NAVIGATION TECHNOLOGIES CORP, S-1/A, 1996-08-22

NAVIGATION TECHNOLOGIES CORP
S-1/A, 1996-08-22
PREPACKAGED SOFTWARE

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 1996

REGISTRATION NO. 333-08409
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NAVIGATION TECHNOLOGIES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 7372 77-0170321
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION) 740 E. ARQUES AVENUE
SUNNYVALE, CA 94086
(408) 737-3200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

RONALD A. BRUMBACK
PRESIDENT AND CHIEF OPERATING OFFICER
NAVIGATION TECHNOLOGIES CORPORATION
740 E. ARQUES AVENUE
SUNNYVALE, CA 94086
(408) 737-3200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:
<TABLE>
<S> <C> <C>
BARRY E. TAYLOR, ESQ. W. LOEBER LANDAU, ESQ. GREGORY M. GALLO, ESQ.
DONNA M. PETKANICS, ESQ. SULLIVAN & CROMWELL DENNIS C. SULLIVAN, ESQ.
WILSON SONSINI GOODRICH & ROSATI 125 BROAD ST. GRAY CARY WARE & FREIDENRICH
PROFESSIONAL CORPORATION NEW YORK, NY 10004 A PROFESSIONAL CORPORATION
650 PAGE MILL ROAD (212) 558-4000 400 HAMILTON AVENUE
PALO ALTO, CALIFORNIA 94304 PALO ALTO, CA 94301
(415) 493-9300 (415) 328-6561
</TABLE>

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration
Statement.

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If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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EXPLANATORY NOTE

The shares of Common Stock registered by this registration statement are to
be offered pursuant to two forms of prospectus; one to be used in connection
with an offering in the United States and Canada (the "U.S. Prospectus") and
one to be used in connection with a concurrent offering outside the United
States and Canada (the "International Prospectus"). The U.S. Prospectus and
the International Prospectus will be identical except for the front and back
cover pages. The form of U.S. Prospectus is included herewith in its entirety.
Only the front and back cover pages of the International Prospectus are
included, appearing at the end of the U.S. Prospectus.
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Subject to Completion, dated August 22, 1996

PROSPECTUS

10,500,000 SHARES

[LOGO OF NAVIGATION TECHNOLOGIES]
COMMON STOCK

------------

Of the 10,500,000 shares of Common Stock, $.001 par value ("Common Stock"),
of Navigation Technologies Corporation ("NavTech" or the "Company") being
offered hereby, 8,400,000 shares are being offered initially in the United
States and Canada by the U.S. Underwriters (the "U.S. Offering") and 2,100,000
shares are being offered initially outside the United States and Canada by the
International Managers (the "International Offering"). Such offerings are
referred to collectively as the "Offerings".

Prior to the Offerings, there has been no public market for the Common Stock.
It is currently estimated that the initial public offering price will be
between $12.00 and $14.00 per share. See "Underwriting" for a discussion of the
factors to be considered in determining the initial public offering price. The
Common Stock has been approved for quotation on the Nasdaq National Market
under the symbol "NAVT," subject to official notice of issuance.

Philips Electronics N.V. ("Philips") has agreed to purchase, concurrently
with the closing of the Offerings, a number of shares of Common Stock that will
result in Philips owning 48% of the outstanding shares of Common Stock
(assuming no exercise of the over-allotment options described below). In
addition, Zenrin Co. Ltd. ("Zenrin") has agreed to purchase directly from the
Company shares of Common Stock having an aggregate purchase price of
$1,000,000. All of such shares to be purchased by Philips and Zenrin will be
purchased at the initial public offering price of the Common Stock offered
hereby, less the underwriting discount. See "Sale of Shares to Philips and
Zenrin" and "Certain Transactions."
------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 7.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
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<S> <C> <C> <C>
Per Share............................... $ $ $
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Total(3)................................ $ $ $
</TABLE>
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(1) The Company has agreed to indemnify the U.S. Underwriters and the
International Managers against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting estimated expenses of the Offerings of $2,000,000 payable
by the Company.

(3) The Company has granted the U.S. Underwriters a 30-day option to purchase
up to 1,260,000 additional shares of Common Stock on the same terms and
conditions as set forth above solely to cover over-allotments, if any. The
International Managers have been granted a similar option to purchase up to
315,000 additional shares solely to cover over-allotments, if any. If such
options are exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $ ,
$ and $ , respectively. See "Underwriting."
------------

The shares of Common Stock offered by this Prospectus are offered by the U.S.
Underwriters subject to prior sale, to withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the U.S.
Underwriters and to certain further conditions. It is expected that delivery of
the shares will be made at the offices of Lehman Brothers Inc., New York, New
York, on or about , 1996.

------------
LEHMAN BROTHERS
COWEN & COMPANY
SALOMON BROTHERS INC
, 1996
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[ARTWORK TO COME]

This page contains the caption

"NavTech Selected Relationships for Route Guidance Products"

together with logos for Alpine, Avis, Magneti Marelli, Acura, Siemens, Zexel,
Oldsmobile, National, Philips, Hertz and Rockwell.

The NavTech logo appears at the bottom of the page above the following text:

"NavTech is a trademark of Navigation Technologies Corporation. All other
trademarks are the property of respective owners"

IN CONNECTION WITH THE OFFERINGS, THE U.S. UNDERWRITERS AND INTERNATIONAL
MANAGERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE COMMON STOCK OF THE COMPANY AT A LEVEL ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED
ON THE NASDAQ NATIONAL MARKET, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
<PAGE>

This page contains the text "The NavTech Navigable Database for Route Guidance."
The page also contains ten pictures of Route Guidance Products that utilize the
NavTech database together with captions identifying the particular products. The
page also contains the following captions:

ACCURATE DETAILED COMPREHENSIVE

NavTech's customers include leading automotive electronics manufacturers from
around the world. Their route guidance products are now appearing in the United
States and Europe as factory and dealer installed new car options, in rental
cars, and in the automotive after-market.

Guidestar -- Route guidance products utilize NavTech's navigable database to
accurately calculate efficient routes to travel. Directions are displayed
graphically, as shown on the screen above, and delivered with voice prompts on a
turn-by-turn basis.

Navigation System -- As each turn approaches, voice prompts and user-friendly
graphics in a route guidance product inform the driver of the next action to be
taken. NavTech's navigable database works with sensors and software to determine
vehicle location and when to deliver the next direction.

In a route guidance product, map displays of the local area, created from
NavTech's navigable database, can be displayed at various levels of detail to
help orient the driver and provide an overview of the calculated route. On
this screen, the vehicle's current location and heading are shown.

<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the financial statements and notes thereto appearing elsewhere
in this Prospectus. See "Risk Factors" for information that should be
considered by prospective investors.

THE COMPANY

Navigation Technologies Corporation ("NavTech" or the "Company") is a leading
developer and provider of a navigable database that is incorporated into route
guidance products ("Route Guidance Products") in the United States and Europe
by automotive electronics manufacturers. Route Guidance Products are in-vehicle
software and hardware systems that use a navigable database and global
positioning satellite (GPS) and other technologies. These products provide
dynamic real-time positioning information and turn-by-turn driving directions,
enabling accurate and efficient vehicle navigation. A highly accurate and
comprehensive navigable database, such as the NavTech database, is essential to
the successful operation of Route Guidance Products, both for continuously
tracking the vehicle's position and for calculating driving routes. NavTech's
navigable database is a digital representation of road transportation networks
and points of interest in the United States and selected European countries,
constructed to provide the high level of accuracy and detail necessary to
support route guidance and related applications. The NavTech database includes
extensive information, including the location, shape and arterial
classification of roads, details on ramps, dividers, bridges and overpasses,
certain traffic rules and regulations, street names and addresses and points of
interest, such as airports, hotels and restaurants.

The demand for time savings, increased safety and security, reduced stress
and hassle, and traffic congestion control is expected to bring many changes in
the way people drive for business, commuting and leisure over the coming
decade. Route Guidance Products are expected to play a major role in addressing
these demands by providing more accurate, efficient and safe vehicle
navigation. Currently, there are at least eight automotive electronics
manufacturers selling Route Guidance Products in the United States or Europe.
More than ten other companies are currently selling Route Guidance Products in
Japan, and the Company believes that many of these companies will introduce
Route Guidance Products in the United States or European markets in the next
several years. In-vehicle navigation products have been sold in Japan since
1987 and, according to an industry source, approximately 300,000 Route Guidance
Products were sold there in 1995. The use of Route Guidance Products is now
emerging in the United States and Europe where the principal initial markets
are expected to be luxury cars, rental cars and vehicles used for business
purposes such as sales, delivery and service. The Company's success will be
dependent upon general market acceptance of Route Guidance Products and
utilization of the NavTech database by manufacturers of Route Guidance
Products.

Through June 30, 1996, the Company has invested more than $200 million in the
development of its business, principally to create and update the NavTech
database, to establish a field organization and to develop technology and
software. Since 1988, the Company has had a strategic relationship with
Philips, which has provided approximately $148 million in equity financing to
the Company as well as assistance with customer and industry relationships.
Upon the closing of the Offerings and the direct placement of shares to Philips
and Zenrin, Philips will own 48% of the Company's outstanding shares of Common
Stock. Philips may in the future agree to make additional investments in the
Company and may make purchases of the Company's Common Stock in the open
market, in negotiated transactions or otherwise in its discretion from time to
time. However, Philips is not contractually obligated to purchase any
additional shares and has indicated to the Company that it has no present
intention to make any additional investment in the Company.

3
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The Company believes it has developed the most comprehensive and accurate
navigable database available today, providing the industry's broadest
geographic coverage and most extensive, detailed and in-depth content in the
United States and Europe. In the United States, NavTech has completed detailed
city databases for metropolitan areas representing in aggregate approximately
100 million in population, and has established nationwide coverage by
completing the intertown database for the continental United States. In Europe,
NavTech has completed detailed city databases for metropolitan areas
representing in aggregate approximately 70 million in population and intertown
databases for Austria, Belgium, southeastern England, France, Germany, northern
Italy and Switzerland.

The NavTech database is currently being used by key participants in each of
the Company's principal initial route guidance markets, including luxury cars,
rental car fleets and vehicles used for business purposes in the United States
and Europe. The Company believes there are currently approximately 2,000
vehicles in the United States and approximately 13,000 vehicles in Europe
equipped with Route Guidance Products incorporating the NavTech database. Route
Guidance Products using the NavTech database are currently available in limited
quantities in certain Oldsmobile models and Acura RL automobiles in selected
United States markets and in certain BMW 7 Series and 5 Series models in
selected European countries. Route Guidance Products using the NavTech database
are also available in Avis, Hertz and National rental cars in the United
States. The Company believes a majority of the Route Guidance Products
currently available in the United States and Europe, including those
manufactured or offered by Aisin AW, Alpine, Magneti Marelli, Philips Car
Systems, Rockwell, Siemens and Zexel, incorporate the NavTech database. The
Company is working with many other automotive electronics manufacturers that
expect to introduce Route Guidance Products in the next several years.

The Company's strategy is to generate license and distribution revenue
through licensing its database to automotive electronics manufacturers for use
in Route Guidance Products. NavTech typically receives license fees in
connection with its customers' sales of products that incorporate a portion of
the NavTech database. The Company also expects to earn revenue from database
distribution and support services and from providing periodic database updates
to end users. NavTech also derives revenue from consulting and contract
services provided by Shields Enterprises, Inc. ("SEI"), which the Company will
acquire concurrently with the closing of the Offerings (the "SEI Merger").

The Company will acquire SEI in exchange for 3,632,099 shares of the
Company's Common Stock (net of shares exchanged for shares held by SEI). The
purchase price for SEI was determined through negotiations between an
independent committee of the Company's Board of Directors and SEI's Board of
Directors. Intangible assets of approximately $39.8 million resulting from an
allocation of the purchase price between the tangible assets and liabilities
acquired and purchased intangibles will be amortized on a straight-line basis
over five years. Since the Company's inception, SEI has provided software
engineering and development services to the Company. The Company accounted for
20% and 29% of SEI's revenue for fiscal 1995 and the nine month period ended
June 30, 1996, respectively. As of June 30, 1996, SEI owned 10% of the
Company's outstanding capital stock. In addition, SEI's Chairman has served as
Chairman and Chief Executive Officer of the Company since 1987.

The principal office of the Company is located at 740 E. Arques Avenue,
Sunnyvale, California 94086, and its telephone number is (408) 737-3200. The
Company was incorporated in California in August 1985 as Karlin & Collins,
Inc., and reincorporated in Delaware in September 1987. Unless the context
requires otherwise, references to "NavTech" or the "Company" herein refer to
Navigation Technologies Corporation and its subsidiaries, including SEI.
References to "Philips" herein refer to Philips Electronics N.V. and its
subsidiaries.

4
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THE OFFERINGS

<TABLE>
<S> <C>
Common Stock initially offered in:
The U.S. Offering............................. 8,400,000 shares
The International Offering.................... 2,100,000 shares
Total Common Stock offered................... 10,500,000 shares
Common Stock to be outstanding after the
Offerings..................................... 41,244,015 shares(1)
Use of proceeds................................ For general corporate purposes,
including working capital.
Nasdaq National Market symbol.................. NAVT
</TABLE>

SUMMARY CONSOLIDATED AND PRO FORMA COMBINED FINANCIAL DATA

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
-------------------------------------- ----------------------------
1995 1996
------------------ ------------------
PRO PRO
1993 1994 ACTUAL FORMA(2) 1995 ACTUAL FORMA(2)
-------- -------- -------- -------- -------- -------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenue:
Database license and
distribution.......... $ 1,093 $ 1,721 $ 3,377 $ 3,377 $ 1,577 $ 1,486 $ 1,486
Consulting and contract
services and other.... 762 765 296 27,809 150 105 14,106
-------- -------- -------- -------- -------- -------- --------
Total revenue.......... 1,855 2,486 3,673 31,186 1,727 1,591 15,592
Costs and expenses:
Cost of revenue........ -- -- -- 22,392 -- -- 11,865
Database creation and
updating.............. 18,713 31,075 40,359 40,359 19,078 20,341 20,341
Software engineering
and development....... 4,506 4,337 8,314 12,192 3,703 6,148 8,019
Selling, general and
administrative........ 3,913 7,217 13,444 16,837 5,515 11,762 14,110
Amortization of
purchased intangibles. -- -- -- 7,951 -- -- 3,976
-------- -------- -------- -------- -------- -------- --------
Total costs and
expenses.............. 27,132 42,629 62,117 99,731 28,296 38,251 58,311
-------- -------- -------- -------- -------- -------- --------
Loss from operations.... (25,277) (40,143) (58,444) (68,545) (26,569) (36,660) (42,719)
Net loss ............... $(25,852) $(41,102) $(56,912) $(67,179) $(25,477) $(37,118) $(43,293)
Pro forma net loss per
share ................. $ (2.58) $ (2.70) $ (1.50) $ (1.57)
Shares used in per share
computation............ 22,038 24,887 24,788 27,637
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1996
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ACTUAL PRO FORMA(2) AS ADJUSTED(3)
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(in thousands)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents.................. $17,432 $17,897 $156,580
Working capital............................ 4,277 923 139,606
Total assets............................... 25,076 70,606 209,289
Long-term debt and obligations............. 14,988 15,343 15,343
Total stockholders' equity (deficit)....... (5,141) 31,906 170,589
</TABLE>
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(1) Excludes (i) 2,474,360 shares of Common Stock issuable upon the exercise of
options outstanding as of June 30, 1996 with a weighted average exercise
price of $8.96 per share and (ii) 2,595,303 shares of Common Stock held by
SEI which will be accounted for as treasury stock on the Company's
consolidated balance sheet upon the closing of the SEI Merger. In addition,
contingent on the closing of the SEI Merger, the Company has granted
options to purchase 833,334 shares of Common Stock with an exercise price
of $20.40 per share. Also, in connection with the SEI Merger, the Company
has agreed to issue, in substitution for shares of SEI common stock
issuable upon exercise of outstanding options, an aggregate of 333,334
shares of Common Stock at a price of $10.20 per share. See
"Capitalization."

(2) Pro forma to give effect to (i) the conversion of all outstanding shares of
Preferred Stock to Common Stock concurrently with the closing of the
Offerings and (ii) the SEI Merger to be effective concurrently with the
closing of the Offerings.

(3) Adjusted to reflect the sale by the Company of the 10,500,000 shares of
Common Stock offered hereby at an assumed initial public offering price of
$13.00 per share and 1,074,052 shares of Common Stock at an assumed price
of $12.16 per share to Philips and Zenrin concurrently with the closing of
the Offerings. See "Use of Proceeds," "Sale of Shares to Philips and
Zenrin," and "Capitalization."

5
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Unless otherwise indicated, all information contained in this Prospectus
assumes (i) no exercise of the U.S. Underwriters' and International Managers'
over-allotment options, (ii) a one-for-twelve reverse stock split of the Common
Stock and Preferred Stock to be effected prior to the closing of the Offerings,
(iii) the automatic conversion of all outstanding shares of the Company's
Preferred Stock into shares of Common Stock on a one-for-one basis upon the
closing of the Offerings, (iv) the issuance of 3,632,099 shares of Common Stock
(net of shares exchanged for shares held by SEI which will be accounted for as
treasury stock on the Company's consolidated balance sheet) in connection with
the SEI Merger concurrently with the closing of the Offerings, (v) the
conversion of shares of Preferred Stock sold to Philips and certain other
stockholders in a private financing in June 1996, (the "Private Financing")
into an aggregate of 2,886,661 shares of Common Stock concurrently with the
closing of the Offerings, (vi) the sale of 1,074,052 shares of Common Stock to
Philips and Zenrin at an assumed price of $12.16 per share concurrently with
the closing of the Offerings (the "Direct Placement"), (vii) the filing of
amendments to the Company's Certificate of Incorporation authorizing
150,000,000 shares of Common Stock and 5,000,000 shares of undesignated
Preferred Stock and eliminating the Company's existing Preferred Stock, (viii)
the cancellation of options to purchase 166,667 shares of Common Stock upon the
closing of the SEI Merger, (ix) no exercise of rights by certain existing
stockholders to sell Common Stock to Philips subsequent to June 30, 1996 and
(x) no exercise of options to purchase shares of Common Stock subsequent to
June 30, 1996. The number of shares of Common Stock that will be issued upon
conversion of the shares of Preferred Stock issued in the Private Financing,
and the number of shares of Common Stock that will be issued in the Direct
Placement, have been calculated based on an assumed initial public offering
price of $13.00 per share and will be adjusted based on the actual initial
public offering price. See "Sale of Shares to Philips and Zenrin," "Certain
Transactions," "Principal Stockholders," "Description of Capital Stock" and
"Underwriting," and Notes 2, 7 and 11 to the NavTech Consolidated Financial
Statements.

----------------

NavTech, SEI EnRoute, SEI and SEI Information Technology are trademarks
and/or service marks or registered marks of the Company. All other marks
appearing in this Prospectus are marks of the respective companies that own or
utilize them.

6
<PAGE>

RISK FACTORS

In addition to the other information in this Prospectus, investors should
carefully consider the following risk factors when evaluating an investment in
the Common Stock offered hereby. This Prospectus contains certain forward
looking statements that involve risks and uncertainties. The Company's actual
results could differ materially from the results discussed in the forward
looking statements, as a result of the factors discussed in "Risk Factors"
below, in "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and in "Business," as well as those discussed elsewhere
in this Prospectus.

HISTORY OF SUBSTANTIAL LOSSES AND ANTICIPATED FUTURE LOSSES

Since its incorporation in 1985, the Company has been primarily engaged in
developing its database and through June 30, 1996 has generated minimal
revenue from the licensing of its database. NavTech incurred net losses of
$56.9 million and $37.1 million for the year ended December 31, 1995 and the
six month period ended June 30, 1996, respectively. As of June 30, 1996, the
Company had an accumulated deficit of $198.2 million. Concurrently with the
closing of the Offerings, NavTech will acquire SEI. SEI had net losses of $2.0
million and $3.0 million for the fiscal year ended September 30, 1995 and the
nine month period ended June 30, 1996, respectively. The pro forma net loss
for NavTech combined with SEI for the year ended December 31, 1995 and the six
month period ended June 30, 1996 would have been $67.2 million and $43.3
million, respectively. Approximately $39.8 million of the purchase price for
SEI will be allocated to purchased intangibles and amortized on a straight-
line basis over five years from the date of the SEI Merger. The Company must
be evaluated in light of the problems, delays, expenses, uncertainties and
complications frequently encountered in connection with a business addressing
a developing market. To address these risks, the Company must, among other
things, continue to respond to a developing market for its database, to
complications in distributing its database, to future capital needs and to
risks associated with managing the transition from a development organization
to a commercial production organization. The Company has not been profitable
since inception and anticipates that it will continue to incur annual
operating losses for at least the next five years. Achieving profitability
will be dependent upon, among other things, significant unit sales of Route
Guidance Products utilizing the Company's database and the Company's ability
to realize sufficient license fees for use of its database. No assurance can
be given that the Company's database or its customers' products will achieve
significant unit sales or that the Company will achieve profitable operations
in the future. In its independent auditors' report on the Company's
consolidated financial statements included herein, KPMG Peat Marwick LLP
indicates that the Company has had recurring losses from operations since
inception and requires significant additional financing which raise
substantial doubt about the Company's ability to continue as a going concern.
See "Management's Discussion and Analysis of Financial Condition and Results
of Operations," Independent Auditors' Report and Note 1 to the NavTech
Consolidated Financial Statements.

NEW AND EMERGING MARKET; UNCERTAINTY OF MARKET ACCEPTANCE

The markets for products that use the Company's database are new and
emerging. The Company believes that the most important commercial application
for its database will be Route Guidance Products. The Company's success
depends upon both the development of a market for Route Guidance Products and
upon the utilization of the Company's database in Route Guidance Products. The
Company does not intend to develop or market its own Route Guidance Products.
There are significant uncertainties as to whether a large market for these
products will ever develop and if it does, whether it will develop at a rate
and to the extent that will enable the successful commercialization and
significant unit sales of Route Guidance Products utilizing the NavTech
database. Route Guidance Products can be either factory-installed, dealer-
installed or sold as aftermarket products. The Company is heavily dependent on
automotive electronics manufacturers to complete the development and
introduction of Route Guidance Products and on vehicle manufacturers to offer
such products with their vehicles. To date, only a few vehicle manufacturers
have introduced vehicles in the United States and Europe that are equipped
with a Route Guidance Product. Although many of the Company's customers are
making significant investments to develop Route Guidance Products, and certain
of the Company's customers

7
<PAGE>

have introduced Route Guidance Products utilizing the NavTech database, sales
of such products have been very limited and there can be no assurance that
such products or any future products that may be developed by such customers
or others will achieve significant unit sales. The Company does not expect
significant unit sales of Route Guidance Products in the United States or
Europe for at least three to five years. According to industry sources, the
design cycle time for vehicles sold in North America and Europe can be as long
as four to seven years. The Company believes that demand for Route Guidance
Products will be price-sensitive and that such products are unlikely to
achieve significant unit sales unless and until prices decline substantially.
The Company has no control over the pricing of Route Guidance Products that
utilize its database and, therefore, cannot provide any assurance that any
such products will reach the price points necessary to achieve significant
unit sales. If Route Guidance Products utilizing the Company's database fail
to achieve significant unit sales, the Company's business, financial condition
and results of operations will be materially adversely affected.

In addition to Route Guidance Products, the Company has identified other
products and services, such as fleet management and personal navigation
applications, that could utilize its database. Although third parties are
developing such products and services, there can be no assurance that any of
such products or services will achieve significant unit sales or that the
Company's database will be utilized with any such products or services. There
can be no assurance that even if route guidance and such other products and
services attain significant unit sales, the Company will be able to license
its database at prices that will result in the Company achieving profitable
operations. The development of alternatives to Route Guidance Products, such
as "off-board" navigation products that receive navigation and traffic
information via wireless communications, could delay or limit acceptance of
Route Guidance Products or render them obsolete. There can be no assurance
that the Company will be successful in participating in the market for any
alternative navigation products, and therefore the development of such
alternate navigation products could have a material adverse effect on the
Company's business, financial condition and results of operations.

The Company believes that the availability of regular database updates will
be an important factor in commercial acceptance of the NavTech database by
manufacturers of Route Guidance Products. The Company also believes that the
ongoing licensing of database updates to end users will be an important source
of future revenue. However, the completion and updating of the NavTech
database will continue to involve significant costs. There can be no assurance
that the market for updates of the NavTech database will develop or that
demand for the NavTech database will be sufficient to justify the costs of
completing geographic coverage of and updating of the database in the United
States and Europe. See "Business--Industry Background," "Business--The NavTech
Database," "Business--Marketing and Database Distribution" and "Business--
Customers."

DEPENDENCE ON SUCCESS OF THIRD-PARTY ROUTE GUIDANCE PRODUCTS

The Company's business is critically dependent upon the timely introduction
and successful marketing and sale of Route Guidance Products that utilize the
NavTech database. The Company, however, has no control over any of its
customers' hardware or software design, user interface, product functionality,
product quality, pricing strategy, release dates, market positioning, product
promotion or distribution, all of which affect Route Guidance Product success
and, therefore, the Company's financial results. In addition, the Company's
license agreements with its customers are non-exclusive, and such customers
have no contractual obligations either to produce and market Route Guidance
Products or to utilize the Company's database with their Route Guidance
Products. If the Company is unable to maintain its customer base, its future
operating results and its ability to achieve profitability will be materially
adversely affected. The Company cannot be certain that automotive electronics
manufacturers that have introduced products incorporating the NavTech database
will be successful or will continue to utilize the NavTech database in
connection with such products, or that other products currently under
development by automotive electronics manufacturers will be completed or
introduced, achieve significant unit sales or utilize the NavTech database.
The Company is also dependent upon automotive electronics manufacturers to
market their products to vehicle manufacturers and retail distributors and
train vehicle dealers on the sale and use of Route Guidance Products. If
products utilizing NavTech's database do not generate

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significant unit sales, the Company's revenue from initial database licenses
and the Company's opportunity to license database updates to end users of such
products will be materially adversely affected. See "Business--Industry
Background," "Business--The NavTech Database," "Business--Marketing and
Database Distribution" and "Business--Customers."

FUTURE CAPITAL NEEDS

The Company's operations to date have required substantial amounts of
capital. Through June 30, 1996, the Company has invested more than $200
million in the development of its business, principally to create and update
the NavTech database, to establish a field organization and to develop
technology and software. The Company expects to require substantial additional
infusions of capital to complete development of its database and to fund its
operations. The Company is dependent upon the net proceeds from the Offerings
and from future financings to continue to fund its operations. The net
proceeds from the Offerings are currently estimated to be $125.6 million, and
the Company anticipates proceeds of approximately $13.1 million from the
Direct Placement. The Company believes that the net proceeds from the
Offerings and the Direct Placement, together with other available cash
resources, will be sufficient to meet the Company's cash needs for the next 18
months. The Company will need to raise significant additional funds to support
its operations after such period.

The Company expects to continue to incur annual operating losses for at
least the next five years. Prior to achieving profitability, in addition to
the funds being raised in the Offerings and the anticipated proceeds from the
Direct Placement, the Company expects to require funds currently estimated at
approximately $250 million, although the required amount could be
substantially greater. The actual funds required by the Company will depend
upon many factors, including the extent and timing of the introduction of
products utilizing the NavTech database, unit sales of such products, the rate
of expansion of database coverage, the cost of updating the database, the
ability to generate revenue from the licensing of the NavTech database, the
amount of funds the Company raises in the Offerings and the Direct Placement,
strategic investment or acquisition opportunities and operating results. In
any event, the Company will need to raise significant additional funds to
support its operations before profitability can be achieved and may seek to
raise additional funds before 1998. There can be no assurance that any
additional funds will be available to the Company on acceptable terms, or at
all, when required by the Company. Philips, the Company's largest stockholder,
may in the future agree to make additional investments and may make purchases
of Common Stock in the open market, in negotiated transactions or otherwise in
its discretion from time to time. However, other than the Direct Placement,
there is no contractual or other commitment by Philips or by any other third
party to provide additional funds, and Philips has indicated to the Company
that it has no present intention to make any additional investment in the
Company. If additional funds are raised by issuing equity securities, there
will be dilution to the ownership interest of existing stockholders and there
may be dilution to the Company's earnings per share, if any. The inability to
obtain funds as needed on reasonable terms would have a material adverse
effect on the Company's business, financial condition and results of
operations. If such funds are not available, the Company may be required to
delay development of portions of its database, to forego market opportunities,
to obtain funds through arrangements with strategic partners or others that
may require the Company to relinquish material rights to certain of its
technologies or potential markets or otherwise to curtail or discontinue its
operations. See "Use of Proceeds," "Sale of Shares to Philips and Zenrin,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" and "Certain Transactions."

NEED TO DEVELOP DISTRIBUTION CAPABILITY AND END USER SUPPORT

The Company's database is presently licensed to automotive electronics
manufacturers who market their Route Guidance Products to vehicle
manufacturers for factory installation or as dealer-installed options in new
vehicles and to the aftermarket. In addition, an important element of the
Company's strategy is to realize revenues from licensing of updates of its
database to end users. Unless the Company is able to market and distribute its
database directly to end users, the Company will be dependent on third parties
to market and

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<PAGE>

distribute the database and updates for use in vehicles. There can be no
assurance that third parties will be willing or able to effectively undertake
such marketing and distribution efforts. The Company intends to develop a
substantial sales and marketing organization and a distribution mechanism to
market and distribute its database. Distribution of both initial copies of the
Company's database and updates is a complex process. Effective marketing and
distribution of the Company's database will require, among other things,
cooperation by automobile electronics manufacturers, vehicle manufacturers,
dealers and others to identify end users. Privacy and confidentiality issues
may inhibit the Company's ability to obtain such information. The Route
Guidance Products that currently utilize the Company's database employ
proprietary technology, which requires the Company to create customer-specific
versions of its database. In addition, only a specific regional portion of the
Company's database is provided with each Route Guidance Product, which further
complicates distribution logistics of the database. Due to the size and scope
of the database and the need to deliver geographic and customer-specific
versions of the database, the Company will need to establish an efficient
distribution capability. In Europe, the Company has contracted to use a third
party for certain aspects of its distribution. If licensing of the Company's
database grows rapidly, the Company could experience difficulties in
delivering the appropriate portion of its database to its customers and end
users on a timely basis. The failure of the Company to establish the necessary
sales, marketing and database distribution infrastructure could have a
material adverse effect on the Company's business, financial condition and
results of operations.

The Company believes that timely and effective customer and end user support
will be important to the successful introduction of Route Guidance Products
and other products using its database. The Company intends to rely in part on
the experience of its SEI subsidiary and third parties to provide customer and
end user support. NavTech currently provides end user support in the United
States through a telephone "help desk." If use of the Company's database
increases significantly in the United States, there can be no assurance that
the Company's help desk organization will be successful in expanding its
capabilities to provide the support required by end users. In Europe, the
Company currently offers first level help desk capability through a third
party, with the Company's limited capability as back-up. There can be no
assurance that the Company will be successful in developing a more
comprehensive help desk capability in Europe in a timely and cost-effective
manner. Inadequate or poor quality customer support could materially and
adversely impact the market acceptance of Route Guidance Products and other
navigation products and, consequently, the Company's business, financial
condition and results of operations. See "Business--The NavTech Database" and
"Business--Marketing and Database Distribution."

RELATIONSHIP WITH AND CONTROL BY PHILIPS

Since 1988, the Company has had a strategic relationship with Philips, which
has provided approximately $148 million in equity financing to the Company. As
a result of its investments in the Company and purchases of shares from third
parties, Philips holds 18,555,345 shares of the Company's Common Stock. In
addition, Philips has agreed to purchase shares from the Company in the Direct
Placement at the initial public offering price less the underwriting discount
and 250,000 shares of the Company's Common Stock from an SEI employee at the
initial public offering price less the underwriting discount, immediately
following the SEI Merger.

Upon the closing of the Offerings and the Direct Placement, Philips will own
48.0% of the outstanding shares of Common Stock and will have four
representatives on the Company's nine member Board of Directors. Thus,
Philips, acting alone, will have significant voting power and will have power
to exercise effective control over all actions affecting the Company's
operations, including actions requiring stockholder approval, such as the
election or removal of the Company's entire Board of Directors, amendments to
the Company's Restated Certificate of Incorporation, or mergers or other
change in control transactions involving the Company. Philips, together with
other holders of Common Stock, may act by written consent to take such actions
at any time, including the election or removal of directors. Certain
contractual limitations on Philips' voting rights and representation on the
Company's Board of Directors that are currently in effect will terminate upon
the closing of the Offerings. Philips has agreed to vote its shares to elect
T. Russell Shields, the Company's Chairman of the Board of Directors and Chief
Executive Officer, to the Company's Board of Directors so long as Mr. Shields

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<PAGE>

together with his family beneficially owns at least 10% of the Company's
outstanding Common Stock. Following the closing of the Offerings, Mr. Shields
and his family will beneficially own approximately 13.3% of the Company's
outstanding Common Stock.

Philips may in the future agree to make additional investments in the
Company and may make purchases of the Company's Common Stock in the open
market, in negotiated transactions or otherwise in its discretion from time to
time. However, other than the Direct Placement, Philips is not contractually
obligated to purchase any additional shares and has indicated to the Company
that it has no present intention to make any additional investment in the
Company. Until three years after the closing of the Offerings, Philips has
agreed not to acquire more than 75% of the Company's outstanding Common Stock
without the approval of a majority of the disinterested members of the Board
of Directors, except in response to tender or exchange offers or in the case
of mergers and similar transactions or because of actions by the Company or
others that Philips cannot prevent. In addition, for five years following the
closing of the Offerings, Philips has agreed to give the Company's other
stockholders the right to participate on equal terms in any sale by Philips of
all or substantially all of its equity interest in the Company other than in
an underwritten public offering.

Other than a 180-day lock-up agreement entered into with the Underwriters
and as described above, there are no contractual restrictions on the ability
of Philips to sell shares of the Company's Common Stock; however, the sale of
any shares by Philips will be subject to the volume limitation and other
provisions of Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"). If the Company effects a future registration of its shares
of Common Stock, Philips may request inclusion of its shares of Common Stock
in such registration, subject to certain exceptions. In addition, beginning on
the third anniversary date of the Offerings, Philips has a contractual right
to require registration of its shares of Common Stock. In addition, at any
time prior to or after such three year period, Philips could cause or agree
with the Company to cause registration of its shares of Common Stock. Sales by
Philips of substantial amounts of Common Stock in the public market after the
Offerings could adversely affect the prevailing market price of the Common
Stock. See "Shares Eligible for Future Sale."

Philips currently manufactures and sells Route Guidance Products that
compete with products offered by the Company's other customers, and Philips
may develop and commercialize other competitive products in the future.
Philips also has developed and continues to independently develop and acquire
intellectual property and other rights that could be competitive with those of
the Company or its customers. The Company's contracts with Philips and other
major customers extend most favored customer terms and prices for similar
applications, quantities and territories. Philips is not contractually
restricted in competing with the Company or licensing or selling rights to, or
otherwise cooperating with, others who may compete directly or indirectly with
the Company. Any such competition or cooperation could have a material adverse
effect on the Company's business, financial condition and results of
operations. In addition, the Company's relationship with Philips may deter
Philips' competitors from using the Company's database. See "Sale of Shares to
Philips and Zenrin," "Certain Transactions," "Principal Stockholders" and
"Description of Capital Stock."

FLUCTUATIONS IN OPERATING RESULTS

The Company derives its revenue from license and distribution activities and
consulting services. The Company's period-to-period results may fluctuate
substantially as a result of a variety of factors, such as order deferrals for
products and services using the Company's database as a result of product,
market or technology-related announcements by third parties; the number of
potential end users of products incorporating the Company's database;
cyclicality in the automotive, electronics or other industries that may
utilize the Company's database; delay in the production or shipment of new or
enhanced versions of the Company's database or products incorporating such
database; delays in revenue recognition due to the timing of customer
reporting of database usage; and the mix of revenues between license and
distribution activities and consulting services. In addition, if there is a
downturn in the automotive or electronics industry generally, the
manufacturers of products that utilize the Company's database could delay or
cancel development, marketing and production of such products. As a result,
any downturns in the automotive industry or the electronics industry could
have an adverse effect on the

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Company's business, financial condition and results of operations. In the near
term, the Company expects a substantial majority of its revenue to be derived
from consulting services performed through SEI. Factors that could affect the
operating results of SEI include the timing of completion of major projects,
the ability to attract business from new and existing customers, fluctuations
in the number of consulting personnel, the extent to which consulting
personnel are utilized on client projects and the extent of competition. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

COMPETITION

The Company's principal map database competitors are Etak, Inc. ("Etak") in
the United States and the United Kingdom and TeleAtlas B.V. ("TeleAtlas") in
Europe, excluding the United Kingdom. Sony Corporation recently acquired Etak
from News Corporation Limited. Robert Bosch GmbH owns 50% of TeleAtlas.
The Company expects to experience significant competition from TeleAtlas and
Etak. The Company could face competition from additional competitors in the
future. Etak and TeleAtlas, together with their corporate parents, each may
have substantially greater financial resources and research and development,
marketing and other capabilities than the Company. There can be no assurance
that the Company will be able to compete successfully in the future or that
competitive pressures will not result in price reductions for the Company's
database and distribution services that could materially adversely affect the
Company's business, financial condition and results of operations. SEI's
software and systems consulting services business faces substantial
competition from larger consulting firms, including nationally recognized
accounting firms and other professional service organizations, many of which
have substantially greater financial resources and other capabilities than the
Company. The Company's failure to be competitive in the software and systems
consulting services business could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Business--Competition."

MANAGEMENT OF GROWTH AND NEED TO HIRE SUBSTANTIAL ADDITIONAL PERSONNEL

The Company is continuing to expand the detailed city and intertown areas
covered by its database and the personnel and systems required to support the
expanding coverage of the database. In addition, the Company anticipates
further increases in its field and other personnel over the next several
years. The Company's future performance will depend in part on its ability to
manage such growth, and such growth will continue to place significant demands
on the Company's administrative, operational and financial resources. The
failure of the Company to effectively manage its growth could have a material
adverse effect on its business, financial condition and results of operations.
As the Company commercializes its database, it will need to hire additional
employees for the marketing, production and distribution of its database and
database updates. In recent years, the Company has substantially increased its
staff and expects to continue to do so in the future. There can be no
assurance that the Company will be successful in hiring and assimilating such
personnel. In addition, if the Company grows, the Company will need to upgrade
its financial and management information systems. There can be no assurance
that the Company will be successful in building the necessary infrastructure,
including the hiring of the requisite personnel, to make a successful
transition from a predominantly database development organization to a
commercial production, sales and distribution organization. See "Business--
Employees" and "Management."

NEED TO HIRE ADDITIONAL OFFICERS; DEPENDENCE ON KEY PERSONNEL

A number of the Company's key management personnel, including Ronald A.
Brumback, NavTech's President and Chief Operating Officer, as well as other
management, support and technical personnel, have recently joined NavTech. The
Company is also in the process of recruiting executives for several other key
positions, including President, NavTech North America; President, NavTech
Europe and Vice President, Corporate Sales and Marketing. The Company's
performance depends, in significant part, upon the continued services of T.
Russell Shields, its Chairman of the Board and Chief Executive Officer, as
well as numerous other management, support and technical personnel. The loss
of services of Mr. Shields, or a significant number of

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<PAGE>

such other personnel, could have a material adverse effect on the Company's
business, financial condition and results of operations. There can be no
assurance that the Company can attract sufficient numbers of new personnel to
complete its database in a timely manner or that existing personnel will not
leave the Company to pursue other opportunities. See "Business--Employees" and
"Management."

DATABASE DEVELOPMENT RISKS

The Company believes the market for its database is dependent upon the
extent of its content and geographic coverage. The Company's future success
will depend in part on its ability to further expand the content and
geographic coverage of its database. The Company must also update the
information in its database. There can be no assurance that the Company will
be successful in expanding and updating its database on a timely basis, or
that such efforts will be well-received in the marketplace. The Company,
through its European subsidiary, European Geographic Technologies B.V.
("NavTech Europe"), began database development more recently in Europe than in
the United States and the European coverage is not as complete as in the
United States. The Company must extend its database coverage in Europe,
particularly in the United Kingdom, the Netherlands, Scandinavia, Spain and
central and southern Italy, in order to compete effectively across Europe and
to support the product introduction plans of automotive electronics
manufacturers. Certain portions of the Company's European database must also
be upgraded to meet full NavTech specifications. While the Company has
announced a projected database coverage completion schedule, the schedule has
in the past changed and the Company believes it is likely to change in the
future depending upon strategic decisions, including customer requests,
expected market need for particular detailed city or intertown coverage, costs
of completion, financial constraints and other operational issues. The Company
has in the past and may in the future alter its schedule for completing
certain portions of the database. If the Company fails to develop and deliver
its database in a timely manner, the Company's customers could choose an
alternative database, if one is available, which may have a material adverse
effect on the Company's business, financial condition and results of
operations. See "Business--The NavTech Database."

RISKS ASSOCIATED WITH ACQUISITION OF SEI AND NAVTECH EUROPE OPERATIONS

The Company entered into an agreement in June 1996 to acquire SEI effective
concurrently with the closing of the Offerings. The integration of the
operations of SEI following the closing of the SEI Merger will require the
dedication of management resources which may detract attention from the day-
to-day business of NavTech. Historically, SEI has provided critical software
development and support services to the Company and certain of NavTech's
customers. The Company is unable to predict what effect, if any, the SEI
Merger will have on SEI's or NavTech's ability to maintain existing customer
relationships, to retain employees, to attract qualified personnel, or to
secure additional future consulting business. SEI's results of operations have
been and will continue to be dependent on its ability to attract business from
new and existing customers. Pursuant to the SEI Merger, NavTech will be the
successor to all of SEI's liabilities, known and unknown. Although NavTech is
indemnified for certain of SEI's liabilities (subject to amount and time
limitations), there can be no assurance that such indemnification will be
adequate. In September 1994, the Company acquired substantially all of the
stock of NavTech Europe, its European affiliate. The Company has incurred and
expects to continue to incur substantial costs to expand database content and
coverage in Europe and the Company continues to work to integrate the NavTech
Europe operations with its United States operations. There can be no assurance
that the Company will be successful in upgrading its European database content
and coverage or integrating its European and North American operations and the
failure to do so could have a material adverse effect on the Company's
business, financial condition and results of operations.

RISKS OF INTERNATIONAL OPERATIONS AND FOREIGN CURRENCY FLUCTUATIONS

The Company has substantial operations in Europe and expects a significant
portion of its expenses and potential revenues will be generated by NavTech
Europe. Accordingly, the Company's operating results are subject to the risks
of doing business in foreign countries, including compliance with, or changes
in, the laws

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<PAGE>

and regulatory requirements of various foreign countries and the European
Community, difficulties in staffing and managing foreign subsidiary
operations, taxes, trade barriers and business interruptions. In addition, all
of NavTech Europe's expenses and revenues are denominated in foreign
currencies. The Company historically has not engaged in activities to hedge
its foreign currency exposure and has no plans to do so in the foreseeable
future. Accordingly, the Company is, and will continue to be, subject to risks
related to foreign currency fluctuations. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

INTELLECTUAL PROPERTY

The Company's success and its ability to compete are dependent, in part,
upon its ability to establish and protect its intellectual property rights.
The Company primarily relies on a combination of copyright laws, trade secrets
and contractual rights to establish and protect its intellectual property
rights in its database, software and related technology. The laws of some
foreign countries do not protect the Company's database, software or related
technology to the same extent as the laws of the United States. There can be
no assurance that the steps taken by the Company to establish and protect its
intellectual property will be sufficient to prevent misappropriations or that
the Company's current or potential competitors will not develop databases,
software or technologies that are substantially equivalent or superior to
those of the Company. While the Company's database and software are protected
in part by copyright and trade secrets protection, copyright protection does
not extend to facts, and thus does not restrict the ability of a competitor to
independently develop substantially the same database. There can be no
assurance that the Company's competitors will not independently create a
database containing substantially the same facts as the Company's database.
Also, there can be no assurance that the Company's trade secrets will not
become known or be independently discovered by competitors.

The Company's database is a compilation of public domain, licensed,
otherwise-acquired and independently developed information obtained from
various sources such as aerial photographs, commercially available maps and
data, government records, other data sources and field observation. Various
public authorities and private entities claim copyright or other ownership of
or protection with respect to certain data and map information. The
intellectual property laws governing databases, map information and related
technology are unclear and are developing. The Company's general policy is to
seek to obtain licenses or other rights where necessary or appropriate. There
can be no assurance that the Company has obtained or will be successful in
obtaining all such licenses or rights that may be necessary to use such
information on reasonable terms or at all. While the Company believes that its
database, software and related technology do not infringe any intellectual
property rights of which it is aware, due to the uncertain and developing
nature of this area of the law, there can be no assurance that claims of
infringement or similar claims will not be asserted against the Company.

