<PAGE>   1
 
                                                                       EXHIBIT A
 
                             TRAK AUTO CORPORATION
                                3300 75TH AVENUE
                            LANDOVER, MARYLAND 20785
 
                    ---------------------------------------
 
                             INFORMATION STATEMENT
                    ---------------------------------------
 
                        PURSUANT TO SECTION 14(F) OF THE
                  SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
                           AND RULE 14F-1 THEREUNDER
 
     This Information Statement is being mailed on or around June 2, 1998 to the
holders of record of outstanding shares of common stock, par value $.01 per
share (the "Common Stock" or the "Shares"), of Trak Auto Corporation, a Delaware
corporation (the "Company"). You are receiving this Information Statement in
connection with the possible election of persons designated by Richfood
Holdings, Inc., a Virginia corporation ("Richfood"), to a majority of the seats
on the Board of Directors of the Company (the "Company Board").
 
     On April 9, 1998, Dart Group Corporation ("Dart"), which owned
approximately 67% of the outstanding Shares of the Company, Richfood and DGC
Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of
Richfood ("Merger Sub"), entered into an Agreement and Plan of Merger (the
"Merger Agreement") pursuant to which (i) Richfood caused Merger Sub to commence
a tender offer (the "Offer") for all of the outstanding common stock, par value
$1.00 per share, of Dart (the "Dart Common Stock") at a price of $160.00 per
Share, net to the seller in cash, and (ii) Merger Sub merged with and into Dart
with Dart as the surviving corporation (the "Merger"). As a result of the Offer
and the Merger, Dart became a wholly owned subsidiary of Richfood and,
consequently, Richfood became the beneficial owner of approximately 67% of the
Shares of the Company.
 
     As the majority shareholder of the Company, Richfood has determined to
designate such number of directors so that affiliates of Richfood would
constitute a majority of directors, with the Company's current board members
remaining on the Company Board. This Information Statement is required by
Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and Rule 14f-1 promulgated thereunder.
 
     You are urged to read this Information Statement carefully. You are not,
however, required to take any action. The information contained in this
Information Statement concerning Richfood has been furnished to the Company by
Richfood and the Company assumes no responsibility for the accuracy or
completeness of such information.
 
GENERAL
 
     The Shares are the only class of outstanding voting securities. Each Share
is entitled to one vote. As of May 20, 1998, there were 5,909,179 Shares
outstanding.
<PAGE>   2
 
RIGHT TO DESIGNATE DIRECTORS; THE RICHFOOD DESIGNEES
 
     Pursuant to the Offer and the Merger, Richfood, through its ownership of
the Dart Common Stock, obtained control of the Company. Approximately 96% of the
outstanding Dart Common Stock was accepted for payment by Richfood at the
closing of the Tender Offer on May 13, 1998 at a purchase price of $160 per
share, net to the seller in cash. The remaining shares were purchased for the
same consideration in a parent-subsidiary merger which was effective on May 18,
1998 (the "Effective Time"). Because Dart owns approximately 67% of the Shares
of the Company, Richfood's purchase of all of the Dart Common Stock resulted in
the transfer of ultimate ownership of Dart's controlling interest in the Company
to Richfood. The aggregate purchase price of the Dart Common Stock acquired
pursuant to the Offer and the Merger was $201,116,325, which was funded from
borrowings under credit facilities provided by First Union National Bank ("First
Union"), as lender and administrative agent for a syndicate of banks, in an
aggregate of $450 million, $250 million of which is a five-year revolving credit
facility and $200 million of which is an eighteen month term loan. Borrowings
under the facilities bear interest at a variable rate per annum, which is
initially equal to LIBOR plus 1%. The representations, warranties and covenants
set forth in the credit facilities are substantially similar to those set forth
in Richfood's previously existing credit facilities with First Union, as lender
and administrative agent for a syndicate of banks. The new credit facilities
contain provisions requiring early repayment of the term loan with the net
proceeds of new offerings of equity securities or senior debt by Richfood and
with the net proceeds of any sale of Richfood's interest in (i) the Company,
(ii) Crown Books Corporation, a Delaware corporation, (iii) Total Beverage
Corp., a Delaware corporation and (iv) certain real estate assets.
 
     Pursuant to the Merger Agreement, the parties thereto agreed that Messrs.
Stokely and Belknap would constitute the entire Board of Directors of Dart as of
the Effective Time. Following the commencement of the Offer but prior to the
Effective Time, the parties further agreed that Mr. Stone would also serve as a
Director of Dart.
 
     At the direction of Richfood, the Company Board intends to increase its
size to nine members, which will comprise the four current directors and five
members recommended by Richfood (the "Richfood Designees"), three of whom, John
E. Stokely, John C. Belknap and Alec C. Covington, have already been elected as
directors of the Company.
 
