but actuallypaid in the subsequent fiscal year.

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| (1)    |   | The shares of restricted stock vest at 33  1/3% per year over a three-year period, with immediate vesting upon the  occurrence of any of the following: (i) the participant’s death;  (ii) the participant’s termination of service due to disability;  (iii) the participant’s termination of service by the Company without  cause; (iv) the participant’s voluntary termination of service after the  attainment of age 65, except for Mr. Kaiser’s shares granted on May 2, 2005;  or (v) a change in control, as such term is defined in the agreement.  Dividends will be paid on the shares of restricted stock, to the extent that  dividends are declared and paid by the Company. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (2)    |   | The value of Mr. Kaiser’s unvested aggregate  restricted stock at November 30, 2006, was $851,497.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (3)    |   | Consists of insurance premiums paid by the Company  and Company matching contributions to the Named Executive Officer’s 401(k)  plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (4)    |   | Mr. Kaiser was named Chairman of the Board on  May 2, 2005. In addition, on May 2, 2005, pursuant to an amendment  to his employment agreement, his salary was increased to $650,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (5)    |   | Includes amounts paid in December 2004 in connection  with a one-time Company buyback of up to 80 hours of unused Personal Time Off  (PTO) accrued through November 30, 2004, at 50% of the Named Executive  Officer’s normal hourly rate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (6)    |   | On May 2, 2005, Mr. Kaiser was granted  142,025 stock appreciation rights in tandem with the grant of the same number  of shares of restricted stock. Pursuant to the terms of Mr. Kaiser’s  restricted stock award agreement, the stock appreciation rights expired on  December 31, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (7)    |   | Includes expense reimbursement of $10,000 for legal  fees related to estate planning.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (8)    |   | The value of Mr. Farrell’s unvested aggregate  restricted stock at November 30, 2006, was $192,559.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (9)    |   | Mr. Farrell was named Executive Vice President of  Finance, Treasurer and Chief Administrative Officer on November 15, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (10)   |   | The value of Ms. Rodriguez’s unvested aggregate  restricted stock at November 30, 2006, was $110,198.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (11)   |   | Includes expense reimbursement of $7,500 for legal  fees related to estate planning.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (12)   |   | The value of Mr. Durham’s unvested aggregate  restricted stock at November 30, 2006, was $110,198.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (13)   |   | Includes expense reimbursement of $1,000 for legal  fees related to estate planning.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (14)   |   | Mr. Durham was named Senior Vice President and  Chief Financial Officer on May 26, 2004. His salary was increased to  $200,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (15)   |   | The value of Mr. Martinez’s unvested aggregate  restricted stock at November 30, 2006, was $42,919.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (16)   |   | Mr. Martinez was named Vice President and  Corporate Controller in June of 2004. His salary was increased to $125,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

 

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**Option/SARGrants During 2006 Fiscal Year**

The following tableprovides information related to stock appreciation rights granted to the NamedExecutive Officers during the fiscal year ended November 30, 2006. Therewere no options granted to the Named Executive Officers in fiscal 2006.
| ** **            | ** ** | **Individual Grants** | ** ** | ****                     | ** ** |
|-----------------------|------------|----------------------------|------------|--------------------------|------------|
| ** **            | ** ** | ** **                 | ** ** | **% of Total** | ** ** | ** ** | ** ** | ** ** | ** ** | **Potential** | ** ** |
| ** **            | ** ** | **Number of**         | ** ** | **Options/**             | ** ** | ** ** | ** ** | ** ** | ** ** | **Realizable Value at** | ** ** |
| ** **            | ** ** | **Securities**             | ** ** | **SARs**                 | ** ** | ** ** | ** ** | ** ** | ** ** | **Assumed Annual** | ** ** |
| ** **            | ** ** | **Underlying**             | ** ** | **Granted to**      | ** ** | **Exercise** | ** ** | ** ** | ** ** | **Rates of Stock Price** | ** ** |
| ** **            | ** ** | **Options/**               | ** ** | **Employees**            | ** ** | **or Base** | ** ** | ** ** | ** ** | **Appreciation for** | ** ** |
| ** **            | ** ** | **SARs**                   | ** ** | **in Fiscal**       | ** ** | **Price** | ** ** | **Expiration** | ** ** | **SAR Term** | ** ** |
| **Name**              | ** ** | ** **                 | ** ** | **Granted(#)**           | ** ** | **Year** | ** ** | **($/Sh)** | ** ** | **Date** | ** ** | **5%($)** | ** ** | **10%($)** | ** ** |
| Robert A. Kaiser      |       | —                     |       | —                   |       | — |   | — |   | — |   | — |   |
| Michael J. Farrell    |       | —                     |       | —                   |       | — |   | — |   | — |   | — |   |
| Elaine Flud Rodriguez |       | —                     |       | —                   |       | — |   | — |   | — |   | — |   |
| Raymond L. Durham     |       | —                     |       | —                   |       | — |   | — |   | — |   | — |   |
| Juan Martinez Jr.     |       | —                     |       | —                   |       | — |   | — |   | — |   | — |   |
|                       |            |                            |            |                          |            |  |  |  |  |  |  |  |  |  |  |

**AggregatedOption/SAR Exercises During 2006 Fiscal Year and Fiscal Year-End Option/SARValues**

The following tableprovides information related to options exercised by the Named ExecutiveOfficers during the fiscal year ended November 30, 2006, and the numberand value of options held on November 30, 2006. None of the NamedExecutive Officers exercised any options in fiscal 2006.
| ** **            | ** ** | **Shares  Acquired on** | ** ** | **Value  Realized** | ** ** | **Number of Securities  Underlying Unexercised  Options at FY-End(#)** | ** ** | **Value of Unexercised  In-the-Money Options at  FY-End($)(1)** | ** ** |
|-----------------------|------------|------------------------------|------------|---------------------|------------|-------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------|------------|
| **Name**              | ** ** | ** **                   | ** ** | **Exercise(#)**     | ** ** | **($)**                                                                                         | ** ** | **Exercisable**                                                                     | ** ** | **Unexercisable** | ** ** | **Exercisable** | ** ** | **Unexercisable** | ** ** |
| Robert A. Kaiser      |       | —                       |       | —              |       | 120,000                                                                                         |       | 15,000                                                                              |       | — |   | — |   |
| Michael J. Farrell    |       | —                       |       | —              |       | —                                                                                          |       | —                                                                              |       | — |   | — |   |
| Elaine Flud Rodriguez |       | —                       |       | —              |       | 86,772                                                                                          |       | 14,500                                                                              |       | — |   | — |   |
| Raymond L. Durham     |       | —                       |       | —              |       | 31,875                                                                                          |       | 6,250                                                                               |       | — |   | — |   |
| Juan Martinez Jr.     |       | —                       |       | —              |       | 4,975                                                                                           |       | 1,175                                                                               |       | — |   | — |   |
|                       |            |                              |            |                     |            |                                                                                                 |            |                                                                                     |            |  |  |  |  |  |  |

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(1)             Theclosing price for the Common Stock as reported by the Nasdaq Stock Market onNovember 30, 2006, the last trading day of fiscal 2006, was $3.48. None ofthe outstanding options held by the Named Executive Officers have an exerciseprice of less than $3.48.