The Company claims rights in its trademarks and service marks. Certain marks
of the Company are registered in the United States. The Company has filed
applications to register certain other marks in the United States and is
investigating its right to use and register certain marks in Europe and
elsewhere. Marks of others that are the same or similar to certain marks of
the Company exist or may exist. There can be no assurance that the Company
will be able to continue using certain marks or that certain of the Company's
marks do not infringe the marks of others in North America, Europe or
elsewhere. The Company has licensed others to use certain of its marks and
expects to continue licensing certain of its marks in the future. No assurance
can be given that others will not take actions that might materially and
adversely affect the value of the Company's marks or reputation.

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<PAGE>

software may also be materially affected by such patents. The existence and
assertion of such patents may deter current and potential customers of the
Company from developing and introducing products, with a corresponding adverse
effect on the Company's operations. In the event that claims of infringement
are asserted against current or potential customers of the Company, such
customers may be required to obtain one or more licenses from third parties.
There can be no assurance that any necessary licenses from third parties can
or will be obtained at a reasonable cost or at all. Also, in the event that a
customer of the Company is found to have infringed such patents, such customer
may be subject to payment of substantial royalties or damages, or enjoined or
otherwise prevented from marketing products which would incorporate the
Company's database, software or related technologies. The Company's license
agreements with its customers generally include mutual indemnity provisions
which in certain cases may require indemnification by the responsible party
for liabilities, costs and expenses arising out of potential violations of
intellectual property rights. Depending upon the scope and applicability of
such indemnification provisions, indemnity claims may be asserted against the
Company. While the Company does not believe that it infringes any patents of
which it is aware, there can be no assurance that such indemnification
provisions and other actions by the Company will not result in indemnification
claims or claims of direct or contributory patent infringement or patent
infringement inducement. There can be no assurance that the outcome of any
such claim would not have a material adverse effect on the Company's business,
financial condition and results of operations.

The Company has in some cases engaged in negotiations and discussions, and
entered into relationships, with customers regarding its database, software
and related technologies without having executed definitive written
agreements. The parties' respective rights and obligations under such
circumstances may be unclear. In addition, without definitive written
agreements, the Company's ability to develop, protect and exploit its
database, software and related intellectual property may be impaired. There
can be no assurance that the Company will be successful in executing
definitive written agreements with all of its customers, and its failure to do
so could have a material adverse effect on the Company's business, financial
condition and results of operations.

The resolution of any claims related to the Company's intellectual property
would generally involve complex legal and factual questions and would
consequently be uncertain. In particular, resolution of such claims would
likely entail considerable cost to the Company and diversion of efforts of
management. The Company is currently involved in litigation with Etak, Zexel
USA Inc. and its parent regarding alleged patent infringement, indemnification
and related issues. See "--Etak Litigation" and "Business--Intellectual
Property."

ETAK LITIGATION

On November 18, 1994, Etak, the Company's primary competitor in the United
States, filed suit against one of the Company's customers, Zexel USA, Inc.
("Zexel USA"), in the United States District Court for the Northern District
of California, alleging that Zexel USA's Route Guidance Product infringes U.S.
Patent Nos. 4,796,191 and 4,914,605 (the "Etak Patents"), and seeking monetary
damages, the trebling of such damages for willful infringement and injunctive
relief. Subsequently, Etak filed an amended complaint adding the Japanese
parent of Zexel USA, Zexel Corporation ("Zexel Japan"), as a defendant. Etak
has not filed any claims that allege that the Company's database or software
infringes the Etak Patents. The suit is currently scheduled for trial in
October 1996.

On June 30, 1995, Zexel Japan filed a third-party complaint against the
Company, seeking recovery of any and all damages awarded against Zexel Japan,
and for costs and expenses incurred by Zexel Japan, in the litigation with
Etak. The third-party complaint is based on certain alleged representations,
warranties, indemnity and other provisions in license agreements between Zexel
Japan and the Company, pursuant to which the Company provided certain software
products to Zexel Japan which allegedly are used in Zexel USA's Route Guidance
Product. Thereafter, the Company filed an answer to Zexel Japan's complaint,
denying all material allegations thereof and asserting numerous affirmative
defenses, and a counterclaim and cross-claim for indemnification against Zexel
Japan and Zexel USA, respectively. The Company also filed claims against Etak
seeking a declaration that the Etak Patents are invalid, unenforceable and not
infringed by Zexel USA or the

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<PAGE>

Company, and for Etak's violation of the federal antitrust laws. Proceedings
on the antitrust claims against Etak have been stayed pending the resolution
of the underlying patent issues.

If Etak prevails in the litigation, Zexel USA or Zexel Japan (collectively,
"Zexel") could be enjoined from selling products incorporating the Company's
proprietary technology and could be required to pay significant monetary
damages to Etak. If the Etak litigation were to be resolved by a settlement,
Zexel might be required to make substantial payments to Etak. If Zexel were to
settle with, or be found liable to Etak and prevail on its indemnification
claim against the Company, the Company could be required to pay substantial
amounts to Zexel. Zexel and the Company are vigorously contesting all of
Etak's claims. It is the Company's position that the Etak Patents are invalid,
unenforceable and not infringed and, even if Zexel were to settle with or be
found liable to Etak, the Company would have no indemnification obligation to
Zexel. However, the Company cannot predict the ultimate outcome of the
lawsuit. Patent litigation is highly complex and can extend for a protracted
time, which can substantially increase the cost of such litigation. In
connection with the Etak litigation, the Company has incurred, and expects to
continue to incur, substantial legal fees and legal expenses. Although the
Company cannot estimate with certainty its legal fees, legal expenses and
potential liability, the Company has established an accrual on its financial
statements at June 30, 1996 in an amount it believes to be a reasonable
estimate of such legal fees and expenses. The Etak litigation has also
diverted, and is expected to continue to divert, the efforts and attention of
some of the Company's legal, management and technical personnel. Although the
Company does not believe the outcome of the Etak litigation will have a
material adverse effect on its business, financial condition or results of
operations, an adverse result in the Etak litigation could have a material
adverse effect on the Company's business, financial condition and results of
operations, including, but not limited to, disruption of the Company's
business relationship with Zexel and other customers and impairment of the
market generally for Route Guidance Products. See "Business--Litigation."

DATA ACQUISITION RISKS; GOVERNMENTAL APPROVALS

Data required to compile the Company's database is, in certain cases,
available only from limited third-party sources and at significant cost. The
Company has generally experienced more difficulty in acquiring data from third
parties in Europe than in the United States. Depending on the nature, scope
and extent of the Company's use of third-party data in the creation and
updating of its database, and upon the actual or possible assertion of rights
in such data by third parties, the Company seeks to enter into agreements with
third parties under which it acquires necessary or appropriate rights and
licenses with respect to such data. The Company has not entered into such
agreements in all geographic areas and no assurance can be made that the
Company will be successful in securing such agreements on terms acceptable to
the Company or at all. Even in the cases where the Company has entered into
data acquisition agreements, the Company's rights and licenses may be limited
in scope and duration and subject to various other terms and restrictions
which may impair or delay the Company's expansion, updating and distribution
of its database. It is unclear whether the Company will be successful in
restructuring or renewing such agreements if and when necessary. The Company's
inability to obtain the data or rights in data necessary to expand, update and
distribute its database, or any significant increase in the cost thereof,
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business--The NavTech Database."

Certain governmental authorities, mapping agencies, military institutes and
other political bodies, particularly in European jurisdictions, have acquired
by contract or otherwise possess certain rights to inspect portions of the
Company's database prior to commercial distribution thereof and certain
limited rights to require permits for, or to prevent, distribution of the
Company's database for certain purposes or under limited circumstances. The
Company may encounter similar situations in the United States and Canada.
While it is unclear whether or not any such rights will be asserted against
the Company, the assertion thereof could delay or impair distribution of the
Company's database and, consequently, have a material adverse effect on the
Company's business, financial condition and results of operations. In
addition, certain laws and regulations, particularly in European jurisdictions
and Canada, may otherwise restrict or impair the activities of the Company in
expanding, updating and distributing its database. The applicability, if any,
of such laws and regulations to the Company's activities is unclear. While the
Company is not aware of any such laws or regulations in the United

16
<PAGE>

States, similar laws and regulations may also be enacted or promulgated in the
United States. To the extent such laws or regulations are deemed applicable to
the Company's activities, there could be a material adverse effect on the
Company's business, financial condition and results of operations.

RISKS OF PRODUCT LIABILITY

The commercialization of the Company's database and updates for certain
applications, including Route Guidance Products and other navigation products,
involves an inherent risk of product liability claims and associated adverse
publicity. In addition, certain of the Company's current or prospective
customers may delay market introduction of Route Guidance Products and other
products because of product liability concerns. Product liability claims could
arise, for example, out of accidents involving use of Route Guidance Products,
inadequate warnings and instructions, an outdated database or database errors.
Product liability claims present a risk of protracted litigation, substantial
money damages, attorneys' fees, costs and expenses, and diversion of
management attention. In an attempt to mitigate the risks of product liability
claims, the Company relies, in part, on disclaimers, limitations of liability
and indemnity provisions contained in license agreements with its customers.
There can be no assurance that any of these disclaimers, limitations of
liability and indemnity provisions will in fact be provided or that they will
prove to be effective. The Company's license agreements with its customers
generally include mutual indemnity provisions which in certain cases may
require indemnification by the responsible party for liabilities, costs and
expenses arising out of potential product liability claims. If any product
liability or indemnity claims are asserted against the Company or its
customers, such claims could have a material adverse effect upon the Company's
business, financial condition and results of operations.

DATABASE WARRANTY RISKS

The Company's license agreements with automotive electronics manufacturers
and other customers typically include a warranty that the Company's database
is 97% complete and accurate against ground truth at the time of delivery. A
similar warranty may also be provided to end users. Although certain of the
Company's license agreements limit warranty remedies to replacement of
database copies or refund of license fees, others do not contain such
limitations. The Company has not incurred significant costs in connection with
its warranties and has not established a reserve for future warranty-related
costs. Other than the limited warranty described above, the Company's license
agreements generally disclaim warranties, express and implied, including
warranties of merchantability and fitness for particular purposes. It is the
Company's general policy to require its licensees to include similar
disclaimers in end user license agreements. There can be no assurance that the
Company's or its licensees' disclaimers will be sufficient to protect the
Company in connection with any warranty or other claims that may be asserted
against the Company. Any failure by the Company to comply with its warranty
obligations and the absence or ineffectiveness of warranty or other
disclaimers could expose the Company to claims for substantial monetary
damages and have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business--Database
Warranty."

RELIANCE ON THIRD PARTY DATA CENTERS

The Company currently relies on two commercial service bureaus, one in the
United States and one in Europe, for all of its mainframe computer data center
operations. This reliance involves certain risks. Although the Company has
taken precautions to protect itself and its customers from events that could
interrupt delivery of the Company's database, there can be no assurance that
such precautions will be adequate. These precautions include off-site storage
of back-up data and fire protection and physical security systems.
Notwithstanding these precautions, there can be no assurance that a fire,
earthquake, other natural disaster or any other interruption affecting either
of the data centers would not impair the Company's database operations or
create significant downtime. Any significant damage to or downtime at either
of the data centers used by the Company could have a material adverse effect
on the Company's business, financial condition and results of operations, at
least until an alternative site could become operational.

17
<PAGE>

The Company may establish its own data center operations in the future to
obtain greater financial and operational control. However, such a transition
would involve risks of successful transfer of the operations and will require
the Company to significantly expand its operations and to develop the
expertise required to manage the data center operations internally. There can
be no assurance as to when or if the Company will establish its own data
center operations or whether a transfer of data center operations would be
successful.

NO PRIOR MARKET; VOLATILITY OF SHARE PRICE

Prior to the Offerings, there has been no public market for the Common Stock
of the Company, and there can be no assurance that an active public market
will develop or be sustained after the Offerings or that the market price of
the Common Stock will not decline below the initial public offering price. The
initial public offering price will be determined by negotiations among the
Company, the Representatives and the Lead Managers. See "Underwriting" for a
discussion of factors to be considered in determining the initial public
offering price. Factors such as announcements of technological innovation,
fluctuations in the Company's operating results, the introduction of new
products by the Company's customers or its competitors, the formation or
termination of relationships with customers, or changes in earnings estimates
or recommendations by securities analysts may have a significant impact on the
market price of the Company's Common Stock. In addition, the stock market has
experienced volatility which has particularly affected the market prices of
equity securities of companies which have recently had initial public
offerings and which often has been unrelated to the operating performance of
such companies. These market fluctuations may adversely affect the price of
the Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offerings, there has been no market for the Common Stock of the
Company. The amount and timing of any future sales of substantial amounts of
Common Stock in the public market could adversely affect market prices
prevailing from time to time and the ability of the Company to raise equity
capital in the future. The number of shares of Common Stock held by the
Company's existing stockholders that will be available for sale in the public
market following the Offerings is limited by restrictions under the Securities
Act, and by lock-up agreements under which certain holders of such shares have
agreed not to sell or otherwise dispose of any of their shares for a period of
180 days after the date of this Prospectus without the prior written consent
of Lehman Brothers. However, Lehman Brothers may, in its sole discretion and
at any time without notice, release all or any portion of the securities
subject to lock-up agreements. As a result of these restrictions, based on
shares outstanding as of June 30, 1996, (i) the 10,500,000 shares offered
hereby and 787,222 additional shares will be eligible for sale on the date of
this Prospectus, (ii) another 129,991 shares will be eligible for sale 90 days
after the date of this Prospectus, (iii) an additional 18,655,059 shares will
be eligible for sale 180 days after the date of this Prospectus (of which
16,258,963 will be held by Philips and other affiliates of the Company and
therefore subject to volume limitations pursuant to Rule 144 under the
Securities Act) and (iv) a further 11,171,743 shares (including the shares
sold in the Direct Placement and issued in the SEI Merger) will become
eligible for sale thereafter pursuant to Rule 144 under the Securities Act
upon the expiration of their respective two-year holding periods. In addition,
the Company intends to register on a registration statement on Form S-8 a
total of 8,140,236 shares of Common Stock issuable upon exercise of
outstanding options or reserved for issuance under the Company's stock option
plans. Of these 8,140,236 shares, 13,371 shares that are not subject to lock-
up agreements will be vested and eligible for sale (if the related options are
exercised) beginning 90 days after the date of this Prospectus, an additional
1,669 shares will vest and become eligible for sale (if the related options
are exercised) between 90 and 180 days after the date of this Prospectus and a
further 868,992 shares that are subject to lock-up agreements will be vested
and eligible for sale (if the related options are exercised) beginning 180
days after the date of this Prospectus. Beginning on the third anniversary
date of the Offerings, Philips and Mr. Shields together with his family, who
hold an aggregate of approximately 25,297,085 shares of Common Stock, have
contractual rights to require registration of such shares. In addition, at any
time prior to or after such three year period, such holders could cause or
agree with the Company to cause registration of their shares of Common Stock.
If such holders, by exercising their registration rights or by otherwise
causing the Company to

18
<PAGE>

effect a registration of shares, cause a large number of shares to be
registered and sold in the public market, such sales could have a material
adverse effect on the market price for the Company's Common Stock.
See "Description of Capital Stock--Registration Rights," "Shares Eligible for
Future Sale" and "Underwriting."

IMMEDIATE SUBSTANTIAL DILUTION

Purchasers of the Common Stock offered hereby will suffer an immediate and
substantial dilution of $9.83 per share in the net tangible book value of the
Common Stock from the initial public offering price. In addition, holders of
the Common Stock will suffer future dilution upon the exercise of outstanding
stock options. See "Dilution."

19
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 10,500,000 shares of
Common Stock being offered by the Company hereby are estimated to be
approximately $125,628,000 (approximately $144,772,000 if the U.S.
Underwriters' and International Managers' over-allotment options are exercised
in full) at an assumed initial public offering price of $13.00 per share after
deducting the estimated underwriting discount and offering expenses.

Concurrently with the closing of the Offerings, the Company anticipates
selling an estimated 1,074,052 additional shares of Common Stock to Philips
and Zenrin in the Direct Placement at the initial public offering price less
the underwriting discount. The aggregate proceeds from the sale of shares to
Zenrin in the Direct Placement will be $1,000,000. The aggregate proceeds from
the sale of shares to Philips in the Direct Placement would be $12,055,000
($41,782,000 if the U.S. Underwriters' and International Managers' over-
allotment options are exercised in full and if Philips exercises its option in
full to purchase additional shares upon exercise of such over-allotment
options) based on an assumed initial public offering price of $13.00 per share
and assuming that no stockholders exercise their rights to sell shares to
Philips prior to the closing of the Offerings and no exercise of outstanding
options prior to the Offerings.

The Company intends to use the net proceeds from the Offerings and the
Direct Placement for general corporate purposes, including working capital.
The Company's specific working capital requirements will depend upon many
factors, including the extent and timing of the introduction of products
utilizing the Company's database, unit sales of such products, the rate of
expansion of database coverage, the cost of updating the database, the ability
to generate revenue from the licensing of its database and operating results.
The Company is dependent upon the net proceeds and future financings to
continue to fund its operations. The Company believes that the net proceeds,
together with other available cash resources, will be sufficient to meet the
Company's cash needs for the next 18 months. The Company will need to raise
significant additional funds to support its operations after such period, and
the Company may seek to raise additional funds before 1998. The Company has no
present commitments or arrangements assuring it of any future debt or equity
financing. Although the Company may pursue possible acquisitions of
businesses, technologies or products complementary to those of the Company in
the future, there are no present understandings, commitments or agreements
with respect to any such acquisitions. Pending use of such net proceeds for
the above purposes, the Company intends to invest such funds in short-term,
interest-bearing, investment-grade obligations. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Liquidity and
Capital Resources."

DIVIDEND POLICY

The Company has never paid or declared cash dividends on its Common Stock or
other securities. The Company currently anticipates that it will retain all of
its future earnings, if any, for use in the expansion and operation of its
business and does not anticipate paying any cash dividends in the foreseeable
future.

20
<PAGE>

SALE OF SHARES TO PHILIPS AND ZENRIN

Philips has agreed to purchase from the Company in the Direct Placement
concurrently with the closing of the Offerings, a number of additional shares
of Common Stock that will result in Philips owning 48% of the outstanding
shares of Common Stock. In addition, Zenrin has agreed to purchase in the
Direct Placement shares of Common Stock at an aggregate purchase price of
$1,000,000. Philips also has an option to purchase from the Company up to an
additional number of shares that would result in Philips owning up to 48% of
the outstanding shares of Common Stock upon the closing of any exercise of the
U.S. Underwriters' and International Managers' over-allotment options. All of
such shares to be purchased by Philips and Zenrin will be purchased at the
initial public offering price, less the underwriting discount. Assuming an
initial public offering price of $13.00 per share and no exercise of such
over-allotment options, the number of shares Philips will purchase would be
991,782 shares and Zenrin will purchase 82,270 shares in the Direct Placement.
The number of shares Philips will purchase in the Direct Placement will depend
on (i) the initial public offering price of the Common Stock, which will
affect the number of shares of Common Stock issued upon conversion of the
Preferred Stock that was sold in the Private Financing and the number of
shares to be sold to Zenrin in the Direct Placement, (ii) the number of
outstanding options that are exercised prior to the closing of the Offerings,
and (iii) the number of shares stockholders sell to Philips pursuant to
certain contractual rights prior to the closing of the Offerings. Philips has
indicated to the Company that it does not have a present intention to resell
any shares purchased by it in the Direct Placement. See "Certain
Transactions--Transactions with Philips."

21
<PAGE>

CAPITALIZATION

The following table sets forth the total capitalization of the Company as of
June 30, 1996 (i) on an actual basis, (ii) on a pro forma basis to give effect
to the conversion of all outstanding shares of Preferred Stock of the Company
into Common Stock upon the closing of the Offerings and the issuance of
3,632,099 shares of Common Stock in connection with the SEI Merger (net of
shares exchanged for shares of Common Stock held by SEI that will be accounted
for as treasury stock on the Company's consolidated balance sheet) and (iii)
as adjusted to give effect to the sale of the 10,500,000 shares of Common
Stock offered hereby at an assumed initial public offering price of $13.00 per
share (and after deducting the estimated underwriting discount and offering
expenses), and the sale of 1,074,052 shares of Common Stock in the Direct
Placement (based on an assumed initial public offering price of $13.00 per
share):

<TABLE>
<CAPTION>
JUNE 30, 1996
-------------------------------
AS
ACTUAL PRO FORMA ADJUSTED
--------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
Long-term debt and other obligations.......... $ 14,988 $ 15,343 $ 15,343
Stockholders' equity (deficit):
Preferred Stock, $0.001 par value; 20,000,000
shares authorized, 14,592,282 issued and
outstanding(1); 5,000,000 shares authorized,
none issued and outstanding pro forma and as
adjusted.................................... 15 -- --
Common Stock, $0.001 par value; 150,000,000
shares authorized, 11,445,582 issued and
outstanding; 32,265,266 shares issued and
outstanding pro forma, 43,839,318 shares
issued and outstanding as adjusted(2)(3).... 11 32 44
Additional paid-in capital................... 191,170 254,683 393,354
Treasury stock, at cost, 2,595,303 shares pro
forma and as adjusted(4).................... -- (26,472) (26,472)
Cumulative translation adjustment............ 1,889 1,889 1,889
Accumulated deficit.......................... (198,226) (198,226) (198,226)
--------- --------- ---------
Total stockholders' equity (deficit)........ (5,141) 31,906 170,589
--------- --------- ---------
Total capitalization........................ $ 9,847 $ 47,249 $ 185,932
========= ========= =========
</TABLE>
- --------

(1) Includes shares issued in the Private Financing that are convertible into
2,886,661 shares of Common Stock based upon an assumed initial public
offering price of $13.00 per share.

(2) Excludes shares of Common Stock issuable upon the exercise of outstanding
options. As of June 30, 1996, there were (i) 2,474,360 shares of Common
Stock issuable upon the exercise of outstanding options at a weighted
average exercise price of $8.96 per share, and (ii) 5,332,542 shares of
Common Stock available for grant of options under the Company's stock
option plans, of which the Company has granted options to purchase 833,334
shares of Common Stock with an exercise price of $20.40 per share
contingent on the closing of the SEI Merger. Also, in connection with the
SEI Merger, the Company has agreed to issue, in substitution for shares of
SEI common stock issuable upon exercise of outstanding SEI options, an
aggregate of 333,334 shares of Common Stock at a price of $10.20 per
share. See "Management--Employee Benefit Plans" and Note 7 to the NavTech
Consolidated Financial Statements.

(3) Excludes Common Stock issuable upon exercise of an option held by a
customer to convert up to $6.0 million of license fee credits into shares
of Common Stock on December 31, 1998, at the then current fair market
value of the Common Stock. See Note 5 to the NavTech Consolidated
Financial Statements.

(4) Shares held by SEI and accounted for as treasury stock.

22
<PAGE>

DILUTION

The pro forma net tangible book value of the Company as of June 30, 1996 was
$(7,849,000), or $(0.26) per share of Common Stock. Pro forma net tangible
book value per share is determined by dividing the pro forma tangible book
value of the Company (total tangible assets less total liabilities) by the pro
forma number of outstanding shares of Common Stock at that date after giving
effect to the conversion of all outstanding shares of Preferred Stock into
Common Stock and the SEI Merger. After giving effect to the sale of the
10,500,000 shares of Common Stock offered hereby at an assumed initial public
offering price of $13.00 per share (after deducting the estimated underwriting
discount and offering expenses) and 1,074,052 shares of Common Stock in the
Direct Placement at the assumed initial public offering price per share less
the estimated underwriting discount, the adjusted pro forma net tangible book
value as of June 30, 1996 would have been $130,834,000 or $3.17 per share,
representing an immediate increase in pro forma net tangible book value of
$3.43 per share to existing stockholders and an immediate dilution of $9.83
per share to the new public investors. The following table illustrates this
per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............. $13.00
Pro forma net tangible book value per share before the
Offerings.................................................. $(0.26)
Increase attributable to purchases in the Direct Placement.. 0.32
Increase attributable to new public investors............... 3.11
------
Adjusted pro forma net tangible book value per share after
the Offerings............................................... 3.17
------
Dilution per share to new public investors................... $ 9.83
======
</TABLE>

The following table summarizes, on a pro forma basis as of June 30, 1996,
the differences between the existing stockholders, the purchasers in the
Direct Placement (Philips and Zenrin) and the new public investors with
respect to the number of shares of Common Stock purchased from the Company,
the consideration paid to the Company and the average price per share paid:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
------------------ -------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders........ 29,669,963 71.9% $228,908,000 60.5% $ 7.72
Direct Placement to Philips
and Zenrin.................. 1,074,052 2.6 13,055,000 3.4 12.16
New public investors......... 10,500,000 25.5 136,500,000 36.1 13.00
---------- ----- ------------ -----
Total....................... 41,244,015 100.0% $378,463,000 100.0%
========== ===== ============ =====
</TABLE>

The above computations assume no exercise of stock options outstanding at
June 30, 1996. As of June 30, 1996, there were (i) 2,474,360 shares of Common
Stock issuable upon the exercise of outstanding options at a weighted average
exercise price of $8.96 per share, and (ii) 5,332,542 shares of Common Stock
available for grant of options under the Company's stock option plans, of
which the Company has granted options to purchase 833,334 shares of Common
Stock with an exercise price of $20.40 per share contingent upon the closing
of the SEI Merger. The Company has agreed to issue in connection with the SEI
Merger, in substitution for shares of SEI common stock issuable upon exercise
of outstanding options, an aggregate of 333,334 shares of Common Stock at a
price of $10.20 per share. To the extent that any of these options are
exercised, there will be further dilution to the new public investors. The
above computations also exclude 2,595,303 shares of Common Stock exchanged for
shares held by SEI which will be accounted for as treasury stock on the
Company's consolidated balance sheet upon the closing of the SEI Merger. See
"Capitalization," "Management--Employee Benefit Plans" and Notes 7 and 11 to
the NavTech Consolidated Financial Statements.

23
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated statement of operations data for the
years ended December 31, 1993, 1994 and 1995, and consolidated balance sheet
data as of December 31, 1994 and 1995 are derived from the consolidated
financial statements of the Company, which have been audited by KPMG Peat
Marwick LLP, independent auditors, and are included elsewhere in this
Prospectus. The following selected consolidated statement of operations data
for the years ended December 31, 1991 and 1992 and consolidated balance sheet
data as of December 31, 1991, 1992 and 1993 are derived from audited financial
statements not included in this Prospectus. The following selected pro forma
combined statement of operations data for the year ended December 31, 1995 and
the six month period ended June 30, 1996 and pro forma balance sheet data as
of June 30, 1996 are derived from unaudited pro forma combined statements of
operations and the unaudited pro forma combined balance sheet included
elsewhere in this Prospectus. The data as of June 30, 1996 and for the six
month period ended June 30, 1995 and 1996 have been derived from unaudited
financial statements that have been prepared on the same basis as the audited
financial statements and in the opinion of the Company, include all
adjustments, consisting only of normal recurring adjustments necessary for a
fair presentation of the consolidated financial position and operating results
for the unaudited periods. The consolidated and pro forma combined operating
results for the six month period ended June 30, 1996 are not necessarily
indicative of the results to be expected for any future period. The following
selected data should be read in conjunction with the consolidated financial
statements, related notes and the independent auditors' report appearing
elsewhere in this Prospectus. Such report contains an explanatory paragraph
that states that the Company has had recurring losses from operations since
inception and requires significant additional financing which raise
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements and the following selected data do not
include any adjustments that might result from the outcome of that
uncertainty.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
--------------------------------------------------------- ----------------------------
1995 1996
------------------ ------------------
PRO PRO
1991 1992 1993 1994 ACTUAL FORMA(1) 1995 ACTUAL FORMA(1)
------- -------- -------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenue:
Database license and
distribution.......... $ 923 $ 2,120 $ 1,093 $ 1,721 $ 3,377 $ 3,377 $ 1,577 $ 1,486 $ 1,486
Consulting and contract
services.............. -- -- -- -- -- 25,600 -- -- 13,315
Other.................. 203 202 762 765 296 2,209 150 105 791
------- -------- -------- -------- -------- -------- -------- -------- --------
Total revenue.......... 1,126 2,322 1,855 2,486 3,673 31,186 1,727 1,591 15,592
Costs and expenses:
Cost of revenue........ -- -- -- -- -- 22,392 -- -- 11,865
Database creation and
updating.............. 2,102 10,589 18,713 31,075 40,359 40,359 19,078 20,341 20,341
Software engineering
and development....... 1,518 2,736 4,506 4,337 8,314 12,192 3,703 6,148 8,019
Selling, general and
administrative........ 1,668 2,481 3,913 7,217 13,444 16,837 5,515 11,762 14,110
Amortization of
purchased intangibles. -- -- -- -- -- 7,951 -- -- 3,976
------- -------- -------- -------- -------- -------- -------- -------- --------
Total costs and
expenses............. 5,288 15,806 27,132 42,629 62,117 99,731 28,296 38,251 58,311
------- -------- -------- -------- -------- -------- -------- -------- --------
Loss from operations.... (4,162) (13,484) (25,277) (40,143) (58,444) (68,545) (26,569) (36,660) (42,719)
Other income (expense).. (330) (198) (575) (959) 1,532 1,366 1,092 (458) (574)
------- -------- -------- -------- -------- -------- -------- -------- --------
Net loss ............... $(4,492) $(13,682) $(25,852) $(41,102) $(56,912) $(67,179) $(25,477) $(37,118) $(43,293)
======= ======== ======== ======== ======== ======== ======== ======== ========
Pro forma net loss per
share ................. $ (2.58) $ (2.70) $ (1.50) $ (1.57)
======== ======== ======== ========
Shares used in per share
computation............ 22,038 24,887 24,788 27,637
======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, 1996
------------------------------------------- ---------------------
1991 1992 1993 1994 1995 ACTUAL PRO FORMA(1)
------- ------- -------- ------- ------- ------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Cash and cash
equivalents............ $ 2,726 $ 5,340 $ 1,433 $30,220 $23,573 $17,432 $17,897
Working capital
(deficit).............. (784) 3,124 (1,070) 26,167 16,784 4,277 923
Total assets............ 3,944 8,027 4,447 36,566 30,026 25,076 70,606
Long-term debt and other
obligations ........... 6,397 7,845 12,525 15,900 20,095 14,988 15,343
Total stockholders'
equity (deficit)....... (6,324) (2,802) (11,568) 14,512 1,803 (5,141) 31,906
</TABLE>
- -------

(1) The pro forma combined statement of operations data for the year ended
December 31, 1995 and the six month period ended June 30, 1996 reflect the
effect of the SEI Merger as if it had occurred at the beginning of the
periods presented. The pro forma combined balance sheet data as of June
30, 1996 reflect (i) the effect of the SEI Merger and (ii) the conversion
of Preferred Stock to Common Stock upon the closing of the Offerings, as
if each had occurred on June 30, 1996. See Unaudited Pro Forma Combined
Financial Statements.

24
<PAGE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995 SIX MONTHS ENDED JUNE 30, 1996
-------------------------------------------- ---------------------------------------------
PRO FORMA PRO FORMA
------------------------- -------------------------
COMPANY SEI ADJUSTMENTS(1) COMBINED COMPANY SEI ADJUSTMENTS(1) COMBINED
-------- ------- -------------- --------- -------- -------- -------------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRO FORMA COMBINED STATEMENT OF
OPERATIONS DATA:
Revenue:
Database license and
distribution.......... $ 3,377 $ -- $ -- $ 3,377 $ 1,486 $ -- $ -- $ 1,486
Consulting and contract
services.............. -- 25,600 -- 25,600 -- 13,315 -- 13,315
Affiliated consulting
services.............. -- 8,039 (8,039)(a) -- -- 5,962 (5,962)(a) --
Other.................. 296 1,913 -- 2,209 105 686 -- 791
-------- ------- ------- -------- -------- -------- ------- --------
Total revenue.......... 3,673 35,552 (8,039) 31,186 1,591 19,963 (5,962) 15,592
-------- ------- ------- -------- -------- -------- ------- --------
Costs and expenses:
Cost of revenue........ -- 29,430 (7,038)(a) 22,392 -- 16,665 (4,800)(a) 11,865
Database creation and
updating.............. 40,359 -- -- 40,359 20,341 -- -- 20,341
Software engineering
and development....... 8,314 5,020 (1,142)(a) 12,192 6,148 2,840 (969)(a) 8,019
Selling, general and
administrative 13,444 3,252 141 (a) 16,837 11,762 2,541 (193)(a) 14,110
Amortization of
purchased intangibles. -- -- 7,951 (b) 7,951 -- -- 3,976 (b) 3,976
-------- ------- ------- -------- -------- -------- ------- --------
Total costs and
expenses.............. 62,117 37,702 (88) 99,731 38,251 22,046 (1,986) 58,311
-------- ------- ------- -------- -------- -------- ------- --------
Loss from operations.... (58,444) (2,150) (7,951) (68,545) (36,660) (2,083) (3,976) (42,719)
Other income (expense).. 1,532 (166) -- 1,366 (458) (116) -- (574)
-------- ------- ------- -------- -------- -------- ------- --------
Net loss................ $(56,912) $(2,316) $(7,951) $(67,179) $(37,118) $ (2,199) $(3,976) $(43,293)
======== ======= ======= ======== ======== ======== ======= ========
Pro forma net loss per
share ................. $ (2.58) $ (2.70) $ (1.50) $ (1.57)
======== ======== ======== ========
Shares used in per share
computation............ 22,038 2,849(c) 24,887 24,788 2,849(c) 27,637
======== ======= ======== ======== ======= ========
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1996
-----------------------------------------------
PRO FORMA
-----------------------------
COMPANY SEI ADJUSTMENTS(1) COMBINED
------- ------- -------------- --------
(in thousands)
<S> <C> <C> <C> <C>
PRO FORMA COMBINED BALANCE
SHEET DATA:
Cash and cash equivalents..... $17,432 $ 465 $ -- $17,897
Working capital (deficit)..... 4,277 (3,354) -- 923
Total assets.................. 25,076 15,522 30,008(d)(e)(f) 70,606
Long-term debt and other
obligations.................. 14,988 355 -- 15,343
Total stockholders' equity
(deficit).................... (5,141) 6,467 30,580(e)(f)(g) 31,906
</TABLE>
- -------
(1) To arrive at the pro forma combined financial statements, the historical
financial statements were adjusted to reflect:

(a) Elimination of intercompany billings between the Company and SEI.

(b) Amortization of purchased intangibles from the SEI Merger over an
estimated useful life of five years.
(c) An increase in the Company's Common Stock outstanding on an "as if
converted" basis for the 3,632,099 shares of Common Stock issued in the
SEI Merger (net of shares exchanged for shares held by SEI and accounted
for as treasury stock on the Company's consolidated balance sheet).

(d) Elimination of intercompany receivables and payables between the Company
and SEI.

(e) Exchange of the Company's Common Stock for outstanding shares of SEI
common stock in the SEI Merger and recognition of purchased intangibles.

(f) Exchange of 2,595,303 shares of the Company's Common Stock held by SEI
and accounted for as treasury stock on the Company's consolidated
balance sheet.

(g) Conversion of the Company's outstanding Preferred Stock to Common Stock.

25
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of
operations of the Company and SEI should be read in conjunction with the
Financial Statements and the Notes thereto included elsewhere in this
Prospectus. This discussion contains forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially
from those anticipated in the forward-looking statements as a result of
certain factors including, but not limited to, those discussed in "Risk
Factors," "Business" and elsewhere in this Prospectus.

OVERVIEW

NavTech is a leading developer and provider of navigable databases in the
United States and Europe. From inception in August 1985 through 1991, the
Company was primarily engaged in developing proprietary database creation
software and methodologies, constructing its database in selected metropolitan
areas for customer evaluations, developing application software to facilitate
the use of its database in Route Guidance Products and establishing strategic
relationships. During this period, NavTech also licensed its database
technology to European Geographic Technologies BV ("EGT"), which had been
formed by Philips and NavTech in 1990 to develop a European navigable
database. In September 1994, the Company acquired EGT and accounted for the
acquisition in a manner similar to a pooling of interests.

From 1992 to the present, the Company has substantially increased its
database creation capabilities, expanded its database coverage to include
additional metropolitan areas and intertown coverage connecting metropolitan
areas, established extensive field data collection and updating methodologies
and organizations, enhanced its proprietary software systems and expanded its
business development efforts. Commercial introductions of Route Guidance
Products incorporating the Company's database commenced in late 1994 in both
the United States and Europe. The Company expects to continue expansion of
field operations to support the development and updating of new database
coverage areas. NavTech also expects to make substantial investments to
establish distribution, customer support and marketing functions to support
commercial product introductions. The Company also plans to make substantial
investments to develop software to facilitate use of the Company's database in
Route Guidance Products and other applications.

Concurrently with the closing of the Offerings, the Company will acquire SEI
in the SEI Merger in exchange for 3,632,099 shares of the Company's Common
Stock (net of shares exchanged for shares held by SEI which will be accounted
for as treasury stock on the Company's consolidated balance sheet).
Approximately $39.8 million of the purchase price will be allocated to
purchased intangibles and amortized on a straight-line basis over five years
from the date of the SEI Merger. SEI provides software and systems consulting
and contract services to clients in a variety of industries. Since the
Company's inception, SEI has provided consulting services to NavTech which
have formed the basis of the Company's software engineering efforts, including
the creation of its technology infrastructure and support for customer
application development of Route Guidance Products. See Note 11 to the NavTech
Consolidated Financial Statements.

The Company's strategy is to generate licensing and distribution revenue
through licensing its database to automotive electronics manufacturers for use
in Route Guidance Products. The Company typically receives license fees in
connection with its customers' sales of products that incorporate a portion of
the Company's database. For Route Guidance Products, the Company's general
policy is to charge a license fee for each copy of the database used in its
customers' products. The Company also charges fees for services related to the
distribution of copies of the database. To date the majority of the Company's
license fees have been attributable to annual, non-refundable minimum license
fees ("Minimum License Fees") under contracts for use of the NavTech database.
The Company expects that Minimum License Fees will comprise a decreasing
amount and proportion of total license revenue in the future. The Company also
expects to earn revenue from database distribution and support services and
from providing periodic database updates to end users. Minimum License Fees
are recognized as revenue ratably over the licensing period. License and
distribution revenue is recognized

26
<PAGE>

when the Company or its customers ship the database or products incorporating
the NavTech database if collection is probable and remaining vendor
obligations are insignificant.

Revenue is also derived from consulting and contract services provided by
SEI. Nearly all of SEI's consulting and contract services are provided under
time and materials contracts. Revenue is recognized as services are performed.
In the near term, the Company expects a substantial majority of its revenue to
be derived from consulting and contract services performed by SEI.

The Company has been unprofitable since inception and as of June 30, 1996,
had an accumulated deficit of $198.2 million. The Company's operating expenses
have increased substantially as the Company made investments related to the
development and commercial introduction of its database. To date, all database
creation and updating costs and software engineering and development costs
have been expensed as incurred. The Company anticipates that operating
expenses will continue to increase for the foreseeable future as it continues
to develop and update its database, increase sales and marketing efforts and
establish and expand database distribution capabilities. The Company
anticipates that it will continue to incur annual operating losses for at
least the next five years.

The Company must be evaluated in light of the problems, delays, expenses,
uncertainties and complications frequently encountered in connection with a
business addressing a developing market. To address these risks, the Company
must, among other things, continue to respond to a developing market for its
database, to complications in distributing its database, to future capital
needs and to risks associated with managing the transition from a development
organization to a commercial production organization. No assurance can be
given that the Company's database or its customers' products will achieve
significant unit sales or that the Company will achieve profitable operations
in the future.

The Company has substantial operations in Europe and expects a significant
portion of its expenses and potential revenue will be generated by NavTech
Europe. All of NavTech Europe's expenses and revenue are denominated in
foreign currencies. Fluctuations in the value of currencies in relation to the
United States dollar have caused and will continue to cause dollar-translated
amounts to vary from one period to another. The Company historically has not
engaged in activities to hedge its foreign currency exposure and has no plans
to do so in the foreseeable future.

NAVTECH RESULTS OF OPERATIONS

Revenue

To date, the Company has not realized any significant revenue from the
licensing or distribution of its database. Total revenue was $1.9 million,
$2.5 million and $3.7 million for 1993, 1994 and 1995, respectively, and $1.7
million and $1.6 million for the six month periods ended June 30, 1995 and
June 30, 1996, respectively. A substantial portion of revenue during these
periods was from Minimum License Fees.

Database License and Distribution. Database license and distribution revenue
consists primarily of license fees charged for use of the Company's database
for route guidance and other applications and fees for database distribution
and related support services. Database license and distribution revenue was
$1.1 million, $1.7 million

27
<PAGE>

and $3.4 million for 1993, 1994 and 1995, respectively, and $1.6 million and
$1.5 million for the six month periods ended June 30, 1995 and June 30, 1996,
respectively. Excluding revenue from Minimum License Fees, database license
and distribution fees from actual database usage were $0.3 million, $0.2
million and $0.8 million for 1993, 1994 and 1995, respectively, and $0.3
million and $0.4 million for the six month periods ended June 30, 1995 and
June 30, 1996, respectively. For 1993 and 1994, such revenue consisted
primarily of test and other non-recurring license fees. The increase in such
revenue for 1995 was due to initial Route Guidance Product introductions that
commenced in late 1994.

Other. Other revenue was $0.8 million, $0.8 million and $0.3 million for
1993, 1994 and 1995, respectively, and $0.2 million and $0.1 million for the
six month periods ended June 30, 1995 and June 30, 1996, respectively. For
1993 and 1994, such revenue primarily consisted of European government grant
income and one-time software license fees.

Costs and Expenses

Database Creation and Updating. These costs consist primarily of research
and acquisition costs to obtain information used to construct the database,
direct costs of database creation and validation and ongoing costs for
updating the database. Such costs were $18.7 million, $31.1 million and $40.4
million for 1993, 1994 and 1995, respectively, and $19.1 million and $20.3
million for the six month periods ended June 30, 1995 and June 30, 1996,
respectively. The increases in database creation and updating costs from 1993
to 1995 reflect expansion of completed metropolitan database areas from
approximately 20 million aggregate population coverage to approximately 150
million aggregate population coverage during these years and the addition of
substantial portions of the United States and European intertown databases.
The Company expects the updating component of database creation and updating
costs to increase as additional coverage areas are added to the database.

Software Engineering and Development. These costs consist primarily of costs
for development of software used in database creation and updating activities
and software to facilitate usage of the NavTech database and application
development by customers. Such costs were $4.5 million, $4.3 million and $8.3
million for 1993, 1994 and 1995, respectively, and $3.7 million and $6.1
million for the six month periods ended June 30, 1995 and June 30, 1996,
respectively. All software engineering work during these periods was performed
by SEI. The increases in such costs from 1994 to 1995 and for such six month
periods reflect a substantial staff buildup to develop tools that are designed
to facilitate development of Route Guidance Products and other products that
utilize the NavTech database. The Company expects software engineering and
development costs to continue to increase to support such activities as well
as to support expanded database updating.

Selling, General and Administrative. These expenses consist primarily of
salaries, promotional and travel expenses and professional services. Such
expenses were $3.9 million, $7.2 million and $13.4 million for 1993, 1994 and
1995, respectively, and $5.5 million and $11.8 million for the six month
periods ended June 30, 1995 and June 30, 1996, respectively. The substantial
increase in such expenses during these periods was due to (i) expanded sales
and marketing costs in support of initial customer Route Guidance Product
introductions, (ii) commencement of database distribution activities, (iii)
expanded participation in industry trade groups, (iv) exploration of new
market opportunities for use of the Company's database, (v) additions of
management and staff to support the substantial growth in Company personnel
during the period, (vi) costs related to the integration of EGT and (vii)
legal fees related to patent litigation which commenced in 1995. In the six
month period ended June 30, 1996, the Company accrued estimated legal fees and
expenses to be incurred in the patent litigation. Selling, general and
administrative costs are expected to increase due to planned additions of key
management staff and expanded market development and customer support
activities.

Other Income and Expense. This category primarily consists of interest
income and interest expense. Interest income consists of earnings on cash
balances and interest on stock subscriptions receivable. Interest income was
$0.2 million, $1.5 million and $2.8 million for 1993, 1994 and 1995,
respectively, and $1.7 million and $0.2 million for the six month periods
ended June 30, 1995 and June 30, 1996, respectively. Interest expense

28
<PAGE>

consists primarily of imputed interest on deferred license revenue payments
from customers and interest on a loan payable to Philips which was converted
into equity in June 1996.