     Set forth below is certain information with respect to the Richfood
Designees:
 
<TABLE>
<CAPTION>
                                          PRINCIPAL OCCUPATION OR EMPLOYMENT
                 NAME                           DURING LAST FIVE YEARS          AGE
                 ----                     ----------------------------------    ---
<S>                                     <C>                                     <C>
John E. Stokely.......................  President and Chief Executive Officer   45
                                        of Richfood (since 1996); former
                                        President and Chief Operating Officer
                                        (1995-1996), Executive Vice President
                                        Finance and Administration (1993-1995)
                                        and Senior Vice President -- Finance
                                        and Chief Financial Officer
                                        (1991-1993) of Richfood.
</TABLE>
 
                                        2
<PAGE>   3
 
<TABLE>
<CAPTION>
                                          PRINCIPAL OCCUPATION OR EMPLOYMENT
                 NAME                           DURING LAST FIVE YEARS          AGE
                 ----                     ----------------------------------    ---
<S>                                     <C>                                     <C>
John C. Belknap.......................  Executive Vice President and Chief      51
                                        Financial Officer of Richfood (since
                                        1997); Executive Vice President and
                                        Chief Financial Officer, officemax,
                                        Inc. (1995-1997); Executive Vice
                                        President and Chief Financial Officer,
                                        Zale Corporation (1994-1995);
                                        independent financial consultant
                                        (1990-1994).
John D. Ryder.........................  President and Chief Operating Officer   50
                                        of Richfood METRO/BASICS Retail
                                        Division (since 1995); President and
                                        Chief Operating Officer retail
                                        division of Super Rite Foods, Inc.
                                        (1990-1995).
Alec C. Covington.....................  President-Wholesale Operations of       41
                                        Richfood (since November 1997);
                                        Executive Vice President and Chief
                                        Operating Officer -- Wholesale
                                        Operations of Richfood (April
                                        1997-November 1997); President and
                                        Chief Operating Officer, Richfood,
                                        Inc. (1996); Executive Vice President
                                        and Chief Operating Officer, Richfood
                                        Inc. (1995-1996); President and Chief
                                        Operating Officer, Houschens
                                        Industries, Inc. (1993-1995);
                                        President, Quincy Florida division of
                                        SuperValu Inc. and President,
                                        Greenville, Kentucky division of
                                        Wetterau, Inc. (1990-1993).
David W. Hoover.......................  Vice President -- Finance of Richfood   34
                                        (since 1993); Director -- Planning and
                                        Analysis, Richfood (1990-1993).
</TABLE>
 
     Richfood has informed the Company that each of the individuals listed above
has consented to act as a director, if so designated. If necessary, Richfood may
choose additional or other Richfood Designees, subject to the requirements of
Rule 14f-1.
 
     There are no material legal proceedings to which any of the Richfood
Designees, or any associate of any such Richfood Designee, is a party adverse to
the Company or any of its subsidiaries. None of the Richfood Designees, or any
associate of any such Richfood Designee, has any material interest adverse to
the Company or any of its subsidiaries.
 
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
 
     The following table sets forth certain information with respect to the
current directors and executive officers of the Company as of May 20, 1998,
other than Messrs. Stokely, Belknap and Covington, who are described above.
 
                                        3
<PAGE>   4
 
RICHARD B. STONE
Chairman of the Board of Directors and Chief Executive Officer
Director since 1997
Age 69
 
     RICHARD B. STONE was appointed Chairman of the Board and Chief Executive
Officer in February 1998. He served as Acting Chief Executive Officer from
October 1997 to February 1998. He is also chairman of Dart and certain of its
affiliates, including Crown Books Corporation ("Crown Books") and Shoppers Food
Warehouse Corp. ("Shoppers"). From December 1995 to February 17, 1998, Mr. Stone
was the Voting Trustee of a trust that held all of the voting stock of Dart.
From 1992 to 1994, Mr. Stone was a director of International Service System. He
served as United States Ambassador to Denmark from 1991 to December 1993, and he
is currently a member of the Council of American Ambassadors. He was Chief
Operating Officer of Capital Bank, N.A. from 1989 to 1991, and was Vice Chairman
of the Board of Directors of Capital Bank, N.A. from 1985 to 1991. Senator Stone
served as President Reagan's Special Envoy for Central American Affairs and
Ambassador-at-Large from 1983 to 1984. He was a United States Senator from 1975
to 1981, representing the State of Florida.
 
HARRY M. LINOWES
Director since 1997
Age 70
 
     HARRY M. LINOWES has been a Director of the Company and its subsidiaries
since October 21, 1997. Mr. Linowes is a consultant. Prior to his retirement,
Mr. Linowes served as a Senior Partner of BDO Seidman, L.L.P. Accountants and
Consultants ("BDO Seidman") from 1992 to 1996, and a Managing Partner from 1986
to 1992. In 1986, Mr. Linowes, then the Managing Partner of the Washington, D.C.
office of Leopold & Linowes, oversaw the merger of that firm with BDO Seidman.
Mr. Linowes has served as President of the Greater Washington Society of
Certified Public Accountants, as President of the Washington, D.C. Estate
Planning Counsel, and as Chairman of the Executive Committee of CPA Associates
(an international association of CPA firms). He has been active in leadership
roles in many civic organizations.
 
HOWARD M. METZENBAUM
Director since 1997
Age 80
 
     HOWARD M. METZENBAUM has been a Director of the Company and its
subsidiaries since October 21, 1997. He currently serves on the Board of the
Public Citizen and National Peace Garden and serves as Chairman of the Board of
the Consumer Federation of America. He served also as a United States Senator
for the State of Ohio between 1977 and 1995, and from January 1974 to December
1974. Senator Metzenbaum was a practicing attorney prior to joining the United
States Senate. He was head of the firm Metzenbaum, Gaines, Schwartz, Arupansky,
Finley and Stern. Senator Metzenbaum was chairman of the Board of COMCORP from
1969 to 1974. Prior to 1974, he served as Chairman of the Board of ITT Consumer
Services Corp. ("ITT") and as a director of Capital National Bank of Cleveland
and Society National Bank of Cleveland for several years. From 1958 to 1966, he
served as Chairman of the Board of the Airport Parking Company of America, which
later merged with ITT.
 