**Compensationof Directors**

During the fiscal yearended November 30, 2006, each director of the Company who was not anofficer or other employee of the Company received an annual retainer fee of$25,000, plus $1,500 for each meeting of the Board of Directors or committee ofthe Board of Directors that he attended and $750 for each telephonic Board ofDirectors or committee meeting that he attended. To the extent that anycommittee meeting was held on the same day as a full Board of Directors meetingor another committee meeting, only one $1,500 or $750 fee (as applicable) was paid.The Company also paid a per diem fee of $1,500 to each non-employee directorfor each day such director performed additional services for the Company at therequest of the Chief Executive Officer. Mr. Kesler and Mr. Jackson were eachpaid $15,000 during fiscal 2006 for attending 10 meetings of a specialcommittee of the Board formed in connection with the proposed sale of theCompany’s U.S. and Miami-based Latin American operations and the proposed saleof the Company’s Mexico operations.

Pursuant to the 1994Amended and Restated Non-Employee Director Nonqualified Stock Option Plan (the “Directors’Plan”), each non-employee director automatically received an option (the “InitialOption”) to purchase 1,500 shares of Common Stock upon becoming a non-employeedirector. Each Initial Option vests in full six months after the date of grant,and expires ten years following the date of grant. In addition to the InitialOption, each non-employee director received an annual grant pursuant to theCellStar Corporation 1993 Long-Term Incentive Plan (the “1993 Plan”) of anoption to purchase 1,000 shares of Common Stock (the “Annual Option”), whichoption was automatically granted on the date of the first full Board ofDirectors meeting following the end of each fiscal year. Each Annual Optionvests with respect to 25% of the shares covered thereby on each of the firstfour anniversaries of the date of grant and expires ten years following thedate of grant. The exercise price of each option was equal to the fair marketvalue of the Common Stock on the date of grant. The Directors’ Plan terminatedon March 3, 2004, and the 1993 Plan terminated on December 3, 2003.The Company began granting shares of restricted stock to its employees andexecutive officers in November 2005. In connection with these grants, the Boardagreed to discontinue the automatic grants to outside directors and determinedthat the Company will make an annual grant (a “Formula Grant”) of shares ofrestricted stock pursuant to the 2003 Plan for each non-employee directorautomatically on the date of the first full Board meeting following the end ofeach 

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fiscal year. The numberof shares to be granted will be determined by the Board of Directors at thetime of the grant based upon the pool of shares then available for grant. Theawarded shares will vest at the rate of 33 1/3% per year on eachanniversary date of grant and will be subject to such other terms andconditions as may be contained in the form of restricted stock award agreementgenerally used by the Company at the time of grant. In addition, the Boarddiscontinued the Initial Option. During fiscal 2006, each non-employee directorwho was then serving as such received a grant of 4,500 shares of restricted stockin March 2006.  No options were grantedto directors in fiscal 2006.

Directors who arealso employees of the Company receive no additional compensation for serving asdirectors. All directors of the Company are entitled to reimbursement of theirreasonable out-of-pocket expenses in connection with their travel to, andattendance at, meetings of the Board of Directors or committees thereof. Therewere no other arrangements pursuant to which any director was compensated forany service provided as a director during fiscal 2006, other than as set forthabove.

**EmploymentContracts and Termination of Employment and Change in Control Arrangements**

The Company currentlymaintains employment agreements (collectively, the “Employment Agreements” orindividually, an “Employment Agreement”) with Mr. Kaiser, Mr. Farrell andMs. Rodriguez effective May 1, 2004, November 15, 2005, andJanuary 14, 2007, respectively. Mr. Kaiser, Mr. Farrell andMs. Rodriguez are referred to individually as an “Executive” orcollectively as “Executives.” The Employment Agreements of Mr. Kaiser,Mr. Farrell and Ms. Rodriguez provide for annual base salaries of$650,000, $250,000 and $285,000, respectively, which may be increased by theBoard of Directors. Each of the Employment Agreements also provides that theExecutive is eligible to participate in an annual incentive plan approved bythe Board of Directors during the term of his or her Employment Agreement.Mr. Durham and Mr. Martinez entered into change of control agreementseffective March 30, 2005, which are described below.

The Company is obligated,during the term of his Employment Agreement, to provide to Mr. Kaiser oneor more life insurance policies with a total benefit of $1,500,000. The Companyis also obligated, during the terms of their respective Employment Agreements,to provide to Mr. Kaiser and Mr. Farrell one or more long-termdisability insurance policies with a total annual disability benefit of thelesser of (i) 60% of their respective base salaries after giving effect toall other disability benefits that would be payable to them by CellStar,Employer or government agencies or (ii) such lesser amounts that may bepayable under insurance policies that Employer can purchase in accordance withnormal insurance underwriting standards. Employer has an obligation to continueto provide similar coverage to Ms. Rodriguez, which can be reduced or cancelledonly in certain circumstances.  TheCompany has in place insurance to cover a portion of such expenses. Each of theExecutives is eligible to participate in the life, health and disabilityinsurance programs customarily made available to employees of the Company.

Mr. Kaiser’sEmployment Agreement has an initial term of four years and automatically renewsfor an additional year unless (i) notice of a decision not to renew theEmployment Agreement is given by Employer or Mr. Kaiser at least 180 daysprior to the expiration of the initial term or (ii) the EmploymentAgreement is earlier terminated pursuant to its terms. Mr. Kaiser’sEmployment Agreement is subject to earlier termination as follows: (i) byEmployer (a) due to the disability of Mr. Kaiser, (b) for “cause”or (c) ”without cause”; or (ii) by Mr. Kaiser (a) upon aCompany Breach, (b) within 12 months of a “change in control” or (c) ”voluntarily”(defined as termination for any reason other than Company Breach). IfMr. Kaiser terminates his employment due to Company Breach or ifMr. Kaiser is terminated by Employer “without cause,” he will be entitledto receive his accrued but unpaid base salary and annual incentive paymentsthrough the date of termination plus a lump-sum payment in the amount of$500,000 plus an amount equal to the product of (i)(a) his base salary plus(b) the greater of the amount of his annual incentive payment for thepreceding year or the average of his annual incentive payments for thepreceding three years, divided by 365, and (ii) the greater of the numberof days remaining in the initial four-year term (or, the number of daysremaining in the initial four-year term plus the one-year renewal term if suchtermination occurs within 180 days of the expiration of the initial four-yearterm and no notice of non-renewal has been given) or 365 (the “Kaiser SeverancePeriod”). Mr. Kaiser is also entitled, under such circumstances, to theservices of an outplacement consultant at Company expense. Within 12 monthsafter a “change in control,” Mr. Kaiser may terminate his employment. Insuch event and in lieu of the foregoing payments, Mr. Kaiser will beentitled to receive a lump-sum payment in the amount of $500,000 plus an amountequal to three times the sum of (i) his base salary plus (ii) thegreater of his annual incentive payment for the preceding year or the averageof his annual incentive payments for the preceding three years or such lesseramount that is the maximum payment permitted by the Internal Revenue Code (the “Code”)that does not constitute an “excess parachute payment,” provided that no suchreduction shall be made if the amount of payments in addition to the $500,000lump-sum payment would not independently constitute an “excess parachutepayment.” Under such circumstances, Mr. Kaiser is also entitled to theservices of an outplacement consultant at Company expense and reimbursement forall reasonable costs and expenses (including, without limitation, attorneys’fees) incurred by him in enforcing his rights under his Employment Agreement.If the employment of Mr. Kaiser is terminated “without cause,” due toCompany Breach or following a “change in control,” Mr. Kaiser is furtherentitled, at Company expense, to health and life insurance coverage for himand, if applicable, his spouse and children, for a period of time equal to, inthe case of termination following a “change in control,” three years or, in allother cases, the lesser of 545 days and the Kaiser Severance Period. IfMr. Kaiser terminates his employment “voluntarily,” he is entitled only tohis unpaid base salary and benefits through the last day of employment, but isnot entitled to any annual incentive payment for the year in which suchtermination occurs.