Income Taxes

To date, the Company has not recorded a provision for income taxes due to
incurred losses. As of December 31, 1995, the Company had net operating loss
carryforwards of approximately $67.0 million and $26.0 million for federal and
California state income tax purposes, respectively. The Company had tax credit
carryforwards of approximately $0.9 million and $0.3 million for federal and
California state income tax purposes, respectively. If not utilized, these
federal and California state carryforwards expire beginning in 1996 through
2010. The Company also has foreign operating loss carryforwards of
approximately $85.0 million with no expiration date. Under certain provisions
of the Internal Revenue Code of 1986, as amended, the availability of the
Company's operating loss and credit carryforwards may be subjected to
limitation if it should be determined that there has been a change of
ownership of more than 50% of the value of the Company's stock within any
three year period. The Company does not anticipate that a material limitation
on its ability to use such carryforwards will result from the Offerings. A
valuation allowance has been recorded for the entire deferred tax asset as a
result of uncertainties regarding the realization of the asset due to the lack
of earnings history of the Company. See Note 6 to the NavTech Consolidated
Financial Statements.

SEI RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED SEPTEMBER ENDED
30, JUNE 30,
-------------------------- ----------------
1993 1994 1995 1995 1996
------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Consulting and contract
services....................... $19,829 $21,451 $25,289 $19,351 $19,453
Affiliated consulting services.. 4,075 4,276 7,076 4,876 8,116
Other........................... 1,136 2,945 2,543 2,001 878
------- ------- -------- ------- -------
Total revenue.................. 25,040 28,672 34,908 26,228 28,447
Costs and expenses:
Cost of revenue................. 21,841 25,475 28,628 21,402 24,033
Software engineering and
development.................... 514 3,152 5,004 3,679 3,932
Selling, general and
administrative ................ 2,279 2,835 3,119 2,319 3,381
------- ------- -------- ------- -------
Total costs and expenses....... 24,634 31,462 36,751 27,400 31,346
------- ------- -------- ------- -------
Income (loss) from operations.... 406 (2,790) (1,843) (1,172) (2,899)
Other income (expense)........... (187) 236 (174) (118) (121)
------- ------- -------- ------- -------
Income (loss) before
extraordinary item.............. 219 (2,554) (2,017) (1,290) (3,020)
Extraordinary item............... -- 15,969 -- -- --
------- ------- -------- ------- -------
Net income (loss)................ $ 219 $13,415 $ (2,017) $(1,290) $(3,020)
======= ======= ======== ======= =======
Pro forma net loss data:
Net loss as reported............ $ (2,017) $(3,020)
Pro forma income tax benefit.... 797 1,193
-------- -------
Pro forma net loss.............. $ (1,220) $(1,827)
======== =======
</TABLE>

Revenue

Total revenue for SEI was $25.0 million, $28.7 million, and $34.9 million
for fiscal 1993, 1994 and 1995, respectively, representing an increase of 15%
from 1993 to 1994 and 22% from 1994 to 1995. Total revenue increased 8% from
$26.2 million in the nine month period ended June 30, 1995 to $28.4 million
for the comparable period in 1996. Total revenue net of affiliated revenue was
$21.0 million, $24.4 million and $27.8

29
<PAGE>

million for fiscal 1993, 1994 and 1995, respectively, representing an increase
of 16% from 1993 to 1994 and 14% from 1994 to 1995. Total revenue net of
affiliated revenue decreased 5% from $21.4 million in the nine month period
ended June 30, 1995 to $20.3 million for the comparable period in 1996. In
addition to NavTech, revenue from SEI's two next largest customers represented
16% and 13% of total revenue in fiscal 1993, 14% and 12% of total revenue in
fiscal 1994 and 10% and 9% of total revenue in fiscal 1995, respectively.

Consulting and Contract Services. Revenue from consulting and contract
services consists primarily of time and materials software and system-related
consulting services, and contract services related to software maintenance and
help desk support. Such revenue was $19.8 million, $21.5 million, and $25.3
million for fiscal 1993, 1994 and 1995, respectively, representing an increase
of 8% from 1993 to 1994 and 18% from 1994 to 1995. Such revenue increased 1%
from $19.4 million in the nine month period ended June 30, 1995 to $19.5
million for the comparable period in 1996. The revenue increases for fiscal
1994 and 1995 were due primarily to demand for technical consulting services
from large corporations and corresponding expansion of SEI's consulting staff.
The lower revenue growth for the nine month period ended June 30, 1996
compared to the 1995 period was due, in part, to a relatively greater
allocation of consulting personnel to NavTech-related projects. Future growth
in revenue from consulting and contract services will depend upon demand for
consulting services from third parties, the allocation of consulting personnel
to NavTech-related projects and the Company's ability to attract and retain
qualified consulting personnel. The Company is unable to predict what effect,
if any, its acquisition of SEI will have on SEI's ability to maintain its
existing customer relationships, to retain its consulting staff, to attract
qualified personnel, or to secure additional future consulting business.

Affiliated Consulting Services. This revenue consists primarily of software
engineering and related services performed for NavTech. Affiliated revenue was
$4.1 million, $4.3 million, and $7.1 million for fiscal 1993, 1994 and 1995,
respectively, representing an increase of 5% from 1993 to 1994 and 65% from
1994 to 1995. Such revenue increased 66% from $4.9 million in the nine month
period ended June 30, 1995 to $8.1 million for the comparable period in 1996.
The increases in revenue reflect an increase in software engineering personnel
assigned to NavTech from 37 at December 31, 1994 to 84 at June 30, 1996.

Other. Other revenue consists primarily of software and computer system
sales for the quick-service restaurant field. Other revenue was $1.1 million,
$2.9 million, and $2.5 million in fiscal 1993, 1994, and 1995, respectively,
representing an increase of 159% from 1993 to 1994 and a decrease of 14% from
1994 to 1995. Such revenue decreased 56% from $2.0 million in the nine month
period ended June 30, 1995 to $0.9 million for the comparable period in 1996.
The increase in such revenue from fiscal 1993 to 1994 was due to increased
software sales, and the declines in such revenue from fiscal 1994 to 1995 and
from the June 1995 period to the June 1996 period were due to the reduction of
computer hardware sales.

Costs and Expenses

Total costs and expenses were $24.6 million, $31.5 million and $36.8 million
in fiscal 1993, 1994 and 1995, respectively, representing an increase of 28%
from 1993 to 1994 and 17% from 1994 to 1995. Such expenses increased 14% from
$27.4 million in the nine month period ended June 30, 1995 to $31.3 million
for the comparable period in 1996.

Cost of Revenue. Cost of revenue includes primarily employee-related costs
for consulting and support services for third parties and NavTech, and
hardware costs related to other revenue. Such costs were $21.8 million, $25.5
million and $28.6 million in fiscal 1993, 1994 and 1995, respectively,
representing an increase of 17% from 1993 to 1994 and 12% from 1994 to 1995.
Such costs increased 12% from $21.4 million in the nine month period ended
June 30, 1995 to $24.0 million for the comparable period in 1996. The increase
in such expenses for all periods was due primarily to increased personnel
costs from staff growth.

Software Engineering and Development. Software engineering and development
costs consist primarily of costs for the development of two software products:
Profit Manager, for the quick service restaurant market, and SEI EnRoute, for
use with the NavTech database. Such costs were $0.5 million, $3.2 million and
$5.0 million in

30
<PAGE>

fiscal 1993, 1994 and 1995, respectively, representing an increase of 513%
from 1993 to 1994 and 59% from 1994 to 1995. Such costs increased 7% from $3.7
million in the nine month period ended June 30, 1995 to $3.9 million for the
comparable period in 1996. The substantial increase from fiscal 1993 to 1994
and from fiscal 1994 to 1995, was primarily due to the commencement of the SEI
EnRoute development effort in 1994.

Selling, General and Administrative. Selling, general and administrative
expenses consist principally of marketing expenses related to participation in
trade shows and professional industry associations, and salaries and bonuses
of marketing, financial, administrative and management personnel and related
indirect costs. Such costs were $2.3 million, $2.8 million and $3.1 million in
fiscal 1993, 1994 and 1995, respectively, representing an increase of 24% from
1993 to 1994 and 10% from 1994 to 1995. Such costs increased 46% from $2.3
million in the nine month period ended June 30, 1995 to $3.4 million for the
comparable period in 1996. The increases in such costs were due primarily to
increased personnel and higher incentive compensation costs along with costs
related to the SEI Merger in the June 1996 period.

Extraordinary Item

An extraordinary item of $16.0 million in fiscal 1994 reflecting payments to
SEI is described in Note 9 to the SEI Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

NavTech has financed its operations primarily through private placements of
equity securities, debt and, to a lesser extent, from payments under license
agreements. As of June 30, 1996, the Company had an accumulated deficit of
$198.2 million, cash and cash equivalents totaling $17.4 million and working
capital of $4.3 million. At June 30, 1996, NavTech's and SEI's principal
commitments consisted of obligations under operating leases aggregating
approximately $8.6 million. The Company expects to experience substantial
negative cash flow from operating activities for the forseeable future.

Net cash used in NavTech's operating activities was $21.8 million, $32.5
million and $48.6 million in 1993, 1994 and 1995, respectively, and $28.6
million for the six month period ended June 30, 1996. The net cash used during
these periods was primarily due to net losses. Investing activities for
acquisitions of property and equipment used net cash of $0.7 million, $3.3
million and $3.0 million for 1993, 1994 and 1995, respectively, and $1.9
million for the six month period ended June 30, 1996. Financing activities,
related primarily to the sale of capital stock, generated cash of $18.3
million, $66.3 million and $41.8 million for 1993, 1994 and 1995,
respectively, and $25.1 million for the six month period ended June 30, 1996.

NavTech has received license payments from certain customers, as a result of
which the Company has extended credits against future license fees that would
otherwise be due from distribution of copies of the database by these
customers. As of June 30, 1996, the Company had deferred revenue of $8.6
million relating to these license payments. This deferred license revenue
could increase up to $13.5 million by December 31, 2000, at which time any
remaining deferred revenue would be payable in cash. One of the Company's
licensees has the option to convert up to $6.0 million of this deferred
revenue into the Company's Common Stock on December 31, 1998 at the fair
market value at that time. See Note 5 to the NavTech Consolidated Financial
Statements.

SEI has financed its operations primarily through cash flow from operations,
an extraordinary item and short-term debt. SEI has a revolving bank line of
credit for $3.0 million, secured by all assets of SEI with an outstanding
balance of $1.7 million at June 30, 1996 which bears interest at a rate of
0.5% over the bank's prime rate. SEI's other short term debt consists of notes
payable to stockholders and employees and bears interest at 0.5% over the
prime rate and amounted to $1.2 million at June 30, 1996. As of June 30, 1996,
SEI had cash and cash equivalents of $0.5 million and negative working capital
of $3.4 million. See Note 9 to the SEI Financial Statements.

31
<PAGE>

Net cash provided by SEI's operating activities was $2.0 million, $7.7
million and $0.2 million in fiscal 1993, 1994 and 1995, respectively, and $0.4
million for the nine month period ended June 30, 1996. This resulted primarily
from increased accrued payroll in fiscal 1993, net income in fiscal 1994, and
a decrease in accounts receivable in fiscal 1995 and 1996. Cash used by SEI
for investing activities, primarily the purchase of NavTech stock and property
and equipment, was $0.1 million, $7.0 million and $0.7 million in fiscal 1993,
1994 and 1995, respectively, and $2.5 million for the nine month period ended
June 30, 1996. SEI financing activities used cash of $2.0 million and $0.7
million and provided cash of $1.5 million for fiscal 1993, 1994 and 1995,
respectively, and provided cash of $1.2 million for the nine month period
ended June 30, 1996. SEI's primary uses of cash were repayment of long-term
debt and repayment of notes payable in fiscal 1993, dividends paid in fiscal
1994, and the primary sources of cash in fiscal 1995 were notes payable to
stockholders and employees, sales of common stock and bank borrowings. In the
nine month period ended June 30, 1996, the principal source of cash was bank
borrowings.

NavTech's operations to date have required substantial amounts of capital.
Through June 30, 1996, the Company has invested more than $200 million in the
development of its business, principally to create and update the NavTech
database, to establish a field organization and to develop technology and
software. The Company expects to require substantial additional infusions of
capital to complete development of its database and to fund its operations.
The Company is dependent upon the net proceeds from the Offerings, the Direct
Placement and from future financings to continue to fund its operations. The
net proceeds from the Offerings are currently estimated to be $125.6 million,
and the Company anticipates proceeds of approximately $13.1 million from the
Direct Placement. The Company believes that the net proceeds from the
Offerings and the Direct Placement, together with other available cash
resources, will be sufficient to meet the Company's cash needs for the next
18 months. The Company will need to raise significant additional funds to
support its operations after such period.

The Company expects to continue to incur annual operating losses for at
least the next five years. Prior to achieving profitability, in addition to
the funds being raised in the Offerings and the anticipated proceeds from the
Direct Placement, the Company expects to require funds currently estimated at
approximately $250 million, although the required amount could be
substantially greater. The actual funds required by the Company will depend
upon many factors, including the extent and timing of the introduction of
products utilizing the NavTech database, unit sales of such products, the rate
of expansion of database coverage, the cost of updating the database, the
ability to generate revenue from the licensing of the NavTech database, the
amount of funds the Company raises in the Offerings and the Direct Placement,
strategic investment or acquisition opportunities and operating results. In
any event, the Company will need to raise significant additional funds to
support its operations before profitability can be achieved and may seek to
raise additional funds before 1998. There can be no assurance that any
additional funds will be available to the Company on acceptable terms, or at
all, when required by the Company. Philips, the Company's largest stockholder,
may in the future agree to make additional investments and may make purchases
of Common Stock in the open market, in negotiated transactions or otherwise in
its discretion from time to time. However, other than the Direct Placement,
there is no contractual or other commitment by Philips or by any other third
party to provide additional capital, and Philips has indicated to the Company
that it has no present intention to make any additional investment in the
Company. If additional funds are raised by issuing equity securities, there
will be dilution to the ownership interest of existing stockholders and there
may be dilution to the Company's earnings per share, if any. The inability to
obtain financing as needed on reasonable terms would have a material adverse
effect on the Company's business, financial condition and results of
operations. If such financing is not available, the Company may be required to
delay development of portions of its database, to forego market opportunities,
to obtain funds through arrangements with strategic partners or others that
may require the Company to relinquish material rights to certain of its
technologies or potential markets or otherwise to curtail or discontinue its
operations.

32
<PAGE>

BUSINESS

NavTech is a leading developer and provider of a navigable database that is
incorporated into Route Guidance Products in the United States and Europe by
automotive electronics manufacturers. Route Guidance Products are in-vehicle
software and hardware systems that use a navigable database and global
positioning satellite (GPS) and other technologies. These products provide
dynamic real-time positioning information and turn-by-turn driving directions
enabling accurate and efficient vehicle navigation. A highly accurate and
comprehensive navigable database, such as the NavTech database, is essential
to the successful operation of Route Guidance Products, both for continuously
tracking the vehicle's position and for calculating driving routes. NavTech's
navigable database is a digital representation of road transportation networks
in the United States and selected European countries, constructed to provide
the high level of accuracy and detail necessary to support route guidance and
related applications. The NavTech database includes extensive information,
including the location, shape and arterial classification of roads, details on
ramps, dividers, bridges and overpasses, certain traffic rules and
regulations, street names and addresses and points of interest such as
airports, hotels and restaurants.

The Company believes it has developed the most comprehensive and accurate
navigable database available today, providing the industry's broadest
geographic coverage and most extensive, detailed and in-depth content in the
United States and Europe. In the United States, NavTech has completed detailed
city databases for metropolitan areas representing in aggregate approximately
100 million in population, and has established nationwide coverage by
completing the intertown database for the continental United States. In
Europe, NavTech has completed detailed city databases for metropolitan areas
representing in aggregate approximately 70 million in population and intertown
databases for Austria, Belgium, southeastern England, France, Germany,
northern Italy and Switzerland.

INDUSTRY BACKGROUND

The demand for time savings, increased safety and security, reduced stress
and hassle, and traffic congestion control is expected to bring many changes
in the way people drive for business, commuting and leisure over the coming
decade. Many drivers waste valuable time and drive unnecessary miles because
of the difficulty of obtaining accurate directions to a desired destination
and following these directions correctly. Drivers using written directions or
paper maps to reach a destination are often distracted as they must not only
read the directions or map but also find and read street signs, make decisions
on lane positioning and evaluate alternative routes to avoid traffic
congestion. Drivers want to reduce travel time and concentrate on the
objective at their destination rather than on how to reach the destination.
Route Guidance Products provide more accurate, efficient and safe vehicle
navigation, and are expected to play a major role in addressing these demands.

In contrast to other navigation products with less functionality, Route
Guidance Products are integrated software and hardware systems located inside
a vehicle that enable accurate and efficient vehicle navigation by providing
dynamic real-time positioning information and turn-by-turn driving directions,
and which typically include an on-board navigable database, a computing and
display unit with a graphical user interface, voice prompts and positioning
and directional sensors. Currently, all Route Guidance Products incorporate
global positioning satellite (GPS) technology. Drivers specify a desired
destination and the navigable database enables the route guidance software to
calculate a route to the requested destination. Route Guidance Products track
a vehicle's location and then deliver real time turn-by-turn driving
directions as the trip progresses, using voice prompts and display graphics.

Currently, there are at least eight automotive electronics manufacturers
selling Route Guidance Products in the United States or Europe. More than ten
other companies are currently selling Route Guidance Products in Japan, and
the Company believes that many of these companies will introduce Route
Guidance Products in the United States or European markets in the next several
years. In-vehicle navigation products have been sold in Japan since 1987, and,
according to an industry source, approximately 300,000 Route Guidance Products
were sold there in 1995. The use of Route Guidance Products is now emerging in
the United States and Europe where the principal initial markets are expected
to be luxury cars, rental cars and vehicles used for business purposes

33
<PAGE>

such as sales, delivery and service. Based upon industry sources, the Company
believes that there are approximately 200 million vehicles in the United
States and 200 million vehicles in Europe. In 1995, approximately 15 million
new vehicles were sold in the United States, of which more than one million
units were luxury or near luxury cars. In Europe, approximately 12 million new
vehicles were sold in 1995, of which more than two million units were luxury
or near luxury cars. Approximately 1.5 million of the total vehicles in the
United States are rental cars. Route Guidance Products are currently available
for sale to consumers in certain regions of the United States in certain
Oldsmobile and Acura automobiles. In selected European countries, Route
Guidance Products are currently available in certain Audi, BMW and Mercedes
Benz models. Route Guidance Products are currently available in rental cars in
many United States cities through Avis, Hertz and National, and in Germany
through Sixt (Budget). In addition, a number of automotive electronics
manufacturers, including Alpine, Bosch/Blaupunkt, Magneti Marelli, Philips Car
Systems and Rockwell International, currently offer aftermarket route guidance
products in either the United States or Europe.

The Company believes several factors will drive initial demand for Route
Guidance Products in the markets for luxury cars, rental cars and vehicles
used for business purposes. Among consumers, initial purchases of Route
Guidance Products are expected to be made by luxury car buyers and business
users who are early adopters of new consumer electronics products and tend to
be less price sensitive. Penetration of the consumer market is expected to
increase as the price of Route Guidance Products declines from the current
range of approximately $2,000 to $5,000 per unit. Price declines are expected
to result from factors such as higher manufacturing volumes, decreased
electronic component costs, greater integration and sharing of electronics in
the dashboard and increased competition among manufacturers of Route Guidance
Products. In the rental car industry, growth in the utilization of Route
Guidance Products may result in their being perceived as an important
differentiating feature among car rental companies. The potential for
efficiencies resulting from using Route Guidance Products for business
purposes is expected to lead to increased demand for these products in much
the same way that productivity gains have resulted in the adoption of mobile
communications for business.

A highly accurate and comprehensive navigable database, such as the NavTech
database, is essential to the successful operation of Route Guidance Products,
both for continuously tracking the vehicle's position and for calculating
driving routes. Database information must accurately represent ground truth to
enable a route guidance product to deliver accurate, real-time driving
guidance. A navigable database includes extensive information, including the
location, shape and arterial classification of roads, details on ramps,
dividers, bridges and overpasses, certain traffic rules and regulations,
street names and addresses and points of interest such as airports, hotels and
restaurants. The Company believes that the accuracy and completeness of the
navigable database will be an important factor in consumer acceptance of Route
Guidance Products.

Building such a navigable database is costly and presents many challenges.
To achieve the necessary accuracy and completeness, information must be
gathered through a labor intensive process of collecting and verifying
information from multiple sources including aerial photographs, municipal base
maps, government surveys and zoning and sign records. In addition, keeping a
navigable database current is a significant challenge, since many
characteristics of the streets and points of interest covered in a database
change each year, and any change can impact the generation of efficient and
accurate driving routes. The depth and breadth of the information gathered and
maintained requires large-scale data management software. Route guidance is
the first commercial application with the market appeal and potential market
size to justify the cost and effort of navigable database construction and
updating. In addition, there are a number of other navigation applications to
which a navigable database can be applied, including fleet management and
personal navigation.

NAVTECH TODAY

NavTech is a leading developer and provider of navigable databases in the
United States and Europe. Since its founding in 1985, NavTech has developed a
high quality navigable database for the United States and selected regions of
Europe enabling turn-by-turn route guidance. In the United States, NavTech has
completed detailed city databases for metropolitan areas representing in
aggregate approximately 100 million in population, and by completing the
intertown database for the continental United States has established
nationwide coverage. In

34
<PAGE>

Europe, NavTech has completed detailed city databases for metropolitan areas
representing in aggregate approximately 70 million in population and intertown
databases for Austria, Belgium, southeastern England, France, Germany,
northern Italy and Switzerland. The Company believes a majority of the Route
Guidance Products currently available in the United States and Europe
incorporate the NavTech database.

The NavTech database is currently being used by key participants in each of
the Company's principal initial route guidance markets, including luxury cars,
rental car fleets and vehicles used for business purposes in the United States
and Europe. The Company believes there are currently approximately 2,000
vehicles in the United States and approximately 13,000 in Europe with Route
Guidance Products incorporating the NavTech database. Route Guidance Products
using the NavTech database are currently available in limited quantities in
certain Oldsmobile models and Acura RL automobiles in selected United States
markets and in certain BMW 7 Series and 5 Series models in Austria, France,
Germany, Italy, Switzerland and the Benelux countries. Route Guidance Products
using the NavTech database are also available in Avis, Hertz and National
rental cars in many of the largest airport car rental markets in the United
States. The Company believes a majority of the Route Guidance Products
currently available in the United States and Europe, including those
manufactured or offered by Aisin AW, Alpine, Magneti Marelli, Philips Car
Systems, Rockwell, Siemens and Zexel, incorporate the NavTech database. The
Company is working with many other automotive electronics manufacturers that
expect to introduce Route Guidance Products in the next several years.

The Company attributes its position as a leading developer and provider of
navigable databases to the following factors:

. Primary focus on route guidance market. From inception, NavTech has
concentrated its efforts on developing a navigable database designed to
meet the rigorous turn-by-turn requirements of route guidance. Accordingly,
the Company believes its database is well positioned to be designed-in to
Route Guidance Products. The Company believes that its navigable database
is provided with all Route Guidance Products currently sold in the United
States.

. Comprehensive high quality database coverage. The Company believes it has
developed the most comprehensive and accurate navigable database available
today, providing the industry's broadest geographic coverage and most
extensive detailed and in-depth content in the United States and Europe.
The Company believes that its database coverage in the United States and
Europe is a significant enabler in the development and commercial
deployment of Route Guidance Products. The Company has developed rigorous
processes that enable it to create a high quality database, and the
Company's goal is to ensure that its database is at least 97% accurate to
ground truth at the time of delivery.

. Extensive field organization. A large amount of detailed, local information
is required to develop and update a comprehensive navigable database. A
permanent local field organization is critical to establishing
relationships with local data sources, gathering detailed, current
information needed to constantly improve and build on its database and
physically verifying the ground truth accuracy and completeness of the
database. The Company believes that its extensive network of local field
offices, linked to the central database, has been a significant factor in
its ability to deliver and continuously update its navigable database.

. Single database specification. The Company's adherence to a single
worldwide database specification is designed to allow each manufacturer of
Route Guidance Products to offer a standard product throughout the United
States and Europe. This enables automotive electronics manufacturers to
reduce development costs and time-to-market schedules for Route Guidance
Products.

35
<PAGE>

. Comprehensive customer support. The Company believes its customer support
has been critical to the development and initial commercialization of its
customers' Route Guidance Products. The Company provides service and
support to its customers in three principal ways: (i) technical support in
the design, development and testing of their Route Guidance Products to
enable close integration between these products and NavTech's database;
(ii) consulting services related to the development of Route Guidance
Products; and (iii) a set of software tools developed by NavTech to help
customers bring their Route Guidance Products to market faster and at a
lower development cost.

. Industry relationships and leadership. The Company has taken a leadership
role in the development of industry standards, established key
relationships in industry and professional organizations, and developed
relationships with major automotive electronics manufacturers worldwide.
The Company believes that its role on standards committees and its industry
relationships enable it to obtain an earlier and better understanding of
the needs of the major manufacturers producing Route Guidance Products.
Several of the Company's key management and technical personnel have
assumed leadership positions in prominent industry, professional and
standards organizations in the United States, Europe and Japan.

The Company is also exploring use of its navigable database for other
applications outside of route guidance, including fleet management and
personal navigation. NavTech has entered into license agreements with several
developers of advanced fleet management systems, including Bowne Distinct,
Comdata Network through its Comdata RoTek division, Lightstone, Nukem GmbH and
Rockwell International. These systems are expected to include the capability
to track, select and dispatch vehicles based on driving time to a target
destination, and to provide door-to-door directions to drivers for flexible
pickup/delivery and service calls. In the personal navigation area,
applications using the NavTech database are incorporated into personal
computer software products including Philips' MetroNavigator and Frommer's
Interactive Travel Guides by GeoSystems and MacMillan Digital U.S.A. For
online delivery of directions, the Company's database is currently being used
by CompuServe for its online directions service, "WayToGo CompuServe."

NAVTECH STRATEGY

NavTech's strategy is to establish its navigable database as the leading
solution for Route Guidance Products and other applications. The Company's
strategy includes the following key elements:

Provide the industry's most complete and current navigable database. The
Company's objective is to provide a comprehensive, up-to-date database
covering all major metropolitan areas and intertown roadways in the United
States, Europe and Canada. The real world road network experiences continuous
change in a variety of ways, such as new construction, changing roadway
attributes, and new points of interest. The NavTech database is continuously
updated to stay abreast of change in the real world and to meet the needs of
NavTech's customers and end users.

Establish strategic relationships with key automotive electronics
manufacturers. The Company's strategy is to establish and maintain
relationships with leading automotive electronics manufacturers of Route
Guidance Products and developers of other related products such as fleet
management systems and personal navigation products. NavTech seeks to
establish long-term relationships with its customers and, where possible,
begin working with them early in their product development cycle to provide a
thorough understanding of the unique capabilities of the NavTech database, to
assist them in successfully designing their products to work with the NavTech
database and to facilitate a high level of customer satisfaction. The Company
supports its customers by offering consulting services and by providing
software development toolkits. NavTech also works to promote industry
awareness of its navigable database and assists suppliers of Route Guidance
Products by marketing directly to the major vehicle manufacturers.

Generate recurring revenue from database updates. The Company intends to
provide database updates and enhancements to end users to generate recurring
revenue in addition to the revenue from licenses of initial databases provided
with Route Guidance Products. The Company believes that as the installed base
of end users

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<PAGE>

increases, the licensing and distribution of database updates will be an
important source of future revenue. NavTech intends to distribute database
updates to end users both by mail for databases on CD-ROMs and via PC-based
kiosks for updatable media like PCMCIA-compatible removable hard disks.
NavTech has commenced limited initial distribution of database updates and
intends to continue to make significant investments to increase its
distribution capability.

Provide extensive end user support. The Company believes that strong end
user support is important to long-term market acceptance of Route Guidance
Products. NavTech has demonstrated its commitment to end user support by
establishing help desk facilities for North America through which end users
can secure assistance in using the products which incorporate the Company's
database and report problems. The telephone facilities are staffed by trained
technicians who can address a wide variety of technical and non-technical
product and database issues. Besides helping to encourage the market, these
hotlines provide an important source of database update information. NavTech
does not believe that any competitor is currently offering comparable help
desk support.

THE NAVTECH DATABASE

NavTech's navigable database is a digital representation of road
transportation networks in the United States and selected European countries,
constructed to provide the high level of accuracy and detail necessary to
support route guidance and related applications. NavTech devotes significant
resources to creating and updating its database and maintaining quality. The
Company has also made a significant investment in software and tools for
database creation and updating.

Database Content

The NavTech database provides two levels of coverage: detailed city and
intertown. Detailed city coverage provides sufficient detail to allow door-to-
door, turn-by-turn route guidance to addresses and points of interest within
metropolitan areas. Detailed city coverage generally includes a broad, logical
driving area around the named city regardless of city, county and state
boundaries. Intertown coverage includes the major roadways for other areas and
seamlessly connects the detailed city coverages. In the United States,
intertown coverage meets or exceeds the level of detail of roadways included
in American Automobile Association ("AAA") state level maps. A particular
Route Guidance Product typically incorporates both detailed city and intertown
information for a selected geographic portion of the NavTech database
applicable for the end user, such as California plus Nevada, the northeastern
United States including metropolitan New York and New England, France or
Germany. The end user can acquire additional geographic portions of the
database.

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<PAGE>

In the United States, detailed city database coverage is complete for cities
and their respective surrounding areas covering in aggregate approximately 100
million in population, and intertown coverage is complete for the continental
United States. By the end of 1998, the Company is scheduled to complete
detailed city coverage in the continental United States for all metropolitan
areas with a population over one million.

UNITED STATES DETAILED CITY COVERAGE

<TABLE>
<CAPTION>
<S> <C>
Albuquerque Miami/Ft. Lauderdale/West Palm Beach
Atlanta Minneapolis/St. Paul
Austin* New Orleans*
Baltimore/Washington D.C. New York area/suburban areas
area/suburban areas of of Long
Virginia/Maryland Island/Connecticut/Westchester/northern
Boston/Providence/southeastern New Jersey
New Hampshire Orlando
Chicago/Gary Philadelphia/Wilmington/Trenton
Dallas/Ft. Worth Phoenix
Denver/Boulder/Colorado Ski St. Louis*
Resorts and Towns St. Petersburg, FL
Detroit/Ann Sacramento
Arbor/Flint/Grand San Antonio*
Rapids/Lansing San Diego
Ft. Meyers/Cape Coral, FL.* San Francisco Bay
Fargo, ND Area/Monterey/Napa Valley/
Houston Santa Cruz/Solano/Sonoma
Indianapolis/Kokomo Seattle/Tacoma
Las Vegas Traverse City, Michigan
Los Angeles area/Orange/
Riverside/San
Bernardino/Santa
Barbara/Ventura
</TABLE>

*Completed coverage expected by the end of 1996, subject to change.

38
<PAGE>

In Europe, detailed city coverage is complete for cities and their
surrounding areas covering in aggregate approximately 70 million in
population. Intertown coverage is complete for Austria, Belgium, southeastern
England, France, Germany, northern Italy and Switzerland, and is expected to
be complete for most of the remainder of Western Europe in 1998. The Company
is scheduled to complete detailed city coverage for an additional 40 million
in population by the end of 1998.

EUROPEAN INTERTOWN AND DETAILED CITY COVERAGE

<TABLE>
<CAPTION>
COUNTRY CURRENT 1996*
---------------------------------------------------------------------------------
<C> <C> <S>
Austria Intertown Vienna
---------------------------------------------------------------------------------
Belgium Intertown Antwerp
Brussels Liege
---------------------------------------------------------------------------------
Great Britain Intertown in southeastern England Intertown in central England
Coventry West Midlands
London
---------------------------------------------------------------------------------
France Intertown Bordeaux
Lille Cote d' Azur
Lyon Monaco
Marseilles Strasbourg
Paris/Ile de France
---------------------------------------------------------------------------------
Most cities over 50,000
Germany Intertown population
Berlin
Hamburg
Hannover
Munich
Rhine/Main area
Ruhr area
Stuttgart
All other cities over 100,000
population
---------------------------------------------------------------------------------
Italy Northern Intertown Central Intertown
Genoa Rome
Milan
Padua
Triest
Turin
Verona
---------------------------------------------------------------------------------
The Netherlands Eindhoven Southern Intertown
---------------------------------------------------------------------------------
Switzerland Intertown Lugano
Basel
Bern
Geneva
Lausanne
Zurich
</TABLE>

*Completed coverage expected by the end of 1996, subject to change.

39
<PAGE>

The NavTech database is constructed to a single database specification so
that an automotive electronics manufacturer can design a single product that
can be sold throughout the United States and Europe. NavTech believes that this
is a significant advantage to its customers because it allows reduction of
development and distribution costs and enables a faster time to market.
NavTech's database can be viewed conceptually as six independent but related
layers, consisting of road network geometry, path attributes (permits route
planning), navigation attributes (enables route guidance), geo-political
boundaries and designations, cartography (land use) and points of interest. The
diagram below illustrates the conceptual database layers and provides examples
of the data in each layer. The database is also designed to allow customers to
incorporate customized information specific to their database application.

[This graphic is titled "Conceptual Database Layers" and consists of six boxes
connected with arrows and textual explanation to the right of each box. The
lowest box is labeled "Geometry" and is followed by "Links, nodes, shape points,
relative elevation and connectivity". This box points to a box labeled "Path"
that is followed by "Street and route names and address ranges". This box points
to a box labeled "Navigation" that is followed by "Arterial and speed
classification, directionality, dividers, turn restrictions, time of day and
flow restrictions and ramp signs". This box points to a box labeled "Geo-
political" that is followed by "Country, state, county, city, settlement and
postal code boundaries". This box points to a box labeled "Cartography" that is
followed by "A graphical representation of railroads, rivers and boundaries for
golf courses, parks, lakes, airports and shopping centers". This box points to a
box labeled "Points of Interest" that is followed by "Information on thousands
of points of interest in over 40 categories, including hotels, restaurants,
tourist attractions, automated teller machines ("ATMs"), airports and bus and
train terminals".]

Database Creation

Creating a comprehensive, high quality navigable database is a multi-step,
labor-intensive process. The major steps in database creation are to:

. Collect data. One of the challenges in collecting data is to find accurate
data sources. In many cases, paper maps may be a decade or more old.
NavTech gathers raw geographic data in both hard copy and digital form.
Aerial photographs are commissioned and digital and paper map data is
acquired from government agencies and other sources. Street name
information is obtained from regional and local governments and other
sources. Highway information, including interchanges and signage is
obtained from regional agencies and other sources. Navigation information
(barriers, one-way restrictions, turn restrictions and other driving rules)
is obtained from municipalities, often from sign maintenance facilities and
other sources. NavTech personnel drive limited access highways and
photograph signs significant for routing, including the text of exit and
entrance signs. Information on points of interest including hotels,
restaurants, ATMs and businesses is obtained from various sources.

. Establish accurate geometry. Road and attribute geometry (a representation
of the shape and location of the roads and how they connect) is created by
digitizing data from paper maps using high resolution

40
<PAGE>

digitizing tables and through the use of digital geographic data files. This
information is cross-checked with recent aerial photographs.

. Overlay addressing data and validate coverage. Attributes including city
code, postal code, street name and addresses are added to the road geometry
data. Sources of address data include postal authorities, tax assessment
records and other government files. Address data is checked for internal
consistency and is also used to identify discrepancies in the physical
structure of the database.

. Add routing data. Roads are classified both physically and functionally to
provide efficient routing. Physical classifications are based on lane
configurations and other characteristics. Functional classification (how a
road is used) is based on local information gathered by NavTech's field
staff.

. Integrate driving rule information with geographic data. Both manual and
software-based techniques are used to integrate driving rules, such as turn
restrictions and one-way streets (including time-of-day and day-of-week),
with geographic information. NavTech has developed proprietary software
tools for data validation to support and optimize this process.

. Perform test drive. At multiple stages during the database construction
process, major arterials and selected other roads are driven by field
researchers to check address ranges, points of interest and driving
restrictions and to determine that routes generated by computer from the
database are reasonable and efficient.

Database Updating and Quality

The NavTech database is continually updated to reflect the current state of
the roadway network and points of interest so that products using the
Company's database can produce accurate directions. The Company typically
establishes a local research and updating field office for each metropolitan
area early in the initial data-gathering process.

The local research and updating team establishes relationships with agencies
responsible for the roadways throughout the area, gathers information on road
conditions and plans from multiple sources, checks data quality and
continuously validates database information. The Company acquires update
information from a variety of sources. For example, revised government
information, including survey maps, postal addressing information and census
information, is acquired as it becomes available; information regarding new
and planned construction and changes in road characteristics is acquired from
government agencies that authorize road building; changes to point-of-interest
information are collected from various sources; end user feedback identifies
errors and anomalies and is a source of ideas for improving the database; and
driving of the area by local field personnel provides other update
information.

The Company strives to maintain its database quality by: (i) supplementing
and cross-checking information from multiple public and private sources with
aerial photographs and field personnel who obtain and verify information; (ii)
employing proprietary software tools and verification programs; and (iii)
performing periodic real-world tests on samples from each metropolitan area.
Local field office personnel use vehicles equipped with Route Guidance
Products and other tools to drive the roadways to verify the accuracy and
completeness of the database. Software tools are used to simulate the intended
uses of the data and to compare generated results with reality, and to analyze
path structure for logic of navigation attributes, connectivity and proper
traffic flow.

Field Organization

The Company's field organization is the central focus of database
development, updating and management. During initial database creation, field
personnel build relationships with authorities at all levels responsible for
the roadways to gather driving rule and other information and field-verify the
database. Once initial development for a metropolitan area is complete, the
field office assumes primary responsibility for keeping the database up to
date and accurate, including information regarding new construction, changes
to the existing road network and driving rules, updated points of interest,
problem report resolution and ongoing field verification. As of

41
<PAGE>

June 30, 1996, the Company had 35 field offices in the United States and one
in Canada with a total of 148 employees, and 22 field offices in Europe with a
total of 147 employees. The Company intends to continue to increase its field
organization to support the continued expansion of its database.

Technical Services

Database Consulting Services. An important component of NavTech's strategy
is to provide extensive consulting services, customer support, custom software
and software development toolkits to NavTech customers. The Company believes
these services can help NavTech customers reduce the time to market for their
products.

Customer Support. The Company offers customer support managers to work with
customers' product designers and product launch teams. The support managers
are available to facilitate the customer's process of incorporating relevant
database capabilities into products, perform trouble-shooting, provide
technical advice and offer overall product development guidance. The field
staff assists customers in testing their products.

Help Desk. NavTech provides end user support through its help desk
facilities. The help desks enable end users to obtain assistance in using
Route Guidance Products incorporating the Company's database and to report
problems with the Route Guidance Product or the database. The telephone
facilities are staffed by trained technicians who can address database issues.
In addition, these hotlines provide the Company with an important source of
database update information.

TECHNOLOGY

Database Creation and Updating Tools. The Company believes that a
significant factor in its successful creation and updating of its navigable
database is its proprietary software environment. From its inception, the
Company has employed an integrated, large-system approach drawing on the
extensive experience of SEI with large-scale databases and software support
and operations environments. The Company has devoted significant resources and
expertise to the development of a custom data management software and
communications environment that includes a mainframe as a server over a wide
area network for database management and updating and networked UNIX
workstations. The Company has built its workstation software with an easy-to-
use graphical user interface. The interface enables employees to perform
sophisticated database creation and updating tasks in a well-controlled and
efficient environment.

The Company's database creation, updating and management tools include:

. Tools for automated data capture from machine-readable sources, including
post office and public domain government spatial data files

. Comparison and validation tools for merging data from multiple sources

. Verification tools to validate connectivity and consistency

. Integration tools for merging new data into the database structure

. Statistical and reporting tools for extracting information in human
readable form

. Translation software for generating versions of the database in a variety
of formats

Data Access Software and Toolkits. The Company is working with a number of
its customers to develop software known as the shared data access library
("SDAL") which is intended to incorporate a common database format. This
software is intended to help customers develop and deploy their products more
swiftly and incorporate advanced database features into their products more
readily and reliably. At the same time, the common database format is expected
to help the Company by simplifying database distribution and support
logistics. In addition, the Company makes a software development toolkit
available to its customers at little or no cost. The toolkit includes software
for route calculation, route explication, map display, map matching,
destination determination and geocoding.

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SEI EnRoute. NavTech is addressing the demand for driving directions and
travel-related information delivered to desktop and hand-held computers via
wired and wireless networks. SEI EnRoute is a database engine that delivers
turn-by-turn driving instructions, travel information and points of interest
derived from NavTech's database in response to online end user requests.
CompuServe began offering access to SEI EnRoute under the service mark
"WayToGo CompuServe" in late 1995. SEI EnRoute routing services are also
provided through the World Wide Web. Revenues from these applications are not
expected to be material for the foreseeable future. The Company believes that
SEI EnRoute may be utilized as a component of off-board Route Guidance
Products in the future.

MARKETING AND DATABASE DISTRIBUTION

NavTech's marketing and distribution strategy is to continue to aggressively
market the NavTech database to automotive electronics manufacturers and
developers of advanced transportation applications and to establish a
distribution function for providing database copies and updates to end users.
For Route Guidance Products, the Company's general policy is to charge a
license fee for each copy of the database distributed to an end user. The
Company also charges fees for services related to the distribution of copies
of the database.

Marketing

The Company uses business development personnel to market the NavTech
database to customers for incorporation in Route Guidance Products, fleet
management and personal navigation products. The Company markets the NavTech
database directly in the United States, Europe and Japan for use in products
to be sold in the United States and Europe. The Company has engaged Nichimen
Corporation, a major Japanese trading company, to assist in sales to companies
based in Japan. A technical customer support organization assists customers
from product inception through testing, market introduction and continuing
through the product's life. A customer support manager is assigned to large
customers and works closely with the Company's database creation and updating
groups to coordinate availability of appropriate database coverage in
conjunction with customer product release and roll-out plans. The Company
participates in industry trade shows and conferences and in professional
organizations that are attempting to expand market awareness and accelerate
adoption of these applications. For example, the Company is regularly
represented in technical sessions, panel discussions and executive briefings
at major industry events.

Database Distribution

The Company believes that the continuing availability to end users of
current database versions for the appropriate geographic area will be an
important factor in market acceptance of Route Guidance Products and other
navigation products. The Company also believes that the ongoing licensing of
database updates to end users will become an important source of its future
revenue. Because automotive electronics manufacturers are primarily focused on
product development and sales, NavTech is making a significant investment to
build an organization, processes and tools for the distribution of initial and
updated databases, both on rewriteable media (e.g., removable PCMCIA-
compatible hard disk drives) and on read-only media (e.g., CD-ROMs). For
rewriteable media, end users are expected to be able to obtain updates,
provided initially at specially configured PCs at car dealerships and other
locations. For read-only media, NavTech expects to provide updates by mailing
new CD-ROMs to end users. NavTech has a distribution relationship with Zenrin,
which is a leading supplier of map data CD-ROMs in the Japanese vehicle
navigation market.

Other Relationships

NavTech has entered into agreements with EL.DA, an Italian digital mapping
company serving Italian industry and government agencies, the Automobile
Association (U.K.), which is the largest provider of travel-related services
in Great Britain, and Institut Geographique National ("IGN"), which is the
government mapping agency of France. Pursuant to such agreements, these
entities provide data to the Company and have certain marketing rights with
respect to the NavTech database.

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CUSTOMERS

NavTech has established customer relationships and entered into licensing
arrangements with automotive electronics manufacturers and others which are
developing Route Guidance Products, fleet management products and personal
navigation products. The Company's customers are selling or developing Route
Guidance Products for factory installation, dealer installation and
aftermarket sale. The following companies are selling Route Guidance Products
using the NavTech database:

Alpine Alpine has developed aftermarket and factory-
installed Route Guidance Products. The aftermarket
product is currently available in Germany. The
factory-installed product is currently available in
a luxury car model on a limited basis in the United
States. Alpine also sells Route Guidance Products
in Japan utilizing a Japanese-developed database.

Magneti Marelli
(TECmobility) Magneti Marelli has developed an aftermarket Route
Guidance Product that is currently available in
France, Germany, Italy and Switzerland. Magneti
Marelli is also developing a factory-installed
product. Magneti Marelli is an Italian automotive
electronics manufacturer and a subsidiary of Fiat.

Philips Car Systems
Philips Car Systems has developed the CARiN
aftermarket and factory-installed Route Guidance
Products which are currently available in Europe.
The factory-installed system is offered as an
option on the BMW 7 Series and 5 Series models in
Austria, the Benelux countries, France, Germany,
Italy and Switzerland. Philips Car Systems is an
affiliate of Philips.

Rockwell International Rockwell manufactures a Route Guidance Product
available in Hertz rental cars in major cities
under the name NeverLost. Rockwell also
manufactures and markets its Route Guidance Product
as the Pathmaster.