                                        4
<PAGE>   5
 
R. KEITH GREEN
President and Director
Age 47
 
     R. KEITH GREEN has been President of the Company since 1990 and a Director
of the Company since 1991. From 1987 to 1990, Mr. Green was President and Chief
Executive Officer of Whitlock Corporation. Prior to 1987, he served as Vice
President of Stores of Auto Zone.
 
DAVID B. MACGLASHAN
Senior Vice President and Chief Financial Officer
Age 54
 
     DAVID B. MACGLASHAN has been Senior Vice President and Chief Financial
Officer of the Company since December 1995. From 1991 to 1995, he was Principal
Accounting Officer of the Company. From 1987 to 1991, Mr. MacGlashan was Vice
President of Finance and Chief Financial Officer of WSR, Inc. (formerly Whitlock
Corporation). Prior to 1987, he served as Chief Financial Officer of I.B.
Diffusion Ltd.
 
ROBERT E. BRANN
Executive Vice President
Age 46
 
     ROBERT E. BRANN has been Executive Vice President of the Company since
1990. From 1989 to 1990, Mr. Brann was Vice President of Merchandising of the
Company. Prior to 1989, he served as Vice President of Merchandising and later
Vice President of Store Operations and Administration of Franks Nursery and
Crafts.
 
ROBERT H. THOMAS
Senior Vice President of Operations
Age 48
 
     ROBERT H. THOMAS was appointed Senior Vice President of Operations in June
1997. Mr. Thomas has held various positions with the Company's store operations.
He joined the Company in May 1984 as a District Manager.
 
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
 
     Section 16(a) of the Exchange Act requires directors and executive
officers, and persons who beneficially own more than ten percent of the issued
and outstanding Shares to file reports of ownership of the Company's securities
and changes in such ownership with the Securities and Exchange Commission (the
"SEC"). Officers, directors and greater than ten percent beneficial stockholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. Based solely upon its review of such forms
received by it, the Company believes that each of its directors, executive
officers and greater than ten percent beneficial stockholders complied with all
Section 16(a) filing requirements applicable to them during the fiscal year
ended January 31, 1998, except that a Form 3 for each of Richard Stone, Howard
Metzenbaum and Harry Linowes was not timely filed.
 
                                        5
<PAGE>   6
 
                SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
 
     The following table sets forth certain information concerning all
stockholders known by the Company to be beneficial owners of five percent or
more of the Common Stock as of May 20, 1998.
 
<TABLE>
<CAPTION>
                                                               AMOUNT AND
                                                               NATURE OF
                                                               BENEFICIAL     PERCENT OF
                      NAME AND ADDRESS                        OWNERSHIP(1)      CLASS
                      ----------------                        ------------    ----------
<S>                                                           <C>             <C>
Richfood Holdings, Inc......................................   3,962,245        67.05%
4860 Cox Road
Suite 300
Glen Allen, VA 23060
Heartland Advisors, Inc.(2).................................     960,650        16.26%
790 N. Milwaukee Street
Milwaukee, WI 53203
</TABLE>
 
---------------
(1) Under the rules of the SEC, a person is deemed to be a beneficial owner of a
     security if such owner, directly or indirectly, has or shares the power to
     vote or direct the voting of such security or the power to dispose or
     direct the disposition of such security. Accordingly, more than one person
     may be deemed to be a beneficial owner of the same securities. Unless
     otherwise indicated by footnote, the persons named in the table have sole
     voting and investment power with respect to the shares of Common Stock
     beneficially owned.
 
(2) Based on holdings reported by Heartland Advisors, Inc. ("Heartland") on
     Schedule 13G/A, filed with the SEC on February 13, 1998. Heartland is a
     registered investment advisor under the Investment Advisors Act of 1940. In
     its Schedule 13G/A, Heartland has reported that it has sole voting power
     over 822,350 shares and sole investment power over 960,650 shares.
 
                                        6
<PAGE>   7
 
                        SECURITY OWNERSHIP OF MANAGEMENT
 
     The following table sets forth information as of May 20, 1998 regarding the
ownership of the Common Stock by the following persons: (a) each of the
Company's current directors and Richfood Designees, (b) each of the executive
officers named in the Summary Compensation Table and (c) all directors and
executive officers as a group.
 