Mr. Kaiser’sEmployment Agreement was amended effective May 2, 2005, at which time hissalary was increased from $450,000 to $650,000, and Mr. Kaiser assumedresponsibility for the Company’s operations in the Asia-Pacific Region. Inaddition, pursuant to his Agreement, Mr. Kaiser was eligible for a targetincentive payment of 50% of his base salary for the 2005 fiscal year, and halfof the incentive payment for the 2005 fiscal year approved by the Company’sBoard of Directors was to be paid if the Company filed with the Securities andExchange Commission both its Annual Report on Form 10-K for the 2004 fiscalyear and its Quarterly Report on Form 10-Q for the first quarter of 2005. Forfiscal 2005, Mr. Kaiser received a bonus payment of $262,500. In addition,Mr. Kaiser received a grant of 142,025 shares of restricted 

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stock in tandem with thesame number of stock appreciation rights pursuant to the terms and conditionsof the CellStar Corporation 2003 Long-Term Incentive Plan and a related awardagreement, which shall vest in thirds over a three-year period. The stockappreciation rights expired on December 31, 2005.

Mr. Farrell’sEmployment Agreement has an initial term of three years and automaticallyrenews for an additional year unless (i) notice of a decision not to renewthe Employment Agreement is given by Employer or Mr. Farrell at least 180days prior to the expiration of the initial term or (ii) the EmploymentAgreement is earlier terminated pursuant to its terms. Mr. Farrell’sEmployment Agreement is subject to earlier termination as follows: (i) byEmployer (a) due to the disability of Mr. Farrell, (b) for “cause”or (c) ”without cause”; or (ii) by Mr. Farrell (a) upon a CompanyBreach, (b) within 24 months of a “change in control,” provided furtherthat his employment is terminated “without cause,” due to Company Breach, orbased on a “forced relocation” (defined as Mr. Farrell being required tobe based at any place outside a 50-mile radius of the Company’s Carrollton,Texas, headquarters) or (c) ”voluntarily” (defined as termination for anyreason other than Company Breach). If Mr. Farrell terminates hisemployment due to Company Breach or if he is terminated by the Company “withoutcause,” he will be entitled to receive his accrued but unpaid base salarythrough the date of termination plus an amount equal to the product of (i)(a)his base salary plus (b) the greater of his annual incentive payment forthe preceding fiscal year or the average of his annual incentive payments forthe preceding three years, divided by 365, and (ii) if the terminationoccurs during the first year of his Agreement, 365, or if the terminationoccurs after the first year of his Agreement, the lesser of (x) 730 and(y) the greater of the number of days remaining in the initial three-yearterm (or, the number of days remaining in the initial three-year term plus theone-year renewal term if such termination occurs within 180 days of theexpiration of the initial three-year term and no notice of non-renewal has beengiven) or 365 (the “Farrell Severance Period”). In addition, Mr. Farrellis entitled to a prorated portion of any annual incentive payment earned forthe fiscal year in which his employment is terminated, if earned in accordancewith the terms of its grant, and to the services of an outplacement consultantat Company expense. In the event of termination of employment ofMr. Farrell within 24 months after a “change in control” as describedabove, he will be entitled to receive an amount equal to two times the sum of(a) his base salary, and (b) the greater of his annual incentivepayment for the preceding year or the average of his annual incentive paymentsfor the preceding three years, or such lesser amount that is the maximumpayment permitted by the Code that does not constitute an “excess parachutepayment.” Under such circumstances, Mr. Farrell is also entitled to theservices of an outplacement consultant at Company expense and reimbursement forall reasonable costs and expenses (including, without limitation, attorneys’fees) incurred by him in enforcing his rights under his Employment Agreement.If Mr. Farrell’s employment is terminated “without cause,” or he resignsdue to Company Breach, or he is forced to relocate within 24 months following a“change in control,” Mr. Farrell is further entitled, at Company expense,to health and life insurance coverage for him and, if applicable, his spouseand children, for a period of time equal to, in the case of terminationfollowing a “change in control,” either one or two years, depending uponMr. Farrell’s length of service, or, in all other cases, the lesser of 545days and the Farrell Severance Period. If Mr. Farrell terminates hisemployment “voluntarily,” he is entitled only to his unpaid base salary andbenefits through the last day of employment, but is not entitled to any annualincentive payment for the year in which such termination occurs. Pursuant tohis Employment Agreement, Mr. Farrell received a grant of 35,000 shares ofrestricted stock of the Company on November 15, 2005.

In January 2007, Ms.Rodriguez’s employment agreement with the Company expired, and the Companyexecuted a new Employment Agreement with Ms. Rodriguez.  Ms. Rodriguez’s Employment Agreement hasa term of two years.  Ms. Rodriguez’sEmployment Agreement is subject to earlier termination as follows: (i) byEmployer (a) due to the disability of Ms. Rodriguez, (b) for “cause”or (c) ”without cause”; or (ii) by Ms. Rodriguez (a) upon aCompany Breach, (b) within 24 months of a “change in control,” providedfurther that her employment is terminated “without cause” or due to CompanyBreach, which includes a relocation in which Ms. Rodriguez would berequired to be based at any place outside a 50-mile radius of the Company’sCoppell, Texas, headquarters, or (c) ”voluntarily” (defined as terminationfor any reason other than Company Breach). If Ms. Rodriguez terminates heremployment due to Company Breach or if she is terminated by the Company “withoutcause,” she will be entitled to receive her accrued but unpaid base salarythrough the date of termination and any prorated portion of her annualincentive payment earned for the fiscal year that includes the date of terminationplus an amount equal to the greater of (a)(i) her regular base salary throughthe end of the term of the Agreement or (ii) one year of her regular basesalary, plus (b) the greater of her annual incentive payment for thepreceding fiscal year or the average of her annual incentive payments for thepreceding three years, divided by 12 and multiplied by the number of months inwhich her regular base salary is to be paid as set forth above, each to be paidquarterly installments. Ms. Rodriguez is also entitled, under such circumstances, to theservices of an outplacement consultant at Company expense.