Siemens Automotive Siemens Automotive sells a Route Guidance Product
to National Car Rental. Siemens is also preparing
to sell an aftermarket product in Europe.

Zexel Zexel sells a Route Guidance Product currently
offered in Avis rental cars and in certain
Oldsmobile models as a dealer-installed option.
Zexel Route Guidance Products are manufactured by
licensees of the route guidance technology
developed by Zexel.

Fleet Management Products

Lightstone Group, a software logistics solutions firm, offers a fleet
routing and scheduling product, RIMMS, incorporating the NavTech database.
Bowne Distinct, Comdata Network through its Comdata RoTek division and
Rockwell International in the United States and Nukem GmbH in Europe are
currently marketing fleet management products incorporating the NavTech
database.

Personal Navigation Products and Services

Travel information and driving direction services incorporating the NavTech
database are being offered online via SEI EnRoute on CompuServe (WayToGo
CompuServe). Self-contained CD-ROM-based travel information and driving
direction products incorporating the NavTech database have been introduced by
MacMillan Digital U.S.A. (Frommer's Interactive Travel Guides) and Philips
Media (MetroNavigator).

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OTHER APPLICATIONS

NavTech believes there are other potential opportunities to commercialize
the NavTech database. For example, as wireless communications become less
expensive and provide greater bandwidth, off-board route guidance may become
economically and technically feasible as an alternative to self-contained in-
vehicle Route Guidance Products. With off-board route guidance, routes would
be calculated on request by a central facility and transmitted, with basic
along-the-route map information, to relatively simple and inexpensive in-
vehicle and portable products. The Company believes that these applications
could extend route guidance or other navigation capabilities to a larger
number of users.

The Company's database could also be used for in-vehicle emergency response
systems to track and report vehicle location and to provide directions to
vehicle occupants. NavTech's database can also be used in automated displays
that would dispense directions, point-of-interest information, and street map
extracts at hotels, travel depots, auto club facilities and service stations.
In addition, the NavTech database could be used in geographic information
systems that could assist a wide range of users whose applications are tied to
the roadway network. These include utility companies that want to track their
facilities (pipelines, junctions) with reference to the street network, and
public agencies responsible for maintaining roadside equipment and monitoring,
analyzing, reporting on and controlling traffic flow.

OTHER SERVICES AND CONSULTING

SEI provides consulting services to NavTech which have formed the basis of
the Company's software engineering efforts, including the creation of its
technology infrastructure and support for development of Route Guidance
Products. SEI also provides software and systems consulting services to
clients in a variety of industries, including telecommunications, finance,
electronics and quick service restaurants. SEI's customers are primarily large
corporations who depend on sophisticated information processing to conduct
their businesses. These customers include: BellSouth, The Capital Group,
Market Data Corporation, McDonald's Corp., Merisel, Motorola, Inc. and Reuters
Information Technology. As part of its support services, SEI operates a
telephone help desk in Fargo, North Dakota which provides support services to
clients in the quick service restaurant industry. Services include providing
operational advice on field systems, handling field requests for new and
updated equipment and a wide range of troubleshooting and problem resolution
support.

DATABASE WARRANTY

The Company's license agreements with automotive electronics manufacturers
and other customers typically include a warranty that the Company's database
is 97% complete and accurate against ground truth at the time of delivery. A
similar warranty may also be provided to end users. Although certain of the
Company's license agreements limit warranty remedies to replacement of
database copies or refund of license fees, others do not contain such
limitations. The Company has not incurred significant costs in connection with
its warranties and has not established a reserve for future warranty-related
costs. Other than the limited warranty described above, the Company's license
agreements generally disclaim warranties, express and implied, including
warranties of merchantability and fitness for particular purposes. It is the
Company's general policy to require its licensees to include similar
disclaimers in end user license agreements. There can be no assurance that the
Company's or its licensees' disclaimers will be sufficient to protect the
Company in connection with any warranty or other claims that may be asserted
against the Company. Any failure by the Company to comply with its warranty
obligations and the absence or ineffectiveness of warranty or other
disclaimers, could expose the Company to claims for substantial monetary
damages and have a material adverse effect on the Company's business,
financial condition and results of operations.

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COMPETITION

The Company's principal map database competitors are Etak in the United
States and the United Kingdom and TeleAtlas in Europe, excluding the United
Kingdom. Sony Corporation recently acquired Etak from News Corporation
Limited. Robert Bosch GmbH owns 50% of TeleAtlas. The Company believes the
principal elements of competition in the market for map databases are the
geographical coverage of the database, the range and specificity of the
information in the database, database accuracy, the price to customers of the
database and the availability of software and hardware products that are
compatible with the database. The Company believes that it competes favorably
with respect to each of the above factors. The Company expects to experience
significant competition from TeleAtlas and Etak. The Company could face
competition from additional competitors in the future. Etak and TeleAtlas,
together with their corporate parents, each may have substantially greater
financial resources and research and development, marketing and other
capabilities than the Company. There can be no assurance that the Company will
be able to compete successfully in the future or that competitive pressures
will not result in price reductions for the Company's database and
distribution services that could materially adversely affect the Company's
business, financial condition and results of operations. SEI's software and
systems development and information services business faces substantial
competition from larger consulting firms, including nationally recognized
accounting firms and other professional service organizations, many of which
have substantially greater financial resources and other capabilities than the
Company. The Company's failure to be competitive in the software and systems
development and information services business could have a material adverse
effect on the Company's business, financial condition and results of
operations.

INTELLECTUAL PROPERTY

The Company also protects its database, software and related technology, in
part, by confidentiality agreements with its employees, consultants and
certain contractors. There can be no assurance that these agreements will not
be breached, that the Company would have adequate remedies for any breach, or
that the Company's confidential information will not otherwise become known or
be independently discovered by competitors.

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The Company claims rights in its trademarks and service marks. Certain marks
of the Company are registered in the United States. The Company has filed
applications to register certain other marks in the United States, and is
investigating its right to use and register certain marks in Europe and
elsewhere. Marks of others that are the same or similar to certain marks of
the Company exist or may exist. There can be no assurance that the Company
will be able to continue using certain marks or that certain of the Company's
marks do not infringe the marks of others in North America, Europe or
elsewhere. The Company has licensed others to use certain of its marks and
expects to continue licensing certain of its marks in the future. No assurance
can be given that others will not take actions that might materially and
adversely affect the value of the Company's marks or reputation.

The Company's database, software and related technologies may be used in a
variety of new and evolving industries and markets. Several participants in
these industries and markets hold patents relating to databases, software and
related subject matter and additional patents may issue in the future. The
validity, scope and enforceability of such patents is unclear. Moreover, since
patent applications in the United States are not publicly disclosed until the
patents issue, applications may have been filed that relate to the Company's
database, software and related technologies. The Company does not believe that
it infringes any patents of which it is aware; however, there can be no
assurance that patent infringement claims, will not be asserted against the
Company. The ability of the Company's customers to develop and market products
using the Company's database and software may also be materially affected by
such patents. The existence and assertion of such patents may deter current
and potential customers of the Company from developing and introducing
products, with a corresponding adverse effect on the Company's operations. In
the event that claims of infringement are asserted against current or
potential customers of the Company, such customers may be required to obtain
one or more licenses from third parties. There can be no assurance that any
necessary licenses from third parties can or will be obtained at a reasonable
cost or at all. Also, in the event that a customer of the Company is found to
have infringed such patents, such customer may be subject to payment of
substantial royalties or damages, or enjoined or otherwise prevented from
marketing products which would incorporate the Company's database, software or
related technologies. The Company's license agreements with its customers
generally include mutual indemnity provisions which in certain cases may
require indemnification by the responsible party for liabilities, costs and
expenses arising out of potential violations of intellectual property rights.
Depending upon the scope and applicability of such indemnification provisions,
indemnity claims may be asserted against the Company. While the Company does
not believe that it infringes any patents of which it is aware, there can be
no assurance that such indemnification provisions and other actions by the
Company will not result in indemnification claims or claims of direct or
contributory patent infringement or patent infringement inducement. There can
be no assurance that the outcome of any such claim would not have a material
adverse effect on the Company's business, financial condition and results of
operations.

The resolution of any claims related to the Company's intellectual property
would generally involve complex legal and factual questions and would
consequently be uncertain. In particular, resolution of such claims would
likely entail considerable cost to the Company and diversion of efforts of
management. The Company is currently involved in litigation with Etak, Zexel
USA, Inc. and its parent regarding alleged patent infringement,
indemnification and related issues. See "--Litigation."

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LITIGATION

EMPLOYEES

As of June 30, 1996, and giving effect to the SEI Merger, the Company had
1,103 employees, consisting of 580 in database production and updating, 142 in
software engineering, 241 in services and consulting, 57 in sales, marketing
and customer support, and 83 in general and administrative functions. The
Company's employees are not represented by any collective bargaining
organization and the Company has never experienced a work stoppage.

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FACILITIES

The Company's worldwide corporate and North American headquarters are
located in Sunnyvale, California in two buildings aggregating approximately
40,000 square feet. The Company has additional operations aggregating 18,200
square feet in two buildings in Fargo, North Dakota, 17,600 square feet in
Rosemont, Illinois and 4,000 square feet in Cupertino, California. The
Company's European headquarters occupy approximately 6,200 square feet near
Frankfurt, Germany. The Company's primary European product development
operations are located in Best, The Netherlands, in an approximately 27,300
square foot building. All of these buildings are leased under leases expiring
from October 1997 to July 2001. The Company also has 35 field offices in the
United States, 22 field offices in Europe and one field office in Canada,
which are primarily used for database research and updating activities. In
July 1996, the Company opened an office in Yokahama, Japan to provide
technical support to electronics manufacturers. SEI has offices in the Chicago
area, in Fargo, in the Los Angeles area and in New York. The Company believes
its North American and European headquarters, production and administration
facilities are adequate for its current needs, except for the facilities
located in Fargo, North Dakota and Rosemont, Illinois. The Company is
currently seeking additional facilities in Fargo and Rosemont. The Company
will need additional facilities for future field offices and may need
additional facilities for marketing and distribution activities. The Company
believes that additional space will be available on reasonable terms.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The executive officers and directors of the Company and their ages as of the
date of this Prospectus are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
T. Russell Shields 54 Chairman of the Board of Directors and Chief Executive Officer
Ronald A. Brumback 49 President, Chief Operating Officer and Director
Thomas A. Lerone 47 Vice President, Finance and Administration and Chief Financial Officer
Richard J. Weiland 52 Vice President, Industry Relations, Secretary and Director
Fidelis N. Umeh 56 President and Chief Executive Officer of SEI
William Curran (1)(2) 47 Director
Richard de Lange 51 Director
Michael S. Hasley (1)(2) 42 Director
Shinichi Komeda (1)(2) 59 Director
Stephen C. Tumminello 59 Director
Dr. Klaus Volkholz 60 Director
</TABLE>
- --------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.

T. Russell Shields has served as Chief Executive Officer of NavTech since
January 1988, Chairman of the Board of NavTech since January 1989 and a
director of NavTech since June 1987. Mr. Shields founded SEI in 1969. Mr.
Shields serves on numerous industry boards and committees, including the
Intelligent Transportation Society of America, the ITS World Congress Board of
Directors, the Transportation Research Board's Committee on Communications and
the International Standards Organization. Mr. Shields holds a B.S. in
Mathematics from Wichita State University and an M.A. in History and an M.B.A.
from the University of Chicago.

Ronald A. Brumback has served as President and Chief Operating Officer of
the Company since April 1996 and as a director of the Company since March
1995. From February 1995 to April 1996, Mr. Brumback served as Senior Vice
President of Philips Media B.V., a subsidiary of Philips. From March 1992 to
January 1995, he served as Senior Vice President, Information Services Group,
and General Manager of Database Technology Services, a division of R.R.
Donnelley and Sons Company, a printing company. From September 1988 to March
1992, Mr. Brumback served as Senior Manager of The Boston Consulting Group, a
management consulting firm. Mr. Brumback holds a B.A. in Economics from the
University of Richmond and an M.A. and M.Phil. in Economics and an M.B.A. from
Columbia University.

Thomas A. Lerone has served as Vice President, Finance and Administration
and Chief Financial Officer of NavTech since September 1988. Prior to joining
the Company, Mr. Lerone served in a consulting capacity as Chief Financial
Officer of Zoran Corporation, a semiconductor company, as Chief Financial
Officer of Elxsi, a computer manufacturer, and as Vice President, Treasurer
and Secretary of Trilogy Ltd., a computer developer, until its merger with
Elxsi. Mr. Lerone holds a B.S.C. in Business Administration from the
University of Santa Clara.

Richard J. Weiland has been a director of NavTech since December 1985 and
Secretary of NavTech since June 1996. Effective upon the consummation of the
SEI Merger, he will serve as the Company's Vice President, Industry Relations.
Mr. Weiland has served in various capacities with SEI since 1971, most
recently as Vice Chairman of SEI and General Manager of SEI Technology Group.
Mr. Weiland holds a B.S. in Mathematics from the University of Michigan and an
M.S. in Information Science and an M.B.A. from the University of Chicago.

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Fidelis N. Umeh has served as President and Chief Executive Officer of SEI
since 1986 and has served in various operational management positions with SEI
since 1974. Mr. Umeh holds a B.S. in Electrical Engineering from the
University of Minnesota, an M.S. in Applied Mathematics from the Illinois
Institute of Technology and an M.B.A. from the University of Chicago.

William Curran became a director of the Company in April 1996. Mr. Curran is
Senior Vice President, Chief Financial Officer and Director of Philips
Electronics North America Corporation, a subsidiary of Philips, and has served
in various positions with Philips and its affiliates since 1976. Mr. Curran
holds a B.S. in Management Engineering from Rensselaer Polytechnic Institute
and an M.B.A. from the Wharton School of Business.

Richard de Lange became a director of the Company in June 1996. Mr. de Lange
is the President of Philips Media U.K. Ltd., a subsidiary of Philips, and has
been employed in various capacities with Philips since 1970, most recently as
Chairman of Philips U.K. and President of Philips Lighting Europe. Mr. de
Lange holds a degree in law from the University of Amsterdam.

Michael S. Hasley became a director of the Company in September 1987. Mr.
Hasley serves as President of R & D Funding Corp., a general partner of
various limited partnerships involved in research and development, and an
affiliate of Prudential Securities Inc., which he joined in 1986. He is
presently a Senior Vice President of Prudential Securities Inc. Mr. Hasley
holds an A.B. in Political Science from Kenyon College and an M.M. (M.B.A.)
from Northwestern University.

Shinichi Komeda became a director of the Company in June 1993. Since March
1995, Mr. Komeda has served as President and Chief Executive Officer of
Nichimen Electronics Component Corp., an electronics components sales company.
From 1962 to March 1995, Mr. Komeda served in various capacities with Nichimen
Corporation and Nichimen America, Inc., most recently as Senior Vice President
of Nichimen America, Inc. Mr. Komeda holds a B.S. in Economics from Kwansei
Gakuin University.

Stephen C. Tumminello became a director of the Company in June 1996. Mr.
Tumminello has served as the President and Chief Executive Officer and
Director of Philips Electronics North America Corporation, a subsidiary of
Philips, since June 1990. Prior to June 1990, Mr. Tumminello served in various
other capacities at Philips. Mr. Tumminello holds a B.S. in Business
Administration from Fairleigh Dickinson University.

Dr. Klaus Volkholz became a director of the Company in March 1994. Dr.
Volkholz served as Senior Director, Corporate Planning and Strategy of Philips
International B.V., a subsidiary of Philips, from March 1986 to March 1996 and
currently serves as a consultant to Philips. Prior to March 1986, Dr. Volkholz
served in various other capacities at Philips. Dr. Volkholz holds an M.A. in
Economics and a Ph.D. in Electrical Engineering from the University of
Michigan.

All directors hold office until the next annual meeting of stockholders or
until their successors have been elected and qualified. Currently, directors
of the Company do not receive compensation for services provided as a
director. Messrs. Weiland and Hasley have agreed to resign from the Board of
Directors upon the appointment of independent directors to be identified by
the Board of Directors subsequent to the Offerings.

The Board of Directors has established an Audit Committee and a Compensation
Committee. The Audit Committee reviews, acts on and reports to the Board of
Directors with respect to various auditing and accounting matters, including
the selection of the Company's auditors, the scope of the annual audits, fees
to be paid to the auditors, the performance of the Company's auditors and the
accounting practices of the Company. The Compensation Committee establishes
salaries, incentives and other forms of compensation for the officers and
other employees of the Company and administers the incentive compensation,
stock option and benefit plans of the Company. See "--Employment Contracts"
and "--Employee Benefit Plans."

There are no family relationships between any directors or executive
officers of the Company. Philips has agreed to vote its shares to elect Mr.
Shields to the Company's Board of Directors, and the Company has agreed

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<PAGE>

to use its best efforts to achieve such election, so long as Mr. Shields,
together with his family, beneficially owns at least 10% of the Company's
outstanding Common Stock. Mr. Shields and his family will beneficially own
approximately 13.3% of the Company's outstanding Common Stock upon the closing
of the Offerings and the Direct Placement.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Company's Board of Directors currently
consists of Messrs. Curran, Hasley and Komeda. None of these individuals were
at any time during fiscal 1995 an officer or employee of the Company. No
executive officer of the Company serves as a member of the board of directors
or compensation committee of any entity that has one or more executive
officers serving as a member of the Company's Board of Directors or
Compensation Committee.

EMPLOYMENT CONTRACTS

Each of Messrs. Shields and Brumback have entered into written employment
agreements with the Company. Mr. Shields' agreement, which will be effective
upon closing of the SEI Merger, is for a term of four years and is terminable
by the Company or Mr. Shields upon written notice. Mr. Brumback's is an "at-
will" agreement with no specified term. The agreements provide for annual base
cash compensation of $375,000 for each of Messrs. Shields and Brumback plus a
target bonus of 50% of such annual base compensation payable upon the
achievement of certain milestones and objectives (except for the year 1996
when the bonus will not be linked to any milestones or objectives but instead
will be 50% of base cash compensation paid in 1996), as well as such customary
benefits as NavTech may provide to its executive employees. The agreements
provide that both Mr. Shields and Mr. Brumback report directly to NavTech's
Board of Directors and specify the duties and responsibilities of each of
them.

Pursuant to the agreement with Mr. Shields, NavTech has granted Mr. Shields
options to purchase 833,334 shares of Common Stock at an exercise price of
$20.40 per share, of which options to acquire 104,166 shares of Common Stock
shall vest on January 1, 1997 and the remaining options shall vest in 42 equal
monthly installments starting on February 1, 1997. Once vested, such options
generally are exercisable for ten years, with certain exceptions in the event
that Mr. Shields' employment is terminated.

If NavTech terminates Mr. Shields' employment for cause (as defined in the
agreement) as a result of an act or omission which involves dishonesty or
criminal conduct directed against the Company, vesting of options shall cease,
and all vested but unexercised options shall terminate upon such termination
of employment. If NavTech terminates Mr. Shields' employment for cause for
reasons other than those described in the foregoing sentence, vesting of
options shall cease and all vested but unexercised options shall terminate 90
days after such termination of employment. In the event Mr. Shields'
employment terminates due to his death or disability (as defined in the
agreement) or Mr. Shields terminates his employment other than as a result of
a continuing material breach of the agreement by NavTech, vesting of options
shall cease, but vested options shall remain exercisable for the remainder of
their respective ten year terms.

If NavTech terminates Mr. Shields' employment for cause, if Mr. Shields'
employment terminates due to his death or disability or if Mr. Shields
terminates his employment other than as a result of a material breach of the
agreement by NavTech, Mr. Shields shall not be entitled to severance
compensation other than payment of any earned but unpaid bonus. If Mr.
Shields' employment is terminated by NavTech without cause or by Mr. Shields
as a result of a material breach of the agreement by NavTech, Mr. Shields will
be entitled to severance pay equal to one year's base annual compensation,
plus any earned and unpaid bonus, continuation of his normal benefits for a
one year period, continuation of vesting of non-qualified stock options for a
period of one year and continuation of the right to exercise all vested
options for the remainder of their respective ten year terms.

NavTech has also agreed to use its best efforts to achieve Mr. Shields'
election to the Board of Directors so long as he, together with his family,
beneficially owns at least 10% of NavTech's outstanding shares of Common

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<PAGE>

Stock. Mr. Shields' employment agreement also contains non-competition
provisions that restrict the activities related to both NavTech's and SEI's
business in which Mr. Shields may engage during the term of his employment
plus one year, as well as provisions granting NavTech ownership of all
proprietary information and inventions made or conceived by Mr. Shields during
the term of his employment, with certain exceptions.

Pursuant to the terms of the agreement with Mr. Brumback, NavTech has
granted Mr. Brumback options to purchase 416,667 shares of NavTech Common
Stock at an exercise price of $10.20 per share. Subject to Mr. Brumback's
continued employment, such options will vest in equal monthly installments
over a four year period starting April 22, 1996. In the event of termination
without cause (as defined in the agreement), the agreement provides for
severance pay equal to one year base compensation plus any earned and unpaid
bonus as well as the continuation of normal benefits for one year.
Furthermore, the agreement provides for the continuation of vesting of Mr.
Brumback's incentive stock options for a period of three months from the date
of termination, continuation of vesting of non-qualified stock options for a
period of one year from the date of any such termination and extension of the
time period for the exercises of non-qualified stock options to two years from
the date of such termination. The incentive stock options shall convert to
non-qualified stock options if they are not exercised within three months of
such termination. In the event of voluntary termination by Mr. Brumback, the
agreement provides for payment of earned but unpaid bonuses. The agreement
expresses an intent that Mr. Brumback shall be a member of the Board of
Directors so long as he remains employed as President and Chief Operating
Officer.

LIMITATION ON LIABILITY AND INDEMNIFICATION MATTERS

The Company's Restated Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law, and the Company's
Bylaws provide that the Company shall indemnify its directors and may
indemnify its other officers, employees and agents to the fullest extent
permitted by law. The Company has also entered into agreements to indemnify
its directors and officers, in addition to the indemnification provided for in
the Company's Bylaws. Pursuant to such agreements the Company, subject to
certain conditions, is required to indemnify its officers and directors to the
fullest extent provided by law. The Company is also required, subject to
certain conditions, to advance the out of pocket expenses of its officers and
directors related to certain types of suits, proceedings or similar actions.
Upon timely notice, the Company may terminate such agreements as they relate
to events which arise after such termination. The Company believes that these
provisions and agreements are necessary to attract and retain qualified
directors and executive officers. At present, there is no pending litigation
or proceeding involving any director, officer, employee or agent of the
Company where indemnification will be required or permitted. The Company is
not aware of any threatened litigation or proceeding that might result in a
claim for such indemnification.

53
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth the compensation paid by NavTech and SEI
during the year ended December 31, 1995 to the Company's Chief Executive
Officer and each of the Company's three other most highly compensated
executive officers whose salary and bonus for services rendered in all
capacities to the Company and its subsidiaries exceeded $100,000 during such
year (collectively, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

LONG-TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL SECURITIES
COMPENSATION UNDERLYING
----------------- OPTIONS
NAME AND PRINCIPAL POSITION SALARY BONUS (SHARES)
--------------------------- -------- -------- ------------
<S> <C> <C> <C>
T. Russell Shields(1).................... $303,255 $409,531(2)(3) --
Chairman and Chief Executive Officer
Thomas A. Lerone......................... 166,058 10,000 16,175
Vice President, Finance and
Administration
and Chief Financial Officer
Fidelis N. Umeh(1) ...................... 9,608 725,375(2) --
President and Chief Executive Officer of
SEI
Richard J. Weiland(1) ................... 186,499 134,350(2)(4) --
Vice President, Industry Relations and
Secretary
</TABLE>
- --------
(1) Such Named Executive Officer was employed by SEI during the year ended
December 31, 1995 and received compensation from SEI during such year.
NavTech paid a total of $300,000 and $105,600, respectively, to SEI for
Mr. Shields' and Mr. Weiland's services to NavTech during such year.

(2) Includes payments pursuant to SEI's Profit Participation Plan (the "Profit
Plan"). Under the Profit Plan, the participants have their salaries
reduced and SEI pays out approximately 75% of its pretax income from
operations (including salary reductions) and certain special items to
Profit Plan participants. For fiscal 1995, Messrs. Shields, Umeh and
Weiland elected to have their salaries reduced by $192,985, $355,502 and
$66,677, respectively. In connection with the SEI Merger, Mr. Shields and
Mr. Weiland have agreed not to receive any further payments under the
Profit Plan in excess of their respective salary reductions, such payments
as they each would have been entitled to absent the occurrence of the SEI
Merger and, in the case of Mr. Weiland, an additional payment not to
exceed $150,000. After the SEI Merger, NavTech plans to review, evaluate
and establish the SEI compensation plans in the ordinary course of
business.

(3) Includes $297,421 earned in 1995 but not paid during such year.

(4) Includes $97,572 earned in 1995 but not paid during such year.

54
<PAGE>

OPTION GRANTS DURING 1995

The following table sets forth, as to the Named Executive Officers,
information concerning stock options granted during the year ended December
31, 1995.
<TABLE>
<CAPTION>

OPTION GRANTS IN 1995

INDIVIDUAL GRANTS(1) POTENTIAL REALIZABLE
------------------------------------------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM(4)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION ---------------------
NAME GRANTED 1995(1) PRICE($/SH)(2) DATE(3) 5% 10%
---- ---------- ------------ -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
T. Russell Shields...... -- -- -- -- -- --
Thomas A. Lerone........ 16,175 2.4% $10.20 07/01/05 $ 103,758 $ 262,944
Fidelis N. Umeh......... -- -- -- -- -- --
Richard J. Weiland...... -- -- -- -- -- --
</TABLE>

- --------
(1) The Company granted options to purchase 662,305 shares of Common Stock
during 1995.

(2) The exercise price may be paid in cash, check, shares of the Company's
Common Stock (subject to approval of the Board of Directors) or any
combination of such methods.

(3) Options may terminate before their expiration date if the optionee's
status as an employee is terminated or upon the optionee's death or
disability.

(4) Potential realizable values are net of exercise price, but before taxes
associated with exercise. Amounts represent hypothetical gains that could
be achieved for the respective options if exercised at the end of the
option term. The 5% and 10% assumed annual compound rates of stock price
appreciation are mandated by the rules of the Securities and Exchange
Commission and do not represent the Company's estimate or projection of
future prices of its Common Stock. Actual gain, if any, on stock option
exercises are dependent on the future performance of the Common Stock,
overall market conditions and the option holder's continued employment
through the vesting period. This table does not take into account any
appreciation in the price of the Common Stock from the date of grant to
the present.

Subsequent to December 31, 1995, the Company granted options to purchase
416,667, 16,667 and 33,334 shares, respectively, of Common Stock to Messrs.
Brumback, Lerone and Weiland at an exercise price of $10.20 per share and,
contingent upon the closing of the SEI Merger, options to purchase 833,334
shares of Common Stock to Mr. Shields at an exercise price of $20.40 per
share.

55
<PAGE>

OPTION EXERCISES AND HOLDINGS

The following table sets forth information concerning option holdings for
the year ended December 31, 1995 with respect to each of the Named Executive
Officers. No options were exercised by the Named Executive Officers during
such year. No stock appreciation rights were granted during such year.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, 1995 DECEMBER 31, 1995(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
T. Russell Shields.......... -- -- -- --
Thomas A. Lerone............ 72,705 31,484 $579,580 $132,545
Fidelis N. Umeh............. -- -- -- --
Richard J. Weiland.......... -- -- -- --
</TABLE>
- --------

(1) Based on the fair market value of the Company's Common Stock at December
31, 1995 of $10.20 per share (as determined by the Company's Board of
Directors) less the exercise price payable for such options.

EMPLOYEE BENEFIT PLANS

1988 Stock Option Plan. As of June 30, 1996, options to purchase an
aggregate of 2,137,012 shares of Common Stock were outstanding under the
Company's 1988 Stock Option Plan (the "1988 Plan"). Following the Offerings,
no further options will be granted under the 1988 Plan, as the Company intends
to grant options pursuant to its 1996 Plan described below. The 1988 Plan
provided for the grant by the Board of Directors of the Company of incentive
and nonqualified stock options to employees and consultants of the Company.
The 1988 Plan is administered by the Board of Directors or a committee
thereof. The Board may interpret the 1988 Plan and, subject to its provisions,
may prescribe, amend and rescind rules and make all other determinations
necessary or desirable for the administration of the 1988 Plan. All options
granted under the 1988 Plan have a term of ten years, and typically vest in
equal annual or monthly installments so that the option is fully vested in
four years.

1996 Stock Option Plan. The Company has reserved an aggregate of 5,669,890
shares of Common Stock for issuance under its Amended and Restated 1996 Stock
Option Plan (the "1996 Plan"). As of June 30, 1996, options to purchase an
aggregate of 337,348 shares of Common Stock were outstanding under the 1996
Plan. In addition, options to purchase 833,334 shares of Common Stock were
granted contingent upon the closing of the SEI Merger. The 1996 Plan was
originally adopted by the Board of Directors in April 1996. The 1996 Plan was
amended and restated by the Board of Directors in June 1996. The 1996 Plan
will be in effect for a term of ten years unless terminated earlier pursuant
to its terms. The 1996 Plan provides for grants of incentive stock options,
nonstatutory stock options and stock purchase rights to employees (including
employees who are officers) of the Company and its subsidiaries; provided
however, that no employee may be granted an option for more than 1,666,667
shares in any one year. The 1996 Plan also provides for grants of nonstatutory
stock options and stock purchase rights to consultants. The 1996 Plan may be
administered by the Board of Directors or by a committee appointed by the
Board (the "Administrator"), in a manner that satisfies the legal requirements
relating to the administration of stock plans and issuance of shares under all
applicable laws. The 1996 Plan is currently administered by the Compensation
Committee of the Board of Directors.

The exercise price of options granted under the 1996 Plan is determined by
the Administrator. With respect to incentive stock options granted under the
1996 Plan, the exercise price must be at least equal to the fair market value
per share of Common Stock on the date of grant, and the exercise price of any
incentive stock option granted to a participant who owns more than 10% of the
voting power of all classes of the Company's outstanding capital stock of the
Company or a parent or subsidiary corporation of the Company (a "Ten Percent

56
<PAGE>

Stockholder") must be equal to at least 110% of the fair market value of the
Common Stock on the date of grant. The maximum term of an incentive stock
option granted under the 1996 Plan may not exceed ten years from the date of
grant (five years in the case of a Ten Percent Stockholder). The term of a
nonstatutory stock option is determined by the Administrator. In the event of
termination of an optionee's employment or consulting arrangement, options may
only be exercised, to the extent vested as of the date of termination, for a
period specified in the notice of grant. If the optionee commits an act of
misconduct, his or her options terminate as of the day of the act of
misconduct. In addition, the Company has a right to rescind the exercise of
any options which occurred after the act of misconduct or, if the optionee has
sold the shares covered by such option, to recover the net proceeds of the
sale along with interest. Generally, misconduct means any acts affecting the
optionee's employment which involve (1) dishonesty, fraud, or criminal
conduct, (2) knowing and willful violation of a material written company
policy or a lawful direction by an authorized executive officer or the board,
(3) material, competitive activities with the Company or (4) knowing,
unauthorized disclosure of confidential, material, proprietary information or
trade secrets of the Company. If the notice of grant does not specify the
period for exercise, the optionee will have three months following the date of
termination. Unless otherwise specified by the Administrator in the notice of
grant, options and stock purchase rights may not be sold or transferred other
than by will or the laws of descent and distribution, and may be exercised
during the life of the optionee only by the optionee.

A stock purchase right allows an employee or consultant to purchase shares
of the Company's Common Stock pursuant to a restricted stock agreement. Unless
otherwise determined by the Administrator, the restricted stock purchase
agreement gives the Company an option, exercisable upon termination of the
purchaser's employment for any reason including death or disability, to
repurchase the shares at the original price paid by the purchaser. Such
repurchase option lapses at a rate determined by the Administrator.

In the event of a merger or sale of substantially all of the Company's
assets, all outstanding options and stock purchase rights may be assumed or an
equivalent option or stock purchase right substituted by the successor
corporation or its parent or subsidiary. In the absence of such assumption or
substitution, all options and stock purchase rights will become fully
exercisable and vested. Any options and stock purchase rights not assumed or
substituted for will terminate fifteen days after the Administrator gives
notice.

The Board has the right to amend or terminate the 1996 Plan, provided that
no such action may impair the rights of any optionee without the written
consent of any such optionee, and provided further that certain amendments are
by law subject to stockholder approval. The 1996 Plan will terminate in 2006
unless terminated sooner by the Board.

1996 Netherlands Stock Option Subplan. The 1996 Stock Option Plan for
Netherlands Employees (the "Netherlands Subplan") is a subplan created under
the 1996 Plan to satisfy the requirements for preferential tax treatment in
the Netherlands. All options granted under the Netherlands Subplan are
nonstatutory options. Options granted under the Netherlands Subplan must
comply with all provisions of the 1996 Plan as well as with the Netherlands
Subplan.

1996 French Stock Option Subplan. The 1996 Stock Option Plan for French
Employees (the "French Subplan") is a subplan created under the 1996 Plan to
satisfy the requirements for preferential tax treatment in France. All options
granted under the French Subplan are nonstatutory options and may be granted
only to salaried employees of a participating French subsidiary of the Company
who are residents of France and are not Ten Percent Stockholders. Options
granted under the French Subplan must comply with all provisions of the 1996
Plan as well as with the French Subplan.

SEI 1996 Stock Option Plan. In connection with the SEI Merger, the Company
will assume SEI's stock option plan (the "SEI Plan"). Options granted under
the SEI Plan are incentive stock options with a ten year term that have an
exercise price equal to the fair market value of SEI's shares on the date of
grant. Following the SEI Merger, shares of NavTech Common Stock will be issued
in substitution for shares of SEI common stock upon any exercise of
outstanding options under the SEI Plan. No further options will be granted
under the SEI Plan. A maximum of 333,334 shares of NavTech Common Stock may be
issued to holders of options under the SEI Plan.

57
<PAGE>

CERTAIN TRANSACTIONS

TRANSACTIONS WITH PHILIPS

In September 1994, the Company sold 7,843,137 shares of its Preferred Stock
to Philips at a price of $10.20 per share (the "1994 Philips Investment") that
was paid in installments with interest through November 1995. At the same
time, the Company issued 2,445,390 shares of Preferred Stock at an effective
price of $10.20 per share to Philips in exchange for shares of NavTech Europe
and notes payable by NavTech Europe held by Philips. Each share of Preferred
Stock will automatically convert into one share of Common Stock upon the
closing of the Offerings.

In connection with the 1994 Philips Investment, Philips agreed with the
Company that, for three years following the closing of the Offerings, except
as approved by a majority of the Company's directors other than Philips'
designees, Philips will not own more than 75% of the outstanding Common Stock
of the Company, except for (i) shares acquired in a tender offer or exchange
offer for all of the Company's Common Stock or in a merger, consolidation,
mandatory share exchange or similar transaction where the Company is a party;
(ii) shares acquired pursuant to the exercise of any right of first refusal
held by Philips or (iii) otherwise due to actions by the Company or others
which Philips has no right or ability to prevent. In addition, for five years
following the Offerings, Philips has agreed to give the Company's other
stockholders the right to participate on equal terms in any sale by Philips of
all or substantially all of its equity interest in the Company other than in
an underwritten public offering. Philips also granted to persons who were
stockholders or optionholders (to the extent the options vest in accordance
with the terms of the option) of the Company on September 2, 1994 the right to
require Philips to purchase certain shares of the Company's Common Stock held,
on a fully-diluted basis, by such stockholders or optionholders on such date
at a per share price of $10.20. As of June 30, 1996, there were approximately
1,982,000 shares of Common Stock and approximately 325,000 shares of Common
Stock subject to vested options which are subject to these contractual rights,
and such rights terminate upon the closing of the Offerings. Philips has
indicated to the Company that it does not have a present intention to hold any
shares of Common Stock that would cause its ownership percentage to equal or
exceed 50% of the Company's outstanding Common Stock.

The Company also has certain agreements with Philips regarding the licensing
of the Company's products. The Company's contracts with Philips and other
major customers extend most favored customer terms and prices for similar
applications, quantities and territories.The description of the terms of the
1994 Philips Investment herein is qualified in its entirety by reference to
the Investor Rights Agreement and Stock Purchase Agreement filed as Exhibits
10.7 and 10.8 to the Registration Statement of which this Prospectus is a
part.

In May 1996, the Company entered into agreements with Philips pursuant to
which the Company granted a nonexclusive, nontransferable, nonsublicensible
license to use its navigable database and related software in connection with
certain personal navigation products and services developed by or for Philips.
The Company received $28,000 in connection with such agreements in July 1996.

In June 1996, pursuant to the Private Financing Philips purchased shares of
Preferred Stock for an aggregate purchase price of $29,283,796 ($18,262,563 of
which was paid in cash and the remainder of which was paid by conversion of
outstanding loans), and T. Russell Shields, together with certain of his
family members, purchased shares of Preferred Stock for an aggregate purchase
price of $189,598, paid in cash. The number of shares of Preferred Stock
issued to each of the purchasers in the Private Financing is subject to
adjustment on the closing of the Offerings made hereby based on the initial
public offering price of the Company's Common Stock. The number of shares of
Preferred Stock to which each purchaser is entitled will be determined by
dividing the aggregate purchase price paid by the purchaser by the "adjustment
price" which will be 80% of the gross price per share at which the Common
Stock is initially offered to the public. After the adjustment is made, the
Company will either issue additional Preferred Stock or the purchaser will
surrender to the Company shares of Preferred Stock so that each purchaser
holds the appropriate number of shares in accordance with the above formula.
Based on an assumed initial public offering price of $13.00 per share, Philips
and Mr. Shields, together with his family, will receive 2,815,750 shares and
18,233 shares of Common Stock, respectively, upon conversion to Common Stock
of the Preferred Stock purchased in the Private Financing.

In connection with the Private Financing, Philips agreed to purchase in the
Direct Placement a number of shares of Common Stock necessary to constitute,
when aggregated with all other shares held by Philips, 48% of the total

58
<PAGE>

number of shares of Common Stock issued and outstanding on the closing date of
the Offerings made hereby. Philips also has an option to purchase directly
from the Company in the Direct Placement additional shares that would result
in Philips owning up to 48% of the outstanding shares of Common Stock upon the
closing of any exercise of the U.S. Underwriters' and International Managers'
over-allotment options. Philips will purchase such shares at a price per share
equal to the price at which the shares of the Common Stock are initially
offered to the public, net of the underwriters' discounts and commissions. The
number of shares Philips will purchase in the Direct Placement will depend on
(i) the initial public offering price of the Common Stock, which will affect
the number of shares of Common Stock issued upon conversion of the Preferred
Stock sold in the Private Financing and the number of shares to be sold to
Zenrin in the Direct Placement, (ii) the number of outstanding options that
are exercised prior to the closing of the Offerings, and (iii) the number of
shares stockholders sell to Philips pursuant to the above described
contractual rights prior to the closing of the Offerings. See "Shares Eligible
for Future Sale."

NavTech Europe purchases certain computer services from an affiliate of
Philips. In 1993, 1994, 1995 and for the six month period ended June 30, 1996,
NavTech Europe incurred charges from such affiliate aggregating $0.9 million,
$1.4 million, $2.0 million and $1.1 million, respectively, in connection with
such services.

OTHER STOCK ISSUANCES

In March 1993, the Company sold an aggregate of 285,000 shares of Preferred
Stock to Nichimen Corporation and Nichimen America, Inc. (the "Nichimen
Entities") at a purchase price of $4.68 per share, which shares were converted
into an equal number of shares of Common Stock in December 1993. In February
1994, the Company issued convertible debentures in an aggregate principal
amount of $320,000 to the Nichimen Entities, which debentures were converted
into an aggregate of 32,694 shares of Common Stock in September 1994. Also in
February 1994, the Company sold an aggregate of 100,000 shares of Common Stock
to the Nichimen Entities at a purchase price of $4.80 per share. Shinichi
Komeda, a director of the Company, is President and Chief Executive Officer of
Nichimen Electronics Corp., an affiliate of the Nichimen Entities.

Between April 1993 and September 1994, Fidelis N. Umeh, President and Chief
Executive Officer of SEI, and T. Russell Shields (or trusts affiliated with
Mr. Shields) purchased an aggregate of 17,983 shares and 26,968 shares,
respectively, of Common Stock (or Preferred Stock or convertible debentures
that converted into Common Stock) at purchase prices ranging from $4.68 to
$10.20 per share.

In June 1996, the Company entered into an Agreement and Plan of
Reorganization (the "Merger Agreement") with SEI pursuant to which SEI will be
merged with a subsidiary of NavTech upon the closing of the Offerings.
Pursuant to the Merger Agreement, each outstanding share of SEI common stock
will be converted into approximately 545.26 shares of NavTech Common Stock. In
addition, outstanding options to purchase approximately 611 shares of SEI
Common Stock will become options to purchase 333,334 shares of NavTech Common
Stock at an exercise price of $10.20 per share. T. Russell Shields, together
with his family members and trusts for the benefit of his family members,
Richard J. Weiland and Fidelis N. Umeh are stockholders of SEI and will
receive 5,237,748 shares, 134,134 shares and 426,938 shares of NavTech Common
Stock, respectively, pursuant to the SEI Merger. Pursuant to an agreement with
SEI, Mr. Umeh will receive 358,235 of these shares in exchange for 657 shares
of SEI Common Stock received in consideration of the termination of previous
compensation arrangements. Philips has also agreed to acquire 250,000 shares
from Mr. Umeh at the initial public offering price, less the underwriting
discount, immediately following the SEI Merger. Mr. Shields has agreed to
indemnify NavTech with respect to certain potential liabilities of SEI,
including liabilities that may arise in connection with the SEI Merger.

From time to time, the Company grants stock options to its executive
officers and directors. See "Management--Option Grants During 1995" and
"Principal Stockholders."

OTHER TRANSACTIONS

Certain holders of shares of the Company's capital stock, including Philips
and Mr. Shields, are entitled to certain rights with respect to the
registration of such shares under the Securities Act so long as such holders,
together with their investment group, hold more than 2% of the Company's
outstanding Common Stock. Currently, only Philips and Mr. Shields meet such
threshold. See "Description of Capital Stock--Registration Rights."

59
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of June 30, 1996 after giving
effect to the issuance of 3,632,099 shares of Common Stock (net of shares
exchanged for shares held by SEI which will be accounted for as treasury stock
on the Company's consolidated balance sheet) in connection with the SEI Merger
and as adjusted to reflect the sale of 10,500,000 shares of Common Stock
offered hereby and the sale of 1,074,052 shares of Common Stock to Philips and
Zenrin in the Direct Placement for (i) each person who is known by the Company
to beneficially own more than 5% of the Common Stock, (ii) each of the
Company's directors, (iii) each of the Named Executive Officers, and (iv) all
directors and executive officers as a group.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED BEFORE OWNED AFTER
THE OFFERINGS(1) (2) THE OFFERINGS(1) (3)
------------------------ ------------------------
BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT
---------------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Philips Electronics, N.V.(4). 18,805,345 63.4% 19,797,127 48.0%
Building VO-p, P.O. Box 218
5600 MD Eindhoven, The
Netherlands
T. Russell Shields(5)........ 5,377,691 18.1 5,377,691 13.0
c/o Navigation Technologies
Corporation
10101 N. DeAnza Boulevard,
Suite 230
Cupertino, CA 95014
Ronald A. Brumback(6)........ 34,723 * 34,723 *
Richard J. Weiland(7)........ 236,951 * 236,951 *
William Curran(8)............ -- -- -- --
Richard de Lange(8).......... -- -- -- --
Michael S. Hasley(9)......... 10,417 * 10,417 *
Shinichi Komeda(10).......... -- -- -- --
Dr. Klaus Volkholz(8)........ -- -- -- --
Thomas A. Lerone(11)......... 220,835 * 220,835 *
Stephen C. Tumminello(8)..... -- -- -- --
Fidelis N. Umeh(12).......... 262,526 * 262,526 *
All executive officers and
directors as a group
(11 persons)(13)............ 6,143,143 20.6 6,143,143 14.8
</TABLE>
- --------
* Less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that
person, shares of Common Stock subject to options or warrants held by
that person that are currently exercisable or exercisable within 60 days
of June 30, 1996 are deemed outstanding. Except as indicated in the
footnotes to this table and as provided pursuant to applicable community
property laws, the stockholders named in the table have sole voting and
investment power with respect to the shares set forth opposite each
stockholder's name.

(2) Based on 29,669,963 shares of Common Stock outstanding.
(3) Assumes no exercise of the U.S. Underwriters' and the International
Managers' over-allotment options.

(4) Represents shares held of record by subsidiaries of Philips. Includes
250,000 shares of Common Stock that are being purchased from Mr. Umeh
immediately following the SEI Merger. Excludes shares acquired after
June 30, 1996 pursuant to contractual obligations that require Philips
to purchase shares from certain stockholders at $10.20 per share upon
the request of such stockholders.