<TABLE>
<CAPTION>
                                                                                APPROXIMATE
                                                     TITLE OF      NO. OF       PERCENTAGE
                      NAME                            CLASS        SHARES        OF CLASS
                      ----                           --------      ------       -----------
<S>                                                <C>             <C>          <C>
Richard B. Stone.................................  None
  None Chief Executive Officer
  Chairman
R. Keith Green...................................  Common Stock    38,333(1)          *
  President
Howard M. Metzenbaum.............................  None
  Director
Harry M. Linowes.................................  None
  Director
Robert E. Brann..................................  Common Stock     8,899(2)          *
  Executive Vice President
David B. MacGlashan..............................  Common Stock     8,899(2)          *
  Senior Vice President,
  Chief Financial Officer
Robert H. Thomas.................................  Common Stock     2,916(3)          *
  Senior Vice President,
  Operations
Herbert H. Haft (4)..............................  None
  Former Chief Executive
  Officer
Dennis N. Weiss (5)..............................  Common Stock     2,917(6)          *
  Former Executive VP,
  Real Estate
John E. Stokely..................................  None
  Richfood Designee
John C. Belknap..................................  None
  Richfood Designee
Alec C. Covington................................  None
  Richfood Designee
David W. Hoover..................................  None
  Richfood Designee
John D. Ryder....................................  None
  Richfood Designee
All directors and executive officers as a group
  (14 persons)...................................  Common Stock    61,964(6)       1.0%
</TABLE>
 
---------------
 
 * Less than one percent.
(1) Exercisable options for 33,333 shares.
(2) Exercisable options for 8,899 shares.
(3) Exercisable options for 2,916 shares.
(4) Herbert H. Haft was Chief Executive Officer of the Company until December
    1997.
 
                                        7
<PAGE>   8
 
(5) Dennis N. Weiss was Executive Vice President, Real Estate of the Company
    until September, 1997.
(6) Exercisable options for 2,917 shares.
(7) Exercisable options for 56,964 shares.
 
                          POTENTIAL CHANGE IN CONTROL
 
     The new credit facilities with First Union provide that, in the event
Richfood's senior debt rating is downgraded below investment grade before the
term loan is repaid, then, at the lenders' request, Richfood will grant to the
lenders a perfected first priority security interest in, among other things, the
Common Stock owned by Dart. In the event any such pledge is required and,
thereafter, an event of default occurs and is continuing under the credit
facilities, the lenders could have the ability to cause a further change in
control of the Company.
 
                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     Dart provides the Company with certain general and administrative services.
Dart charged the Company approximately $1,873,000 for such services during the
year ended January 31, 1998. In addition, the Company provides similar services
to Dart and its other subsidiaries. The Company charged Dart and its
subsidiaries approximately $768,000 for such services during the year ended
January 31, 1998. In management's opinion, the intercompany charges for these
services were equal to the costs incurred by Dart or the Company to provide
these functions. It is not practicable for the Company to estimate the cost it
would have incurred for these services if it had operated as an unaffiliated
entity. In addition, Dart charges the Company, on a monthly basis, for actual
expenses that relate directly to the Company's operations. Substantially all
such charges are supported by invoices from unrelated parties designating the
Company as recipient of the related goods and services or were for matters
related to Dart and all of its affiliated companies (including the Company) and
were allocated on a judgmental basis by management. These direct charges were
$4,121,000 in the year ended January 31, 1998.
 
     The Company leased a 176,000 square foot warehouse located in Bridgeview,
Illinois from a private partnership in which Haft family members own all of the
partnership interests. As a result of the various settlements with members of
the Haft family (the "Settlements"), the Company's lease is now with a
subsidiary of Dart. For a description of the Settlements, see Item 3 of the
Company's Annual Report on Form 10-K for the fiscal year ended January 31, 1998.
The lease is for thirty years and six months, provides for rental payments
increasing approximately 15% every five years over the term of the lease and
commenced in 1984. The current annual rental is $754,000. The lease also
requires the Company to pay for maintenance, utilities, insurance and real
estate taxes on the warehouse.
 
     The Company subleases from Dart 210,000 square feet of a warehouse and
office facility, located in Landover, Maryland, which it shares with Dart and
Crown Books. The sublease is for 30 years and six months, provides for rental
payments increasing approximately 15% every five years over the term of the
sublease and commenced in 1985. The current annual rental is $1,647,000. The
sublease also requires the additional payment of maintenance, utilities,
insurance and real estate taxes allocable to the space subleased. Dart
originally leased the entire 271,000 square foot warehouse and office facility
from a private partnership in which Haft family members owned all of the
partnership interests. As a result of the Settlements, a Dart subsidiary now
owns the warehouse and office facility. The Company's sublease is on the same
terms as Dart's lease with the Haft family partnership.
 
     The Company has an arrangement with Dart to sublease space in a warehouse
facility adjacent to the above warehouse and office facility. Dart originally
leased this property from a partnership in which Haft family members owned all
the partnership interests until the Settlements. Dart now owns the property. The
 
                                        8
<PAGE>   9
 
rental is variable dependent on square footage used. In fiscal 1998, the rental
was $177,000. The arrangement also requires the Company to pay a prorated share
of utilities, real estate taxes and maintenance.
 
     The Company leases a 317,000 square foot warehouse located in Ontario,
California from a private partnership in which Haft family members own all of
the partnership interests. The lease is for 20 years and provides for increasing
rental payments, based upon the Consumer Price Index for the Los Angeles area,
over the term of the lease. The lease commenced in 1989. The current annual
rental is $1,516,000. The lease also requires the Company to pay for
maintenance, utilities, insurance and real estate taxes on the warehouse.
 