In the event oftermination of employment of Ms. Rodriguez after a “change in control” asdescribed below, she will be entitled to receive an amount equal to two timesthe sum of (i) her base salary plus (ii) the greater of her annualincentive payment for the preceding year or the average of her annual incentivepayments for the preceding three years, or such lesser amount that is themaximum payment permitted by the Code that does not constitute an “excessparachute payment.” Under such circumstances, Ms. Rodriguez is alsoentitled to the services of an outplacement consultant at Company expense andreimbursement for all reasonable costs and expenses (including, withoutlimitation, attorneys’ fees) incurred by her in enforcing her rights under herEmployment Agreement. If the employment of Ms. Rodriguez is terminated “withoutcause,” or due to Company Breach, Employer shall continue to pay the sameportion of premiums it paid prior to her termination for health and lifeinsurance coverage for her and, if applicable, her spouse and children, for aperiod of time equal to the earlier of the last day of the 24th month following her date of termination, orthe date Ms. Rodriguez’s coverage under Employer’s plans terminates for anyreason. If Ms. Rodriguez terminates her employment “voluntarily,” she isentitled only to her unpaid base salary and benefits through the last day ofemployment, but is not entitled to any annual incentive payment for the year inwhich such termination occurs.

Under the EmploymentAgreements, a termination will be deemed to be “without cause” if it is for anyreason other than due to the disability of the Executive or for “cause.” Underthe Employment Agreements, a termination will generally be considered to be for“cause” if it is due to the Executive’s (i) gross incompetence; or, inMr. Farrell’s Agreement, failure to perform his duties under theAgreement; or, in Ms. Rodriguez’s agreement, willful failure to substantiallyperform her duties after written notice is given and not cured by Ms. Rodriguezwithin 30 days of

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such notice;(ii) willful misconduct that causes or is likely to cause materialeconomic harm to, or material discredit to the reputation of, the Company orits affiliated entities; (iii) failure to follow the directions of seniormanagement or the Board of Directors or general partner of the Company or theExecutive’s employer; (iv) conviction of or entry of a plea of guilty ornolo contendere to a felony involving moral turpitude or the entry of an orderby any federal or state regulatory agency prohibiting the Executive fromparticipating in the affairs of the Company; (v) any other material breachof his or her Employment Agreement; or (vi) in Ms. Rodriguez’s agreement,intentional violation of any material written policy or procedure of Employeror the Company. A cure period is allowed under certain circumstances.

For purposes of theEmployment Agreements, a “change in control” will be deemed to occur upon theoccurrence of any of the following: (i) any consolidation or merger of theCompany in which the Company is not the continuing or surviving corporation orpursuant to which shares of Common Stock would be converted into cash,securities or other property, other than a merger of the Company in which theholders of Common Stock immediately prior to the merger have the sameproportionate ownership of common stock of the surviving corporationimmediately after the merger; (ii) any sale, lease, exchange or othertransfer (in one transaction or a series of related transactions) of all orsubstantially all of the assets of the Company, or with respect to Mr. Kaiser’sAgreement, the sale, lease exchange or other transfer of 50% or more of theassets of the Company reflected on the balance sheet as of the end of thefiscal quarter ending immediately prior to the closing of such transaction orthe first in a series of transactions; (iii) any approval by thestockholders of the Company of any plan or proposal for the liquidation ordissolution of the Company; (iv) the cessation of control (by virtue oftheir not constituting a majority of directors) of the Board of Directors bythe Continuing Directors or the Incumbent Directors (as defined in theEmployment Agreements); (v) with respect to the Employment Agreement ofMs. Rodriguez only, (a) the acquisition of beneficial ownership of50% of the voting power of the Company’s outstanding voting securities by anyperson or group who beneficially owned less than 10% of such voting power onthe effective date of such Employment Agreement, (b) the acquisition ofbeneficial ownership of an additional 40% of the voting power of the Company’soutstanding voting securities by any person or group who beneficially owned atleast 10% of such voting power on the effective date of such EmploymentAgreement or (c) the execution by the Company and a stockholder of acontract that grants such stockholder or its affiliate (including, withoutlimitation, such stockholder’s nominee to the Board) the right to veto or blockdecisions or actions of the Board, in each case subject to certain exceptions;(vi) with respect to Mr. Kaiser’s Employment Agreement only,(a) the acquisition of beneficial ownership of 50% of the voting power ofthe Company’s outstanding voting securities by any person or group whobeneficially owned less than 10% of such voting power on the effective date ofhis Employment Agreement or (b) the execution by the Company and astockholder of a contract that grants such stockholder or its affiliate(including without limitation, such stockholder’s nominee to the Board) theright to veto or block decisions or actions of the Board, in each case subjectto certain exceptions; or (vii) subject to applicable law, in a Chapter 11bankruptcy proceeding, the appointment of a trustee or the conversion of a caseinvolving the Company to a case under Chapter 7 of the United States BankruptcyCode.

On March 30, 2005,Employer entered into agreements with Raymond L. Durham and Juan Martinez, Jr.The agreements provide for severance payments to Mr. Durham andMr. Martinez in the event that Employer terminates Mr. Durham orMr. Martinez without cause. The agreements also provide for payments toMr. Durham and Mr. Martinez if, during the twenty-four month periodfollowing a change in control, as such term is defined in the agreement,Mr. Durham’s or Mr. Martinez’s employment is terminated withoutcause, or either terminates his employment with Employer due to Company breach,as such term is defined in the agreement.

The Employment Agreements, including the change incontrol agreements for Mr. Durham and Mr. Martinez, also provide thatthe Executives will be indemnified by the Company to the extent provided in theCompany’s Certificate of Incorporation or bylaws as of the date of theEmployment Agreement and to the fullest extent permitted by changes to Delawarelaw. In addition, on July 8, 2005, the Company entered intoindemnification agreements with Mr. Kaiser, Ms. Rodriguez andMr. Durham, and with Mr. Farrell and Mr. Martinez on July 19, 2006. TheEmployment Agreements of all Executives include non-competition andconfidentiality provisions.

*SeparationAgreement and Release.* As of July 5, 2001, the Companyentered into a Separation Agreement and Release with Alan H. Goldfield, theCompany’s former Chief Executive Officer, under which the Company may engageMr. Goldfield to provide information or assistance in connection with allmatters relating to or arising out of his former employment with the Company orpertaining to the general business operations of the Company. In return forthis information and assistance, the Company pays Mr. Goldfield hispre-approved, reasonable, actual, out-of-pocket expenses plus the greater of$1,500 per day or the highest per day amount then being paid to members of theBoard for services other than services provided as a member of the Board. Underthis Separation Agreement and Release, the Company was required to provide Mr. Goldfieldwith a $5,000,000 term life insurance policy and disability insurance with anannual benefit of $300,000 until age 65. This obligation terminated on July 5,2006.  The Company satisfied itsremaining obligations related to term life insurance through payment ofpremiums in fiscal 2005.  The Companymust continue to provide Mr. Goldfield and his spouse, Shirley M.Goldfield, with reimbursement of medical and dental expenses for the remainderof their respective lives, subject to certain conditions.  Mr. Goldfield did not elect disabilityinsurance for 2006. The Company paid medical and dental insurance premiums of$7,060.44 for Mr. and Mrs. Goldfield, which is net of the amountMr. Goldfield is required to reimburse the Company pursuant to theSeparation Agreement and Release. For fiscal 2006, there were no payments madeto Mr. Goldfield in connection with services provided pursuant to hisSeparation Agreement and Release.