(5) Includes 368,142 shares held of record by trusts for the benefit of Mr.
Shields' children and grandchildren, of which Mr. Shields is trustee.
Also includes options to purchase 5,034 shares of Common Stock
exercisable within 60 days of June 30, 1996, which options were
purchased from an employee of the

60
<PAGE>

Company and vest subject to the continued employment of such employee.
Also includes 11,730 shares held of record by the trustee of a 401(k) Plan
for the benefit of Mr. Shields.
(6) Represents options to purchase shares of Common Stock exercisable within
60 days of June 30, 1996.
(7) Represents shares held of record by Mr. Weiland and his wife as joint
tenants. Also includes 11,617 shares held of record by the trustee of a
401(k) Plan for the benefit of Mr. Weiland.

(8) Does not include 18,805,345 shares held by Philips, with whom such person
is affiliated, prior to the Offerings, or 19,797,127 shares held by
Philips after the Offerings.
(9) Represents shares held of record by Mr. Hasley and his wife as joint
tenants. Does not include 190,379 shares held by PruTech, with whom Mr.
Hasley is affiliated.
(10) Does not include 735,196 shares held by the Nichimen Entities, with whom
Mr. Komeda is affiliated.
(11) Includes 4,167 shares held of record by a trust for the benefit of Mr.
Lerone. Includes options to purchase 86,206 shares of Common Stock
exercisable within 60 days of June 30, 1996.

(12) Includes 1,070 shares held by Mr. Umeh as trustee of a trust for the
benefit of a minor child. Also includes 37,262 shares held of record by
the trustee of a 401(k) Plan for the benefit of Mr. Umeh. Does not
include 250,000 shares of Common Stock that are being sold to Philips
immediately following the SEI Merger.
(13) Includes options to purchase 125,963 shares of Common Stock exercisable
within 60 days of June 30, 1996. See also notes (5) through (12).

61
<PAGE>

DESCRIPTION OF CAPITAL STOCK

After giving effect to the filing of a Restated Certificate of Incorporation
upon the closing of the Offerings, the authorized capital stock of the Company
consists of 150,000,000 shares of Common Stock, $.001 par value, and 5,000,000
shares of Preferred Stock, $.001 par value.

The following summary of certain provisions of the Common Stock and
Preferred Stock does not purport to be complete and is subject to, and
qualified in its entirety by, the provisions of the Company's Restated
Certificate of Incorporation the form of which is included as an exhibit to
the Registration Statement of which this Prospectus is a part and by the
provisions of applicable law.

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Subject to
preferences that may be applicable to any outstanding shares of Preferred
Stock, the holders of Common Stock are entitled to receive ratably such
dividends, if any, as may be declared by the Board of Directors out of funds
legally available for the payment of dividends. See "Dividend Policy." In the
event of a liquidation, dissolution or winding up of the Company, the holders
of Common Stock are entitled to share ratably in all assets remaining after
payment of liabilities and liquidation preferences of any outstanding shares
of Preferred Stock. Holders of Common Stock have no preemptive rights or
rights to convert their Common Stock into any other securities. There are no
redemption or sinking fund provisions applicable to the Common Stock. All
outstanding shares of Common Stock are fully paid and non-assessable, and the
shares of Common Stock to be issued upon the closing of the Offerings will be
fully paid and non-assessable.

PREFERRED STOCK

Pursuant to the Company's Restated Certificate of Incorporation, the Board
of Directors has the authority, without further action by the stockholders, to
issue up to 5,000,000 shares of Preferred Stock in one or more series and to
fix the designations, powers, preferences, privileges, and relative
participating, optional or special rights and the qualifications, limitations
or restrictions thereof, including dividend rights, conversion rights, voting
rights, terms of redemption and liquidation preferences, any or all of which
may be greater than the rights of the Common Stock. The Board of Directors,
without stockholder approval, can issue Preferred Stock with voting,
conversion or other rights that could adversely affect the voting power and
other rights of the holders of Common Stock. Preferred Stock could thus be
issued quickly with terms calculated to delay or prevent a change in control
of the Company or make removal of management more difficult. Additionally, the
issuance of Preferred Stock may have the effect of decreasing the market price
of the Common Stock, and may adversely affect the voting and other rights of
the holders of Common Stock. At present, there are no shares of Preferred
Stock outstanding and the Company has no plans to issue any of the Preferred
Stock.

REGISTRATION RIGHTS

After the Offerings, Philips and Mr. Shields together with his family, who
hold an aggregate of 25,297,085 shares of Common Stock will be entitled to
certain rights with respect to the registration of such shares under the
Securities Act. Under the terms of the agreement between the Company and these
holders beginning on the third anniversary date of the Offerings if the
Company receives from these holders a written request that the Company effect
a registration, the Company, subject to certain conditions, is required to:
(i) give written notice of the proposed registration to all such holders; and
(ii) use its reasonable best efforts to effect, as soon as practicable, such
registration by filing a registration statement covering the registrable
securities so requested to be registered. In addition, subject to certain
exceptions, whenever the Company determines to register any of its securities,
either for its own account or for the account of a securityholder or
securityholders, these holders are entitled to written notice of the
registration and are entitled to include such shares in such registration.
Further, such holders may require the Company to register their shares on Form
S-3 when such form becomes available

62
<PAGE>

to the Company. These rights are subject to certain conditions and
limitations, among them the right of the underwriters of an offering to limit
the number of shares included in such registration in certain circumstances.

ANTI-TAKEOVER EFFECTS OF DELAWARE LAW

The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203"). Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless (i) prior to such
date, the board of directors of the corporation approves either the business
combination or the transaction that resulted in the stockholder becoming an
interested stockholder, (ii) upon consummation of the transaction that
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the outstanding voting stock, excluding
certain shares held by employee directors and employee stock plans, or (iii)
on or after the consummation date the business combination is approved by the
board of directors and by the affirmative vote of at least 66 2/3% of the
outstanding voting stock that is not owned by the interested stockholder. For
purposes of Section 203, a "business combination" includes, among other
things, a merger, asset sale or other transaction resulting in a financial
benefit to the interested stockholder, and an "interested stockholder" is
generally a person who, together with affiliates and associates, owns (or
within three years, did own) 15% or more of the corporations voting stock. A
"business combination" with Philips would not be subject to Section 203,
because Philips' investments were all approved by the Company's Board of
Directors prior to their consummation.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Harris Trust
Company of California.

LISTING

The Common Stock has been approved for quotation on the Nasdaq National
Market under the symbol "NAVT," subject to official notice of issuance.

63
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

The number of shares of Common Stock held by the Company's existing
stockholders that will be available for sale in the public market following
the Offerings is limited by restrictions under the Securities Act and by lock-
up agreements described below. All of the Company's officers and directors and
certain other securityholders, who in the aggregate beneficially own
29,272,049 shares of the Common Stock of the Company and vested options to
acquire an additional 546,364 shares of the Common Stock of the Company, have
agreed that they will not, subject to certain limited exceptions, directly or
indirectly, offer, sell or otherwise dispose of any shares of Common Stock or
any securities exercisable for any such shares for a period of 180 days after
the Offerings without the prior written consent of Lehman Brothers. However,
Lehman Brothers may, in its sole discretion and at any time without notice,
release all or any portion of the securities subject to such lock-up
agreements.

As a result of these restrictions (assuming Lehman Brothers does not release
any securities subject to lock-up agreements), based on shares outstanding as
of June 30, 1996, (i) the 10,500,000 shares offered hereby and 787,222
additional shares will be eligible for sale on the date of this Prospectus,
(ii) another 129,991 shares will be eligible for sale 90 days after the date
of this Prospectus, (iii) an additional 18,655,059 shares will be eligible for
sale 180 days after the date of this Prospectus (of which 16,258,963 shares
will be held by Philips and other affiliates of the Company and therefore
subject to volume limitations pursuant to Rule 144 under the Securities Act)
and (iv) a further 11,171,743 shares (including the shares sold in the Direct
Placement) will become eligible for sale thereafter pursuant to Rule 144 under
the Securities Act upon the expiration of their respective two-year holding
periods. In addition, the Company intends to register on a registration
statement on Form S-8 a total of 8,140,236 shares of Common Stock issuable
upon exercise of outstanding options or reserved for issuance under the
Company's stock option plans. Of these 8,140,236 shares, 13,371 shares that
are not subject to lock-up agreements will be vested and eligible for sale (if
the related options are exercised) beginning 90 days after the date of this
Prospectus, an additional 1,669 shares will vest and become eligible for sale
(if the related options are exercised) between 90 and 180 days after the date
of this Prospectus and a further 868,992 shares that are subject to lock-up
agreements will be vested and eligible for sale (if the related options are
exercised) beginning 180 days after the date of this Prospectus. Beginning on
the third anniversary date of the Offerings, Philips and Mr. Shields together
with his family, who hold an aggregate of approximately 25,297,085 shares of
Common Stock, have contractual rights to require registration of such shares.
In addition, at any time prior to or after such three year period, such
holders could cause or agree with the Company to cause registration of their
shares of Common Stock. If such holders, by exercising their registration
rights or by otherwise causing the Company to effect registration of shares,
cause a large number of shares to be registered and sold in the public market,
such sales could have a material adverse effect on the market price for the
Company's Common Stock.

Upon completion of the Offerings, the Company will have outstanding
41,244,015 shares of Common Stock, 30,744,015 of which are "restricted shares"
within the meaning of Rule 144 under the Securities Act. In general, under
Rule 144 as currently in effect, a person (or persons whose shares are
aggregated) is entitled to sell any "restricted shares" beneficially owned by
him or her, provided that at least two years have elapsed since such shares
were acquired from the Company or an affiliate of the Company and subject to
certain volume limitations and requirements as to the manner of sale, notice
and the availability of current public information regarding the Company.
Under the volume limitations of Rule 144, a person (or persons whose shares
are aggregated) who has beneficially owned restricted shares for at least two
years (including the holding period of any prior owner except an affiliate)
would be entitled to sell within any three-month period a number of shares
that does not exceed the greater of (i) one percent of the then outstanding
shares of Common Stock (approximately 412,000 shares immediately after the
Offerings) or (ii) the average weekly trading volume of the Common Stock
during the four calendar weeks preceding the filing of a Form 144 with respect
to such sale. However, a person who has not been an "affiliate" of the Company
at any time within three months prior to the

64
<PAGE>

sale is entitled to sell his or her shares without regard to the volume
limitations or other requirements of Rule 144, provided that at least three
years have elapsed since such shares were acquired from the Company or an
affiliate of the Company. Pursuant to Rule 701 under the Securities Act,
shares purchased by an employee, officer or director of the Company pursuant
to a written compensatory plan or contract may be resold under Rule 144
without complying with the holding period requirement, provided that the
Company has been subject to the reporting requirements of the Exchange Act for
at least 90 days.

65
<PAGE>

CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON STOCK

The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a person that, for United States federal income tax purposes, is a
non-resident alien individual, a foreign corporation, a foreign partnership or
an estate or trust, in each case not subject to U.S. federal income tax on a
net income tax basis in respect of income or gain from Common Stock (a "non-
U.S. holder"). This discussion is based on the Internal Revenue Code of 1986,
as amended, Treasury regulations thereunder, and administrative and judicial
interpretations as of the date hereof, all of which may be changed. This
discussion does not address all the aspects of U.S. federal income and estate
taxation that may be relevant to non-U.S. holders in light of their particular
circumstances, or to certain types of holders subject to special treatment
under United States federal income tax laws (such as life insurance companies
and dealers in securities). Nor does it address tax consequences under the
laws of any state, municipality or other taxing jurisdiction or under the laws
of any country other than the United States.

Prospective holders should consult their own tax advisors about the
particular tax consequences to them of holding and disposing of Common Stock.

DIVIDENDS

Generally, dividends paid to a non-U.S. holder of Common Stock will be
subject to United States federal withholding tax at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty, unless the
dividends are effectively connected with the conduct of a trade or business
within the United States (or alternatively are attributable to a United States
permanent establishment of such holder, if an applicable income tax treaty so
requires as a condition for the non-U.S. holder to be subject to United States
income tax on a net income basis in respect of such dividends). Such
"effectively connected" dividends, or dividends attributable to a permanent
establishment, are subject to tax at rates applicable to United States
citizens, resident aliens and domestic United States corporations, and are not
generally subject to withholding. Effectively connected dividends received by
a non-U.S. corporation may be subject to an additional "branch profits tax" at
a 30% rate (or a lower rate under an applicable income tax treaty) when such
dividends are deemed repatriated from the United States.

Under current U.S. Treasury regulations, dividends paid to an address
outside the United States in a foreign country are presumed to be paid to a
resident of such country for purposes of the withholding tax. Under current
interpretation of U.S. Treasury regulations, the same presumption applies to
determine the applicability of a reduced rate of withholding under a tax
treaty. Thus, non-U.S. holders receiving dividends at addresses outside the
United States are not currently required to file tax forms to obtain the
benefit of an applicable treaty rate. Under U.S. Treasury regulations that are
proposed to be effective for distributions after 1997 (the "Proposed
Regulations"), to claim the benefits of a tax treaty a non-U.S. holder of
Common Stock would be required to satisfy applicable certification
requirements. In addition, under the Proposed Regulations, in the case of
Common Stock held by a foreign partnership, (x) the certification requirement
would generally be applied to the partners of the partnership and (y) the
partnership would be required to provide certain information. The Proposed
Regulations also provide look-through rules for tiered partnerships. It is not
certain whether, or in what form, the Proposed Regulations will be adopted as
final regulations.

If there is excess withholding on a person eligible for a treaty benefit,
the person can file for a refund with the United States Internal Revenue
Service.

GAIN ON DISPOSITION OF COMMON STOCK

A non-U.S. holder generally will not be subject to United States federal
income tax in respect of gain recognized on a disposition of Common Stock
unless (i) the gain is effectively connected with a trade or business of the
non-U.S. holder in the United States, (ii) in the case of a non-U.S. holder
who is an individual and holds

66
<PAGE>

the Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in the taxable year of the disposition and certain
other conditions are met, (iii) the non-U.S. holder is subject to tax pursuant
to the provisions of United States tax law applicable to certain United States
expatriates, or (iv) the Company is or has been a "U.S. real property holding
corporation" for federal income tax purposes and, if the Common Stock is
regularly traded on an established securities market, the non-U.S. holder
held, directly or indirectly, at any time during the 5-year period ending on
the date of disposition (or such shorter period that such shares were held)
more than 5% of the Common Stock. The Company has not been and does not
anticipate becoming a "U.S. real property holding corporation" for United
States federal income tax purposes.

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

Generally, the Company must report to the U.S. Internal Revenue Service the
amount of dividends paid, the name and address of the recipient and the
amount, if any, of tax withheld. A similar report is sent to the holder.
Pursuant to tax treaties or other agreements, the U.S. Internal Revenue
Service may make its reports available to tax authorities in the recipient's
country of residence. Dividends not subject to withholding tax may be subject
to backup withholding if the non-U.S. holder is not an "exempt recipient" and
fails to provide a tax identification number and other information to the
Company. Under the Proposed Regulations, dividend payments generally will be
subject to information reporting and backup withholding unless applicable
certification requirements are satisfied.

If the proceeds of a disposition of Common Stock are paid over by or through
a United States office of a broker, the payment is subject to information
reporting and possible backup withholding at a 31% rate unless the disposing
holder certifies under penalties of perjury as to his name, address, and non-
U.S. holder status or otherwise establishes an exemption. Generally, United
States information reporting and backup withholding requirement will not apply
to a payment of disposition proceeds if the payment is made outside the United
States through a non-United States office of a broker. However, United States
information reporting requirements (but not backup withholding) will apply to
a payment of disposition proceeds outside the United States if (A) the payment
is made through an office outside the United States of a broker that either
(i) is a U.S. person, (ii) derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States or (iii)
is a "controlled foreign corporation" for United States federal income tax
purposes and (B) the broker fails to maintain documentary evidence that the
holder is a non-U.S. holder or that the holder otherwise is entitled to an
exemption.

Backup withholding is not an additional tax. Rather, the tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained.

FEDERAL ESTATE TAXES

Common Stock held by a non-U.S. holder at the time of death will be included
in such holder's gross estate for United States federal estate tax purposes
unless an applicable estate tax treaty provides otherwise.

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<PAGE>

UNDERWRITING

Under the terms of, and subject to the conditions contained in, the U.S.
Underwriting Agreement, the form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, each of the
underwriters named below (the "U.S. Underwriters"), for whom Lehman Brothers
Inc., Cowen & Company and Salomon Brothers Inc are acting as representatives
(the "Representatives"), has severally agreed to purchase from the Company,
and the Company has agreed to sell to each U.S. Underwriter, the number of
shares of Common Stock set forth opposite the name of such U.S. Underwriter
below:

<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
----------------- ---------
<S> <C>
Lehman Brothers Inc................................................
Cowen & Company....................................................
Salomon Brothers Inc...............................................
---------
Total ........................................................... 8,400,000
=========
</TABLE>

Under the terms of, and subject to the conditions contained in, the
International Underwriting Agreement, the form of which is filed as an exhibit
to the Registration Statement of which this Prospectus forms a part, each of
the managers named below (the "International Managers") for whom Lehman
Brothers International (Europe), Cowen & Company and Salomon Brothers
International Limited are acting as lead managers (the "Lead Managers"), has
severally agreed to purchase from the Company, and the Company has agreed to
sell to each International Manager, the number of shares of Common Stock set
forth opposite the name of such International Manager below:

<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGERS SHARES
---------------------- ---------
<S> <C>
Lehman Brothers International (Europe).............................
Cowen & Company....................................................
Salomon Brothers International Limited.............................
---------
Total ........................................................... 2,100,000
=========
</TABLE>

The U.S. Underwriting Agreement and the International Underwriting Agreement
(collectively, the "Underwriting Agreements") provide that the obligations of
the U.S. Underwriters and the International Managers to purchase shares of
Common Stock are subject to certain conditions, and that, if any of the
foregoing shares of Common Stock are purchased by the U.S. Underwriters
pursuant to the U.S. Underwriting Agreement or by the International Managers
pursuant to the International Underwriting Agreement, all the shares of Common
Stock agreed to be purchased by either the U.S. Underwriters or the
International Managers, as the case may be, pursuant to their respective
Underwriting Agreements must be so purchased. The offering price and
underwriting discounts and commissions for the U.S. Offering and the
International Offering are identical. The closing of the U.S. Offering is a
condition to the closing of the International Offering, and the closing of the
International Offering is a condition to the closing of the U.S. Offering.

The Company has been advised that the U.S. Underwriters and the
International Managers propose to offer the shares of Common Stock directly to
the public initially at the public offering price set forth on the cover page
of this Prospectus, and to certain selected dealers (who may include the U.S.
Underwriters and the International Managers) at such public offering price
less a selling concession not in excess of $ per share.

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<PAGE>

The selected dealers may reallow a concession not in excess of $ per share
to certain brokers and dealers. After the initial public offering, the public
offering price, the concession to selected dealers and reallowance may be
changed by the Representatives and the Lead Managers.

Prior to the Offerings, there has been no public market for the Common
Stock. There can be no assurance that an active trading market will develop
for shares of the Common Stock or as to the price at which shares of the
Common Stock may trade in the public market from time to time subsequent to
the Offerings. The initial public offering price for the Common Stock will be
determined by negotiations among the Company, the Representatives and the Lead
Managers. Among the factors to be considered in determining the initial public
offering price of the Common Stock, in addition to prevailing market
conditions, will be the financial and operating history and condition of the
Company, the Company's business and financial prospects, the prospects for the
industry in which the Company operates, the recent market prices of securities
of companies in businesses similar to that of the Company and other relevant
factors.

The Company has granted to the U.S. Underwriters and the International
Managers options to purchase up to an aggregate of 1,260,000 and 315,000
additional shares of Common Stock, respectively, exercisable solely to cover
over-allotments, at the initial price to the public less the aggregate
underwriting discounts shown on the cover page of this Prospectus. Either or
both options may be exercised at any time up to 30 days after the date of this
Prospectus. To the extent that the U.S. Underwriters or International Managers
exercise such options, each of the U.S. Underwriters or International
Managers, as the case may be, will be committed, subject to certain
conditions, to purchase a number of the additional shares of Common Stock
proportionate to such U.S. Underwriter's or International Manager's initial
commitment.

The U.S. Underwriters and the International Managers have entered into an
Agreement Between U.S. Underwriters and International Managers pursuant to
which each U.S. Underwriter has agreed that, as part of the distribution of
the shares (plus any of the shares to cover over-allotments) of Common Stock
offered in the U.S. Offering, (i) it is not purchasing any of such shares for
the account of anyone other than a U.S. Person (as defined below) and (ii) it
has not offered or sold, and will not offer, sell, resell or deliver, directly
or indirectly, any of such shares or distribute any Prospectus relating to the
U.S. Offering to anyone other than a U.S. Person. In addition, pursuant to the
same Agreement, each International Manager has agreed that, as part of the
distribution of the shares (plus any of the shares to cover over-allotments)
of Common Stock offered in the International Offering, (i) it is not
purchasing any of such shares for the account of a U.S. Person and (ii) it has
not offered or sold, and will not offer, sell, resell or deliver, directly or
indirectly, any of such shares or distribute any Prospectus relating to the
International Offering to any U.S. Person. Each International Manager has also
agreed that it will offer to sell shares only in compliance with all relevant
requirements of any applicable laws.

The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Underwriting Agreements and the
Agreement Between U.S. Underwriters and International Managers, including (i)
certain purchases and sales between the U.S. Underwriters and International
Managers, (ii) certain offers, sales, resales, deliveries or distributions to
or through investment advisors or other persons exercising investment
discretion, (iii) purchases, offers or sales by a U.S. Underwriter who is also
acting as an International Manager or by an International Manager who is also
acting as a U.S. Underwriter and (iv) other transactions specifically approved
by the Representatives and the Lead Managers. As used herein, "U.S. Person"
means any resident or citizen of the United States or Canada and its
provinces, any corporation or other entity created or organized in or under
the laws of the United States or Canada and its provinces or any estate or
trust the income of which is subject to United States or Canadian federal
income taxation regardless of the source of its income. The term "United
States" means the United States of America (including the District of
Columbia) and its territories, its possessions and other areas subject to its
jurisdiction.

Pursuant to the Agreement Between U.S. Underwriters and International
Managers, sales may be made between the U.S. Underwriters and the
International Managers of such number of shares of Common Stock as may be
mutually agreed upon. The price of any shares so sold shall be the public
offering price as then in effect

69
<PAGE>

for Common Stock being sold by the U.S. Underwriters and the International
Managers, less an amount not greater than the selling concession allocable to
such Common Stock. To the extent there are sales between the U.S. Underwriters
and the International Managers pursuant to the Agreement Between U.S.
Underwriters and International Managers, the number of shares initially
available for sale by the U.S. Underwriters or by the International Managers
may be more or less than the amount appearing on the cover page of this
Prospectus.

Each International Manager has represented and agreed that (i) it has not
offered or sold, and will not offer or sell, in the United Kingdom, by means
of any document, any shares of the Common Stock other than to persons whose
ordinary business it is to buy or sell shares or debentures, whether as
principal or agent (except under circumstances which do not constitute an
offer to the public within the meaning of the Companies Act 1985); (ii) it has
complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to anything done by it in relation to the
Common Stock in, from or otherwise involving the United Kingdom; and (iii) it
has only issued or passed on, and will only issue and pass on to any person in
the United Kingdom, any document received by it in connection with the issue
of the Common Stock if that person is of a kind described in Article 9(3) of
the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1988 or is a person to whom the document may otherwise be lawfully issued or
passed on.

Purchasers of the shares offered pursuant to the Offerings may be required
to pay stamp taxes and other charges in accordance with the laws and practices
of the country of purchase in addition to the initial public offering price
set forth on the cover page hereof.

The Company has agreed to indemnify the U.S. Underwriters and the
International Managers against certain liabilities, including liabilities
under the Securities Act or to contribute to payments that U.S. Underwriters
and the International Managers may be required to make in respect thereof.

In connection with the Offerings, the officers and directors of the Company
and certain other securityholders, holding in the aggregate 29,272,049 shares
of Common Stock and vested options to purchase an additional 546,364 shares of
Common Stock immediately after the Offerings, and the Company have agreed,
with certain exceptions, not to sell or otherwise dispose of any shares of
Common Stock for a period of 180 days from the date of this Prospectus, in
each case, without the written consent of Lehman Brothers.

The Representatives have informed the Company that the U.S. Underwriters do
not intend to confirm sales of Common Stock to any accounts over which they
exercise discretionary authority.

LEGAL MATTERS

Certain legal matters with respect to the legality of the issuance of the
shares of Common Stock offered hereby will be passed upon for the Company by
Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California, and for the Underwriters by Gray Cary Ware & Freidenrich, A
Professional Corporation, Palo Alto, California.

EXPERTS

The consolidated financial statements of Navigation Technologies Corporation
as of December 31, 1994 and 1995, and for each of the years in the three year
period ended December 31, 1995 and the financial statements of Shields
Enterprises, Inc. as of September 30, 1994 and 1995, and for each of the years
in the three year period ended September 30, 1995 have been included herein
and in the registration statement in reliance upon the reports of KPMG Peat
Marwick LLP, independent auditors, appearing elsewhere herein, and upon the
authority of said firm as experts in accounting and auditing.

The report of KPMG Peat Marwick LLP covering the December 31, 1995
consolidated financial statements of Navigation Technologies Corporation
contains an explanatory paragraph that states that the Company has had

70
<PAGE>

recurring losses from operations since inception and requires significant
additional financing which raise substantial doubt about the Company's ability
to continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of that
uncertainty.

CHANGE IN INDEPENDENT AUDITOR

At a meeting on December 15, 1995, the Company's Board of Directors decided
to retain KPMG Peat Marwick LLP as the independent auditor for the Company and
to replace the Company's former auditor. KPMG Peat Marwick LLP has served as
independent auditor for SEI since 1992 and for NavTech Europe since 1993.
There were no disagreements with the former auditor regarding any matters with
respect to accounting principles or practices, financial statement disclosure,
or auditing scope or procedure at the time of the change or with respect to
the Company's consolidated financial statements for fiscal 1993 and 1994. The
former auditor's reports for fiscal 1993 and 1994 are not a part of and do not
cover the consolidated financial statements of the Company included in this
Prospectus. Such reports did not contain an adverse opinion or a disclaimer of
an opinion or qualifications as to uncertainty, audit scope or accounting
principles. Prior to retaining KPMG Peat Marwick LLP, NavTech had not
consulted with KPMG Peat Marwick LLP regarding accounting principles, except
as it relates to consultations regarding SEI and NavTech Europe, the Company's
European subsidiary.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement on Form S-1 under the Securities
Act with respect to the shares of Common Stock offered hereby. This Prospectus
does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information with
respect to the Company and the Common Stock offered hereby, reference is made
to the Registration Statement and the exhibits and schedules filed therewith.
Statements contained in this Prospectus as to the contents of any contract or
any other document referred to are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document
filed as an exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. A copy of the Registration
Statement, and the exhibits and schedules thereto, may be inspected without
charge at the public reference facilities maintained by the Securities and
Exchange Commission in Room 1024, 450 Fifth Street, NW, Washington, D.C.
20549, and at the regional offices of the Commission located at Seven World
Trade Center, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and copies of all or any part of
the Registration Statement may be obtained from the Commission upon payment of
a prescribed fee. The Securities and Exchange Commission maintains a World
Wide Web site that contains reports, proxy and information statements and
other information filed electronically with the Commission. The address of the
site is http://www.sec.gov.

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<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Navigation Technologies Corporation and Subsidiaries:
Independent Auditors' Report............................................. F-2
Consolidated Balance Sheets.............................................. F-3
Consolidated Statements of Operations.................................... F-4
Consolidated Statements of Stockholders' Equity (Deficit)................ F-5
Consolidated Statements of Cash Flows.................................... F-6
Notes to Consolidated Financial Statements............................... F-7
Shields Enterprises, Inc.:
Independent Auditors' Report............................................. F-18
Balance Sheets........................................................... F-19
Statements of Operations................................................. F-20
Statements of Stockholders' Equity (Deficit)............................. F-21
Statements of Cash Flows................................................. F-22
Notes to Financial Statements............................................ F-23
Unaudited Pro Forma Combined Financial Statements:
Pro Forma Combined Financial Information................................. F-29
Pro Forma Combined Balance Sheet......................................... F-30
Pro Forma Combined Statements of Operations.............................. F-31
Notes to Pro Forma Combined Financial Statements......................... F-33
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Navigation Technologies Corporation:

We have audited the accompanying consolidated balance sheets of Navigation
Technologies Corporation and subsidiaries (the Company) as of December 31,
1994 and 1995, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for each of the years in the
three year period ended December 31, 1995. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Navigation
Technologies Corporation and subsidiaries as of December 31, 1994 and 1995,
and the results of their operations and their cash flows for each of the years
in the three year period ended December 31, 1995, in conformity with generally
accepted accounting principles.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in
Note 1 to the consolidated financial statements, the Company has had recurring
losses from operations since inception and requires significant additional
financing which raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 1. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

KPMG Peat Marwick LLP

Palo Alto, California

June 4, 1996, except for
the description of the
reverse stock split in
Note 7, which is as of
July 12, 1996

F-2
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- JUNE 30,
1994 1995 1996
--------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................... $ 30,220 $ 23,573 $ 17,432
Accounts receivable......................... 1,749 990 509
Prepaid expenses and other current assets... 352 349 1,565
--------- --------- ---------
Total current assets....................... 32,321 24,912 19,506
Property and equipment, net.................. 4,192 5,038 5,473
Deposits and other assets.................... 53 76 97
--------- --------- ---------
Total assets............................... $ 36,566 $ 30,026 $ 25,076
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable............................ $ 3,017 $ 2,425 $ 2,640
Accounts payable to affiliate............... 1,158 759 1,561
Accrued payroll and related expenses........ 1,442 2,193 3,202
Other accrued expenses...................... 404 2,115 5,508
Deferred revenue............................ 133 636 2,318
--------- --------- ---------
Total current liabilities.................. 6,154 8,128 15,229
Long-term source material obligations........ 4,404 6,757 6,356
Deferred license revenue..................... 7,153 8,227 8,632
Loan payable to related party................ 4,343 5,111 --
--------- --------- ---------
Total liabilities.......................... 22,054 28,223 30,217
--------- --------- ---------
Stockholders' equity (deficit):
Convertible preferred stock, $0.001 par
value; 20,000 shares authorized; 10,547,
11,091 and 14,592 shares issued and
outstanding in 1994, 1995 and 1996,
respectively (liquidation preference of
$113,128 in 1995).......................... 11 11 15
Common stock, $0.001 par value; 150,000
shares authorized; 12,488, 12,036 and
11,445 shares issued and outstanding in
1994, 1995 and 1996, respectively.......... 12 12 11
Additional paid-in capital.................. 160,831 161,068 191,170
Stock subscriptions receivable.............. (41,184) -- --
Cumulative translation adjustment........... (962) 1,820 1,889
Accumulated deficit......................... (104,196) (161,108) (198,226)
--------- --------- ---------
Total stockholders' equity (deficit)....... 14,512 1,803 (5,141)
Commitments and contingencies
--------- --------- ---------
Total liabilities and stockholders' equity
(deficit)................................. $ 36,566 $ 30,026 $ 25,076
========= ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

See accompanying notes to consolidated financial statements.

F-4
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(IN THOUSANDS)
<TABLE>
<CAPTION>

CONVERTIBLE
PREFERRED STOCK COMMON STOCK ADDITIONAL STOCK CUMULATIVE TOTAL
------------------ -------------- PAID-IN SUBSCRIPTIONS TRANSLATION ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL RECEIVABLE ADJUSTMENT DEFICIT EQUITY(DEFICIT)
--------- ------- ------ ------ ---------- ------------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balances as of
December 31, 1992.... 5,870 $ 6 2,859 $ 3 $ 33,991 $ -- $ 430 $ (37,242) $ (2,812)
Issuance of
convertible preferred
stock................ 1,729 2 -- -- 8,106 -- -- -- 8,108
Exercise of stock
options.............. -- -- 161 -- 83 -- -- -- 83
Issuance of common
stock for services... -- -- 229 -- 2,124 -- -- -- 2,124
Issuance of common
stock for cash....... -- -- 102 -- 950 -- -- -- 950
Issuance of common
stock for stock
subscriptions........ -- -- 127 -- 1,181 (1,181) -- -- --
Conversion of note
payable into
convertible preferred
stock................ 242 -- -- -- 1,130 -- -- -- 1,130
Conversion of
convertible preferred
stock into common
stock................ (7,841) (8) 7,841 8 -- -- -- -- --
Conversion of
convertible
debentures into
common stock......... -- -- 442 -- 4,107 -- -- -- 4,107
Translation
adjustment........... -- -- -- -- -- -- 594 -- 594
Net loss.............. -- -- -- -- -- -- -- (25,852) (25,852)
--------- ------ ------ --- -------- ------- ------ --------- --------
Balances as of
December 31, 1993.... -- -- 11,761 11 51,672 (1,181) 1,024 (63,094) (11,568)
Issuance of
convertible preferred
stock for cash and
stock subscriptions,
net of $601 of
issuance costs....... 8,004 8 -- -- 81,687 (40,000) -- -- 41,695
Exchange of common
stock for convertible
preferred stock...... 1,209 1 (1,209) (1) -- -- -- -- --
Issuance of common
stock for cash....... -- -- 1,601 2 10,212 -- -- -- 10,214
Exercise of stock
options.............. -- -- 5 -- 12 -- -- -- 12
Issuance of common
stock for cash and
stock subscriptions.. -- -- 119 -- 1,236 (1,184) -- -- 52
Issuance of common
stock for services... -- -- 20 -- 204 -- -- -- 204
Conversion of
convertible
debentures into
convertible preferred
stock and common
stock................ 179 -- 191 -- 3,774 -- -- -- 3,774
Conversion of notes
payable into
convertible preferred
stock................ 1,155 2 -- -- 12,034 -- -- -- 12,036
Payment of stock
subscriptions........ -- -- -- -- -- 1,181 -- -- 1,181
Translation
adjustment........... -- -- -- -- -- -- (1,986) -- (1,986)
Net loss.............. -- -- -- -- -- -- -- (41,102) (41,102)
--------- ------ ------ --- -------- ------- ------ --------- --------
Balances as of
December 31, 1994.... 10,547 11 12,488 12 160,831 (41,184) (962) (104,196) 14,512
Exchange of common
stock for convertible
preferred stock...... 544 -- (544) -- -- -- -- -- --
Exercise of stock
options.............. -- -- 92 -- 237 -- -- -- 237
Payment of stock
subscriptions........ -- -- -- -- -- 41,184 -- -- 41,184
Translation
adjustment........... -- -- -- -- -- -- 2,782 -- 2,782
Net loss.............. -- -- -- -- -- -- -- (56,912) (56,912)
--------- ------ ------ --- -------- ------- ------ --------- --------
Balances as of
December 31, 1995.... 11,091 11 12,036 12 161,068 -- 1,820 (161,108) 1,803
Exchange of common
stock for convertible
preferred stock
(unaudited).......... 615 1 (615) (1) -- -- -- -- --
Exercise of stock
options (unaudited).. -- -- 24 -- 84 -- -- -- 84
Issuance of preferred
stock for cash
(unaudited).......... 1,827 2 -- -- 18,998 -- -- -- 19,000
Conversion of notes
payable into
convertible preferred
stock (unaudited).... 1,059 1 -- -- 11,020 -- -- -- 11,021
Translation adjustment
(unaudited).......... -- -- -- -- -- -- 69 -- 69
Net loss (unaudited).. -- -- -- -- -- -- -- (37,118) (37,118)
--------- ------ ------ --- -------- ------- ------ --------- --------
Balances as of June
30, 1996 (unaudited). 14,592 $ 15 11,445 $11 $191,170 $ -- $1,889 $(198,226) $ (5,141)
========= ====== ====== === ======== ======= ====== ========= ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
---------------------------- -----------------------
1993 1994 1995 1995 1996
-------- -------- -------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net loss............... $(25,852) $(41,102) $(56,912) $(25,477) $(37,118)
Adjustments to
reconcile net loss to
net cash used in
operating activities:
Depreciation and
amortization......... 505 1,233 2,262 1,097 1,330
Noncash interest on
refundable license
payments............. 608 707 782 385 410
Noncash interest on
notes payable and
debentures........... 463 968 424 219 248
Long-term source
material obligations. -- 4,302 2,175 677 163
Issuance of common
stock for services... 2,124 204 -- -- --
Other................. 20 -- (27) (28) (5)
Changes in operating
assets and
liabilities:
Accounts receivable.. 464 (1,402) 759 205 481
Prepaid expenses and
other current
assets.............. (527) 201 3 (92) (1,216)
Deposits and other
assets.............. (15) (13) (23) (19) (21)
Note receivable from
related party....... (200) 200 -- -- --
Accounts payable..... 313 1,164 (991) (1,499) 1,017
Accrued payroll and
related expenses.... 288 807 751 727 1,009
Other accrued
expenses............ 31 221 1,711 1,270 3,393
Deferred revenue..... -- -- 503 1,435 1,682
-------- -------- -------- -------- --------
Net cash used in
operating
activities......... (21,778) (32,510) (48,583) (21,100) (28,627)
-------- -------- -------- -------- --------
Cash flows used in
investing activities--
acquisition of property
and equipment.......... (675) (3,288) (2,960) (1,499) (1,921)
-------- -------- -------- -------- --------
Cash flows from
financing activities:
Receipts of stock
subscriptions
receivable............ -- 1,181 41,184 20,592 --
Loans.................. 8,114 12,480 -- -- 6,000
Sale of capital stock.. 9,141 51,973 237 2,133 19,084
Deferred license
revenue............... 1,000 633 341 -- --
-------- -------- -------- -------- --------
Net cash provided by
financing
activities......... 18,255 66,267 41,762 22,725 25,084
-------- -------- -------- -------- --------
Effect of exchange rate
changes on cash........ 291 (1,682) 3,134 445 (677)
-------- -------- -------- -------- --------
Net (decrease) increase
in cash and cash
equivalents............ (3,907) 28,787 (6,647) 571 (6,141)
Cash and cash
equivalents at
beginning of period.... 5,340 1,433 30,220 30,220 23,573
-------- -------- -------- -------- --------
Cash and cash
equivalents at end of
period................. $ 1,433 $ 30,220 $ 23,573 $ 30,791 $ 17,432
======== ======== ======== ======== ========
Supplemental disclosures
of cash flow
information:
Cash paid during the
period for interest... $ 17 $ 40 $ 14 $ 1 $ 6
Common stock issued for
services.............. $ 2,124 $ 204 $ -- $ -- $ --
Common stock issued for
stock subscriptions
receivable............ $ 1,181 $ 1,184 $ -- $ -- $ --
Convertible preferred
stock issued for stock
subscriptions
receivable............ $ -- $ 40,000 $ -- $ -- $ --
Conversion of debt,
including accrued
interest, into capital
stock................. $ 5,237 $ 15,810 $ -- $ -- $ 11,021
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION AS OF AND FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996 IS
UNAUDITED)

(1) SUMMARY OF THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES

The Company

Navigation Technologies Corporation (the Company) was incorporated in
December 1987 and is the successor to Karlin & Collins, Inc., which was
incorporated in August 1985. The Company was a development stage enterprise
prior to the year ended December 31, 1995. The Company, together with its
subsidiaries, develops, maintains and markets a database for route guidance
and other applications in the United States and Europe. The Company's database
is a digital representation of road transportation networks that includes the
information necessary to determine accurate and efficient routes for vehicle
navigation. The Company's database is licensed to leading automotive
electronics manufacturers that are developing products for route guidance.
These systems electronically calculate an efficient route within the
geographic coverage area of the database and provide real-time positioning and
turn-by-turn audible and/or graphical directions to guide the driver at each
turn.

In September 1994, the Company acquired European Geographic Technologies
B.V. (EGT), a Netherlands-based company that develops, maintains, and markets
a database for route guidance and other applications in Europe. As the Company
and EGT were entities under common control, the acquisition has been accounted
for in a manner similar to a pooling of interests and, accordingly, the
accompanying consolidated financial statements have been retroactively
restated to include the accounts of EGT for all periods presented.

The Company has been primarily engaged in development of software and
methodologies for the creation, updating and use of its database and in the
creation and updating of database coverage for parts of the United States and
Europe. The Company is currently realizing revenue primarily from license fees
from customers developing applications which incorporate the Company's
database.

The consolidated financial statements have been prepared on a going concern
basis. Continuance of the Company as a going concern is dependant upon the
Company's ability to raise substantial additional financing. The Company
believes that the net proceeds from its proposed initial public offering (IPO)
and a direct placement of its common stock to be consummated concurrently with
the IPO, together with its other available cash resources, will be sufficient
to meet the Company's cash needs through the first quarter of 1998.
Significant additional financing will be required in order for the Company to
continue funding its operations.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany accounts and transactions
have been eliminated in consolidation.

Cash Equivalents

The Company considers all highly liquid debt instruments purchased with
original maturities of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost. Depreciation and amortization are
computed using the straight-line method over the estimated useful lives of the
assets, ranging from three to five years. Leasehold improvements are amortized
over the lesser of their estimated useful lives or the lease terms.

F-7
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Revenue Recognition

The Company recognizes revenue in accordance with the provisions of the
American Institute of Certified Public Accountants' Statement of Position No.
91-1, Software Revenue Recognition. Annual nonrefundable minimum license fees
are recognized as revenue ratably over the licensing period. License and
distribution revenue is recognized when the Company or its customers ship the
Company's database or products incorporating the Company's database if
collection is probable and remaining vendor obligations are insignificant.

Database Creation and Updating Costs

Database creation and updating costs consist primarily of research and
acquisition costs to obtain information used to construct the database, direct
costs of database creation and validation and ongoing costs for updating the
database. Database creation and updating costs are being charged to operations
as incurred.

Software Engineering and Development Costs

Software engineering and development costs consist primarily of costs for
development of software used in database creation and updating activities and
software to facilitate usage of the Company's database and application
development by customers. Software engineering and development costs are
charged to operations as incurred until such time as both technological
feasibility is established and future economic benefit is assured. To date,
such conditions have not been satisfied and, accordingly, all software
engineering and development costs have been expensed as incurred.

Income Taxes

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
basis and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in operations in the period that includes
the enactment date. A valuation allowance is recorded for deferred tax assets
whose realization is not more likely than not.

Financial Instruments

The carrying amount of the Company's financial instrument assets and
liabilities approximates fair value because of the short maturity of those
instruments.

Foreign Currency Translation

The financial statements for the Company's foreign subsidiaries are measured
using the local currency as the functional currency. Foreign assets and
liabilities in the accompanying consolidated balance sheets have been
translated at the rate of exchange as of the balance sheet date. Revenue and
expenses are translated at the average exchange rate for the year. Translation
adjustments are reported as a separate component of stockholders' equity.
Foreign currency transaction gains and losses are included in the results of
operations.

Use of Estimates

The Company's management has made estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of contingent assets
and liabilities to prepare these consolidated financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates.

F-8
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Pro Forma Net Loss Per Share

Pro forma net loss per share is computed using net loss and is based on the
weighted average number of outstanding shares of common stock, convertible
preferred stock (on an "as if converted" basis) and dilutive common equivalent
shares using the treasury stock method. In accordance with certain Securities
and Exchange Commission (SEC) Staff Accounting Bulletins, such computations
include all common and common equivalent shares issued 12 months prior to the
IPO date as if they were outstanding for all periods presented, using the
treasury stock method and the anticipated IPO price.

Unaudited Interim Consolidated Financial Statements

The unaudited interim consolidated financial statements as of June 30, 1996
and for the six month periods ended June 30, 1995 and 1996 have been prepared
on substantially the same basis as the audited consolidated financial
statements, and in the opinion of management include all adjustments,
consisting only of normal recurring adjustments, necessary for a fair
presentation of the financial information set forth therein.

Recent Accounting Pronouncements

In March 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets To Be Disposed Of.
SFAS No. 121 is effective for fiscal years beginning after December 15, 1995,
and requires long-lived assets to be evaluated for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. The Company adopted SFAS No. 121 in 1996. Such adoption
did not have a material effect on the Company's consolidated financial
position or results of operations.

(2) RELATED PARTY TRANSACTIONS

Philips

As of December 31, 1995, Philips held 11,027,000 shares of the Company's
convertible preferred stock and 4,098,000 shares of its common stock,
representing approximately 37% of the Company's voting stock and 68% of the
Company's total equity. The convertible preferred stock held by Philips will
be converted into voting common stock upon the closing of the IPO.