     Pursuant to the Settlements, Ronald S. Haft agreed to transfer the real
estate and partnership interests controlled by him in the Ontario, California
office and warehouse facility to Dart (or its subsidiaries). These transfers are
subject to certain contingencies, including bankruptcy court approval, mortgagee
approval and challenges brought by Herbert H. Haft concerning the extent of
Ronald S. Haft's ownership interest in the property. As a result of the
Settlements, the remaining contingencies relate to agreements with the mortgagee
and bankruptcy reorganization plans.
 
     Of the Company's 181 stores as of January 31, 1998, 22 stores were held
under lease agreements from entities in which members of the Haft family own
substantially all the beneficial interests. Two stores were subleased from Crown
Books and one store is subleased from Shoppers. These 25 store lease agreements
provide for various termination dates from 1998 to 2024 (assuming option periods
are exercised) and require future minimum rentals aggregating $42,293,000 at
January 31, 1998. These lease agreements also require payment of a percentage of
sales in excess of a stated minimum. During the year ended January 31, 1998, the
fees and rentals paid by the Company under these agreements were $2,279,000.
 
     The total annual fees and rent paid to Haft-owned entities for stores,
warehouse and office space was $5,999,000 during fiscal 1998.
 
            THE BOARD OF DIRECTORS, ITS COMMITTEES AND COMPENSATION
 
     The Company Board held twelve meetings and took action by written consent
on one occasion during the year ended January 31, 1998. The Company Board has an
Audit Committee and a Compensation Committee. The Company does not have a
standing committee on nomination. In 1994, the Company Board established an
Executive Committee. All Directors attended at least seventy-five percent of the
meetings of the Company Board and the committees on which such Directors served
during fiscal 1998.
 
     The Audit Committee currently consists of Howard M. Metzenbaum and Harry M.
Linowes, who both joined the Audit Committee on October 21, 1997 (subject to
approval of the Delaware Chancery Court, in connection with the litigation
involving control of the Company, which was pending at that time). Richard Stone
was a member of the Audit Committee from October 21, 1997 (subject to approval
of the Delaware Chancery Court, in connection with the litigation involving
control of the Company, which was pending at that time) until he became Chief
Executive Officer, on February 17, 1998. The Audit Committee held three meetings
during fiscal 1998, one of which occurred after Sen. Metzenbaum and Mr. Linowes
joined the Audit Committee. The Audit Committee reviews potential conflicts of
interest, reviews the results of the annual audit with the Company's independent
auditors and the adequacy of the Company's internal accounting controls and
practices, and recommends to the Company Board the independent auditors to be
retained by the Company.
 
     The Compensation Committee currently consists of Howard M. Metzenbaum and
Harry M. Linowes, who both joined the Compensation Committee on October 21, 1997
(subject to approval of the Delaware Chancery Court, in connection with the
litigation involving control of the Company, which was pending at that time).
The members of the Compensation Committee met informally from time to time
during the last fiscal
 
                                        9
<PAGE>   10
 
year, but no formal meetings were held in fiscal 1998 and no action was taken by
written consent. The Company's Chief Executive Officer is to consult with the
Compensation Committee prior to exercising such officer's authority to fix the
compensation of the Company's officers. The Compensation Committee also advises
the Company Board as to the compensation of the Chief Executive Officer.
 
     In 1994, the Board of Directors created the Executive Committee to conduct
the affairs of the Company with respect to matters that were the subject of
disputes involving the company and members of the Haft family, the former
controlling shareholders of Dart. Sen. Metzenbaum and Mr. Linowes joined the
Executive Committee on October 21, 1997 (subject to approval of the Delaware
Chancery Court, in connection with the litigation involving control of the
Company, which was pending at that time).
 
     On June 1, 1998, the Board of Directors established an Independent
Committee, composed of Howard M. Metzenbaum and Harry M. Linowes, which was
charged with responsibility for evaluating proposals to maximize shareholder
value for the Company's shareholders.
 
     Compensation.  Each director is compensated by the Company at the rate of
$15,000 per year and each outside director is compensated an additional $1,000
per meeting physically attended. When board meetings are held for affiliates of
the Company on the same day as a Company Board meeting, common directors are
entitled to a single $1,000 payment, allocated among each such affiliate. Those
directors who are members of the Company's audit committee receive an annual fee
of $5,000. Directors who are also members of the audit committee of certain
affiliates of the Company are entitled to a single fee of $5,000, attributable
pro rata to each such company.
 
     Members of the Independent Committee are compensated at a rate of $275 per
hour plus reimbursement of expenses. In addition, upon consummation of a
transaction that results in a change of control of the Company, members of the
Independent Committee will be entitled to a $25,000 bonus payment. Members of
the Executive Committee are compensated at a rate of $275 per hour plus
reimbursement of expenses. During fiscal 1998, the compensation paid by Dart and
its subsidiaries, including the Company, to members of the respective Executive
Committees for their services totaled $1,137,000, of which $379,000 was paid by
the Company. Of the total amount paid by the Company, the members of the current
Executive Committee received a total of approximately $30,000 in the last fiscal
year, with former members receiving the remaining $349,000.
 
     Trak Auto Corporation 1993 Stock Option Plan.  The Trak Auto Corporation
1993 Stock Option Plan specifies that 1,500 Non-Qualified Stock Options shall be
granted during each calendar year to each non-employee director. Such options
are effective as of July 31 of each year and expire five years from the date of
grant.
 