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**CompensationCommittee Interlocks and Insider Participation**

In fiscal 2006, the CompensationCommittee of the Board of Directors consisted of J.L. Jackson, Chairman, JereW. Thompson, Dale V. Kesler and Dr. Da Hsuan Feng, who joined the CompensationCommittee in January of 2006. No member of the Compensation Committee is or hasbeen an officer or employee of the Company or any of its subsidiaries. Noexecutive officer of the Company served on the compensation committee, or as adirector, of another entity, one of whose executive officers served on theCompany’s Compensation Committee or on its Board of Directors in fiscal 2006.

**Item 12. Security Ownership ofCertain Beneficial Owners and Management and Related Stockholder Matters**

**SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS**

The following table sets forth information withrespect to the number of shares of Common Stock beneficially owned as of March21, 2007, by each person known by the Company to beneficially own more than 5%of the outstanding shares of Common Stock. Unless otherwise noted, the personsnamed in the table have sole voting and investment power with respect to allshares of Common Stock beneficially owned by them.
| **Name and Address of Beneficial Owner**                                               | ** ** | ** ** | ** ** | **Amount and Nature of  Beneficial Ownership** | ** ** | **Percent of  Class(1)** | ** ** |
|-----------------------------------------------------------------------------------------------------------------|------------|------------|------------|--------------------------------------------------------------------|------------|-------------------------------|------------|
| Michael A. Roth  and Brian J. Stark  c/o Stark Investments  3600 South Lake Drive  St. Francis, Wisconsin 53235 |       | 3,262,254  | (2)        | 15.4                                                               |       |
| Timothy S.  Durham  111 Monument Circle, Suite 4800  Indianapolis, Indiana 46204-2415                           |       | 2,047,441  | (3)        | 9.7                                                                |       |
| Strong Capital  Management, Inc.  100 Heritage Reserve  Menomonee Falls, Wisconsin 53051                        |       | 1,114,053  | (4)        | 5.3                                                                |       |
| Raul Marcelo Claure  2010 NW 84  Avenue Miami, Florida 33122                                                    |       | 1,060,000  | (5)        | 5.0                                                                |       |

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(1)             Basedon 21,136,631 shares outstanding as of March 21, 2007.

(2)             Basedon a Form 4 filed with the SEC on January 23, 2007, by Michael A. Roth andBrian J. Stark, filing as joint filers pursuant to Rule 13d-1(k) under theSecurities Exchange Act of 1934, as amended (the ***“Exchange Act”*** ). Mr. Roth and Mr. Starkreported shared voting and dispositive power with respect to all shares ownedin an amended Schedule 13G filed on February 14, 2007.

(3)             Basedon an amended Schedule 13D filed with the SEC on December 29, 2006, by TimothyS. Durham, Patrick J. O’Donnell, Henri B. Najem, Jr., Anthony P. Schilchte,David Tornek, Neil E. Lucas, Terry G. Whitesell, and Jonathan B. Swain, filingas joint filers pursuant to Rule 13d-1(k) under the Exchange Act. Eachindividual owner reported sole voting and dispositive power with respect to hisindividual shares.

(4)             Basedon a Schedule 13G filed with the SEC on February 11, 2005, by Strong CapitalManagement Inc.

(5)             Basedon a Schedule 13D filed with the SEC on February 2, 2007.

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**SECURITYOWNERSHIP OF MANAGEMENT**

The following table sets forth information withrespect to the number of shares of Common Stock beneficially owned as of March21, 2007, by (i) each individual acting as the Company’s Chief ExecutiveOfficer, or in a similar capacity, during fiscal 2006, and each of the Company’sfour other most highly compensated executive officers who were serving as suchon November 30, 2006, based on salary and bonus earned during fiscal 2006(collectively, the ***“NamedExecutive Officers”*** ); (ii) each current director of the Companyand (iii) all directors and executive officers of the Company as a group.Unless otherwise noted, the persons named in the table have sole voting andinvestment power with respect to all shares of Common Stock beneficially ownedby them.

| Name of Beneficial Owner             | ** ** | ** ** | ** ** | **Amount and Nature of  Beneficial Ownership** | ** ** | **Percent of  Class(1)** | ** ** |
|-----------------------------------------------------|------------|------------|------------|--------------------------------------------------------------------|------------|-------------------------------|------------|
| Robert A. Kaiser                                    |       | 402,109    | (2)        | 1.9                                                                |       |
| Michael J. Farrell                                  |       | 64,179     | (3)        | *                                                                  |       |
| Elaine Flud Rodriguez                               |       | 131,866    | (4)        | *                                                                  |       |
| Raymond L. Durham                                   |       | 70,956     | (5)        | *                                                                  |       |
| Juan Martinez Jr.                                   |       | 18,933     | (6)        | *                                                                  |       |
| Da Hsuan Feng                                       |       | 14,000     | (7)        | *                                                                  |       |
| John L. (“J.L.”)  Jackson                 |       | 49,250     | (8)        | *                                                                  |       |
| Dale V. Kesler                                      |       | 47,450     | (9)        | *                                                                  |       |
| Jere W. Thompson                                    |       | 47,740     | (10)       | *                                                                  |       |
| Current Directors and Executive Officers as a Group |       | 846,483    | (11)       | 3.9                                                                |       |

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*                    Lessthan 1%.

(1)             Basedon 21,136,631 shares outstanding as of March 21, 2007.

(2)             Mr.Kaiser’s holdings consist 73,676 shares of Common Stock, of which 36,901 areheld in a partnership controlled by Mr. Kaiser and his wife, 194,683 shares ofrestricted Common Stock, 130,000 shares subject to options granted under the1993 Plan and 3,750 shares subject to options granted under the 2003 Plan,which options are exercisable within 60 days.

(3)             Mr.Farrell’s holdings consist of 19,513 shares of Common Stock and 44,666 sharesof restricted Common Stock.

(4)             Ms.Rodriguez’s holdings consist of 10,928 shares of Common Stock, 26,666 shares ofrestricted Common Stock, 91,272 shares subject to options granted under the1993 Plan and 3,000 shares subject to options granted under the 2003 Plan,which options are exercisable within 60 days.

(5)             Mr.Durham’s holdings consist of 9,790 shares of Common Stock, 26,666 shares ofrestricted Common Stock, 32,625 shares subject to options granted under the1993 Plan and 1,875 shares subject to options granted under the 2003 Plan,which options are exercisable within 60 days.

(6)             Mr.Martinez’s holdings consist of 3,534 shares of Common Stock, 9,999 shares ofrestricted Common Stock, 4,650 shares subject to options granted under the 1993Plan and 750 shares subject to options granted under the 2003 Plan, whichoptions are exercisable within 60 days.

(7)             Dr.Feng’s holdings consist of 4,167 shares of Common Stock, 8,333 shares ofrestricted Common Stock and 1,500 shares subject to options granted under the2003 Plan, all of which options are exercisable within 60 days.

(8)             Mr.Jackson’s holdings consist of 6,167 shares of Common Stock, 8,333 shares ofrestricted Common Stock, 1,500 shares subject to options granted under theDirectors’ Plan, 32,000 shares subject to options granted under the 1993 Planand 1,250 shares subject to options granted under the 2003 Plan, all ofwhich options are exercisable within 60 days.