In 1994, Philips agreed with the Company that, for the three year period
following the IPO, except as approved by a majority of the Company's directors
other than Philips' designees, Philips will not own more than 75% of the
outstanding common stock of the Company, except for (i) shares acquired in a
tender offer or exchange offer for all of the Company's common stock or in a
merger, consolidation, mandatory share exchange or similar transaction where
the Company is a party; (ii) shares acquired pursuant to the exercise of any
right of first refusal held by Philips or (iii) otherwise due to actions by
the Company or others which Philips has no right or ability to prevent.

Philips also granted to persons who were securityholders of the Company on
September 2, 1994 the right to require Philips to purchase certain shares of
the Company's common stock at a per share price of $10.20. This contractual
right terminates upon the closing of the IPO.

F-9
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

In September 1994, Philips, a significant stockholder of both EGT and the
Company, entered into agreements with the Company that resulted in the
Company's acquisition of Philips' interest in EGT in exchange for 2,445,000
shares of the Company's convertible preferred stock.

In prior years, the Company borrowed funds from Philips in the form of a
loan denominated in Dutch guilders, of which $4,343,000 and $5,111,000,
including accrued interest, remained outstanding as of December 31, 1994 and
1995, respectively. The loan bore interest at a rate of 9% per annum. In June
1996, the loan, including accumulated interest, was converted to convertible
preferred stock.

In 1993, the Company borrowed $3,027,000 from Philips. The loan and accrued
interest was converted into shares of the Company's convertible preferred
stock during 1994.

The Company purchases data processing services from an affiliate of Philips
in Europe. Total fees charged for these services of $878,000, $1,422,000 and
$2,006,000 are included in database production and updating costs for the
years ended December 31, 1993, 1994 and 1995, respectively.

In June 1996, the Company issued shares of convertible preferred stock to
Philips for $29,284,000 ($11,021,000 of which was paid by conversion of
outstanding loans). Approximately 2,816,000 shares will be issued to Philips
based on the IPO price of $13.00 per share. The number of shares of
convertible preferred stock will be adjusted upward or downward depending on
the actual IPO price.

Shields Enterprises, Inc.

As of December 31, 1995, Shields Enterprises, Inc. (SEI ) held approximately
11% of the Company's total stock outstanding, representing 21% of the
Company's voting stock. SEI provided technical support to the Company on a
contract basis for development of proprietary software and systems for
database creation and updating. The Company also contracted with SEI for
development of software that utilizes the Company's database. The Company
retains all rights in the software and any modifications or enhancements to
the software developed under these agreements. SEI provided the services of
the Company's chairman and another director from SEI for compensation approved
by non-SEI directors. Total fees charged to the Company by SEI of $4,383,000,
$4,456,000 and $8,039,000 are included in operating expenses for the years
ended December 31, 1993, 1994 and 1995, respectively.

Prior to 1994, SEI was granted options for the purchase of 33,000 shares of
the Company's common stock at $1.20 per share and 133,000 shares of the
Company's common stock at $2.40 per share. The options expire by their terms
in March and October 2002, respectively. As of December 31, 1995, options held
by SEI covering 133,000 shares were vested, with the remaining options
covering 33,000 shares vesting monthly through December 1996, subject to the
continued full-time service of the Chairman of SEI as Chairman and Chief
Executive Officer (CEO) of the Company. During 1994, the Company entered into
an agreement with SEI under which the Chairman of SEI will continue to serve
as Chairman and CEO of the Company. The agreement provides that additional
options will be granted beginning in January 1997 based on the Chairman of
SEI's continued service to the Company. In May 1996, the Company's board of
directors approved the principal terms of an agreement with SEI to cancel the
above agreement and options upon the merger with SEI (see Note 11).

Other Related Party

Long-term source material obligations of $2,252,000 and $3,269,000 as of
December 31, 1994 and 1995, respectively, represent an obligation to a
stockholder who provided contract services and electronic source material used
in creating a portion of the European database. The obligation is interest
free and payable as a percentage of revenue from licensing the database
incorporating the material provided.

F-10
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(3) PROPERTY AND EQUIPMENT

The components of property and equipment are as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1994 1995
------ ------
<S> <C> <C>
Machinery and equipment....................................... $4,449 $6,971
Furniture and fixtures........................................ 1,120 1,613
Purchased software............................................ 911 1,021
Leasehold improvements........................................ 258 314
------ ------
6,738 9,919
Less accumulated depreciation and amortization................ 2,546 4,881
------ ------
$4,192 $5,038
====== ======
</TABLE>

(4) LONG-TERM SOURCE MATERIAL OBLIGATIONS

Long-term source material obligations represent the Company's obligations
for (1) contract services and electronic source materials used in creating a
portion of the European database and (2) minimum fees payable to European
government entities related to the use of source materials in the creation of
the Company's database. These obligations are interest free and generally
payable as a percentage of revenue from licensing the database incorporating
the material provided.

(5) DEFERRED LICENSE REVENUE

In 1989 and 1991, the Company entered into database license agreements with
two unaffiliated companies which required fixed prepaid license fees for use
of the Company's database and related navigation software in route guidance
products and other applications. Under these agreements, the Company received
$5,250,000 and $5,591,000 in cash through December 31, 1994 and 1995,
respectively, in exchange for aggregate future credits of $13,500,000, which
can be utilized by such companies as follows:

. Credits against 50% of future license obligations subject to a maximum
of $2,000,000 per company in any one year.

. Credits toward purchase of nonexclusive, nontransferable licenses to
use the Company's navigation software source code.

Any portion of the $13,500,000 in credits that is unused as of December 31,
2000 is to be paid in cash by the Company. In addition, one of the companies
has the option to convert up to $6,000,000 in unused credits into the
Company's common stock on December 31, 1998 at the fair market value of the
Company's common stock at that time. Due to the repayment contingencies
discussed above, amounts received were recorded as deferred license revenue.
The total amount initially recorded of $5,591,000 is being accreted to the
maximum amount repayable of $13,500,000 through December 31, 2000, at rates
ranging 9% to 14% using the effective interest rate method. The Company's non-
cash interest expense was $608,000, $707,000 and $782,000 for the years ended
December 31, 1993, 1994 and 1995, respectively. In the event the companies use
the credits, the liabilities will be reduced and revenue will be recognized.
Non-cash revenue of $49,000 was recognized during the year ended December 31,
1995, and as of December 31, 1995, the maximum future credits available have
been reduced to $13,451,000.

F-11
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(6) INCOME TAXES

The domestic and foreign components of net loss before income taxes are as
follows (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER
31,
-----------------------
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Domestic............................................. $11,519 $20,530 $25,447
Foreign.............................................. 14,333 20,572 31,465
------- ------- -------
Net loss........................................... $25,852 $41,102 $56,912
======= ======= =======
</TABLE>

Deferred tax assets are summarized as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1994 1995
------- -------
<S> <C> <C>
Research and development credits carryforwards.............. $ 855 $ 1,195
Imputed interest............................................ 764 1,077
Prepaid license fees........................................ 2,107 2,200
Capitalized research and development........................ 1,711 1,144
Net operating loss carryforwards............................ 33,570 55,213
Other deductible temporary differences...................... 127 862
------- -------
Gross deferred tax assets................................. 39,134 61,691
Less valuation allowance.................................... 39,134 61,691
------- -------
Net deferred tax assets................................... $ -- $ --
======= =======
</TABLE>

The total valuation allowance for the years ended December 31, 1994 and
1995, increased by $4,595,000 and $22,557,000, respectively. The Company has
provided a valuation allowance due to the uncertainty of generating future
profits that would allow for the realization of such deferred tax assets.

As of December 31, 1995, the Company had net operating loss carryforwards
for federal and state tax purposes of approximately $67,000,000 and
$26,000,000, respectively. The difference between the federal loss
carryforward and the state loss carryforward results primarily from a 50%
limitation on California loss carryforwards. The Company also had available
tax credit carryforwards of approximately $900,000 and $300,000 for federal
and California tax purposes, respectively. There is no expiration date for
California tax credit carryforwards. The Company had foreign operating loss
carryforwards in Europe of approximately $85,000,000 with no expiration date.
If not utilized, the other federal and California carryforwards expire through
2010 as follows (in thousands):

<TABLE>
<CAPTION>
FEDERAL NET CALIFORNIA
OPERATING NET OPERATING FEDERAL TAX
LOSS LOSS CREDIT
YEAR OF EXPIRATION CARRYFORWARDS CARRYFORWARDS CARRYFORWARDS
------------------ ------------- ------------- -------------
<S> <C> <C> <C>
1996............................ $ -- $ 1,840 $ --
1997............................ -- 3,673 --
1998............................ -- 7,223 --
1999............................ -- 2,411 --
2000............................ 123 10,853 --
Thereafter...................... 66,877 -- 900
------- ------- ----
$67,000 $26,000 $900
======= ======= ====
</TABLE>

F-12
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(7) STOCKHOLDERS' EQUITY

Convertible Preferred Stock

The convertible preferred stock has the following rights:

Voting

Convertible preferred stock has no voting rights except on matters
relating to the certificate of incorporation, bylaws, exchange of
shares, merger of the Company, sales of assets, and plans for
liquidation or dissolution of the Company. In such cases, each share of
convertible preferred stock has voting rights equal to an equivalent
number of shares of common stock into which it is convertible.

Dividends

Holders of convertible preferred stock are entitled to receive
noncumulative dividends, when and if declared by the Company's board of
directors. The Company shall make no distribution to holders of common
stock until the convertible preferred stock dividends have been paid.
No dividends were declared by the Company's board of directors through
December 31, 1995.

Liquidation

In the event of any liquidation, dissolution, or winding up of the
Company, the holders of convertible preferred stock are entitled to
receive an amount of $10.20 per share, and any declared but unpaid
dividends prior to and in preference to any distribution to the holders
of common stock. The remaining assets, if any, shall be distributed
ratably among the holders of the common and convertible preferred
stock, based on the number of shares held (assuming conversion of
convertible preferred stock).

Conversion and Registration

Each share of convertible preferred stock is convertible, at the
option of the holder, into one share of common stock, subject to
adjustment for dilution. The convertible preferred stock held by
Philips is subject to certain restrictions related to conversion. Each
share of convertible preferred stock automatically converts into common
stock at the earlier of the closing of a public offering of common
stock with gross proceeds of at least $40,000,000 or on October 1,
1996. The Company has reserved shares of common stock in the event of
conversion.

Stock Option Plan

In 1988, the Company adopted a stock option plan (the 1988 Plan). The total
authorized shares under the 1988 Plan are 2,975,000.

Options granted under the 1988 Plan are for periods not to exceed 10 years
and may be either incentive stock options as that term is used in Section 422
of the Internal Revenue Code (Incentive Stock Options), or options which do
not qualify as Incentive Stock Options (Supplemental Stock Options). All
grants under the 1988 Plan must be at prices of not less than 100% of the fair
market value of the common stock as determined by the Company's board of
directors at the date of grant in the case of Incentive Stock Options and 85%
of fair market value in the case of Supplemental Stock Options. Options
granted after July 1995 generally vest monthly over 48 months and options
granted prior to July 1995 generally vest at 25% per year from the date of
employment or grant and are adjusted pro rata for any stock splits or
dividends.

F-13
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

In April 1996, the Company's board of directors approved the 1996 Stock
Option Plan (1996 Plan). The 1996 Plan was amended and restated by the
Company's board of directors in June 1996, subject to stockholder approval.
The 1996 Plan, as amended, provides for grants of incentive stock options,
nonstatutory stock options, and stock purchase rights to employees (including
employees who are officers) of the Company and its subsidiaries; provided
however, that no employee may be granted an option for more than 1,667,000
shares in any one fiscal year. The 1996 Plan also provides for grants of
nonstatutory stock options and stock purchase rights to consultants. The
Company has reserved 5,414,000 shares of common stock for issuance under the
1996 Plan.

The following summarizes activity under both stock option plans:

<TABLE>
<CAPTION>
SHARES
AVAILABLE OPTIONS PRICE
FOR GRANT OUTSTANDING PER SHARE
---------- ----------- ----------
<S> <C> <C> <C>
Balances, December 31, 1992............... 184,000 516,000 $0.48-2.40
Additional shares reserved............... 83,000
Options granted.......................... (229,000) 229,000 4.20-4.68
Options exercised........................ -- (161,000) 0.48-1.20
Options canceled......................... 29,000 (29,000) 0.48-4.68
---------- --------- ----------
Balances, December 31, 1993............... 67,000 555,000 0.48-4.68
Additional shares reserved............... 1,892,000
Options granted.......................... (345,000) 345,000 4.80-10.20
Options exercised........................ -- (5,000) 0.48-4.68
Options canceled......................... 44,000 (44,000) 0.48-10.20
---------- --------- ----------
Balances, December 31, 1994............... 1,658,000 851,000 0.48-10.20
Options granted.......................... (662,000) 662,000 10.20
Options exercised........................ -- (92,000) 0.48-10.20
Options canceled......................... 195,000 (195,000) 1.20-10.20
---------- --------- ----------
Balances, December 31, 1995............... 1,191,000 1,226,000 0.48-10.20
Additional shares reserved (unaudited)... 5,414,000
Options granted (unaudited).............. (1,374,000) 1,374,000 10.20
Options exercised (unaudited)............ -- (24,000) 0.48-10.20
Options canceled (unaudited)............. 102,000 (102,000) 2.40-10.20
---------- --------- ----------
Balances, June 30, 1996 (unaudited)....... 5,333,000 2,474,000 0.48-10.20
========== =========
</TABLE>

Options to purchase a total of 417,000 and 510,000 shares of common stock
were exercisable as of December 31, 1995 and June 30, 1996, respectively.

Private Financing

In June 1996, the Company issued shares of convertible preferred stock for
$30,021,000 ($11,021,000 of which was paid by conversion of outstanding
loans). The convertible preferred stock will be converted into approximately
2,887,000 shares of common stock based on the IPO price of $13.00 per share.
The number of shares of common stock to be issued will be adjusted upward or
downward depending on the actual IPO price.

F-14
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Stock Split

In July 1996, the Company's board of directors approved a one-for-twelve
reverse stock split of its common and convertible preferred stock, subject to
stockholder approval. All references in the consolidated financial statements
to the number of shares of stock have been retroactively restated to reflect
this reverse stock split. In July 1996, the Company's board of directors also
approved a decrease in the authorized number of shares of common stock to
150,000,000 shares, the elimination of the convertible preferred stock and the
authorization of 5,000,000 shares of a new class of preferred stock, all to be
effective concurrently with the IPO.

(8) EMPLOYEE BENEFIT PLAN

In 1991, the Company implemented a savings and investment plan (the 401(k)
Plan) which qualifies as a thrift plan under Section 401(k) of the Internal
Revenue Code. All of the Company's employees who have completed three months
of service are eligible to participate in the 401(k) Plan. The 401(k) Plan
allows participants to contribute up to 20% of eligible compensation but no
more than the amount applicable under the Internal Revenue Service guidelines.
The 401(k) Plan permits, but does not require, additional matching
contributions to the 401(k) Plan by the Company. The Company made no
contributions to the 401(k) Plan through December 31, 1995.

(9) SEGMENT REPORTING

The following summarizes, on a geographic basis, revenue, operating losses
and identifiable assets (in thousands):

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Revenue:
United States................................. $ 1,075 $ 2,101 $ 2,756
Europe........................................ 780 385 917
-------- -------- --------
$ 1,855 $ 2,486 $ 3,673
======== ======== ========
Operating loss:
United States................................. $(13,540) $(19,584) $(25,986)
Europe........................................ (11,737) (20,559) (32,458)
-------- -------- --------
$(25,277) $(40,143) $(58,444)
======== ======== ========
Identifiable assets:
United States.......................................... $ 18,460 $ 11,537
Europe................................................. 18,106 18,489
-------- --------
$ 36,566 $ 30,026
======== ========
</TABLE>

Approximately 44% of the Company's revenue for the year ended December 31,
1993 was from two customers, accounting for 27% and 17% of total revenue.
Approximately 75% of the Company's revenue for the year ended December 31,
1994 was from three customers, accounting for 37%, 19% and 19% of total
revenue. Approximately 81% of the Company's revenue for the year ended
December 31, 1995 was from five customers, accounting for 23%, 21%, 13%, 12%
and 12% of total revenue.

F-15
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(10) COMMITMENTS AND CONTINGENCIES

Lease Obligations

The Company leases its facilities and certain equipment under leases
expiring through 2003. Pursuant to an agreement for software engineering
services, the Company is also responsible for reimbursement of SEI facility
lease costs under a lease expiring in 1998. Monthly payments under certain
facility leases are subject to fixed increases. For accounting purposes, rent
expense is based on a straight-line amortization of the total payments
required over the lease term. The leases require the Company to pay property
taxes, insurance, maintenance, and repair costs.

The aggregate future minimum lease obligations as of December 31, 1995 are
as follows (in thousands):

<TABLE>
<CAPTION>
YEAR
ENDING
DECEMBER 31,
------------
<S> <C>
1996............................................................. $2,633
1997............................................................. 2,015
1998............................................................. 1,498
1999............................................................. 622
2000............................................................. 546
Thereafter....................................................... 98
------
$7,412
======
</TABLE>

Total rent expense under operating leases for facilities and equipment was
$522,000, $1,135,000, and $2,343,000 for the years ended December 31, 1993,
1994 and 1995, respectively.

Contingencies

Etak, the Company's primary competitor in the United States, filed suit
against one of the Company's customers, Zexel USA, Inc. (Zexel) alleging
patent infringement. Etak has not filed any claims that allege that the
Company's database or software infringes the Etak Patents. The suit is
currently scheduled for trial in October 1996.

On June 30, 1995, Zexel filed a third-party complaint against the Company,
seeking recovery of any and all damages and for costs and expenses incurred in
the litigation with Etak. Thereafter, the Company filed an answer to Zexel's
complaint, denying all material allegations thereof and asserting numerous
affirmative defenses, and a counterclaim and cross-claim for indemnification
against Zexel. The Company also filed claims against Etak.

If Etak prevails in the litigation, Zexel could be enjoined from selling
products incorporating the Company's proprietary technology and could be
required to pay significant monetary damages to Etak. If the Etak litigation
were to be resolved by a settlement, Zexel might be required to make
substantial payments to Etak. If Zexel were to settle with, or be found liable
to Etak and prevail on its indemnification claim against the Company, the
Company could be required to pay Zexel substantial amounts. Zexel and the
Company are vigorously contesting all of Etak's claims. It is the Company's
position that the Etak Patents are invalid, unenforceable and not infringed
and, even if Zexel were to settle with or be found liable to Etak, the Company
would have no indemnification obligation to Zexel. However, the Company cannot
predict the ultimate outcome of the lawsuit and cannot reasonably estimate the
potential loss or range of potential loss. In connection with the Etak
litigation, the Company has incurred, and expects to continue to incur,
substantial legal fees and legal expenses. Although the Company cannot
estimate with certainty its legal fees, legal expenses and potential
liability, the Company has established an accrual on its financial statements
at June 30, 1996 in an amount it believes to be a reasonable

F-16
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

estimate of such legal fees and expenses. The Company does not believe the
outcome of the Etak litigation will have a material adverse effect on its
business, financial condition or results of operations.

(11) ACQUISITION OF SHIELDS ENTERPRISES, INC. (UNAUDITED)

In May 1996, the Company's board of directors approved the principal terms
of an agreement to merge with SEI, a provider of software consulting services,
concurrent with the closing of the IPO. Pursuant to the agreement, all of the
shares of outstanding common stock of SEI will be exchanged for approximately
3,632,000 shares of the Company's common stock (net of 2,595,000 shares of the
Company's common stock exchanged for shares held by SEI which will be
accounted for as treasury stock on the Company's consolidated balance sheet).

The merger will be accounted for as a purchase with the results of SEI
included from the acquisition date. The purchase price of $37,047,000 (based
on a $10.20 value per share for the Company's common stock and net of
$26,472,000 of common stock exchanged for shares held by SEI and accounted for
as treasury stock on the Company's consolidated balance sheet) was assigned to
the fair value of the net assets acquired, including approximately $2,708,000
to the net liabilities assumed and $39,755,000 to purchased intangibles. Such
purchased intangibles will be amortized on a straight-line basis over five
years from the date of acquisition.

The following summary prepared on an unaudited pro forma basis combines the
consolidated results of operations as if SEI had been acquired as of the
beginning of the periods presented (in thousands, except per share data):

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
DECEMBER 31, JUNE 30,
1995 1996
------------ ----------
<S> <C> <C>
Revenue.............................................. $ 31,186 $ 15,592
Pro forma net loss................................... (67,179) (43,293)
Pro forma net loss per share......................... (2.70) (1.57)
</TABLE>

The pro forma results are not necessarily indicative of what would have
occurred if the acquisition had been in effect during the periods presented.
In addition, they are not intended to be a projection of future results and do
not reflect any synergies that might be achieved from combined operations.

F-17
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors
Shields Enterprises, Inc.:

We have audited the accompanying balance sheets of Shields Enterprises, Inc.
(SEI) as of September 30, 1994 and 1995, and the related statements of
operations, stockholders' equity (deficit), and cash flows for each of the
years in the three year period ended September 30, 1995. These financial
statements are the responsibility of SEI's management. Our responsibility is
to express an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Shields Enterprises, Inc.
as of September 30, 1994 and 1995, and the results of its operations and its
cash flows for each of the years in the three year period ended September 30,
1995, in conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP

Chicago, Illinois
November 22, 1995, except for the descriptions of the settlement
in Note 10, the merger in Note 11 and the NavTech stock
split in Note 2, which are as of December 28, 1995,
May 14, 1996 and July 12, 1996, respectively

F-18
<PAGE>

SHIELDS ENTERPRISES, INC.

BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------- JUNE 30,
1994 1995 1996
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................... $ 315 $ 1,359 $ 465
Accounts receivable:
Trade............................................ 3,759 4,252 4,033
Affiliate........................................ 530 573 572
Other............................................ 2,500 2,500 --
Prepaid expenses and other current assets......... 272 347 276
------- ------- -------
Total current assets............................ 7,376 9,031 5,346
Investment in affiliate............................ 6,761 6,939 9,175
Property and equipment, net........................ 1,088 1,068 1,001
Other receivables.................................. 2,500 -- --
------- ------- -------
Total assets.................................... $17,725 $17,038 $15,522
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable to bank.............................. $ -- $ 438 $ 1,695
Current maturities of long-term debt.............. 134 137 109
Notes payable to stockholders and employees....... 404 902 1,198
Notes payable to others........................... 49 159 --
Accounts payable.................................. 608 367 405
Accrued payroll and related expenses.............. 3,706 3,775 4,291
Customer claim.................................... -- 600 --
Other accrued expenses............................ 404 412 693
Deferred revenue.................................. 263 273 309
------- ------- -------
Total current liabilities....................... 5,568 7,063 8,700
Long-term debt, less current maturities............ 487 429 355
Customer claim..................................... 600 -- --
------- ------- -------
Total liabilities............................... 6,655 7,492 9,055
------- ------- -------
Stockholders' equity:
Common stock, stated value $125 per share; 20,000
shares authorized; 9,500, 10,764 and 10,764
shares issued and outstanding in 1994, 1995 and
1996, respectively............................... 1,188 1,345 1,345
Additional paid-in capital........................ 195 3,594 3,594
Common stock subscribed........................... 3,063 -- --
Retained earnings................................. 6,624 4,607 1,528
------- ------- -------
Total stockholders' equity...................... 11,070 9,546 6,467
Commitments and contingencies
------- ------- -------
Total liabilities and stockholders' equity...... $17,725 $17,038 $15,522
======= ======= =======
</TABLE>

See accompanying notes to financial statements.

F-19
<PAGE>

SHIELDS ENTERPRISES, INC.

STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER NINE MONTHS ENDED
30, JUNE 30,
-------------------------- -----------------------
1993 1994 1995 1995 1996
------- ------- -------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenue:
Consulting and contract
services................. $19,829 $21,451 $25,289 $19,351 $19,453
Affiliated consulting
services................. 4,075 4,276 7,076 4,876 8,116
Other..................... 1,136 2,945 2,543 2,001 878
------- ------- -------- ------- -------
Total revenue............ 25,040 28,672 34,908 26,228 28,447
------- ------- -------- ------- -------
Costs and expenses:
Cost of consulting and
contract services........ 18,242 20,016 21,027 15,820 16,762
Cost of affiliated
consulting services...... 3,067 3,707 6,196 4,332 6,717
Cost of other revenue..... 532 1,752 1,405 1,250 554
Software engineering and
development.............. 514 3,152 5,004 3,679 3,932
Selling, general and
administrative........... 2,279 2,835 3,119 2,319 3,381
------- ------- -------- ------- -------
Total costs and expenses. 24,634 31,462 36,751 27,400 31,346
------- ------- -------- ------- -------
Income (loss) from
operations.............. 406 (2,790) (1,843) (1,172) (2,899)
Other income (expense):
Interest income........... 4 59 4 4 53
Interest expense.......... (220) (82) (178) (122) (174)
Gain on sale of
investments.............. 29 259 -- -- --
------- ------- -------- ------- -------
Income (loss) before
extraordinary item...... 219 (2,554) (2,017) (1,290) (3,020)
Extraordinary item......... -- 15,969 -- -- --
------- ------- -------- ------- -------
Net income (loss)........ $ 219 $13,415 $ (2,017) $(1,290) $(3,020)
======= ======= ======== ======= =======
Pro forma net loss data
(unaudited):
Net loss as reported...... $ (2,017) $(3,020)
Pro forma income tax
benefit.................. 797 1,193
-------- -------
Pro forma net loss........ $ (1,220) $(1,827)
======== =======
</TABLE>

See accompanying notes to financial statements.

F-20
<PAGE>

SHIELDS ENTERPRISES, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
COMMON STOCK
-------------- RETAINED TOTAL
NUMBER ADDITIONAL COMMON EARNINGS STOCKHOLDERS'
OF PAID-IN STOCK (ACCUMULATED EQUITY
SHARES AMOUNT CAPITAL SUBSCRIBED DEFICIT) (DEFICIT)
------ ------ ---------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Balances as of September
30, 1992............... 9,688 $1,211 $ 527 $ -- $(3,784) $(2,046)
Retirement of common
stock.................. (208) (25) (375) -- -- (400)
Dividends paid.......... -- -- -- -- (72) (72)
Net income.............. -- -- -- -- 219 219
------ ------ ------ ------- ------- -------
Balances as of September
30, 1993............... 9,480 1,186 152 -- (3,637) (2,299)
Issuance of common stock
for cash............... 20 2 43 -- -- 45
Common stock subscribed. -- -- -- 3,063 -- 3,063
Dividends paid.......... -- -- -- -- (3,154) (3,154)
Net income.............. -- -- -- -- 13,415 13,415
------ ------ ------ ------- ------- -------
Balances as of September
30, 1994............... 9,500 1,188 195 3,063 6,624 11,070
Issuance of common stock
subscribed............. 660 83 2,980 (3,063) -- --
Issuance of common
stock.................. 604 74 419 -- -- 493
Net loss................ -- -- -- -- (2,017) (2,017)
------ ------ ------ ------- ------- -------
Balances as of September
30, 1995............... 10,764 1,345 3,594 -- 4,607 9,546
Dividends paid (unau-
dited)................. -- -- -- -- (59) (59)
Net loss (unaudited).... -- -- -- -- (3,020) (3,020)
------ ------ ------ ------- ------- -------
Balances as of June 30,
1996 (unaudited)....... 10,764 $1,345 $3,594 $ -- $ 1,528 $ 6,467
====== ====== ====== ======= ======= =======
</TABLE>

See accompanying notes to financial statements.

F-21
<PAGE>

SHIELDS ENTERPRISES, INC.

STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER NINE MONTHS ENDED
30, JUNE 30,
------------------------- -----------------------
1993 1994 1995 1995 1996
------- ------- ------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss).......... $ 219 $13,415 $(2,017) $(1,290) $(3,020)
Adjustments to reconcile
net income (loss) to net
cash provided by (used in)
operating activities:
Depreciation and
amortization............. 106 112 495 234 346
Gain on sale of
investments.............. (29) (259) -- -- --
Changes in operating
assets and liabilities:
Accounts receivable...... 141 (6,581) 1,964 (2,873) 2,720
Prepaid expenses and
other current assets.... (128) (44) (75) 25 71
Accounts payable......... 262 148 (241) (7) 38
Accrued payroll and other
expenses................ 1,004 740 77 1,897 797
Customer claim........... 600 -- -- -- (600)
Deferred revenue......... (146) 164 10 50 36
------- ------- ------- ------- -------
Net cash provided by
(used in) operating
activities............. 2,029 7,695 213 (1,964) 388
------- ------- ------- ------- -------
Cash flows from investing
activities:
Acquisition of property and
equipment................. (210) (992) (475) (254) (279)
Purchase of stock and
exercise of warrants of
affiliate................. (62) (6,336) (178) (132) (2,236)
Proceeds from sale of
investments............... 192 369 -- -- --
------- ------- ------- ------- -------
Net cash used in
investing activities... (80) (6,959) (653) (386) (2,515)
------- ------- ------- ------- -------
Cash flows from financing
activities:
Proceeds from long-term
debt...................... 3,494 621 38 17 --
Repayment of long-term
debt...................... (4,264) (672) (93) -- (102)
Proceeds from notes payable
to bank, net.............. 550 -- 438 921 1,257
Repayment of notes payable
to affiliate.............. (1,350) (200) -- -- --
Proceeds from notes payable
to stockholders and
employees................. 348 228 606 716 296
Repayment of notes payable
to stockholders and
employees................. (398) (586) (108) -- --
Proceeds from notes payable
to others................. 56 -- 110 (49) (159)
Repayment of notes payable
to others................. -- (49) -- -- --
Dividends paid............. (72) (3,154) -- -- (59)
Sale of common stock....... -- 45 493 493 --
Common stock subscribed.... -- 3,063 -- -- --
Retirement of common stock. (400) -- -- -- --
------- ------- ------- ------- -------
Net cash provided by
(used in) financing
activities............. (2,036) (704) 1,484 2,098 1,233
------- ------- ------- ------- -------
Net increase (decrease) in
cash and cash equivalents.. (87) 32 1,044 (252) (894)
Cash and cash equivalents at
beginning of period........ 370 283 315 315 1,359
------- ------- ------- ------- -------
Cash and cash equivalents at
end of period.............. $ 283 $ 315 $ 1,359 $ 63 $ 465
======= ======= ======= ======= =======
Supplemental disclosures of
cash flow information:
Cash paid during the
period:
Interest.................. $ 220 $ 83 $ 178 $ 122 $ 111
Income taxes.............. $ 6 $ 7 $ 11 $ -- $ 2
</TABLE>

See accompanying notes to financial statements.

F-22
<PAGE>

SHIELDS ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS

(INFORMATION AS OF AND FOR THE NINE MONTH PERIOD ENDED JUNE 30, 1996 IS
UNAUDITED)

(1) DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Shields Enterprises, Inc. (SEI) provides systems consulting services to
diversified customers across the United States and provides in-store and back
office software, installation, training and support services. SEI also
provides development and support services to Navigation Technologies
Corporation (NavTech). In addition to NavTech, revenue from SEI's two largest
customers was 16% and 13% of total revenue in 1993, 14% and 12% of total
revenue in 1994, and 10% and 9% of total revenue in 1995, respectively.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents

SEI considers all highly liquid debt instruments purchased with original
maturities of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost. Provisions for depreciation are
computed using accelerated methods to amortize the cost of depreciable assets
over their estimated useful lives. Leasehold improvements are amortized over
the lesser of their estimated useful lives or the lease term.

Revenue Recognition

Revenue from consulting and contract services under time and materials
contracts is recognized as services are performed. SEI also provides services
through maintenance contracts on proprietary software. Revenue related to the
maintenance contracts is recognized ratably over the term of the agreement.

Income Taxes

The stockholders of SEI have elected under Subchapter S of the Internal
Revenue Code to include SEI's income in their own income for federal and state
income tax purposes. Accordingly, SEI is not subject to federal and most state
income taxes. Upon the closing of the merger with NavTech, SEI will be taxed
under Subchapter C of the Internal Revenue Code.

Financial Instruments

The carrying amount of SEI's financial instrument assets and liabilities
approximates fair value because of the short maturity of those instruments.

Use of Estimates

SEI's management has made estimates and assumptions relating to the
reporting of assets and liabilities and the disclosure of contingent assets
and liabilities to prepare these financial statements in conformity with
generally accepted accounting principles. Actual results could differ from
those estimates.

F-23
<PAGE>

SHIELDS ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Unaudited Interim Financial Statements

The unaudited interim financial statements as of June 30, 1996 and for the
nine month periods ended June 30, 1995 and 1996 have been prepared on
substantially the same basis as the audited financial statements, and in the
opinion of management include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
information set forth therein.

(2) NAVTECH

Description and Relationship

NavTech, together with its subsidiaries, was established in 1985 to develop,
maintain and market a database for route guidance products and other
applications in the United States and Europe. NavTech's database is a digital
representation of road transportation networks that includes the information
necessary to determine efficient routes for vehicle guidance. NavTech's
database is licensed to leading automotive electronics manufacturers that are
developing products for route guidance. These products electronically
calculate an efficient route and provide real-time positioning and turn-by-
turn audible and/or graphical directions to guide the driver at each turn.

NavTech has been primarily engaged in development of software and
methodologies for the creation, updating and use of its database and in the
creation and updating of database coverage for parts of the United States and
Europe.

As of September 30, 1995, SEI held 2,332,000 shares of NavTech's common
stock which represented 10.5% of the outstanding stock of NavTech. (NavTech
share amounts have been restated to reflect a one-for-twelve reverse stock
split.)

SEI's Chairman has served as Chairman and Chief Executive Officer (CEO) of
NavTech since June 1987. SEI has an agreement with NavTech under which SEI's
Chairman will continue to serve as Chairman and CEO of NavTech for a base
annual compensation to SEI plus incentive compensation based on NavTech's
gross revenue and operating income. Such agreement will terminate upon the
merger with NavTech. SEI's Chairman and the other directors' compensation is
approved by non-SEI directors.

SEI was granted options for the purchase of 33,000 shares of NavTech common
stock at $1.20 per share and 133,000 shares of NavTech common stock at $2.40
per share during fiscal 1992 and 1993, respectively. The options expire by
their terms in March and October 2002, respectively. As of September 30, 1995,
options held by SEI covering 125,000 shares were vested, with the remaining
options covering 41,000 shares vesting monthly through December 1996, subject
to the continued full-time services of the Chairman of SEI as Chairman and CEO
of NavTech. During 1994, SEI entered into an agreement that provides that
additional options will be granted beginning in January 1997 based on the
Chairman and CEO's continuing service to NavTech. In May 1996, SEI's board of
directors approved the principal terms of an agreement with NavTech to cancel
the above agreement and options upon the merger with NavTech (see Note 11).

During fiscal 1992, SEI and NavTech entered into an agreement whereby SEI
performs substantially all database software engineering services for NavTech.
Under the agreement, SEI charges NavTech for actual direct costs incurred for
the services provided plus a markup for SEI's overhead and fees. Total revenue
from NavTech during fiscal 1993, 1994 and 1995 was $4,075,000, $4,276,000 and
$7,076,000, respectively.

F-24
<PAGE>

SHIELDS ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Pursuant to a 1994 agreement, SEI has the option to require Philips Media
B.V. to purchase up to 605,000 shares of NavTech common stock held by SEI at a
per share price of $10.20. Such rights have been waived by SEI through October
1, 1996 and will terminate upon the closing of an initial public offering by
NavTech.

Accounting for Investment in NavTech

SEI records its investment in NavTech using the cost method. Prior to April
30, 1993, SEI recorded its investment in NavTech using the equity method.

(3) ACCOUNTS RECEIVABLE

Included in accounts receivable are unbilled accounts receivable (work in
progress) and unbilled expenses of $877,000 and $948,000 as of September 30,
1994 and 1995, respectively, representing recoverable costs and accrued
profits which will be billed in accordance with contract terms and delivery
schedules.

(4) PROPERTY AND EQUIPMENT

The components of property and equipment as of September 30, 1994 and 1995
are as follows (in thousands):

<TABLE>
<CAPTION>
1994 1995
------ ------
<S> <C> <C>
Furniture..................................................... $ 323 $ 392
Equipment..................................................... 1,204 1,602
Leasehold improvements........................................ 14 19
------ ------
1,541 2,013
Less accumulated depreciation and amortization................ 453 945
------ ------
$1,088 $1,068
====== ======
</TABLE>
(5) FINANCING ARRANGEMENTS

Note Payable to Bank

As of September 30, 1994 and 1995, SEI had a line of credit under which it
could borrow 80% of eligible accounts receivable, as defined, up to
$3,000,000. The line bears interest at a rate of 0.5% over prime (8.25% and
9.25% as of September 30, 1994 and 1995, respectively). As of September 30
1995, $438,000 was outstanding under this line. The line expires on January
15, 1997, is secured by substantially all assets of SEI other than its shares
of NavTech common stock, and is personally guaranteed by T. Russell Shields,
the Chairman of SEI.

Long-Term Debt

During 1994, SEI entered into loan agreements with the Fargo-Cass County
Growth Initiative Fund and the Future Fund of North Dakota under which SEI
borrowed $720,000 at an interest rate of 1% per annum. Amounts outstanding
under the two loan agreements aggregated $621,000 and $566,000 as of September
30, 1994 and 1995, respectively. The loans are secured by certain office
furniture, equipment, fixtures and 125,000 shares of

F-25
<PAGE>

SHIELDS ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

NavTech stock held by SEI. The aggregate maturities of long-term debt as of
September 30, 1995 are as follows: 1996--$137,000; 1997--$138,000; 1998--
$139,000; 1999--$141,000 and 2000--$11,000.

Notes Payable to Stockholders, Employees and Others

SEI has multiple outstanding notes to stockholders, employees and others.
The notes are due on various dates during 1995 and on December 31, 1995
(short-term), and December 31, 1996 (long-term). The amount of interest paid
to stockholders, employees and others for the years ended September 30, 1993,
1994 and 1995 was $78,000, $59,000 and $100,000, respectively. These notes
bear interest at prime plus 0.5% or prime plus 1.25%, depending on the
maturity of the notes.

(6) LEASES

SEI leases office space in several locations. The future minimum lease
obligations under lease agreements with initial terms in excess of one year as
of September 30, 1995 were as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDING
SEPTEMBER 30,
-------------
<S> <C>
1996................................................................. $ 683
1997................................................................. 638
1998................................................................. 641
1999................................................................. 389
2000................................................................. 233
Thereafter........................................................... 528
------
$3,112
======
</TABLE>

Several office leases provide for adjustment of base rentals for subsequent
increases in the lessor's operating costs. Total rent expense under all leases
amounted to $343,000, $500,000 and $719,000, in fiscal 1993, 1994 and 1995,
respectively.

(7) EMPLOYEE INCENTIVE PLANS

SEI's profit sharing plan covers substantially all of its employees. SEI
contributes the lesser of 50% of operating profits above 9% of operating
revenue or 15% of total compensation paid in the year to all participants, or
an amount determined by SEI's board of directors. During the years ended
September 30, 1993, 1994 and 1995, SEI made no contributions to the plan.

Effective October 1, 1985, SEI established a Profit Participation Plan. This
plan compensates senior employees based on SEI's performance. Under the terms
of this plan, SEI is to pay out approximately 75% of the pretax income from
operations (including salary reductions) and certain special items. The
accrued payroll and related expense liabilities include employee salary
reductions and company contributions. SEI contributions in excess of salary
reductions were $136,000, $2,105,000 and $820,000 in 1993, 1994 and 1995,
respectively.

(8) STOCK SPLIT

On June 1, 1995, SEI's board of directors declared a twenty-for-one stock
split. Stated value was reduced from $2,500 to $125 per share. All references
in the accompanying financial statements to the number of SEI's shares
outstanding have been retroactively restated to reflect the split.

F-26
<PAGE>

SHIELDS ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(9) EXTRAORDINARY ITEM

In March 1994, SEI arrived at a settlement of outstanding litigation which
provided for payments to SEI aggregating $20,000,000 ($15,969,000, net of
legal fees) to be made during fiscal 1994 and future periods. Accounts
receivable "other" represents amounts to be paid to SEI pursuant to the
settlement.

(10) CUSTOMER CLAIM

As of September 30, 1995, SEI accrued $600,000 representing a judgment on a
claim by a customer, which SEI appealed. In December 1995, SEI entered into an
agreement to settle the action for approximately the amount accrued as of
September 30, 1995.

(11) MERGER WITH NAVTECH

In May 1996, SEI's board of directors approved the principal terms of an
agreement to merge with NavTech. In connection with the merger, all of the
outstanding common stock of SEI will be exchanged for NavTech's common stock.

(12) SUBSEQUENT EVENTS (UNAUDITED)

In June 1996, SEI entered into an agreement with an officer of SEI which
provides for the termination of certain conditions of a previous agreement
between SEI and the officer. In consideration of the termination of these
conditions, SEI will issue the officer 657 shares of SEI common stock. The
common stock is to be issued to the officer immediately prior to the
completion of the proposed merger discussed in Note 11. The agreement will be
canceled in the event that such merger is not consummated by October 1, 1996
or an initial public offering of NavTech common stock is not completed in
connection with the merger.

In June 1996, SEI's board of directors approved the 1996 Stock Option Plan
(the Plan). Options granted under the Plan will be incentive stock options
with a ten year term.

The SEI board of directors has authorized the grant of options to purchase
an aggregate of 611 shares of Common Stock under the Plan.

F-27
<PAGE>

SHIELDS ENTERPRISES, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

(13) PRO FORMA ADJUSTMENT TO FINANCIAL STATEMENTS (UNAUDITED)

The pro forma provision for income taxes reflects the income tax benefit
that would have been reported if SEI had been a C corporation using the asset
and liability method. Under this approach, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax basis. The components of unaudited pro
forma income taxes were as follows (in thousands):

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, JUNE 30,
1995 1996
------------- -----------
<S> <C> <C>
Current:
Federal.......................................... $(28) $ 177
State............................................ (5) 26
---- ------
(33) 203
---- ------
Deferred:
Federal.......................................... 714 850
State............................................ 116 140
---- ------
830 990
---- ------
Pro forma income tax benefit....................... $797 $1,193
==== ======
</TABLE>

The pro forma income tax benefit differs from the amounts computed by
applying the U.S. federal statutory income tax rate to pro forma loss before
taxes as a result of the following (in thousands):

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, JUNE 30,
1995 1996
------------- -----------
<S> <C> <C>
Computed "expected" tax benefit.................... $686 $1,027
State income taxes, net of federal tax effect...... 111 166
---- ------
$797 $1,193
==== ======
</TABLE>

As of September 30, 1995, the tax basis of SEI's investment in NavTech and
other accounts receivable differed from the financial statement carrying
amounts, which would have resulted in a deferred tax liability of $2,270,000
on a pro forma basis.

F-28
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION AND SHIELDS ENTERPRISES, INC.

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined balance sheet and statements of
operations have been derived from Navigation Technologies Corporation's (the
Company) financial statements for the year ended December 31, 1995, and as of
and for the six month period ended June 30, 1996, included elsewhere herein
and the Shields Enterprises, Inc. (SEI) financial statements for the year
ended September 30, 1995, and as of and for the nine month period ended June
30, 1996, included elsewhere herein.

Adjustments have been made to the pro forma combined balance sheet to give
effect to the merger with SEI and the conversion of convertible preferred
stock to common stock in connection with the Company's initial public offering
as if each had occurred on June 30, 1996.

Adjustments have been made to the pro forma combined statements of
operations to give effect to the acquisition of SEI as if it had occurred at
the beginning of each of the respective periods presented and to present the
data consistently using a December 31 year-end.

Since the Company's inception, SEI has provided software engineering and
development services to the Company. The principal components of the purchased
intangibles in SEI are the technical knowledge of SEI's skilled, trained
employee base, the ability to manage software engineering and development
efforts internally and the relationships developed with SEI's existing
customer base. No significant technology will be acquired as a result of the
SEI Merger since the Company owns the technology developed by SEI in
connection with such services. Accordingly, the purchase price was principally
allocated to purchased intangibles, as well as the tangible assets and
liabilities of SEI.

The purchased intangibles of approximately $39,755,000 will be amortized on
a straight-line basis over five years. The Company has established an
estimated useful life of purchased intangibles of five years based on employee
and customer turnover levels for consulting organizations, lack of binding
employment agreements between SEI and its employees and the recent increase in
SEI's NavTech-related revenue.

The following unaudited pro forma combined balance sheet and statements of
operations are not necessarily indicative of the future results of operations
of the Company or the results of operations which would have resulted had the
Company and SEI been combined during the periods presented. In addition, the
pro forma results are not intended to be a projection of future results.

The unaudited pro forma combined balance sheet and statements of operations
should be read in conjunction with the consolidated financial statements of
the Company and SEI, including the notes thereto, contained elsewhere in this
Prospectus.

F-29
<PAGE>

PRO FORMA FINANCIAL INFORMATION

NAVIGATION TECHNOLOGIES CORPORATION AND SHIELDS ENTERPRISES, INC.