     Deferred Compensation Plan.  The Company adopted the 1988 Trak Auto
Corporation Deferred Compensation Plan for Directors, effective January 1, 1988
(the "Compensation Plan"). The Compensation Plan permits the Company's directors
to defer the payment of all or a specified part of future compensation payable
for services as director, including fees for serving on or attending meetings of
committees of the Company Board. Each director may elect, on or before January
31 of any year, to defer payment of compensation that is payable on or after the
February 1st following such election, for services to be performed during the
twelve-month period commencing on such February 1 and ending on January 31 of
the following calendar year (the "Plan Year"). After such an election, all
subsequent compensation will be deferred until the director notifies the
Company, prior to the commencement of any Plan Year, that compensation for
future Plan Years is to be paid on a current basis.
 
     Deferred compensation will not be paid to a director as earned, but will be
held in the Company's general funds and credited to a bookkeeping account
maintained by the Company in the name of the director. Each
 
                                       10
<PAGE>   11
 
participating director is treated as a creditor of the Company with respect to
such funds. Deferred compensation will be paid to directors in a lump sum on the
February 15th of the Plan Year after retirement, unless the director elects, at
the time he exercises the deferral option, to be paid in up to ten annual
installments.
 
                       COMPENSATION OF EXECUTIVE OFFICERS
 
SUMMARY COMPENSATION TABLE
 
     The following table sets forth in summary form all compensation for all
services rendered in all capacities to the Company and its subsidiaries for the
three years ended January 31, 1998 to (i) the Chief Executive Officer of the
Company, (ii) the other four most highly paid executive officers of the Company
and (iii) the former Chief Executive Officer of the Company (collectively, the
"Named Executive Officers").
 
<TABLE>
<CAPTION>
                                                                                      LONG TERM
                                                                                     COMPENSATION
                                                  ANNUAL COMPENSATION                   AWARDS
                                           ----------------------------------   ----------------------
                                                                   OTHER        RESTRICTED  SECURITIES
            NAME AND              FISCAL                          ANNUAL          STOCK     UNDERLYING      ALL OTHER
       PRINCIPLE POSITION          YEAR     SALARY    BONUS   COMPENSATION(1)     AWARDS     OPTIONS     COMPENSATION(2)
       ------------------         ------    ------    -----   ---------------   ----------  ----------   ---------------
<S>                               <C>      <C>        <C>     <C>               <C>         <C>          <C>
Richard B. Stone................  1998         None   --          $ 3,750(3)        --            --             --
  Chief Executive Officer(3)
R. K. Green.....................  1998     $340,200   --          $20,000(4)        --        20,000         $3,000
  President                        1997    $340,200   --          $20,000(4)        --        20,000         $3,000
                                   1996    $310,200   --          $20,000(4)        --        25,000         $3,000
Robert E. Brann.................  1998     $263,500   --               --           --        12,500         $3,000
  Executive Vice President         1997    $259,800   --               --           --         7,500         $3,000
                                   1996    $247,800   --               --           --         7,000         $3,000
David B. MacGlashan.............  1998     $224,400   --               --           --        12,500         $3,000
  Senior VP, Chief                 1997    $219,800   --               --           --         7,500         $3,000
    Financial Officer              1996    $207,800   --               --           --         7,000         $3,000
Robert H. Thomas................  1998     $149,100   --               --           --         9,000         $3,000
  Senior VP, Operations            1997    $131,700   --               --           --         2,500         $3,000
                                   1996    $120,500   --               --           --         1,750         $3,000
Herbert H. Haft.................  1998     $250,000   --          $15,000(5)        --            --         $3,000
  Former Chief Executive           1997    $250,000   --          $15,000(5)        --            --         $3,000
    Officer                        1996    $250,000   --          $15,000(5)        --            --         $3,000
Dennis N. Weiss.................  1998     $194,800   --               --           --         2,500         $3,000
  Former Executive VP,             1997    $110,200   --               --           --         2,500         $3,000
    Real Estate                    1996    $110,000   --               --           --         2,500         $1,000
</TABLE>
 
---------------
(1) Excludes perquisites and other personal benefits, unless the aggregate
    amount of such compensation is at least $10,000 or 10% of the total annual
    salary and bonus reported for the Named Executive Officer.
(2) Includes approximate allocation to the accounts of the Named Executive
    Officers pursuant to the 401(k) retirement and/or profit-sharing plans of
    the Company.
(3) Richard B. Stone was appointed Chief Executive Officer in October 1997. He
    received board fees of $3,750 in fiscal 1998 and was not otherwise
    compensated by the Company.
(4) Includes fees received as a director of the Company ($15,000) and health,
    life and disability insurance ($5,000).
(5) Includes fees received as a director of the Company.
 
                                       11
<PAGE>   12
 
OPTION GRANTS IN LAST FISCAL YEAR
 
     The following table provides information with respect to grants of options
for shares of common stock of the Company to the Named Executive Officers during
fiscal 1998, and the exercise price, expiration date and estimates of the
potential realizable values of such options.
 