(9)             Mr.Kesler’s holdings consist of 4,367 shares of Common Stock, of which 200 sharesare held jointly with Mr. Kesler’s wife, 8,333 shares of restricted CommonStock, 1,500 shares subject to options granted under the Directors’ Plan,32,000 shares subject to options granted under the 1993 Plan and 1,250 sharessubject to options granted under the 2003 Plan, all of which options areexercisable within 60 days.

(10)       Mr.Thompson’s holdings consist of 4,657 shares of Common Stock, 8,333 shares ofrestricted Common Stock, 1,500 shares subject to options granted under theDirectors’ Plan, 32,000 shares subject to options granted under the 1993 Planand 1,250 shares subject to options granted under the 2003 Plan, all ofwhich options are exercisable within 60 days.

(11)       Includesshares subject to options and shares of Common Stock and restricted CommonStock held by directors and Named Executive Officers more fully described infootnotes 2 through 10 above.

**EquityCompensation Plan Information**

The Company’s equitycompensation plan information is provided in Part II of this Form 10-K, underthe heading “Market for Registrant’s Common Equity, Related Stockholder Mattersand Issuer Purchases of Equity Securities — Equity Compensation PlanInformation,” and is incorporated herein by reference.

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**Item 13. Certain Relationshipsand Related Transactions**

None.

**Item 14. Principal AccountingFees and Services**

The following tablesummarizes the fees paid or payable to Grant Thornton LLP for services renderedfor the fiscal years ended November 30, 2006 and November 30, 2005(in thousands).

|                       | ** ** | **2006**  | ** ** | **2005**  | ** ** |
|-----------------------|------------|-----------|------------|-----------|------------|
| Audit Fees(1)         |       | 2,330,649 |       | $         | 2,600,263  |   |
| Audit-Related Fees(2) |       | 19,007    |       | 1,137,922 |       |
| Tax Fees(3)           |       | 72,000    |       | 59,258    |       |
| All Other Fees        |       | —    |       | —    |       |
|                  |       |      |       |      |       |
| TOTAL                 |       | 2,421,656 |       | $         | 3,797,443  |   |

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(1)             “AuditFees” includes fees and expenses billed for the audit of the Company’s annualfinancial statements and review of financial statements included in theCompany’s quarterly reports on Form 10-Q, and services provided in connectionwith statutory and regulatory filings. For fiscal 2006 and 2005, respectively,the amount includes approximately $1.4 million and $1.6 millionrelated to the financial statement audit and $0.9 million and $1.0 millionrelated to compliance with Section 404 of Sarbanes-Oxley.

(2)             “Audit-RelatedFees” includes fees billed for services that are related to the performance ofthe audit or review of the Company’s financial statements (which are notreported above under the caption “Audit Fees”). For fiscal 2006, the amountrelates to an audit of the Company’s 401k plan. For fiscal 2005, the amount includes approximately $1.1 million forthe restatement of the Company’s financial statements related to issuesidentified in the Asia-Pacific Region and the filing of the fiscal 2004 Form 10-K.

(3)             “TaxFees” for fiscal 2006 and 2005 include fees for statutory tax reporting inMexico.

The Audit Committee hasconsidered whether the provision of non-audit services by Grant Thornton iscompatible with maintaining the principal accountant’s independence, and hasdetermined that it is. The Audit Committee has sole authority to engage anddetermine the compensation of the Company’s independent auditor. Pre-approvalby the Audit Committee is required for any engagement of Grant Thornton,subject to certain de minimis exceptions. Annually, the Audit Committeepre-approves services to be provided by Grant Thornton. The Audit Committeealso considers the engagement of Grant Thornton to provide other servicesduring the year. In addition to conducting the Company’s 2006 audit, the AuditCommittee pre-approved Grant Thornton to provide services to the Company inconnection with the statutory tax filings in Mexico, which are considerednon-audit matters.

 

11

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**PART IV.**

**Item 15. Exhibits, FinancialStatement Schedules**

(a)The following are filed as part of this Annual Report on Form 10-K:

(1)Consolidated Financial Statements

SeeIndex to Consolidated Financial Statements on page F-1 of this Form 10-K.

(2) Financial Statement Schedules

SeeIndex to Consolidated Financial Statements on page F-1 of this Form 10-K.

(3) Exhibits

Anindex identifying the exhibits to be filed with this Form 10-K is providedbelow.
|        | **Exhibit No.** | ** **                                                                                                                                                                                                                                              | ** ** | **Description**                                         | ** ** | **Previously Filed as an Exhibit to and   Incorporated by Reference From** | ** ** | **Date Filed** |
|--------|----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|----------------|
| 2.1    |                 | Asset Purchase  Agreement, dated December 18, 2006, related to the U.S. Sale (Schedules and  exhibits have been omitted, and CellStar agrees to furnish to the Commission  supplementally a copy of any omitted schedules and exhibits upon request).   |       | Current Report on Form  8-K.                            |       | December 19, 2006                                                                                                       |
|   |                 |                                                                                                                                                                                                                                                    |       |                                                    |       |                                                                                                                    |
| 2.2    |                 | Stock Purchase  Agreement, dated December 18, 2006, related to the Mexico Sale (Schedules and  exhibits have been omitted, and CellStar agrees to furnish to the Commission  supplementally a copy of any omitted schedules and exhibits upon request). |       | Current Report on Form  8-K.                            |       | December 19, 2006                                                                                                       |
|   |                 |                                                                                                                                                                                                                                                    |       |                                                    |       |                                                                                                                    |
| 3.1    |                 | Amended and Restated  Certificate of Incorporation of CellStar Corporation (the “Certificate of  Incorporation”).                                                                                                                             |       | Form 10-Q for the  quarter ended August 31, 1995.       |       | October 13, 1995                                                                                              |
|   |                 |                                                                                                                                                                                                                                                    |       |                                                    |       |                                                                                                                    |
| 3.2    |                 | Certificate of  Amendment to Certificate of Incorporation.                                                                                                                                                                                              |       | Form 10-Q for the  quarter ended May 31, 1998.          |       | July 14, 1998                                                                                                           |
|   |                 |                                                                                                                                                                                                                                                    |       |                                                    |       |                                                                                                                    |
| 3.3    |                 | Certificate of  Amendment to Certificate of Incorporation dated as of February 20, 2002 (the  “Second Certificate of Amendment”).                                                                                                             |       | Form 10-K for the  fiscal year ended November 30, 2002. |       | February 28, 2003                                                                                             |
|   |                 |                                                                                                                                                                                                                                                    |       |                                                    |       |                                                                                                                    |
| 3.4    |                 | Amended and Restated  Bylaws of CellStar Corporation, effective as of May 1, 2004.                                                                                                                                                                      |       | Form 10-Q for the  quarter ended May 31, 2004.          |       | July 15, 2004                                                                                                           |

 

 