PRO FORMA COMBINED BALANCE SHEET--UNAUDITED
(IN THOUSANDS)

<TABLE>
<CAPTION>
JUNE 30, 1996
----------------------------------------------
COMPANY SEI PRO FORMA PRO FORMA
ACTUAL ACTUAL ADJUSTMENTS COMBINED
--------- ------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...... $ 17,432 $ 465 $ -- $ 17,897
Accounts receivable............ 509 4,033 -- 4,542
Accounts receivable from
affiliate..................... -- 572 (572)(a) --
Prepaid expenses and other
current assets................ 1,565 276 -- 1,841
--------- ------- -------- ---------
Total current assets.......... 19,506 5,346 (572) 24,280
Property and equipment, net..... 5,473 1,001 -- 6,474
Purchased intangibles........... -- -- 39,755 (b) 39,755
Deposits and other assets....... 97 9,175 (9,175)(c) 97
--------- ------- -------- ---------
Total assets.................. $ 25,076 $15,522 $ 30,008 $ 70,606
========= ======= ======== =========
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Note payable to bank........... $ -- $ 1,695 $ -- $ 1,695
Current maturities of long-term
debt.......................... -- 109 -- 109
Notes payable to stockholders,
employees and others.......... -- 1,198 -- 1,198
Accounts payable............... 2,640 405 -- 3,045
Accounts payable to affiliate.. 1,561 -- (572)(a) 989
Accrued payroll and related
expenses...................... 3,202 4,291 -- 7,493
Other accrued expenses......... 5,808 693 -- 6,201
Deferred revenue............... 2,318 309 -- 2,627
--------- ------- -------- ---------
Total current liabilities..... 15,229 8,700 (572) 23,357
Long-term debt, less current
maturities..................... -- 355 -- 355
Long-term source material
obligations.................... 6,356 -- -- 6,356
Deferred license revenue........ 8,632 -- -- 8,632
--------- ------- -------- ---------
Total liabilities............. 30,217 9,055 (572) 38,700
--------- ------- -------- ---------
Stockholders' equity (deficit):
Convertible preferred stock.... 15 -- (15)(d) --
Common stock................... 11 1,345 (1,324)(b)(d) 32
Additional paid-in capital..... 191,170 3,594 59,919 (b)(c) 254,683
Treasury stock................. -- -- (26,472)(c) (26,472)
Cumulative translation
adjustment.................... 1,889 -- -- 1,889
Retained Earnings (accumulated
deficit)...................... (198,226) 1,528 (1,528)(b) (198,226)
--------- ------- -------- ---------
Total stockholders' equity
(deficit).................... (5,141) 6,467 30,580 31,906
--------- ------- -------- ---------
Total liabilities and
stockholders' equity
(deficit).................... $ 25,076 $15,522 $ 30,008 $ 70,606
========= ======= ======== =========
</TABLE>

See accompanying notes to unaudited pro forma combined financial statements.

F-30
<PAGE>

PRO FORMA FINANCIAL INFORMATION

NAVIGATION TECHNOLOGIES CORPORATION AND SHIELDS ENTERPRISES, INC.

PRO FORMA COMBINED STATEMENT OF OPERATIONS--UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
------------------------------------------
COMPANY SEI PRO FORMA PRO FORMA
ACTUAL ACTUAL ADJUSTMENTS COMBINED
-------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Revenue:
Database license and distribution.. $ 3,377 $ -- $ -- $ 3,377
Consulting and contract services... -- 25,600 -- 25,600
Affiliated consulting services..... -- 8,039 (8,039)(e) --
Other.............................. 296 1,913 -- 2,209
-------- ------- ------- --------
Total revenue..................... 3,673 35,552 (8,039) 31,186
-------- ------- ------- --------
Costs and expenses:
Cost of revenue.................... -- 29,430 (7,038)(e) 22,392
Database creation and updating..... 40,359 -- -- 40,359
Software engineering and
development....................... 8,314 5,020 (1,142)(e) 12,192
Selling, general and
administrative.................... 13,444 3,252 141 (e) 16,837
Amortization of purchased
intangibles....................... -- -- 7,951 (f) 7,951
-------- ------- ------- --------
Total costs and expenses.......... 62,117 37,702 (88) 99,731
-------- ------- ------- --------
Loss from operations................ (58,444) (2,150) (7,951) (68,545)
Other income (expense).............. 1,532 (166) -- 1,366
-------- ------- ------- --------
Net loss............................ $(56,912) $(2,316) $(7,951) $(67,179)
======== ======= ======= ========
Pro forma net loss per share........ $ (2.58) $ (2.70)
======== ========
Shares used in per share
computation........................ 22,038 2,849 (g) 24,887
======== ======= ========
</TABLE>

See accompanying notes to unaudited pro forma combined financial statements.

F-31
<PAGE>

PRO FORMA FINANCIAL INFORMATION

NAVIGATION TECHNOLOGIES CORPORATION AND SHIELDS ENTERPRISES, INC.

PRO FORMA COMBINED STATEMENT OF OPERATIONS--UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1996
------------------------------------------
COMPANY SEI PRO FORMA PRO FORMA
ACTUAL ACTUAL ADJUSTMENTS COMBINED
-------- ------- ----------- ---------
<S> <C> <C> <C> <C>
Revenue:
Database license and distribution.. $ 1,486 $ -- $ -- $ 1,486
Consulting and contract services... -- 13,315 -- 13,315
Affiliated consulting services..... -- 5,962 (5,962)(e) --
Other.............................. 105 686 -- 791
-------- ------- ------- --------
Total revenue..................... 1,591 19,963 (5,962) 15,592
-------- ------- ------- --------
Costs and expenses:
Cost of revenue.................... -- 16,665 (4,800)(e) 11,865
Database creation and updating..... 20,341 -- -- 20,341
Software engineering and
development....................... 6,148 2,840 (969)(e) 8,019
Selling, general and
administrative.................... 11,762 2,541 (193)(e) 14,110
Amortization of purchased
intangibles....................... -- -- 3,976 (f) 3,976
-------- ------- ------- --------
Total costs and expenses.......... 38,251 22,046 (1,986) 58,311
-------- ------- ------- --------
Loss from operations................ (36,660) (2,083) (3,976) (42,719)
Other income (expense).............. (458) (116) -- (574)
-------- ------- ------- --------
Net loss............................ $(37,118) $(2,199) $(3,976) $(43,293)
======== ======= ======= ========
Pro forma net loss per share........ $ (1.50) $ (1.57)
======== ========
Shares used in per share
computation........................ 24,788 2,849 (g) 27,637
======== ======= ========
</TABLE>

See accompanying notes to unaudited pro forma combined financial statements.

F-32
<PAGE>

PRO FORMA FINANCIAL INFORMATION

NAVIGATION TECHNOLOGIES CORPORATION AND SHIELDS ENTERPRISES, INC.

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

All of the shares of outstanding common stock of SEI were exchanged for
3,632,000 shares of the Company's common stock (net of exchange of
2,595,000 shares of the Company's common stock held by SEI which will be
accounted for as treasury stock on the Company's consolidated balance
sheet). The purchase price of $37,047,000 (based on a $10.20 value per
share for the Company's common stock and net of $26,472,000 of common stock
exchanged for shares held by SEI and accounted for as treasury stock on the
Company's consolidated balance sheet) was assigned to the fair value of the
net assets acquired, including approximately $2,708,000 to the net
liabilities assumed and $39,755,000 to purchased intangibles.

To arrive at the pro forma combined financial statements, the historical
financial statements were adjusted to reflect:

(a) Elimination of intercompany receivables and payables between the
Company and SEI.

(b) Exchange of the Company's common stock for outstanding shares of SEI's
common stock in the SEI merger and recognition of purchased
intangibles.

(c) Exchange of 2,595,000 shares of the Company's common stock held by SEI
and accounted for as treasury stock on the Company's consolidated
balance sheet.

(d) Conversion of the Company's outstanding preferred stock to common
stock.

(e) Elimination of intercompany billings between the Company and SEI.

(f) Amortization of purchased intangibles from the SEI merger over an
estimated useful life of five years.

(g) An increase in the Company's common stock outstanding on an "as if
converted" basis for the 3,632,000 shares of common stock issued in the
SEI merger (net of shares exchanged for shares held by SEI and
accounted for as treasury stock on the Company's consolidated balance
sheet).

Certain amounts have been reclassified to conform to the pro forma
presentation.

F-33
<PAGE>

This page contains the text "NavTech United States" together with a map of the
continental United States with lines depicting the coverage of the NavTech
database and a map legend. The page also contains the following text:

In the United States, NavTech has completed detailed city databases for many
metropolitan areas representing in aggregate approximately 100 million in
population and has established nationwide coverages, completing the intertown
database for the continental United States. The map displayed illustrates the
detailed city and intertown coverage currently provided by the NavTech database
in the United States

The NavTech logo appears at the bottom of the page.

<PAGE>

This page contains the text "NavTech Europe" together with a map of parts of
Europe with lines depicting the coverage of the NavTech database and a map
legend. The page also contains the following text:

In Europe, NavTech has completed detailed city databases for metropolitan areas
representing in aggregate approximately 70 million in population and intertown
databases for Austria, Belgium, Southeastern England, France, Germany, northern
Italy and Switzerland. The above map illustrates NavTech's detailed city and
intertown coverage currently provided by the NavTech database in Europe.

The NavTech logo appears at the bottom of the page.

<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE U.S. UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE
TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE UN-
LAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

-------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary............................................ 3
Risk Factors.................................................. 7
Use of Proceeds............................................... 20
Dividend Policy............................................... 20
Sale of Shares to Philips and Zenrin.......................... 21
Capitalization................................................ 22
Dilution...................................................... 23
Selected Consolidated Financial Data.......................... 24
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................................... 26
Business...................................................... 33
Management.................................................... 50
Certain Transactions.......................................... 58
Principal Stockholders........................................ 60
Description of Capital Stock.................................. 62
Shares Eligible for Future Sale............................... 64
Certain United States Federal Tax
Considerations for Non-U.S. Holders of
Common Stock................................................. 66
Underwriting.................................................. 68
Legal Matters................................................. 70
Experts....................................................... 70
Change in Independent
Auditor....................................................... 71
Additional Information........................................ 71
Index to Financial Statements................................. F-1
</TABLE>

-------------------

UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPAT-
ING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

10,500,000 SHARES

[LOGO OF NAVIGATION TECHNOLOGIES APPEARS HERE]

COMMON STOCK

-------------------

PROSPECTUS
, 1996

-------------------

LEHMAN BROTHERS

COWEN & COMPANY

SALOMON BROTHERS INC

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

Subject to Completion, dated August 22, 1996

PROSPECTUS

10,500,000 SHARES

[LOGO OF NAVIGATION TECHNOLOGIES]

COMMON STOCK

------------

Of the 10,500,000 shares of Common Stock, $.001 par value ("Common Stock"),
of Navigation Technologies Corporation ("NavTech" or the "Company") being
offered hereby, 2,100,000 shares are being offered initially outside the United
States and Canada by the International Managers (the "International Offering")
and 8,400,000 shares are being offered initially in the United States and
Canada by the U.S. Underwriters (the "U.S. Offering"). Such offerings are
referred to collectively as the "Offerings".

Philips Electronics N.V. ("Philips") has agreed to purchase, concurrently
with the closing of the Offerings, a number of shares of Common Stock that will
result in Philips owning 48% of the outstanding shares of Common Stock
(assuming no exercise of the over-allotment options described below). In
addition, Zenrin Co. Ltd. ("Zenrin") has agreed to purchase directly from the
Company shares of Common Stock having an aggregate purchase price of
$1,000,000. All of such shares to be purchased by Philips and Zenrin will be
purchased at the initial public offering price of the Common Stock offered
hereby, less the underwriting discount. See "Sale of Shares to Philips and
Zenrin" and "Certain Transactions."
------------
THE COMMON STOCK OFFERED HEREBY INCLUDES A HIGH DEGREE OF RISK.SEE "RISK
FACTORS" BEGINNING ON PAGE 7.
------------

(3) The Company has granted the International Managers a 30-day option to
purchase up to 315,000 additional shares of Common Stock on the same terms
and conditions as set forth above solely to cover over-allotments, if any.
The U.S. Underwriters have been granted a similar option to purchase up to
1,260,000 additional shares solely to cover over-allotments, if any. If
such options are exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."
------------

The shares of Common Stock offered by this Prospectus are offered by the
International Managers subject to prior sale, to withdrawal, cancellation or
modification of the offer without notice, to delivery to and acceptance by the
International Managers and to certain further conditions. It is expected that
delivery of the shares will be made at the offices of Lehman Brothers Inc., New
York, New York, on or about , 1996.

------------
LEHMAN BROTHERS
COWEN & COMPANY
SALOMON BROTHERS INTERNATIONAL LIMITED
, 1996
<PAGE>

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS,
AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE INTERNATIONAL MAN-
AGERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITA-
TION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.

-------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................................. 3
Risk Factors........................................ 7
Use of Proceeds..................................... 20
Dividend Policy..................................... 20
Sale of Shares to Philips and Zenrin................ 21
Capitalization...................................... 22
Dilution............................................ 23
Selected Consolidated Financial Data................ 24
Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 26
Business............................................ 33
Management.......................................... 50
Certain Transactions................................ 58
Principal Stockholders.............................. 60
Description of Capital Stock........................ 62
Shares Eligible for Future Sale..................... 64
Certain United States Federal Tax Considerations
for Non-U.S. Holders of Common Stock............... 66
Underwriting........................................ 68
Legal Matters....................................... 70
Experts............................................. 70
Change in Independent Auditor....................... 71
Additional Information.............................. 71
Index to Financial Statements....................... F-1
</TABLE>

-------------------

UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICI-
PATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS
IN ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING
AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

10,500,000 SHARES

[LOGO OF NAVIGATION TECHNOLOGIES]

COMMON STOCK

-------------------

PROSPECTUS
, 1996

-------------------

LEHMAN BROTHERS

COWEN & COMPANY

SALOMON BROTHERS
INTERNATIONAL LIMITED

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Registrant in
connection with the sale of Common Stock being registered. All amounts are
estimates except the registration fee and the NASD filing fee.

<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
Registration Fee.............................................. $ 66,621
NASD Filing Fee............................................... 19,820
Nasdaq National Market Listing Fee............................ 50,000
Printing and Engraving........................................ 175,000
Legal Fees and Expenses....................................... 950,000
Accounting Fees and Expenses.................................. 250,000
Blue Sky Fees and Expenses.................................... 15,000
Transfer Agent Fees........................................... 10,000
Officers' and Directors' Liability Insurance.................. 300,000
Miscellaneous................................................. 163,559
----------
Total....................................................... $2,000,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Pursuant to Section 102(b)(7) of the Delaware General Corporation Law (the
"DGCL"), Article X of the Company's Restated Certificate of Incorporation (the
"Restated Certificate of Incorporation") (filed as Exhibit 3.1 to this
Registration Statement) eliminates the liability of the Company's directors to
the Company or its stockholders, except for liabilities related to breach of
duty of loyalty, actions not in good faith and certain other liabilities.

Section 145 of the DGCL provides for indemnification by the Company of its
directors and officers. In addition, Article VI of the Company's Bylaws (filed
as Exhibit 3.2 to this Registration Statement) requires the Company to
indemnify any current or former director or officer to the fullest extent
permitted by the DGCL. In addition, the Company has entered into indemnity
agreements with its directors and executive officers (a form of which is filed
as Exhibit 10.1 to this Registration Statement) that obligate the Company to
indemnify such directors and executive officers to the fullest extent
permitted by the DGCL. The Company also maintains officers' and directors'
liability insurance, which insures against liabilities that officers and
directors of the Company may incur in such capacities.

Reference is made to the forms of Underwriting Agreements filed as Exhibit
1.1 and Exhibit 1.2 to this Registration Statement, which provide for
indemnification of the directors and officers of the Company signing the
Registration Statement and certain controlling persons of the Company against
certain liabilities, including those arising under the Securities Act of 1933,
as amended (the "Securities Act"), in certain instances by the U.S.
Underwriters and the International Managers.

II-1
<PAGE>

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

(a) Since June 1, 1993, the Registrant has issued and sold the following
securities (as adjusted to reflect the Registrant's one-for-twelve reverse
stock split to be effected prior to the Offerings):

(i) The Registrant issued and sold an aggregate of 132,000 shares of
Common Stock to employees and consultants for an aggregate price of
approximately $342,000 pursuant to exercises of options under its 1988
Stock Option Plan.

(ii) On December 31, 1993, the Registrant issued an aggregate of
7,841,000 shares of Common Stock to a total of 207 stockholders upon
conversion of all then-outstanding Preferred Stock.

(iii) In February and March 1994, the Registrant issued and sold an
aggregate of 1,132,000 shares of Common Stock to a total of 91 investors
for aggregate cash consideration of approximately $5,433,000 and
convertible debentures in the aggregate principal and accrued interest in
the amount of approximately $3,774,000, which debentures, together with
accrued interest, converted into an aggregate of 179,000 shares of
Convertible Preferred Stock and 191,000 shares of Common Stock on September
2, 1994.

(iv) In September 1994, the Registrant issued and sold 7,843,000 shares
of Preferred Stock to an accredited investor at a price of $10.20 per share
that was paid in installments with interest through November 1995. At the
same time, the Registrant issued 2,445,000 shares of Preferred Stock at an
effective price of $10.20 per share to such investor in exchange for shares
of and notes payable by NavTech Europe held by such investor.

(v) On September 30, 1994, the Registrant issued 57,000 shares of
Preferred Stock and 468,000 shares of Common Stock to a total of 18
accredited investors for aggregate cash consideration in the amount of
$5,354,000.

(vi) Pursuant to the Registrant's acquisition of NavTech Europe in 1994
and an exchange rate in accordance with that transaction, since December
1994, an aggregate of 1,004,000 shares of Common Stock have been deemed
issued to a total of five investors in exchange for their minority holdings
in such subsidiary valued at $10,240,800.

(vii) In June 1996, the Registrant issued to a total of 20 accredited
investors shares of Preferred Stock that will be converted into 2,887,000
shares of Common Stock upon the closing of the Offerings for aggregate cash
consideration in the amount of $19,000,000 and conversion of debt in the
amount of $11,021,000. The number of such shares of Preferred Stock issued
was determined with reference to an assumed initial public offering price
of $13.00 per share of Common Stock and is subject to adjustment based on
the actual initial public offering price.

(viii) Concurrently with the closing of the Offerings, the Registrant
will issue an aggregate of 6,227,000 shares of Common Stock to a total of
28 persons in connection with the acquisition of SEI.

(ix) Concurrently with the closing of the Offerings, the Registrant will
issue an aggregate of 1,074,000 shares of Common Stock to two accredited
investors for aggregate cash consideration in the amount of $13,055,000
(3,520,000 shares for $42,782,000 if the U.S. Underwriters' and
International Managers' over-allotment options are exercised in full and if
Philips exercises its option in full to purchase additional shares upon
exercise of such over-allotment options).

The issuances described in Items 15(a)(i) were deemed exempt from
registration under the Securities Act in reliance upon Rule 701. The issuances
described in Items 15(a)(iv), (v), (vii) and (viii) were deemed exempt from
registration under the Securities Act in reliance upon Rule 506 of Regulation
D. The issuances described in Item 15(a)(ii) were deemed exempt from
registration under the Securities Act in reliance upon Section 3(a)(9)
thereof. The issuances described in Items 15(a)(iii), (vi) and (ix) were
deemed exempt from registration under the Securities Act in reliance upon
Section 4(2) thereof. In addition, the recipients of securities in the
transactions described in Items 15(a)(ii)-(ix) represented their intentions to
acquire the securities for investment only and not with a view to or for sale
in connection with any distribution thereof and appropriate legends were
affixed to the share certificates and warrants issued in such transactions.
All recipients had adequate access, through their relationships with the
Registrant, to information about the Registrant.

II-2
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

1.1* Form of U.S. Underwriting Agreement.

1.2* Form of International Underwriting Agreement.

3.1+ Certificate of Incorporation of the Registrant, as amended.

3.2+ Form of Certificate of Amendment of Certificate of Incorporation of the
Registrant to be adopted prior to the closing.

3.3+ Form of Amended and Restated Certificate of Incorporation to be filed
upon the closing.

3.4+ Bylaws of the Registrant.

3.5+ Form of Amended and Restated Bylaws of the Registrant to be effective
upon the closing.

4.1* Form of the Registrant's Common Stock Certificate.

5.1* Opinion of Wilson Sonsini Goodrich & Rosati, P.C. regarding legality of
the securities being issued.

10.1+ Form of Indemnification Agreement Entered into with the Registrant's
officers and directors.

10.2 1988 Stock Option Plan and related agreements.

10.3 1996 Stock Option Plan and related agreements.

10.4+ 1996 Stock Option Plan for Netherlands Employees and related agreements.

10.5+ 1996 Stock Option Plan for French Employees and related agreements.

10.6+ SEI 1996 Stock Option Plan and related agreements.

10.7+ Investor Rights Agreement dated as of September 1, 1994.

10.8+ Stock Purchase Agreement dated as of September 1, 1994.

10.9+ Stock Purchase Agreement dated as of June 24, 1996.

10.10+ Supplementary Purchase Agreement dated as of September 1, 1994.

10.11+ Employment Agreement between the Registrant and T. Russell Shields
dated June 24, 1996.

10.12+ Employment Agreement between the Registrant and Ronald Brumback dated
April 18, 1996.

10.13+ Lease Agreement between the Registrant and the Bianchi Joint Venture,
dated October 1991, as amended March 24, 1995, relating to the premises
at 740 E. Arques Avenue, Sunnyvale, CA.

10.14+ Lease Agreement between Shields Enterprises, Inc. and First Bank
System, Inc. dated June 1, 1994 relating to the premises at Dakota
Center, 51 Broadway, Fargo, ND.

10.15+ Lease Agreement between Planoform Vastgard B.V. and European Geographic
Technologies B.V. relating to the premises at De Waal 15, 56884 PH
Best, The Netherlands.

10.16+ Agreement and Plan of Reorganization among the Registrant, Shields
Enterprises, Inc., NT Acquisitions Corp. and T. Russell Shields, dated
June 24, 1996.

10.17+ Agreement between Shields Enterprises, Inc. and Fidelis N. Umeh, dated
June 21, 1996.

10.18+ Principal Shareholder Agreement dated June 24, 1996.

10.19+ Agreement and Plan of Merger between NT Acquisitions Corp. and Shields
Enterprises, Inc. dated June 24, 1996.

10.20 Amendment No. 1, dated as of July 23, 1996, to Stock Purchase Agreement,
dated as of June 24, 1996.

11.1 Statement of computation of net loss per share.

16.1+ Letter from predecessor auditor regarding change in the certifying
accountant of the Registrant, dated July 12, 1996.

21.1 Subsidiaries of the Registrant.

23.1* Consent of Wilson Sonsini Goodrich & Rosati, P.C. (included in Exhibit
5.1).

23.2 Consent of KPMG Peat Marwick LLP.

24.1+ Power of Attorney.

27.1 Financial Data Schedule.
- --------
+ Previously filed
* To be filed by amendment.

(b) Financial Statement Schedules

Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the
financial statements or notes thereto.

II-3
<PAGE>

ITEM 17. UNDERTAKINGS

The undersigned hereby undertakes to provide to the U.S. Underwriters and
the International Managers at the closing specified in the U.S. Underwriting
Agreement and the International Underwriting Agreement, respectively,
certificates in such denominations and registered in such names as required by
the U.S. Underwriters and the International Managers, respectively, to permit
prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions referenced in Item 14 of this Registration
Statement or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered
hereunder, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.

The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Sunnyvale, State of California, on this 21st day of August, 1996.

NAVIGATION TECHNOLOGIES CORPORATION

/s/ Thomas A. Lerone
By:
---------------------------------------

Thomas A. Lerone, Vice President,
Finance and Administration and Chief
Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed on the 21st day of August, 1996 by
the following persons in the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ T. Russell Shields* Chairman of the Board and Chief
- ------------------------------------ Executive Officer (Principal
T. Russell Shields Executive Officer)

/s/ Ronald A. Brumback* President, Chief Operating
- ------------------------------------ Officer and Director
Ronald A. Brumback

/s/ Thomas A. Lerone Vice President, Finance and
- ------------------------------------ Administration and Chief
Thomas A. Lerone Financial Officer (Principal
Financial and Accounting
Officer)
</TABLE>

II-5
<PAGE>

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----

<S> <C>
/s/ Richard de Lange* Director
- ------------------------------------
Richard de Lange

/s/ Richard J. Weiland* Director
- ------------------------------------
Richard J. Weiland

/s/ William Curran* Director
- ------------------------------------
William Curran

/s/ Michael S. Hasley* Director
- ------------------------------------
Michael S. Hasley

/s/ Shinichi Komeda* Director
- ------------------------------------
Shinichi Komeda

/s/ Stephen C. Tumminello* Director
- ------------------------------------
Stephen C. Tumminello

/s/ Dr. Klaus Volkholz* Director
- ------------------------------------
Dr. Klaus Volkholz
</TABLE>

/s/ Thomas A. Lerone

*By:
----------------------

Thomas A. Lerone
(Attorney-in-Fact)

II-6
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
------- ----------- ----------
<C> <S> <C>
10.2 1988 Stock Option Plan and related agreements.
10.3 1996 Stock Option Plan and related agreements.
10.20 Amendment No. 1, dated as of July 23, 1996, to Stock
Purchase Agreement, dated as of June 24, 1996.
11.1 Statement of computation of net loss per share.
21.1 Subsidiaries of the Registrant
23.2 Consent of KPMG Peat Marwick LLP.
27.1 Financial Data Schedule.
</TABLE>

<PAGE>

EXHIBIT 10.2
NAVIGATION TECHNOLOGIES CORPORATION

1988 STOCK OPTION PLAN

Adopted December 18, 1987
Amended April 2, 1990
Amended December 13, 1993
Amended July 7, 1994
Amended September 29, 1994
Amended November 30, 1994
Amended June 17, 1996

1. PURPOSE
-------
(a) The purpose of the Plan is to provide a means by which selected
employees, consultants, officers and directors (if declared eligible under
paragraph 4) of Navigation Technologies Corporation, a Delaware Corporation (the
"Company"), and its Affiliates, as defined in subparagraph 1(b), may be given an
opportunity to purchase stock of the Company.

(b) The word "Affiliate" as used in the Plan means any parent corporation
or subsidiary corporation of the Company, as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
from time to time (the "Code").

(c) The Company, by means of the Plan, seeks to retain the services of
persons now employed by or serving as employees, consultants, officers,
directors or other service providers to the Company, to secure and retain the
services of persons capable of filling such positions, and to provide incentives
for such persons to exert maximum efforts for the success of the Company.

(d) The Company intends that the options issued under the Plan shall, in
the discretion of the Board of Directors of the Company (the "Board") or any
committee to which responsibility for administration of the Plan has been
delegated pursuant to subparagraph 2(c), be either incentive stock options as
that term is used in Section 422 of the Code ("Incentive Stock Options"), or
options which
<PAGE>

do not qualify as incentive stock options ("Supplemental Stock Options"). All
options shall be separately designated Incentive Stock Options or Supplemental
Stock Options at the time of grant, and in such form as issued pursuant to
paragraph 5, and a separate certificate or certificates shall be issued for
shares purchased on exercise of each type of option. An option designated as a
Supplemental Stock Option shall not be treated as an incentive stock option.

2. ADMINISTRATION
--------------

(a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a committee, as provided in subparagraph 2(c).
Whether or not the Board has delegated administration, the Board shall have the
final power to determine all questions of policy and expediency that may arise
in the administration of the Plan.

(b) The Board shall have the power, subject to, and within the
limitations of the express provisions of the Plan:

(i) To determine from time to time which of the persons eligible
under the Plan shall be granted options; when and how the option shall be
granted; whether the option will be an Incentive Stock Option or a Supplemental
Stock Option; the provisions of each option granted (which need not be
identical), including the time or times during the term of each option within
which all or portions of such option may be exercised; and the number of shares
for which an option shall be granted to each person.

(ii) To construe and interpret the Plan and options granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.

-2-
<PAGE>

(iii) To amend the Plan as provided in paragraph 10.

(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of which Committee shall be disinterested persons, if required and as defined by
the provisions of subparagraph 2(d). If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board, subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, as may be
adopted from time to time by the Board. The Board may abolish the Committee at
any time and revest in the Board the administration of the Plan. Additionally,
prior to the date of the first registration of an equity security of the Company
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and notwithstanding anything to the contrary contained herein,
the Board may expressly determine that the requirement that the Committee be
composed of two (2) members be waived and may delegate administration of the
Plan to any person or persons and the term "Committee" shall apply to any person
or persons to whom such authority has been delegated.

(d) The term "disinterested person," as used in this Plan, shall mean an
administrator of the Plan, whether a member of the Board or of any Committee
to which responsibility for administration of the Plan has been delegated
pursuant to subparagraph 2(c): (i) who is not at the time he or she exercises
discretion in administering the Plan eligible and has not at any time within one
year prior thereto been eligible for selection as a person to whom stock may be
allocated or to whom stock options or stock appreciation rights may be granted
pursuant to the Plan or any other plan of the Company or any of its affiliates
entitling the participants therein to acquire stock, stock options or stock
appreciation rights of the Company or any of its affiliates; or (ii) who is
otherwise considered to be a "disinterested person" in

-3-
<PAGE>

accordance with the rules, regulations or interpretations of the
Securities and Exchange Commission. Any such person shall otherwise comply with
the requirements of Rule 16b-3 promulgated under the Exchange Act.

(e) Any requirement that an administrator of the Plan be a "disinterested
person" shall not apply prior to the date of the first registration of an equity
security of the Company under Section 12 of the Exchange Act.

3. SHARES SUBJECT TO THE PLAN
--------------------------

(a) Subject to the provisions of paragraph 9 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to options granted under
the Plan shall not exceed in the aggregate Thirty-Five Million Seven Hundred
Thousand (35,700,000) shares of the Company's common stock. If any options
granted under the Plan shall for any reason expire or otherwise terminate
without having been exercised in full, the stock not purchased under such option
shall again become available for the Plan.

(b) The stock subject to the Plan may be unissued shares or reacquired
shares bought on the market or otherwise.

(c) An Incentive Stock Option may be granted to an eligible person under
the Plan only if the aggregate fair market value (determined at the time the
option is granted) of the stock with respect to which incentive stock options
(as defined in the Code) granted after 1986 are exercisable for the first time
by such optionee during any calendar year under all incentive stock option plans
of the Company and its Affiliates does not exceed One Hundred Thousand Dollars
($100,000). Should it be determined that an option granted under the Plan
exceeds such maximum for any reason other than the failure of a good faith
attempt to value the stock subject to the option, such option shall be
considered a Supplemental Stock Option to the extent, but only to the extent, of
such excess; provided, however, that should it be

-4-
<PAGE>

determined that an entire option or any portion thereof does not qualify for
treatment as an incentive stock option by reason of exceeding such maximum, such
option or the applicable portion shall be considered a Supplemental Stock
Option.

4. ELIGIBILITY
-----------

(a) Incentive Stock Options may be granted only to employees (including
officers) of the Company or its Affiliates. A director of the Company shall not
be eligible to receive Incentive Stock Options unless such director is also an
employee (including an officer) of the Company or any Affiliate. Supplemental
Stock Options may be granted only to employees, consultants, officers,
directors, or other service providers to the Company or its Affiliates.

(b) Subject to the limitations contained elsewhere herein, no director of
the Company who is not an employee of the Company or an Affiliate may be
granted options to purchase more than one-half of one percent (0.5%) of the
capital stock of the Company over any five-year period; and no director of the
Company who is an employee of the Company or any Affiliate may be granted
options to purchase more than five percent (5%) of the outstanding capital stock
of the Company over any five-year period. The Board shall otherwise comply with
the requirements of Rule 16b-3 promulgated under the Exchange Act, as from time
to time in effect. This subparagraph 4(b) shall not apply prior to the date of
the first registration of an equity security of the Company under Section 12 of
the Exchange Act.

(c) No person shall be eligible for the grant of an option under the Plan
if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates unless the exercise price of such option is at least one hundred
ten percent (110%)

-5-
<PAGE>

of the fair market value of such stock at the date of grant and the term of the
option does not exceed five (5) years from the date of grant.

5. OPTION PROVISIONS
-----------------

Each option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The provisions
of separate options need not be identical, but each option shall include
(through incorporation of provisions hereof by reference in the option or
otherwise) the substance of each of the following provisions:

(a) The term of any option shall not be greater than ten (10) years from
the date it was granted.

(b) The exercise price of each Incentive Stock Option shall be not less
than one hundred percent (100%) of the fair market value of the stock subject to
the option on the date the option is granted. The exercise price of each
Supplemental Stock Option shall be not less than eighty-five percent (85%) of
the fair market value of the stock subject to the option on the date the option
is granted.

(c) The purchase price of stock acquired pursuant to an option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i)
in cash at the time the option is exercised, or (ii) at the discretion of the
Board or the Committee, either at the time of the grant or exercise of the
option, (A) by delivery to the Company of other common stock of the Company, (B)
according to a deferred payment or other arrangement (which may include, without
limiting the generality of the foregoing, the use of other common stock of the
Company) with the person to whom the option is granted or to whom the option is
transferred pursuant to subparagraph 5(d), or (C) in any other form of legal
consideration that may be acceptable to the Board or the Committee.

-6-
<PAGE>

Notwithstanding the foregoing, an option may not be exercised by tender to
the Company of shares of the Company's stock to the extent such tender of stock
would constitute a violation of the provisions of any law, regulation and/or
agreement restricting the redemption of the Company's stock. Furthermore, no
promissory note shall be permitted if an exercise using a promissory note would
be a violation of any law.

In the case of any deferred payment arrangement, interest shall be payable
at least annually and shall be charged at the minimum rate of interest necessary
to avoid the treatment as interest, under any applicable provisions of the Code,
of any amounts other than amounts stated to be interest under the deferred
payment arrangement. The Board or Committee shall have the authority to permit
or require the optionee to secure any promissory note used to exercise an option
with the shares of stock acquired on exercise of the option and/or with other
collateral acceptable to the Company.

Unless otherwise provided by the Board or the Committee, in the event the
Company at any time is subject to the regulations promulgated by the Board of
Governors of the Federal Reserve System or any other governmental entity
affecting the extension of credit in connection with the Company's securities,
any promissory note shall comply with such applicable regulations, and the
optionee shall pay the unpaid principal and accrued interest, if any, to the
extent necessary to comply with such applicable regulations.

(d) An option shall not be transferable except by will or by the laws of
descent and distribution, and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person.

(e) The total number of shares of stock subject to an option may, but need
not, be allotted in periodic installments (which may, but need not, be equal).
From time to time during each of such

-7-
<PAGE>

installment periods, the option may become exercisable ("vest") with respect to
some or all of the shares allotted to that period, and may be exercised with
respect to some or all of the shares allotted to such period and/or any prior
period as to which the option was not fully exercised. During the remainder of
the term of the option (if its term extends beyond the end of the installment
periods), the option may be exercised from time to time with respect to any
shares then remaining subject to the option. The vesting provisions of
individual options may vary but in each case will provide for vesting of at
least twenty percent (20%) per year of the total number of shares subject to the
option. The provisions of this subparagraph 5(e) are subject to any option
provisions governing the minimum number of shares as to which an option may be
exercised.

(f) The Company may require any optionee, or any person to whom an option
is transferred under subparagraph 5(d), as a condition of exercising any such
option, (1) to give written assurances satisfactory to the Company as to the
optionee's knowledge and experience in financial and business matters and/or to
employ a purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters, and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the option; and (2) to give
written assurances satisfactory to the Company stating that such person is
acquiring the stock subject to the option for such person's own account and not
with any present intention of selling or otherwise distributing the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then currently effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
or (ii) as to any particular requirement, a determination is made by the

-8-
<PAGE>

Company that such requirement need not be met in the circumstances under the
then applicable securities laws.

(g) An option shall terminate three (3) months after termination of the
optionee's employment or relationship as a director or consultant with the
Company or an Affiliate, unless (i) termination is due to such person's
disability, in which case the option may be exercised within one (1) year
following such termination of employment or relationship as a director or
consultant (or such longer or shorter period, which in no event shall be less
than six (6) months, specified in the option); or (ii) the optionee dies while
in the employ of or while serving as a director or consultant to the Company or
an Affiliate, or not more than three (3) months after termination of such
relationship, in which case the option may be exercised within eighteen (18)
months following the death of the optionee (or such longer or shorter period,
which in no event shall be less than six (6) months, specified in the option) by
the person or persons to whom the optionee's rights under such option pass by
will or by the laws of descent and distribution; or (iii) the optionee commits
an act of Misconduct (defined in subparagraph 5(h) below), in which case the
option shall immediately terminate as of and at the time of such act, and the
shares covered by the unexercised portion of such option shall revert to the
Plan, or if this option has been exercised subsequent to such Misconduct and the
optionee has received shares of the Company's common stock, the Company may,
within ninety (90) days after the Board or the Company's chief executive officer
has knowledge of the act of Misconduct, (A) rescind such exercise and recover
such shares issued to optionee upon returning to optionee the exercise price for
such shares or (B) if the optionee has sold such shares, recover from optionee
the net proceeds from the sale of such shares less the exercise price and plus
interest on such difference at 8% per annum from the exercise date to the date
such difference is paid by optionee to the Company; or (iv) the option by its
terms specifies either (A) that it shall terminate sooner than three (3)

-9-
<PAGE>

months after termination of the optionee's employment or relationship as a
director or consultant, but, except as stated above in subparagraph 5(g)(iii),
no less than thirty (30) days thereafter, or (B) that it may be exercised more
than three (3) months after termination of such relationship with the Company or
an Affiliate. This subparagraph 5(g) shall not be construed to extend the term
of any option or to permit anyone to exercise the option after expiration of its
term, nor shall it be construed to increase the number of shares as to which any
option is exercisable from the amount exercisable on the date of termination of
the optionee's employment or relationship as a director or consultant.

(h) "Misconduct" means the commission of any act affecting employment
----------
which involves (1) dishonesty, fraud or criminal conduct by optionee, (2)
optionee's knowing and willful violation of a material Company written policy or
a lawful direction by an authorized executive officer or the Board, (3)
optionee's engaging in any activity in competition with the Company or its
Affiliates in a material manner (excluding a less than 5% investment in any
public company), or (4) optionee's knowing unauthorized disclosure of
confidential material, proprietary information or trade secrets of the Company.

(i) The option may, but need not, include a provision whereby the optionee
may elect at any time during the term of his or her employment or relationship
as a director or consultant with the Company or any Affiliate to exercise the
option as to any part or all of the shares subject to the option prior to the
stated vesting date of the option or of any installment or installments
specified in the option. Any shares so purchased from any unvested installment
or option may be subject to a repurchase right in favor of the Company, with the
repurchase price to be equal to the original purchase price of the stock, or to
any other restriction the Board or the Committee determines to be appropriate;
provided, however, that (i) the right to repurchase at the original purchase
- -----------------
price shall lapse at a minimum rate of twenty percent (20%) per year over five
(5) years from the date the option was granted, and (ii) such right shall

-10-
<PAGE>

be exercisable only within (A) the ninety (90) day period following the
termination of employment or the relationship as a director or consultant, or
(B) such longer period as may be agreed to by the Company and the optionee (for
example, for purposes of satisfying the requirements of Section 1202(c)(3) of
the Code (regarding "qualified small business stock")), and (iii) such right
shall be exercisable only for cash or cancellation of purchase money
indebtedness for the shares. Should the right of repurchase be assigned by the
Company, the assignee shall pay the Company cash equal to the difference between
the original purchase price and the stock's fair market value if the original
purchase price is less than the stock's fair market value.

(j) The option may, but need not, include a provision whereby any tax
withholding obligation of the Company, whether federal, state or local arising
by reason of the exercise of an option, the lapse of a substantial risk of
forfeiture with respect to shares acquired upon such exercise, or the
disposition of shares acquired upon such exercise may be satisfied by the
retention by the Company of shares otherwise issuable by reason of the exercise
of the option.

(k) Options granted to directors of the Company (i) must be granted at or
above the fair market price of the underlying stock on the date of grant; (ii)
shall not be exercisable for at least one year following the date of grant; and
(iii) shall only be exercised during the period commencing with the third
business day and ending on the eighteenth business day following the Company's
release of quarterly or annual financial information; provided, however, that
such restriction on exercise shall not apply (A) after a person ceases to be a
director of the Company or an affiliate or (B) in the event of a change
in control of the Company. The provisions of this subparagraph 5(k) shall not
apply prior to the date of the first registration of an equity security of the
Company under Section 12 of the Exchange Act.

-11-
<PAGE>

(l) The option may, but need not, include a provision granting the Company
the right to purchase any options and/or shares issued upon exercise of options
proposed to be sold or otherwise transferred by an optionee.

6. COVENANTS OF THE COMPANY
------------------------
(a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.

(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan or any stock issued or issuable pursuant to any such option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such options unless and until such authority is obtained.

7. USE OF PROCEEDS FROM STOCK
--------------------------
Proceeds from the sale of stock pursuant to options granted under the Plan
shall constitute general funds of the Company.

-12-
<PAGE>

8. MISCELLANEOUS
-------------

(a) Neither an optionee nor any person to whom an option is transferred
under subparagraph 5(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.

(b) Throughout the term of any option granted pursuant to the Plan, the
Company shall deliver to the holder of such option, not later than one hundred
twenty (120) days after the close of each of the Company's fiscal years during
the option term, upon request, such financial and other information regarding
the Company as comprises the annual report to the stockholders of the Company
provided for in the bylaws of the Company.

(c) Nothing in the Plan or any instrument executed or option granted
pursuant thereto shall confer upon any eligible employee or optionee any right
to continue in the employ of the Company or any Affiliate (or to continue acting
as a consultant or director) or shall affect the right of the Company or any
Affiliate to terminate the employment or directorship of any eligible employee
or optionee with or without cause.

(d) The Board or the Committee shall have the authority to effect, at any
time and from time to time (i) the repricing of any outstanding Options under
the Plan and/or (ii) with the consent of the affected holders of options, the
cancellation of any outstanding options and the grant in substitution therefor
of new options under the Plan covering the same or different numbers of shares
of common stock, but having an exercise price per share not less than eighty-
five percent (85%) of the fair market value (one hundred percent (100%) of the
fair market value in the case of an Incentive Stock Option or,

-13-
<PAGE>

in the case of a ten percent (10%) stockholder (as defined in subsection 4(c)),
not less than one hundred and ten percent (110%) of the fair market value) per
share of Common Stock on the new grant date.

9. ADJUSTMENTS UPON CHANGES IN STOCK
---------------------------------

(a) If any change is made in the stock subject to the Plan, or subject to
any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
options will be appropriately adjusted in the class(e's) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding options.

(b) In the event of: (1) a merger or consolidation in which the Company is
not the surviving corporation; or (2) a reverse merger in which the Company is
the surviving corporation but the shares of the Company's common stock
outstanding immediately preceding the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or otherwise
then to the extent permitted by applicable law: (i) any surviving corporation
shall assume any options outstanding under the Plan or shall substitute similar
options for those outstanding under the Plan, or (ii) such options shall
continue in full force and effect. In the event any surviving corporation
refuses to assume or continue such options, or to substitute similar options for
those outstanding under the Plan, then, such options shall be terminated if not
exercised prior to such event. In the event of a dissolution or liquidation of
the Company, any options outstanding under the plan shall terminate if not
exercised prior to such event.

10. AMENDMENT OF THE PLAN
---------------------

(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon changes
in stock, no amendment shall be effective

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<PAGE>

unless approved by the vote or written consent of the holders of the outstanding
shares of the company entitled to vote, to the degree necessary under applicable
laws to obtain incentive stock option treatment under Section 422 of the Code,
within twelve (12) months before or after the adoption of the amendment, where
the amendment will:

(i) Increase the number of shares reserved for options under the
Plan;
(ii) Modify the requirements as to eligibility for participation in
the Plan; or

(iii) Materially increase the benefits accruing to participants under
the Plan.

(b) It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee incentive stock
options and/or to bring the Plan and/or incentive stock options granted under it
into compliance therewith.

(c) Rights and obligations under any option granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan unless
(i) the Company requests the consent of the person to whom the option was
granted and (ii) such person consents in writing.

11. ARBITRATION
-----------

Each stock option agreement shall contain a provision submitting to
arbitration all claims, disputes, or controversies arising out of, relating to,
or in connection with such stock option agreement.

12. TERMINATION OR SUSPENSION OF THE PLAN
-------------------------------------

(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate ten (10) years from the date the
Plan is adopted by the Board or approved by the

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<PAGE>

stockholders of the Company, whichever is earlier. No options may be granted
under the Plan while the Plan is suspended or after it is terminated.

(b) Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.