<TABLE>
<CAPTION>
                                                                                    POTENTIAL
                                                                                  RELIABLE VALUE
                                         INDIVIDUAL GRANTS                          AT ASSUMED
                       ------------------------------------------------------    ANNUAL RATES OF
                       NUMBER OF      % OF TOTAL                                   STOCK PRICE
                       SECURITIES      OPTIONS                                   APPRECIATION FOR
                       UNDERLYING      GRANTED                                    OPTION TERM(2)
                        OPTIONS      TO EMPLOYEES    EXERCISE OR   EXPIRATION   ------------------
        NAME           GRANTED(1)   IN FISCAL YEAR   BASE PRICE       DATE        5%        10%
        ----           ----------   --------------   -----------   ----------   -------   --------
<S>                    <C>          <C>              <C>           <C>          <C>       <C>
Richard B. Stone.....      None
R. Keith Green.......    20,000         10.3%          $13.00       7/31/02     $71,800   $158,700
Robert E. Brann......    12,000          6.2%          $13.00       7/31/02     $43,100   $ 95,200
David B. MacGlashan..    12,000          6.2%          $13.00       7/31/02     $43,100   $ 95,200
Robert H. Thomas.....     9,000          4.3%          $13.00       7/31/02     $32,300   $ 71,400
Herbert H. Haft......      None
Dennis N. Weiss......     2,500          1.3%          $13.00       7/31/02     $ 9,000   $ 19,800
</TABLE>
 
---------------
 
(1) Options become exercisable over time. One-third become exercisable one year
    from the date of grant, an additional one-third become exercisable two years
    from the date of grant and the last third become exercisable three years
    from the date of grant. Options expire five years from the date of grant.
    Options are granted at market price on the date of grant. All options
    granted to executive officers are incentive stock options ("ISO's") under
    the Internal Revenue Code of 1986, as amended (subject to statutory
    limitations). ISO's entitle the option holder to special tax treatment
    provided that the option holder satisfies certain holding periods with
    respect to shares acquired on the exercise of options. In general, if the
    holding periods are satisfied, the option holder will incur no taxable
    income by reason of exercise of the option, and the Company will not receive
    an income tax deduction by reason of the exercise. The option holder will
    recognize gain or loss upon a subsequent sale of the common stock, based on
    the difference between the amount for which the stock is sold, and the
    option price paid.
 
(2) Potential realizable value is based on an assumption that the price of the
    Common Stock appreciates at the annual rate shown (compounded annually) from
    the date of grant until the end of the five year option term. These numbers
    are calculated based on the rules and regulations promulgated by the SEC and
    do not reflect the Company's estimate of future stock price growth.
 
                                       12
<PAGE>   13
 
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
 
     For each of the Named Executive Officers, the following table provides
information regarding the exercise of options during fiscal 1998 and the number
and value of unexercised options held as of January 31, 1998.
 
<TABLE>
<CAPTION>
                                                                            NUMBER OF
                                                                           SECURITIES         VALUE OF
                                                                           UNDERLYING        UNEXERCISED
                                                                           UNEXERCISED      IN-THE-MONEY
                                                                           OPTIONS AT        OPTIONS AT
                                                                           FISCAL YEAR       FISCAL YEAR
                                                                               END               END
                                                                         ---------------   ---------------
                                            SHARES ACQUIRED    VALUE      EXERCISABLE/      EXERCISABLE/
                   NAME                       ON EXERCISE     REALIZED    UNEXERCISABLE     UNEXERCISABLE
                   ----                     ---------------   --------    -------------     -------------
<S>                                         <C>               <C>        <C>               <C>
Richard B. Stone..........................       None           --           --/--             --/--
R. Keith Green............................       None           --        33,333/38,334        --/--
Robert E. Brann...........................       None           --         8,899/18,668        --/--
David B. MacGlashan.......................       None           --         8,899/18,668        --/--
Robert H. Thomas..........................       None           --         2,916/11,251        --/--
Herbert H. Haft...........................       None           --           --/--             --/--
Dennis N. Weiss...........................       None           --         2,917/ 5,001        --/--
</TABLE>
 
EMPLOYMENT AGREEMENTS
 
     In January 1995, the Company entered into an employment agreement with each
of Messrs. Green, Brann and MacGlashan. Mr. Green's agreement was for an
original term of two years, from February 1, 1995 to January 31, 1997, and was
automatically extended pursuant to its terms for an additional two years at the
end of the original term, unless Mr. Green is terminated pursuant to the
agreement prior to such time. The other agreements were for an original term of
one year, from February 1, 1995 to January 31, 1996, and were automatically
extended for an additional one year at the end of the original term, unless the
individual is terminated pursuant to the agreement prior to such time.
 
     The agreements provide for the following rates of annual compensation: Mr.
Green, $300,000; Mr. Brann, $240,000; Mr. MacGlashan, $200,000 plus an
automobile allowance. Annual compensation is subject to annual increases, as
recommended to the Board by the Compensation Committee, following review and
performance appraisal by the Compensation Committee and approval by the Company
Board.
 
     Mr. Green is eligible for an annual bonus pursuant to a bonus agreement
based on performance. The bonus base is $75,000 if the Company meets budget, is
increased by a percentage of the Company's net income that exceeds budget and is
decreased by a percentage of net income that is below budget.
 