12

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| 4.1    |   | The Certificate of  Incorporation, Certificate of Amendment to Certificate of Incorporation,  Second Certificate of Amendment and Amended and Restated Bylaws of CellStar  Corporation filed as Exhibits 3.1, 3.2, 3.3 and 3.4 are incorporated into  this item by reference.                                                                                        |   | See above.                                              |   |              |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|-------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                 |   |                                                    |   |              |
| 4.2    |   | Specimen Common Stock  Certificate of CellStar Corporation.                                                                                                                                                                                                                                                                                                          |   | Form 10-K for the fiscal  year ended November 30, 2006. |   | February 12, 2007 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                 |   |                                                    |   |              |
| 10.1   |   | Amended and Restated  Loan and Security Agreement, dated as of March 31, 2006, by and among  CellStar Corporation and each of CellStar Corporation’s subsidiaries  signatory thereto, as borrowers, the lenders signatory thereto, as lenders,  and Wells Fargo Foothill, Inc. (f/k/a Foothill Capital Corporation), as the  arranger and administrative agent. |   | Form 10-Q for the  quarter ended February 28, 2006.     |   | April 10, 2006    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                 |   |                                                    |   |              |
| 10.2   |   | Consent, dated as of  May 25, 2006, by and among CellStar Corporation and each of CellStar  Corporation’s subsidiaries signatory thereto, as borrowers, Wells Fargo  Foothill, Inc., as agent and a lender, and Bank of America, N.A., and Textron  Financial Corporation, as lenders.                                                                          |   | Current Report on Form  8-K.                            |   | May 31, 2006      |
|   |   |                                                                                                                                                                                                                                                                                                                                                                 |   |                                                    |   |              |
| 10.3   |   | First Amendment to  Amended and Restated Loan Agreement, dated as of July 12, 2006, by and among  CellStar Corporation and each of CellStar Corporation’s subsidiaries  signatory thereto, as borrowers, Bank of America, N.A., and Wells Fargo  Foothill, Inc.                                                                                                 |   | Current Report on Form  8-K.                            |   | July 12, 2006     |
|   |   |                                                                                                                                                                                                                                                                                                                                                                 |   |                                                    |   |              |
| 10.4   |   | Second Amendment to  Amended and Restated Loan Agreement, dated August 31, 2006, by and among  CellStar Corporation and each of CellStar Corporation’s subsidiaries  signatory thereto, as borrowers, Wells Fargo Foothill, Inc., as agent and a  lender, and Bank of America, N.A., and Textron Financial Corporation, as  lenders.                            |   | Current Report on Form  8-K.                            |   | September 1, 2006 |
|   |   |                                                                                                                                                                                                                                                                                                                                                                 |   |                                                    |   |              |
| 10.5   |   | Waiver, effective as of  October 4, 2006, executed by and among CellStar Corporation and each of  CellStar Corporation’s subsidiaries signatory thereto, as borrowers, Wells  Fargo Foothill, Inc., as agent and a lender, and Bank of America, N.A., and  Textron Financial Corporation, as lenders.                                                           |   | Form 10-Q for the  quarter ended August 31, 2006.       |   | October 5, 2006   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                 |   |                                                    |   |              |

 

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| 10.6   |   | Waiver and Consent, as  of October 26, 2006, by and among CellStar Corporation and each of CellStar  Corporation’s subsidiaries signatory thereto, as borrowers, Wells Fargo  Foothill, Inc., as agent and a lender, and Bank of America, N.A., and Textron  Financial Corporation, as lenders.                                      |   | Current Report on Form  8-K.                            |   | November 1, 2006  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|-------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                      |   |                                                    |   |              |
| 10.7   |   | Third Amendment to  Amended and Restated Loan Agreement, dated October 31, 2006, by and among  CellStar Corporation and each of CellStar Corporation’s subsidiaries  signatory thereto, as borrowers, Wells Fargo Foothill, Inc., as agent and a  lender, and Bank of America, N.A., and Textron Financial Corporation, as  lenders. |   | Current Report on Form  8-K.                            |   | November 1, 2006  |
|   |   |                                                                                                                                                                                                                                                                                                                                      |   |                                                    |   |              |
| 10.8   |   | Term Loan and Security  Agreement, dated August 31, 2006, by and among CellStar Corporation and  each of CellStar Corporations’ subsidiaries signatory thereto, as borrowers,  and CapitalSource Finance LLC, as agent and lender.                                                                                              |   | Current Report on Form  8-K.                            |   | September 1, 2006 |
|   |   |                                                                                                                                                                                                                                                                                                                                      |   |                                                    |   |              |
| 10.9   |   | First Amendment to Term  Loan and Security Agreement, dated October 31, 2006, by and among CellStar  Corporation and each of CellStar Corporation’s subsidiaries signatory  thereto, as borrowers, and CapitalSource Finance LLC, as agent and lender.                                                                               |   | Current Report on Form  8-K.                            |   | November 1, 2006  |
|   |   |                                                                                                                                                                                                                                                                                                                                      |   |                                                    |   |              |
| 10.10  |   | Letter Agreement dated  as of August 31, 2006, by and between CellStar Corporation and Quattro Global  Capital LLC.                                                                                                                                                                                                                       |   | Current Report on Form  8-K.                            |   | September 7, 2006 |
|   |   |                                                                                                                                                                                                                                                                                                                                      |   |                                                    |   |              |
| 10.11  |   | CellStar Corporation  Amended and Restated Annual Incentive Compensation Plan, effective as of  March 22, 1996.*                                                                                                                                                                                                                          |   | Form 10-K for the  fiscal year ended November 30, 1996. |   | February 28, 1997 |
|   |   |                                                                                                                                                                                                                                                                                                                                      |   |                                                    |   |              |
| 10.12  |   | First Amendment to the  CellStar Corporation Amended and Restated Annual Incentive Compensation Plan,  executed as of September 10, 2002.*                                                                                                                                                                                                |   | Form 10-K for the  fiscal year ended November 30, 2002. |   | February 28, 2003 |

 

14

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| 10.13  |   | Separation Agreement  and Release, dated as of July 5, 2001, by and between Alan H. Goldfield  and CellStar Corporation and Its Affiliates.*                                               |   | Form 10-Q for the  quarter ended May 31, 2001.                                              |   | July 12, 2001               |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|-----------------------------|
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.14  |   | CellStar Corporation  2003 Long-Term Incentive Plan, effective as of March 13, 2003.*                                                                                                           |   | Appendix C to the  Company’s Proxy Statement on Schedule 14A for the 2002 fiscal year. |   | December 22, 2003 |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.15  |   | Form of Incentive Stock  Option Agreement under the CellStar Corporation 2003 Long-Term Incentive  Plan.*                                                                                       |   | Registration Statement  on Form S-8 (File no. 333-121590).                                  |   | December 23, 2004           |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.16  |   | Form of Non-Qualified  Stock Option Agreement under the CellStar Corporation 2003 Long-Term  Incentive Plan.*                                                                                   |   | Registration Statement  on Form S-8 (File no. 333-121590).                                  |   | December 23, 2004           |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.17  |   | Form of Restricted  Stock Award Agreement under the CellStar Corporation 2003 Long-Term Incentive  Plan.*                                                                                       |   | Current Report on Form  8-K.                                                                |   | November 21, 2005 |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.18  |   | Form of Amendment to  Restricted Stock Award Agreement under the CellStar Corporation 2003  Long-Term Incentive Plan.*                                                                          |   | Form 10-K for the  fiscal year ended November 30, 2006.                                     |   | February 12, 2007           |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.19  |   | Amended and Restated  Employment Agreement, effective as of May 1, 2004, by and among  CellStar, Ltd., CellStar Corporation and Robert A. Kaiser.*                                         |   | Form 10-Q for the  quarter ended May 31, 2004.                                         |   | July 15, 2004          |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.20  |   | First Amendment to  Amended and Restated Employment Agreement, executed May 2, 2005, by and among  CellStar, Ltd., CellStar Corporation and Robert Kaiser.*                                     |   | Current Report on Form  8-K.                                                                |   | May 6, 2005                 |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.21  |   | CellStar Corporation  Restricted Stock Award Agreement and Tandem Grant of Stock Appreciation  Rights, effective as of May 2, 2005, by and between CellStar Corporation and  Robert A. Kaiser.* |   | Form 10-Q for the  quarter ended August 31, 2005.                                           |   | October 11, 2005            |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.22  |   | Employment Agreement,  executed on April 27, 2005, and effective as of April 30, 2005, by  and among CellStar, Ltd., CellStar Corporation and Terry S. Parker.*                  |   | Current Report on Form  8-K.                                                                |   | May 3, 2005       |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |
| 10.23  |   | Agreement, dated March  30, 2005, by and between CellStar, Ltd. and Raymond L. Durham.*                                                                                                    |   | Form 10-K for the  fiscal year ended November 30, 2004.                                     |   | September 6, 2005 |
|   |   |                                                                                                                                                                                            |   |                                                                                        |   |                        |