13. EFFECTIVE DATE OF PLAN
----------------------

The Plan shall become effective as determined by the Board, but no options
granted under the Plan shall be exercised unless and until the Plan has been
approved by the vote of the holders of a majority of the outstanding shares of
the Company entitled to vote, or by the written consent of the holders of the
outstanding shares of the Company entitled to vote to the extent necessary under
applicable laws to obtain incentive stock option treatment under Section 422 of
the Code, and if required, an appropriate permit has been issued by the
Commissioner of Corporations of the State of California.

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<PAGE>

IT IS UNLAWFUL TO CONSUMMATE A SALE
OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY
CONSIDERATION THEREFOR, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE
COMMISSIONER OF CORPORATIONS OF
THE STATE OF CALIFORNIA, EXCEPT AS
PERMITTED IN THE COMMISSIONER'S
RULES.

INCENTIVE STOCK OPTION

Optionee:

Navigation Technologies Corporation (the "Company"), pursuant to its 1988
Stock Option Plan (the "Plan") has this day granted to you, the optionee named
above, an option to purchase shares of the common stock of the company ("Common
Stock"). This option is intended to qualify as an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended from time to time (the "Code").

The details of your options are as follows:

1. The total number of shares of Common Stock subject to this option is
[__________]. Subject to the limitations contained herein, six forty-eighths
(6/48ths) of the Common Stock subject to this option shall vest on January 1,
1997 and one forty-eighth (1/48th) of this option shall vest on the first day of
each month thereafter, rounded down to the nearest whole share. All or part of
the vested portion of this option may be exercised at any time subject to the
limitations set forth on sections 3 and 5 hereof.

2. (a) The exercise price of this option is [_______________] per
share, being not less than fair market value of the common Stock on the date of
grant of this option.

(b) Payment of the exercise price per share is due in full in cash
upon exercise of all or any part of each installment which has become
exercisable by you.

3. The minimum number of shares with respect to which this option may be
exercised at any one time is one hundred (100), except (a) as to an installment
subject to exercise, as set forth in paragraph 1, which amounts to fewer than
one hundred (100) shares, in which case, as to the exercise of that installment,
the number of shares in such installment shall be the minimum number of shares,
and (b) with respect to the final exercise of this option this paragraph 3 shall
not apply.
<PAGE>

4. Notwithstanding anything to the contrary contained herein, this option
may not be exercised unless the shares issuable upon exercise of this option are
then registered under the Securities Act of 1933, as amended (the "Act"), or, if
such shares are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Act.

5. The term of this option commences on the date hereof and, unless
sooner terminated as set forth below or in the Plan, terminates on
[________________] (which date shall be no more than ten (10) years from the
date this option is granted). This option shall terminate prior to the
expiration of its term three (3) months after the termination of your employment
with the Company or an affiliate of the Company (as defined in the Plan) for any
reason or for no reason unless (a) such termination of employment is due to your
voluntary termination, in which event the option shall terminate thirty (30)
days after the termination of your employment with the Company; or (b) such
termination of employment is due to your permanent and total disability (within
the meaning of Section 22(e)(3) of the Code), in which event the option shall
terminate on the earlier of the termination date set forth above or one (1) year
following such termination of employment; or (c) such termination of employment
is due to your death, in which event the option shall terminate on the earlier
of the termination date set forth above or eighteen (18) months after your
death; or (d) optionee commits an act of Misconduct (as defined in the Plan), in
which case the option shall terminate immediately as of and at the time of such
act of Misconduct and the shares covered by such option shall revert to the Plan
or if the option has been exercised subsequent to such Misconduct, the Company
may, within ninety (90) days after the Board or the Company's chief executive
officer has knowledge of the act of Misconduct, (A) rescind such exercise and
recover the shares issued to optionee upon returning to optionee the exercise
price for such shares or (B) if optionee has already disposed of such shares,
recover from optionee the net proceeds from the sale of such shares less the
exercise price and including interest on the difference between the sales
proceeds and the exercise price at a rate of eight percent (8%) per annum from
the exercise date until the date such difference is paid by optionee to the
Company, or (e) during any part of such three (3) month period or lesser
applicable period provided above the option is not exercisable solely because of
the condition set forth in paragraph 4 above, in which event the option shall
not terminate, except as provided in (d) above, until the earlier of the
termination date set forth above or until it shall have been exercisable for an
aggregate period of three (3) months or such lesser applicable period after the
termination of employment; or (f) exercise of the option within three (3) months
or a lesser applicable period after termination of your employment with the
Company or with an affiliate would result in liability under section 16(b) of
the Securities Exchange Act of 1934, in which case, unless (d) above is
applicable, the option will terminate on the earlier of (i) the tenth (10th) day
after the last date upon which exercise would result in such liability or (ii)
six (6) months and ten (10) days after the termination of your employment with
the Company or an affiliate. However this option may be exercised following
termination of employment only as to that number of shares as to which it was
exercisable on the date of termination of employment under the provisions of
paragraph 1 of this option.

-2-
<PAGE>

6. (a) This option may be exercised, to the extent specified above, by
delivering a notice of exercise together with the exercise price to the
Secretary of the Company, or to such other person as the Company may designate,
during regular business hours, together with such additional documents as the
Company may then require pursuant to subparagraph 5(f) of the Plan.

(b) As a condition to the issuance of shares upon exercise of this
option the Company may require you to enter an arrangement providing for the
payment by you to the Company of any tax withholding obligation of the Company
arising by reason of your exercise of this option or the lapse of any
substantial risk of forfeiture to which the shares are subject at the time of
exercise. The form of payment shall be in cash or, with the consent of the
Company, in other common stock of the Company including shares otherwise
issuable by reason of the exercise of this option.

7. Lock-Up Period. Optionee hereby agrees that in connection with any
--------------
registration of the offering of any securities of the Company under the
Securities Act of 1933, as amended (the "Securities Act"), Optionee shall not
sell or otherwise transfer any shares of Common Stock during the 180-day period
(or such longer or shorter period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company) (the "Market Standoff
Period") following the effective date of a registration statement of the Company
filed under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.

8. This option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by you.

9. This option is not an employment contract and nothing in this option
shall be deemed to create in any way whatsoever any obligation on your part to
continue in the employ of the Company, or of the Company to continue your
employment with the Company.

10. Any notices provided for in this option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by the Company to you, five (5) days after deposit in the
United States mail, postage prepaid, addressed to you at the address specified
below or at such other address as you hereafter designate by written notice to
the Company.

11. This option is subject to all the provisions of the Plan, a copy of
which is attached hereto and its provisions are hereby made a part of this
option, including without limitation the provisions of paragraph 5 of the Plan
relating to option provisions, and is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to he Plan. In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the Plan
shall control.

-3-
<PAGE>

12. Optionee agrees that any claim, dispute or controversy arising out of,
relating to, or in connection with this stock option agreement shall be settled
by binding arbitration pursuant to the Commercial Arbitration Rules and the
Supplemental Procedures for Large, Complex Disputes of the American Arbitration
Association by one arbitrator appointed in accordance with said rules. The
arbitrator may grant injunctions or other relief in such dispute or controversy.
The decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the award of the
arbitration in any court having jurisdiction thereof.

(a) The arbitrator shall apply Delaware law to the merits of any
dispute or claim, without reference to rules of conflicts of law. The
arbitration proceedings shall be governed by federal arbitration law, without
reference to state arbitration law.

(b) The Company and optionee shall each pay one-half of the costs and
expenses of such arbitration, and each shall separately pay its counsel fees and
expenses.

(c) Optionee understands that nothing in this Section 11 modifies
optionee's at-will status. Either optionee or the Company can terminate the
employment relationship at any time, with or without cause.

13. All certificates representing any shares in the Company acquired upon
exercise of this Option shall be stamped or otherwise imprinted with legends in
the following forms (in addition to any legends required under any other
applicable Securities Laws):

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR ANY STATE OR OTHER GOVERNMENTAL SECURITIES LAWS. THEY MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER SAID ACT AND ANY OTHER APPLICABLE CORPORATION
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST
REFUSAL OPTION IN FAVOR OF THE CORPORATION AND

-4-
<PAGE>

ITS OTHER STOCKHOLDERS AS PROVIDED IN THE BYLAWS OF THE CORPORATION.

Dated the [_______________].

Very truly yours,

NAVIGATION TECHNOLOGIES CORPORATION

By
____________________________________________
Duly authorized on behalf of the
Board of Directors

The undersigned:

(a) Acknowledges receipt of a copy of Section 260.141.11 of Title 10 of the
California Administrative Code;

(b) Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and

(c) Acknowledges that as of the date of grant of this option, it sets forth
the entire understanding between the undersigned optionee and the Company and
its affiliates regarding the acquisition of stock in the Company and supersedes
all prior oral and written agreements on that subject with the exception of the
following agreements only: [if none, so state]

NONE

(d) OPTIONEE HAS READ AND UNDERSTANDS SECTION 11, WHICH DISCUSSES
ARBITRATION. OPTIONEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, OPTIONEE
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT TO BINDING ARBITRATION, AND THAT

-5-
<PAGE>

THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF OPTIONEE'S RIGHT TO A JURY TRIAL
AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THIS
RELATIONSHIP.

--------------------------------------------
Optionee

Address:
--------------------------------------------

--------------------------------------------

Attachments:

1988 Stock Option Plan
Regulation 260.141.11
Form of Exercise

-6-

<PAGE>

EXHIBIT 10.3
NAVIGATION TECHNOLOGIES CORPORATION

1996 STOCK OPTION PLAN

1. Purposes of the Plan. The purposes of this Stock Option Plan are to
--------------------
attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees and Consultants of
the Company and its Affiliates and to promote the success of the Company's
business. Options granted under the Plan shall be Supplemental Stock Options.

2. Definitions. As used herein, the following definitions shall apply:
-----------

(a) "Administrator" means the Board or any of its Committees
-------------
appointed pursuant to Section 4 of the Plan.

(b) "Affiliate" means any corporation or any other entity
---------
(including, but not limited to, partnerships and joint ventures) controlling,
controlled by or under common control with the Company.

(d) "Committee" means a Committee appointed by the Board of
---------
Directors in accordance with Section 4 of the Plan.

(e) "Common Stock" means the Common Stock of the Company.
------------

(f) "Company" means Navigation Technologies Corporation, a Delaware
-------
corporation.

(g) "Consultant" means any person who is engaged by the Company or
----------
any Affiliate to render consulting, advisory or other services and is
compensated for such services, and any director of the Company or any Affiliate
whether compensated for such services or not.

(h) "Employee" means any person, including officers and directors,
--------
employed by the Company or any Affiliate.

(i) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined in good faith by the Administrator.

(j) "Misconduct" means the commission of any act affecting employment
----------
which involves (1) dishonesty, fraud or criminal conduct by Optionee, (2)
Optionee's knowing and willful violation of a material Company written policy or
a lawful direction by an authorized executive officer or the Board, (3)
Optionee's engaging in any activity in competition with the Company or its
subsidiaries in a material manner (excluding a less than 5% investment in any
public company), or (4) Optionee's knowing unauthorized disclosure of
confidential material, proprietary information or trade secrets of the Company.
<PAGE>

(k) "Option" means a stock option granted pursuant to the Plan.
------

(l) "Optioned Stock" means the Common Stock subject to an Option.
--------------

(m) "Optionee" means an Employee or Consultant who receives an
--------
Option, or any person to whom such an Option is transferred.

(n) "Plan" means this 1996 Stock Option Plan.
----

(o) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 11 below.

(p) "Supplemental Stock Option" means an Option not intended to
-------------------------
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code.

3. Stock Subject to the Plan. Subject to the provisions of Section 11 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 5,000,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.

If an Option expires or becomes unexercisable without having been
exercised in full the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated).

4. Administration of the Plan. The Plan shall be administered by the
--------------------------
Board or a Committee appointed by the Board, which Committee shall be
constituted to satisfy the legal requirements, if any, relating to the
administration of stock option plans or the issuance of Shares upon exercise of
the Options ("Applicable Law"). Once appointed, such Committee shall serve in
its designated capacity until otherwise directed by the Board. The Board may
increase the size of the Committee and appoint additional members, remove
members (with or without cause) and substitute new members, fill vacancies
(however caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by Applicable Law.

(a) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:

(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(i) of the Plan;

(ii) to select the Consultants and Employees to whom Options
may from time to time be granted hereunder;

(iii) to determine whether and to what extent Options are
granted hereunder;

-2-
<PAGE>

(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;

(v) to approve forms of agreement for use under the Plan;

(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder. Such terms and
conditions may include, but are not limited to, the exercise price, the time or
times when Options may be exercised, any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option
or the Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

(vii) to determine whether and under what circumstances an
Option may be settled in cash under Section 9(c) instead of Common Stock;

(viii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option has declined since the date the Option was granted;

(ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

(x) to provide for the early exercise of Options for the
purchase of unvested Shares, subject to such terms and conditions as the
Administrator may determine; and

(xi) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan.

(b) Effect of Administrator's Decision. All decisions,
----------------------------------
determinations and interpretations of the Administrator shall be final and
binding on all Optionees.

5. Eligibility.
-----------

(a) Options may be granted to Employees and Consultants. An
Employee or Consultant who has been granted an Option may, if otherwise
eligible, be granted additional Options.

(b) The Plan shall not confer upon any Optionee any right with
respect to the continuation of the Optionee's employment or consulting
relationship with the Company, nor shall it interfere in any way with the
Optionee's right or the Company's right to terminate the Optionee's employment
or consulting relationship at any time, with or without cause.

6. Term of Plan. The Plan shall become effective upon its adoption by
------------
the Board of Directors. It shall continue in effect until terminated under
Section 13 of the Plan.

-3-
<PAGE>

7. Term of Option. The term of each Option shall be the term stated in
--------------
the Notice of Grant.

8. Option Exercise Price and Consideration. The per share exercise price
---------------------------------------
for the Shares to be issued pursuant to exercise of an Option shall be such
price as is determined by the Board. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator and may consist of any form of
consideration acceptable to the Administrator and permitted by Applicable Law.
In making its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.

9. Exercise of Option.
------------------

(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.

An Option may not be exercised for a fraction of a Share.

An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Until the issuance (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company) of the
stock certificate evidencing such Shares, no right to vote or receive dividends
or any other rights as a shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Company shall issue (or
cause to be issued) such stock certificate promptly upon exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.

Exercise of an Option in any manner shall result in a decrease
in the number of Shares which thereafter may be available, both for purposes of
the Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.

(b) Termination of Employment or Consulting Relationship. Upon
----------------------------------------------------
termination of an Optionee's status as an Employee or Consultant, the Optionee
may exercise his or her Option, only if and within such period of time as may be
specified in the Notice of Grant, and only to the extent that the Optionee was
entitled to exercise it at the date of termination (but in no event later than
the expiration of the term of such Option as set forth in the Notice of Grant).
To the extent that the Notice of Grant permits the Optionee to exercise his or
her Option after the termination of Optionee's employment or consulting
relationship, different periods of time may be specified in the Notice of Grant
for terminations resulting from death, Disability or any other reason specified
in the Notice of Grant. If, on the date of termination, the Optionee is not
entitled to exercise the Optionee's entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does

-4-
<PAGE>

not exercise his or her Option within the time, if any, specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan. Notwithstanding the above, if Optionee commits an act
of Misconduct, the Option shall immediately terminate as of and at the time of
such act of Misconduct, and the Shares covered by the unexercised portion of
such Option shall revert to the Plan, or if this Option has been exercised
subsequent to such Misconduct, the Company may within ninety (90) days after the
Board or the Company's chief executive officer has knowledge of the Misconduct,
at its option, either (i) rescind such exercise and recover the Shares issued to
Optionee upon returning to Optionee the exercise price for such Shares or (ii)
if Optionee has sold the Shares, recover from Optionee the net proceeds from the
sale of such Shares less such exercise price and plus interest on such
difference at 8% per annum from the exercise date to the date such difference is
paid by Optionee to the Company.

In the event of an Optionee's change in status from Consultant to
Employee or Employee to Consultant, the Optionee's status as an Employee or
Consultant shall not be considered terminated solely as a result of such change
in status.

(c) Buyout Provisions. The Administrator may at any time offer to
-----------------
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

10. Non-Transferability of Option. Unless otherwise specified by the
-----------------------------
Administrator in the Notice of Grant, this option may not be sold, pledged,
assigned hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent and distribution and may be exercised during the
lifetime of Optionee only by Optionee. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.

11. Adjustments Upon Changes in Capitalization or Merger.
----------------------------------------------------

(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such out standing Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.

-5-
<PAGE>

(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Optioned Stock covered thereby, including Shares as
to which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option shall lapse as to all such Shares,
provided the proposed dissolution or liquidation takes place at the time and in
the manner contemplated. To the extent it has not been previously exercised, an
Option will terminate immediately prior to the consum mation of such proposed
action.

(c) Merger or Asset Sale. In the event of a merger of the Company
--------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option shall be assumed or an equivalent option
substituted by the successor corporation or a parent or subsidiary of the
successor corporation. In the event that the successor corporation refuses to
assume or substitute for the Option, the Optionee shall have the right to
exercise the Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable. If an Option is exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee that the Option shall be fully
exercisable for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For the purposes
of this paragraph, the Option shall be considered assumed if, following the
merger or sale of assets, the option confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely common stock of the successor corporation or its parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

12. Time of Granting Options. The date of grant of an Option shall, for
------------------------
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to
whom an Option is so granted within a reasonable time after the date of such
grant.

13. Amendment and Termination of the Plan. The Board may at any time
-------------------------------------
amend, alter, suspend or discontinue the Plan, but no amendment, alteration,
suspension or discontinuation shall be made which would materially impair the
rights of any Optionee under any grant theretofore made, without his or her
written consent.

-6-
<PAGE>

14. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with
Applicable Law, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by
Applicable Law.

15. Reservation of Shares. The Company, during the term of this Plan,
---------------------
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.

16. Agreements. Options shall be evidenced by written agreements in such
----------
form as the Administrator shall approve from time to time.

17. Arbitration. Each stock option agreement shall contain a provision
-----------
submitting to arbitration all claims, disputes, or controversies arising out of,
relating to, or in connection with such stock option agreement.

-7-
<PAGE>

NAVIGATION TECHNOLOGIES CORPORATION
1996 STOCK OPTION PLAN
NOTICE OF GRANT

Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Notice of Grant.

[Optionee's Name and Address]
- -----------------------------

- -----------------------------

You have been granted a Supplemental Stock Option to purchase Common Stock
of the Company, subject to the terms and conditions of the Plan and this Stock
Option Agreement, as follows:

Grant Number ____________________

Date of Grant ____________________

Vesting Commencement Date July 1, 1996

Exercise Price per Share $0.85

Total Number of Shares Granted ____________________

Total Exercise Price $___________________

Term/Expiration Date: ____________________

Vesting Schedule:
----------------

This Option may be exercised, in whole or in part, in accordance with the
following schedule:

Six forty-eighths (6/48ths) of the Shares subject to this Option shall vest
six (6) months after the Vesting Commencement Date, and one forty-eighth
(1/48th) of the Shares subject to this Option shall vest on the first day of
each month thereafter.

Termination Period:
------------------

Except as provided herein, this Option may be exercised for three (3)
months after termination of your employment or consulting relationship. In the
event that you have voluntarily terminated your employment, this Option shall be
exercisable for thirty (30) days after such termination. In the event of your
death, this Option may be exercised for a period of eighteen (18) months, or in
the event you become disabled, this Option may be exercised for a period of
twelve (12) months. In the event of your change in status from Employee to
Consultant or Consultant to Employee, this Option Agreement shall remain in
effect. In no event may this Option be exercised later than the Term/Expiration
Date as
<PAGE>

provided above. If you commit an act of Misconduct, the Option shall
immediately terminate as of and at the time of such act of Misconduct, and the
Shares covered by the unexercised portion of such Option shall revert to the
Plan, or if this Option has been exercised subsequent to such Misconduct, the
Company may within ninety (90) days after the Board or the Company's chief
executive officer has knowledge of the Misconduct, (i) rescind such exercise
and recover the Shares issued to you upon returning to you the exercise price
for such Shares or (ii) if you have sold the Shares, recover from you the net
proceeds from the sale of such Shares less such exercise price and plus interest
on such difference at 8% from the exercise date to the date such difference is
paid by you to the Company .

NAVIGATION TECHNOLOGIES CORPORATION
1996 STOCK OPTION PLAN
OPTION AGREEMENT FOR NON U.S. EMPLOYEES

1. Grant of Option. Navigation Technologies Corporation (the "Company"),
---------------
hereby grants to the Optionee (the "Optionee") named in the Notice of Grant, an
option (the "Option") to purchase the total number of shares of Common Stock
(the "Shares") set forth in the Notice of Grant, at the exercise price per share
set forth in the Notice of Grant (the "Exercise Price") subject to the terms,
definitions and provisions of the 1996 Stock Option Plan (the "Plan") adopted by
the Company, which is incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings in this Option Agreement.

2. Exercise of Option. This Option shall be exercisable during its term
------------------
in accordance with the Vesting Schedule set out in the Notice of Grant and with
the provisions of Section 9 of the Plan as follows:

(i) Right to Exercise.
-----------------

(a) This Option may not be exercised for a fraction of a
Share.

(b) In the event of Optionee's death, disability or other
termination of the Optionee's status as an Employee or Consultant, the
exercisability of the Option is governed by Section 6 below, subject to the
limitation contained in subsection 2(i)(c).

(c) In no event may this Option be exercised after the date
of expiration of the term of this Option as set forth in the Notice of Grant.

(ii) Method of Exercise. This Option shall be exercisable by
------------------
written notice (in the form attached as Exhibit A) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised, and such other representations and agreements as to
the holder's investment intent with respect to such shares of Common Stock as
may be required by the Company pursuant to the provisions of the Plan. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall

-2-
<PAGE>

be accompanied by payment of the Exercise Price. This Option shall be
deemed to be exercised upon receipt by the Company of such written notice
accompanied by the Exercise Price.

Until the stock certificate evidencing such Shares is issued (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as shareholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Company shall issue to
the Optionee (or cause to be issued) a stock certificate evidencing such Shares
promptly after the Option is exercised and after full payment, as indicated
above, is received by the Company. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 12 of the Plan.

No Shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange or national market system upon which
the Common Stock is then listed. Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to the Optionee on the date
on which the Option is exercised with respect to such Shares.

3. Optionee's Representations. In the event the Shares purchasable
--------------------------
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, if required by the Company, concurrently with the exercise of
all or any portion of this Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B.

4. Method of Payment. Payment of the Exercise Price shall be made in
-----------------
U.S. Dollars unless otherwise determined by the Administrator and shall be by
any of the following, or a combination thereof, at the election of the Optionee:

(i) cash or check; or

(ii) wire transfer; or

(iii) surrender of other shares of Common Stock of the Company
which (A) in the case of Shares acquired pursuant to the exercise of a Company
option, have been owned by the Optionee for more than six (6) months on the date
of surrender, and (B) have a Fair Market Value on the date of surrender equal to
the Exercise Price of the Shares as to which the Option is being exercised; or

(iv) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the Exercise Price.

5. Lock-Up Period. Optionee hereby agrees that in connection with any
--------------
registration of the offering of any securities of the Company under the
Securities Act of 1933, as amended (the "Securities Act"), Optionee shall not
sell or otherwise transfer any of the Shares during the 180-day period (or such

-3-
<PAGE>

longer or shorter period as may be requested in writing by the Managing
Underwriter and agreed to in writing by the Company) (the "Market Standoff
Period") following the effective date of a registration statement of the Company
filed under the Securities Act. The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.

6. Restrictions on Exercise. This Option may not be exercised if the
------------------------
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable EC,
National, or U.S. securities or other laws or regulations, including any rule
under Part 207 of Title 12 of the Code of Federal Regulations as promulgated by
the Federal Reserve Board. As a condition to the exercise of this Option, the
Company may require Optionee to make any representation and warranty to the
Company as may be required by any applicable law or regulation.

7. Termination of Relationship. In the event an Optionee's status as an
---------------------------
Employee Consultant terminates, Optionee may, to the extent otherwise so
entitled at the date of such termination (the "Termination Date"), exercise this
Option during the Termination Periods set out in the Notice of Grant. To the
extent that Optionee was not entitled to exercise this Option at the date of
such termination, or if Optionee does not exercise this Option within the times
specified herein, the Option shall terminate.

8. Non-Transferability of Option. This Option may not be sold, pledged,
-----------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent and distribution and may be exercised during the
lifetime of Optionee only by Optionee. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.

9. Term of Option. This Option may be exercised only within the term set
--------------
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option.

10. Tax Consequences. THE COMPANY MAKES NO REPRESENTATIONS OF ANY KIND
----------------
REGARDING THE TAXATION OF THIS OPTION AND THE SHARES PURCHASED HEREUNDER.
OPTIONEE IS STRONGLY ENCOURAGED TO CONSULT THEIR PERSONAL TAX ADVISER REGARDING
THE APPROPRIATE TAX TREATMENT OF THIS OPTION AND THE SHARES PURCHASED HEREUNDER.
OPTIONEE ACKNOWLEDGES THAT OPTIONEE IS NOT RELYING ON THE COMPANY FOR ANY TAX
ADVICE.

11. Arbitration. Optionee agrees that any claim, dispute or controversy
-----------
arising out of, relating to, or in connection with this stock option agreement
shall be settled by binding arbitration pursuant to the rules and under the
supervision of the recognized national arbitration institute of the country of
the employee's residence. The arbitrator may grant injunctions or other relief
in such dispute or controversy. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may be
entered on the award of the arbitration in any court having jurisdiction
thereof.

(a) The Company and optionee shall each pay one-half of the costs and
expenses of such arbitration, and each shall separately pay its counsel fees and
expenses.

-4-
<PAGE>

(b) Optionee understands that nothing in this Section 11 modifies
optionee's at-will status. Either optionee or the Company can terminate the
employment relationship at any time, with or without cause.

12. Entire Agreement; Governing Law. The Plan is incorporated herein by
-------------------------------
reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the laws of the State of Delaware and
the United States of America.

OPTIONEE ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREUNDER DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF
CONTINUED ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT, FOR ANY PERIOD, AND SHALL NOT
INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S
EMPLOYMENT OR CONSULTING RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE.
OPTIONS UNDER THE PLAN ARE GRANTED IN A DISCRETIONARY FASHION, AND THE GRANT OF
ONE OR MORE OPTIONS UNDER THE PLAN SHALL NOT GIVE RISE TO A RIGHT IN ANY
EMPLOYEE OR CONSULTANT TO RECEIVE ADDITIONAL OPTION GRANTS IN THE FUTURE.
FURTHER, THE BOARD RETAINS THE RIGHT, IN ITS SOLE DISCRETION, TO TERMINATE THE
PLAN FOR ANY REASON, OR NO REASON, AT ANY TIME.

OPTIONEE HAS READ AND UNDERSTANDS SECTION 11, WHICH DISCUSSES ARBITRATION.
OPTIONEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, OPTIONEE AGREES TO SUBMIT
ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT TO
BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF
OPTIONEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES
RELATING TO ALL ASPECTS OF THIS RELATIONSHIP.

Optionee acknowledges receipt of a copy of the Plan and represents that
Optionee is familiar with the terms and provisions thereof, and hereby accepts
this Option subject to all of the terms and provisions thereof. Optionee has
reviewed the Plan and this Option in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option and fully
understands all provisions of the Option. Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Option.
Optionee further agrees to notify the Company upon any change in the residence
address indicated below.

-5-
<PAGE>

OPTIONEE: NAVIGATION TECHNOLOGIES CORPORATION

- -------------------------------- -------------------------------------------
Signature By

- -------------------------------- -------------------------------------------
Print Name Title

- -------------------------------- -------------------------------------------
Address Date

- --------------------------------

CONSENT OF SPOUSE
-----------------

The undersigned spouse of Optionee has read and hereby approves the terms
and conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.

-------------------------------------------
Spouse of Optionee

-6-
<PAGE>

EXHIBIT A
---------

NAVIGATION TECHNOLOGIES CORPORATION

1996 STOCK OPTION PLAN

EXERCISE NOTICE FOR NON U.S. EMPLOYEES

Navigation Technologies Corporation
740 East Arques Avenue
Sunnyvale, California 94086 3833
Attention: Secretary

1. Exercise of Option. Effective as of today, ___________, 19__, the
------------------
undersigned ("Optionee") hereby elects to exercise Optionee's option to purchase
--------
_________ shares of the Common Stock (the "Shares") of Navigation Technologies
Corporation (the "Company") under and pursuant to the 1996 Stock Option Plan, as
amended (the "Plan") and the Option Agreement dated ________, 19__ (the "Stock
Option Agreement").

2. Representations of Optionee. Optionee acknowledges that Optionee has
---------------------------
received, read and understood the Plan and the Stock Option Agreement and agrees
to abide by and be bound by their terms and conditions.

3. Rights as Shareholder. Until the stock certificate evidencing such
---------------------
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to the Optioned Stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such stock certificate promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 11 of the Plan.

4. Tax Consultation. Optionee understands that Optionee may suffer
----------------
adverse tax consequences as a result of Optionee's purchase or disposition of
the Shares. Optionee represents that Optionee has consulted with any tax
consultants Optionee deems advisable in connection with the purchase or
disposition of the Shares and that Optionee is not relying on the Company for
any tax advice.

5. Restrictive Legends and Stop-Transfer Orders.
--------------------------------------------

(a) Legends. Optionee understands and agrees that the Company shall
-------
cause the legend set forth below, or a legend substantially equivalent thereto,
to be placed upon any certificate(s) evidencing ownership of the Shares together
with any other legends that may be required by state or federal securities laws
or by-laws of the Company at the time of the issuance of the Shares:

THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS
<PAGE>

AMENDED (THE "ACT"), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
THE ACT OR THE ISSUER OF THE SHARES (THE "ISSUER") HAS RECEIVED AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE WITH THE ACT.

(b) Stop-Transfer Notices. Optionee agrees that, in order to ensure
---------------------
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

(c) Refusal to Transfer. The Company shall not be required (i) to
-------------------
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.

6. Successors and Assigns. The Company may assign any of its rights
----------------------
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Agreement shall be binding
upon Optionee and his or her heirs, executors, administrators, successors and
assigns.

7. Interpretation. Any dispute regarding the interpretation of this
--------------
Agreement shall be submitted by Optionee or by the Company forthwith to the
Administrator of the Plan, which shall review such dispute at its next regular
meeting. The resolution of such a dispute by the Administrator shall be final
and binding on the Company and on Optionee.

8. Governing Law; Severability. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Delaware and the United
States of America excluding that body of law pertaining to conflicts of law.
Should any provision of this Agreement be determined by a court of law to be
illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.

9. Notices. Any notice required or permitted hereunder shall be given in
-------
writing and shall be deemed effectively given upon personal delivery or upon
deposit in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below beneath its
signature, or to such other address as such party may designate in writing from
time to time to the other party.

10. Further Instruments. The parties agree to execute such further
-------------------
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this Agreement.

-2-
<PAGE>

11. Delivery of Payment. Optionee herewith delivers to the Company the
-------------------
full Exercise Price for the Shares.

12. Entire Agreement. The Plan, the Notice of Grant, and the Option
----------------
Agreement are incorporated herein by reference. This Agreement, the Plan, the
Notice of Grant, the Option Agreement and the Investment Representation
Statement (if applicable) constitute the entire agreement of the parties and
supersede in their entirety all prior undertakings and agreements of the Company
and Optionee with respect to the subject matter hereof.

Submitted by: Accepted by:

OPTIONEE: NAVIGATION TECHNOLOGIES CORPORATION

- -------------------------------- -------------------------------------------
Signature By

- -------------------------------- -------------------------------------------
Print Name Title

- -------------------------------- -------------------------------------------
Address Date Accepted

- --------------------------------
Address:
-------
740 East Arques Avenue
Sunnyvale, CA 94086-3833

-3-
<PAGE>

EXHIBIT B
---------

INVESTMENT REPRESENTATION STATEMENT

OPTIONEE :

COMPANY :

SECURITY : COMMON STOCK

AMOUNT :

DATE :

In connection with the purchase of the above-listed Securities, the undersigned
Optionee represents to the Company the following:

(a) Optionee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Optionee is
acquiring these Securities for investment for Optionee's own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").

(b) Optionee acknowledges and understands that the Securities
constitute "restricted securities" under the Securities Act and have not been
registered under the Securities Act in reliance upon a specific exemption
therefrom, which exemption depends upon, among other things, the bona fide
nature of Optionee's investment intent as expressed herein. In this connection,
Optionee understands that, in the view of the Securities and Exchange
Commission, the statutory basis for such exemption may be unavailable if
Optionee's representation was predicated solely upon a present intention to hold
these Securities for the minimum capital gains period specified under tax
statutes, for a deferred sale, for or until an increase or decrease in the
market price of the Securities, or for a period of one year or any other fixed
period in the future. Optionee further understands that the Securities must be
held indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. Optionee further
acknowledges and understands that the Company is under no obligation to register
the Securities. Optionee understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel satisfactory to the Company and any other legend required
under then applicable state or federal securities laws.

(c) Optionee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions. Rule 701 provides that if the issuer qualifies under Rule
701 at the time of the grant of the Option to the Optionee, the exercise will be
exempt from registration under the Securities Act. In the event the Company
becomes subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") ninety (90)
days thereafter (or such longer period as any market stand-off agreement may
require) the Securities exempt
<PAGE>

under Rule 701 may be resold, subject to the satisfaction of certain of the
conditions specified by Rule 144, including: (1) the resale being made through
a broker in an unsolicited "broker's transaction" or in transactions directly
with a market maker (as said term is defined under the Exchange Act); and, in
the case of an affiliate, (2) the availability of certain public information
about the Company, (3) the amount of Securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), and (4) the
timely filing of a Form 144, if applicable.

In the event that the Company does not qualify under Rule 701 at the time
of grant of the Option, then the Securities may be resold in certain limited
circumstances subject to the provisions of Rule 144, which requires the resale
to occur not less than two years after the later of the date the Securities were
sold by the Company or the date the Securities were sold by an affiliate of the
Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the
Securities less than three years, the satisfaction of the conditions set forth
in sections (1), (2), (3) and (4) of the paragraph immediately above.

(d) Optionee hereby agrees that if so requested by the Company or any
representative of the underwriters (the "Managing Underwriter") in connection
with any registration of the offering of any securities of the Company under the
Securities Act, Optionee shall not sell or otherwise transfer any Shares or
other securities of the Company during the 180-day period (or such longer period
of time as may be requested in writing by the Managing Underwriter and agreed to
in writing by the Company) (the "Market Standoff Period") following the
effective date of a registration statement of the Company filed under the
Securities Act; provided, however, that such restriction shall only apply to the
first registration statement of the Company to become effective under the
Securities Act which include securities to be sold on behalf of the Company to
the public in an underwritten public offering under the Securities Act. The
Company may impose stop-transfer instructions with respect to securities subject
to the foregoing restrictions until the end of such Market Standoff Period.

(e) Optionee further understands that in the event all of the
applicable requirements of Rule 701 or 144 are not satisfied, registration under
the Securities Act, compliance with Regulation A under the Securities Act, or
some other registration exemption will be required; and that, notwithstanding
the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities
and Exchange Commission has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise
than pursuant to Rules 144 or 701 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk. Optionee understands that no
assurances can be given that any such other regis tration exemption will be
available in such event.

Signature of Optionee:

----------------------------------------
Date:
-----------------------------------

-2-

<PAGE>

EXHIBIT 10.20

AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT

This AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT (this "Amendment") is made
as of July 23, 1996, by and among NAVIGATION TECHNOLOGIES CORPORATION, a
Delaware corporation, PHILIPS MEDIA B.V. and PHILIPS MEDIA SERVICES B.V., each a
Netherlands corporation, SHIELDS ENTERPRISES, INC., a Delaware corporation
("SEI"), and T. Russell Shields.

WHEREAS, the parties hereto are parties to a certain Stock Purchase
Agreement dated as of June 24, 1996 (the "Agreement"), and the recordholders of
at least 90% of the Shares purchased pursuant to the Stock Purchase Agreement;
and

WHEREAS, pursuant to the provisions of Section 11.3 of the Agreement, the
parties desire to amend the Agreement in certain respects;

NOW THEREFORE, the parties hereto hereby agree as follows:

1. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Agreement.

2. The Agreement is hereby amended by deleting Section 3.1 thereof in its
entirety and by substituting the following new Section 3.1 in lieu thereof:

"3.1 Additional Purchase Rights.
--------------------------

(a) Concurrently with the IPO, Philips shall purchase the number
of shares of Common Stock necessary to constitute, when aggregated with
all other Philips Shares, 48% of the Stock Outstanding on the IPO Date,
exclusive of any shares that may be sold by the Company to the underwriters
pursuant to the underwriters' over-allotment option. The Company shall
provide to Philips written notice of the number of shares of Common Stock
to be offered pursuant to the IPO at least one business day prior to the
effectiveness of the registration statement relating to the IPO. Within 24
hours of receipt of the Company's notice, Philips shall enter into an
agreement for the purchase of the shares Philips has agreed to purchase to
this Section 3.1(a) and shall purchase such shares concurrently with the
closing of the IPO, at a price per shares equal to the price at which
shares of the Common Stock are initially offered to the public pursuant to
the IPO, net of underwriters discounts.

(b) In the event of any exercise by the underwriters of the over-
allotment option in connection with the IPO, Philips shall have the right,
by not the obligation, to purchase up to the number of additional shares of
Common Stock which, when aggregated with all other Philips Shares,
including those purchased concurrently with the IPO pursuant to Section
3.1(a) above, shall constitute 48% of the Common Stock outstanding
following the closing of the over-allotment sale. The Company shall
provide to Philips written notice of the number of shares to be purchased
by the underwriters pursuant to an exercise of the over-allotment option,
if any, immediately following each exercise by the underwriters of such
option. Within 24 hours of receipt of the Company's notice, Philips shall
inform the Company
<PAGE>

how many, if any, shares of Common Stock it elects to purchase
pursuant to this Section 3.1(b) and promptly thereafter enter into an
agreement for the purchase of such shares. Philips shall purchase such
shares concurrently with the closing of the sale of the over-allotment
shares, at a price per share equal to the price at which shares of Common
Stock are initially offered to the public pursuant to the IPO, net of the
underwriters discounts."

3. The Agreement is hereby further amended by adding a new Section 4.7
thereto, to read as follows:

"4.7 Registration Rights. Subject to an effective upon consummation
-------------------
of the merger of NT Acquisitions Corp. with and into SEI, pursuant to which
SEI will become a wholly-owned subsidiary of the Company, the Company
hereby grants to T. Russell Shields ("Shields") the same rights with
respect to registration of those Registrable Securities (as defined in the
Investor Rights Agreement) held by Shields or any member of Shields' Family
(as defined below), as the rights currently in effect in favor of SEI as a
Signatory and Holder (each as defined in the Investor Rights Agreement)
under Article 3 of the Investor Rights Agreement with respect to SEI and
the SEI Investor Group; provided, however, that Shields shall have no right
ro request registration of such Registrable Securities pursuant to (i)
Section 3.1 of the Investor Rights Agreement until the third anniversary of
the IPO Date and (ii) Section 3.2 of the Investor Rights Agreement in
connection with the Company's initial IPO. "Shields' Family" shall mean
Shields' spouse and siblings, and all descendants of Shields, his spouse,
siblings and descendants." Notwithstanding anything to the contrary set
forth in this Section 4.7 or in the Investor Rights Agreement, the Company
shall not be required to register any shares proposed for sale by either
Shields or Philips if it delivers to Shields or Philips, as the case may
be, an opinion of responsible counsel or a no-action letter from the staff
of the Securities and Exchange Commission to the effect that the shares may
be publicly sold without (i) registration, (ii) restrictions under
paragraphs (e) or (f) of Rule 144 promulgated by the Commission under the
Securities Act, or (iii) any other material restrictions under the
Securities Act.

4. The Agreement is hereby further amended by deleting Section 5.7 in its
entirety and by substituting the following new Section 5.7 in lieu thereof:

"5.7 Public Offerings. During 1996, the Company will not, without
----------------
the prior consent of Philips, sell pursuant to public offerings. excluding
pursuant to over-allotment options granted to underwriters in connection
therewith, shares of Common Stock resulting in proceeds to the Company in
excess of $168,000,000. The foregoing amount shall be in additions to, and
not reduced by, the proceeds to the Company resulting from the sale of
shares to Philips and others at the initial public offering price less the
underwriting commission contemporaneously with, but not as part of, the
IPO."

-2-
<PAGE>

5. Except as specifically provided herein, all of the terms and
conditions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.

NAVIGATION TECHNOLOGIES CORPORATION

By: /s/ Thomas A. Lerone
-----------------------------------
Thomas A. Lerone

PHILIPS MEDIA B.V.

By: /s/ Samuel J. Rozel
-----------------------------------
Samuel J. Rozel

PHILIPS MEDIA SERVICES B.V.

By: /s/ Samuel J. Rozel
-----------------------------------
Samuel J. Rozel

SHIELDS ENTERPRISES, INC. (SEI)

By: /s/ Mitchell Morris
-----------------------------------
Mitchell Morris

/s/ T. Russell Shields
-----------------------------------
T. Russell Shields

-3-

<PAGE>

EXHIBIT 11.1

NAVIGATION TECHNOLOGIES CORPORATION AND SUBSIDIARIES

COMPUTATION OF PRO FORMA NET LOSS PER SHARE

(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
ACTUAL PRO FORMA
----------------------- -----------------------
SIX MONTHS SIX MONTHS
YEAR ENDED ENDED YEAR ENDED ENDED
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1995 1996 1995 1996
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Net loss....................... $(56,912) $(37,118) $(67,179) $(43,293)
-------- -------- -------- --------
Shares used in per share
computation:
Convertible preferred stock
outstanding.................. 8,323 11,554 8,323 11,554
Common stock outstanding...... 12,138 11,657 12,138 11,657
SAB No. 83 shares, treasury
stock method................. 1,577 1,577 1,577 1,577
Acquisition adjustment, as if
converted basis.............. -- -- 2,849 2,849
-------- -------- -------- --------
22,038 24,788 24,887 27,637
-------- -------- -------- --------
Pro forma net loss per share... $ (2.58) $ (1.50) $ (2.70) $ (1.57)
======== ======== ======== ========
</TABLE>

<PAGE>

EXHIBIT 21.1

LIST OF SUBSIDIARIES

<TABLE>
<CAPTION>
JURISDICTION OF
NAME INCORPORATION
---- ---------------
<S> <C>
European Geographic Technologies B.V..................... The Netherlands
Navigation Technologies North America, Inc. ............. Delaware
Navigation Technologies International Corporation........ Delaware
</TABLE>

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Navigation Technologies Corporation:

We consent to the use of our reports included herein and to the references
to our firm under the headings "Risk Factors--History of Substantial Losses
and Anticipated Future Losses," "Selected Consolidated Financial Data,"
"Experts" and "Change in Independent Auditor" in the prospectus.

Our report on Navigation Technologies Corporation and subsidiaries dated
June 4, 1996, except for the description of the reverse stock split in Note 7,
which is as of July 12, 1996, contains an explanatory paragraph that states
that the Company has had recurring losses from operations since inception and
requires significant additional financing which raise substantial doubt about
the Company's ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

KPMG Peat Marwick LLP
Palo Alto, California

August 21, 1996

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
CONSOLIDATED FINANCIAL STATEMENTS OF NAVIGATION TECHNOLOGIES CORPORATION AS OF
AND FOR THE YEAR ENDED DECEMBER 31, 1995 AND THE UNAUDITED CONSOLIDATED
FINANCIAL STATEMENTS OF NAVIGATION TECHNOLOGIES CORPORATION AS OF AND FOR THE
SIX MONTH PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.<F1>
</LEGEND>
<MULTIPLIER> 1,000

<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996
<PERIOD-START> JAN-01-1995 JAN-01-1996
<PERIOD-END> DEC-31-1995 JUN-30-1996
<CASH> 23,573 17,432
<SECURITIES> 0 0
<RECEIVABLES> 990 509
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 24,912 19,506
<PP&E> 9,919 11,554
<DEPRECIATION> (4,881) (6,081)
<TOTAL-ASSETS> 30,026 25,076
<CURRENT-LIABILITIES> 8,128 15,229
<BONDS> 0 0
0 0
11 15
<COMMON> 12 11
<OTHER-SE> 1,780 (5,167)
<TOTAL-LIABILITY-AND-EQUITY> 30,026 25,076
<SALES> 0 0
<TOTAL-REVENUES> 3,673 1,591
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 48,673 26,489
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,220 682
<INCOME-PRETAX> (56,912) (37,118)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (56,912) (37,118)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (56,912) (37,118)
<EPS-PRIMARY> (2.57) (1.50)
<EPS-DILUTED> (2.57) (1.50)

<FN>
<F1> The financial data included herein does not include the financial data for
Shields Enterprises, Inc. which will be merged with Navigation Technologies
Corporation concurrently with the offering.
</FN>

</TABLE>