     On June 2, 1997, the Company entered into an employment agreement with
Robert H. Thomas. Mr. Thomas' agreement is for an original term of one year and
is automatically extended for an additional one year, unless Mr. Thomas is
terminated pursuant to the agreement prior to such time. The agreement provides
for an annual base salary of $150,000 per year, an automobile allowance of $650
per month and bonus and salary increases based on performance and review by the
Board of Directors.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     The Compensation Committee currently is comprised of the Company's outside,
nonemployee Directors (Howard M. Metzenbaum and Harry M. Linowes). No member of
the Compensation Committee has a relationship that would constitute an
interlocking relationship with executive officers or directors of another
entity.
 
                                       13
<PAGE>   14
 
                    REPORT OF THE COMPENSATION COMMITTEE ON
                             EXECUTIVE COMPENSATION
 
     This report describes the Company's compensation policies applicable to its
executive officers during the fiscal year ended January 31, 1998. During fiscal
1998, executive compensation policies were formulated by the Compensation
Committee. An Executive Compensation Program was developed in fiscal 1996 and
was implemented in fiscal 1997. This program shifts the former "base pay"
emphasis to one that is more closely tied to company performance.
 
     The key elements of the Company's executive compensation program consist of
base salaries that are determined based upon (a) concerns of competitive pay and
performance, (b) cash bonus awards that are driven solely on performance and (c)
ownership of stock options to align the interests of management with those of
stockholders. These elements are described in more detail below.
 
     Executive compensation during fiscal 1998 consisted principally of salary.
For executive officers other than the Chief Executive Officer, annual salary is
determined by the person to whom such officer reports (in the case of officers
other than the President, in consultation with the Chief Executive Officer),
based on the officer's previous year's salary and his superior's subjective
assessment of the responsibilities of the position held, the competitive market
for retail executives with comparable levels of responsibility, the executive's
performance on the job and other factors that the superior deems relevant or
appropriate.
 
     The Company's President is eligible to receive a bonus based on the
Company's operating results as compared to budget for the fiscal year. No
bonuses were awarded to the President or any other executive officer in fiscal
1998.
 
     The Compensation Committee believes that annual awards of stock options are
an effective means of aligning an executive's compensation with the interests of
shareholders, since the value of such options are tied directly to increases in
the market value of the Common Stock. The exercise price for such options
granted is the market value of the Common Stock on the date of grant. Options
become exercisable over time. One-third become exercisable one year from the
date of grant, an additional one-third become exercisable two years from the
date of grant and the last third become exercisable three years from the date of
grant. There is no set number of options that can be awarded in any year or any
formula for allocating options among the officers. The amount of options awarded
to each executive officer is based on the Compensation Committee's subjective
evaluation of the relative contributions of the executives to the Company.
 
     Prior to Sen. Metzenbaum and Mr. Linowes joining the Compensation
Committee, the Company granted stock options to certain executive officers
during fiscal 1998 based upon performance during fiscal 1997.
 
FISCAL 1997 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
 
     Richard B. Stone, the current Chief Executive Officer, does not receive
compensation from the Company other than director's fees, which were $3,750 in
fiscal 1998.
 
     Herbert H. Haft, the former Chief Executive Officer, received $250,000 in
salary from the Company in fiscal 1998. Mr. Haft's salary was not reviewed by
the Compensation Committee during the past fiscal year. From 1986 until his
resignation from the Company (in connection with his settlement with Dart and
its affiliates, including the Company), Mr. Haft was paid $250,000 each year
regardless of his performance and the performance of the Company.
 
                                       14
<PAGE>   15
 
LIMIT ON DEDUCTIBILITY OF CERTAIN COMPENSATION
 
     It is the responsibility of the Company Board to address the issues raised
by a change in the federal income tax laws that has made certain non-performance
based compensation to executive officers of public companies in excess of $1
million non-deductible to such companies. In this regard, the Company Board must
determine whether any actions with respect to this new limit should be taken by
the Company. At this time, it is not anticipated that any executive officer of
the Company will receive any such compensation in fiscal 1999. Therefore, the
Company Board has not taken any action to comply with the $1 million limitation.
The Company Board will continue to monitor this situation and will take
appropriate action if it is warranted in the future.
 
                                          Compensation Committee
 
                                          Howard M. Metzenbaum
                                          Harry M. Linowes
 
                                       15
<PAGE>   16
 
                         STOCK PRICE PERFORMANCE GRAPH
 
     The following graph compares cumulative total returns (assuming
reinvestment of dividends) on the Common Stock, the S&P Composite-500 Stock
Index and a peer company index (the S&P Retail Store Specialty Index) for the
five-year period ending January 31, 1998. This stock price performance graph
assumes that the value of the investment in the Common Stock and each index was
$100 on January 31, 1993. Through January 31, 1998, no dividends were paid on
the Common Stock. The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
 
                COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
                      FOR THE YEAR ENDED JANUARY 31, 1998
 
<TABLE>
<CAPTION>
               MEASUREMENT PERIOD                    TRAK AUTO         STANDARD &       RETAIL STORE
             (FISCAL YEAR COVERED)                  CORPORATION       POOR'S INDEX       COMPOSITE
<S>                                               <C>               <C>               <C>
1993                                                       100.000           100.000           100.000
1994                                                        66.892           112.990            99.685
1995                                                        93.243           119.926            96.636
1996                                                        81.081           166.241            90.035
1997                                                        76.351           210.120           102.727
1998                                                        58.108           223.196           138.705
</TABLE>