 

15

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| 10.24  |   | Agreement, dated March  30, 2005, by and between CellStar, Ltd. and Juan Martinez.*                                                                                         |   | Form 10-K for the  fiscal year ended November 30, 2004.   |   | September 6, 2005           |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|-----------------------------|
|   |   |                                                                                                                                                                        |   |                                                      |   |                        |
| 10.25  |   | Employment Agreement by  and among CellStar, Ltd., CellStar Corporation and Michael J. Farrell, dated  as of November 15, 2005.*                                            |   | Current Report on Form  8-K.                              |   | November 21, 2005 |
|   |   |                                                                                                                                                                        |   |                                                      |   |                        |
| 10.26  |   | Employment Agreement,  effective as of January 14, 2007, by and among CellStar, Ltd., CellStar  Corporation, and Elaine Flud Rodriguez.*                                    |   | Current Report on Form  8-K.                              |   | November 21, 2006           |
|   |   |                                                                                                                                                                        |   |                                                      |   |                        |
| 10.27  |   | Form of CellStar  Corporation Indemnification Agreement.*                                                                                                                   |   | Current Report on Form  8-K.                              |   | July 13, 2005               |
|   |   |                                                                                                                                                                        |   |                                                      |   |                        |
| 10.28  |   | Stock Purchase Agreement,  dated August 21, 2005, by and among CellStar International  Corporation/Asia, Newco and An-Hsien Horng.                                     |   | Current Report on Form  8-K.                              |   | August 25, 2005             |
|   |   |                                                                                                                                                                        |   |                                                      |   |                        |
| 10.29  |   | Amended and Restated  Stock Purchase Agreement, dated August 24, 2005, by and among CellStar  International Corporation/Asia, Fine Day Holdings Limited and An-Hsien Horng. |   | Current Report on Form  8-K.                              |   | August 25, 2005             |
|   |   |                                                                                                                                                                        |   |                                                      |   |                        |
| 10.30  |   | Letter Agreement  executed on September 1, 2005, by and between Fine Day Holdings Limited and  CellStar International Corporation/Asia.                                     |   | Form 10-K for the  fiscal year ended November 30, 2004.   |   | September 6, 2005           |
|   |   |                                                                                                                                                                        |   |                                                      |   |                        |
| 10.31  |   | Agreement and Mutual  Release, entered into on September 2, 2005, by and among CellStar (Asia)  Corporation Limited, CellStar Corporation, and Hong An-Hsien.               |   | Form 10-K for the  fiscal year ended November 30, 2004.   |   | September 6, 2005           |
|   |   |                                                                                                                                                                        |   |                                                      |   |                        |
| 10.32  |   | Industrial Lease  Agreement, executed December 9, 2003, by and between Texas Dugan Limited  Partnership and CellStar, Ltd.                                                  |   | Form 10-K/A for the  fiscal year ended November 30, 2005. |   | March 30, 2006              |
|   |   |                                                                                                                                                                        |   |                                                      |   |                        |
| 10.33  |   | Lease, effective as of March 1, 2006, by and between  Americas’ Gateway Business Center, Inc., and National Auto Center, Inc.,  d/b/a CellStar Latin America.          |   | Form 10-K/A for the fiscal year ended November 30,  2005. |   | March 30, 2006              |

 

 

16

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|  10.34 |   | Master Distribution Agreement, made as of November  20, 2006, by and between Motorola, Inc. and CellStar, Ltd.**                                                               |   | Current Report on Form 8-K.                             |   | December 20, 2006    |
|-------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|----------------------|
|        |   |                                                                                                                                                                           |   |                                                    |   |                 |
| 10.35       |   | Regional Amendment for the Sale of Products Between  Motorola and CellStar in North America, made as of November 20, 2006, by and  between Motorola, Inc. and CellStar, Ltd.** |   | Current Report on Form 8-K.                             |   | December 20, 2006    |
|        |   |                                                                                                                                                                           |   |                                                    |   |                 |
| 21.1        |   | Subsidiaries of the Company.                                                                                                                                                   |   | Form 10-K for the fiscal year ended November 30,  2006. |   | February 12, 2007    |
|        |   |                                                                                                                                                                           |   |                                                    |   |                 |
| 23.1        |   | Consent of Grant Thornton LLP.                                                                                                                                                 |   | Form 10-K for the fiscal year ended November 30,  2006. |   | February 12, 2007    |
|        |   |                                                                                                                                                                           |   |                                                    |   |                 |
| 31.1        |   | Certification of the Chief Executive Officer pursuant  to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                  |   |                                                    |   | Filed herewith. |
|        |   |                                                                                                                                                                           |   |                                                    |   |                 |
| 31.2        |   | Certification of the Chief Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                       |   |                                                    |   | Filed herewith. |
|        |   |                                                                                                                                                                           |   |                                                    |   |                 |
| 31.3        |   | Certification of the Chief Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                       |   |                                                    |   | Filed herewith. |

----

*                    Theexhibit is a management contract or compensatory plan or agreement.

**             Certainprovisions of this exhibit are subject to a request for confidential treatmentfiled with the Securities and Exchange Commission.

17

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**SIGNATURES**

Pursuantto the requirements of Section 13 or 15(d) of the Securities Exchange Actof 1934, as amended, the registrant has duly caused this report to be signed onits behalf by the undersigned, thereunto duly authorized.
|            | **CELLSTAR CORPORATION** |
|------------|--------------------------|
| ** ** | ** **               | ** ** | ** ** |
|       | By:                      |   | /s/ Elaine  Flud Rodriguez |
|       |                     | ** ** | **Elaine  Flud Rodriguez** |
|       |                     |   | **Senior  Vice President and General Counsel** |
|       |                     |   | ** ** |
|       |                     | ** ** | **Date:  March 30, 2007** |

 

 

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