<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 20-F

[ ]          REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       or

[X]           ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1998

                                       or

[ ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

             For the transition period from _________ to ___________

                         Commission File number 0-20738

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

                                   OLICOM A/S
             (Exact name of registrant as specified in its charter)

                N/A                              THE KINGDOM OF DENMARK
   (Translation of Registrant's             (Jurisdiction of incorporation or
        name into English)                            organization)

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

                                  NYBROVEJ 114
                                 DK-2800 LYNGBY
                                     DENMARK
                    (Address of principal executive offices)

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

Securities registered or to be registered pursuant to Section 12(b) of the Act:
                                      None

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

<TABLE>
<CAPTION>
                                                NAME OF EACH EXCHANGE ON
          TITLE OF EACH CLASS                       WHICH REGISTERED
<S>                                             <C>
 Common Shares, nominal value DKK 0.25 each      Nasdaq National Market 
 Common Stock Purchase Warrants                  Nasdaq National Market
</TABLE>

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:
                  Common Shares, nominal value DKK 0.25 each
                  Common Stock Purchase Warrants

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

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:

                  Common Shares, nominal value DKK 0.25 each: 18,523,473
                  Common Stock Purchase Warrants: 923,158

Indicate by check mark whether the Registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.

                                 Yes [X] No [ ]

Indicate by check mark which financial statement item the Registrant has elected
to follow:
                             Item 17 [ ] Item 18 [X]

<PAGE>   2


                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None.






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ITEM 1.  DESCRIPTION OF BUSINESS.

         Certain statements included in this Report include trend analysis and
are forward-looking statements (within the meaning of Section 27A of the United
States Securities Act of 1933, as amended (the "Securities Act") and Section 21E
of the United States Securities Exchange Act of 1934, as amended (the "Exchange
Act")), including, without limitation, statements containing the words
"believes", "anticipates", "expects" , "plans", "may", "will", "should",
"objective", "target", "goal", "strategy" or "continue" or the negative of such
terms or other words of similar import. Such forward-looking statements relate
to future events, the future financial performance of the Company, and involve
known and unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of the Company or industry results
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Prospective investors
should specifically consider the various factors identified in this Report that
could cause actual results to differ, including, without limitation, those
discussed in the following section, as well as in the section titled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations". The Company is under no duty to update any such factors or to
update any of the forward-looking statements after the date of this Report to
conform such statements to actual results.

         Olicom A/S ("Olicom" or the "Company") develops, markets and supports
network software and hardware products that enable personal and work-group
computer users to communicate, exchange data and share computing resources in
local area networks ("LANs"), in wide area networks ("WANs") and over the
Internet.

         Olicom's target customers include Global 1000 corporations with
mission-critical enterprise networks that require additional bandwidth to
support increasingly demanding applications. The Company believes that its suite
of Token-Ring, ATM and Ethernet solutions offer superior performance, are price
competitive and are fully compatible with applicable industry standards (such as
Institute of Electrical and Electronics Engineers ("IEEE") standards) and
networking products manufactured by other major vendors.

         Olicom's products are marketed worldwide, primarily through
distributors, value-added resellers (including dealers, systems integrators and
other resellers) ("VARs") and original equipment manufacturer customers
("OEMs").

COMPANY HISTORY

         Olicom was organized in the Kingdom of Denmark in 1985. Since 1987,
Olicom has been involved in the design, development and production of
high-quality networking products. In 1988, Olicom began marketing an
increasingly broader range of network interface cards ("NICs" or "adapters"),
internetworking products, hubs and cabling components, repeaters, converters,
filters and associated software drivers.

         In order to provide global support for an increasingly broad product
line, the Company established Olicom, Inc. in 1990, with its headquarters in
metropolitan Dallas, to coordinate marketing in North and South America. In late
1991, Olicom introduced a line of Token-Ring bridging products. In 1992, an
acquisition enabled Olicom to broaden its product line to Ethernet networks, and
in 1995, Olicom began shipping 155 Mbps Asychronous Transfer Mode ("ATM") NICs.


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         In June 1997, with the acquisition of CrossComm Corporation
("CrossComm"), Olicom acquired a chassis-based integrated networking platform
for its Token-Ring, Ethernet and ATM solutions.

         In September 1997, Olicom introduced advanced Token-Ring and ATM
switching solutions, including the CrossFire(R) 8600 Token Ring Switch.

         In March 1998, the Company announced a suite of Fast Ethernet switching
products designed for customers migrating from Token-Ring to Fast Ethernet.

STRATEGY

         The Company's objective is to improve its profitability and enhance its
market position as a leading provider of Token Ring NIC and switching products.
Additionally, the Company is taking steps to position itself to take advantage
of a current transition in data networking to a more diversified environment as
exemplified by the growth of Fast Ethernet.

         During 1998, accelerated pricing pressure, particularly in Olicom's
Token-Ring NIC business, prompted a detailed evaluation of the Company's
Token-Ring business. As a result of this review, Olicom embarked on a strategy
to regain profitability by streamlining expenses and costs, while implementing a
new sales and marketing model that is designed to increase brand awareness and
consideration for its products, as well as enhance the productivity of Olicom's
sales force.

         At the same time, Olicom's strategy addresses the perceived change to a
more diversified environment by focusing the Company on carefully selected,
growth-oriented niche markets where it is likely to benefit from the growth in
mission critical, Fast Ethernet local area networks. Olicom's reputation for
product reliability and excellence in customer support are expected to be of a
substantial value to this segment of the market.

         The key elements of the Company's strategy include the following:

         o    IMPROVE PROFITABILITY AND ENHANCE LEADERSHIP POSITION IN THE 
              TOKEN-RING DATA NETWORKING MARKET

         The Company remains fully committed to the Token-Ring business, where
Olicom's technological expertise and service excellence have enabled the Company
to achieve market leadership. The Company will continue to develop products for
this market. Olicom's goal is to improve the profitability of its products, and
maintain its leadership position, in this market segment.

         o    HELP TOKEN RING USERS MIGRATE TO FAST ETHERNET

         While the Company continues to believe that Token-Ring has a crucial
place in networks for the foreseeable future, the Company believes that
Token-Ring enterprises are likely to incorporate Fast Ethernet in parts of their
network architecture going forward. Against this backdrop, Olicom is making a
concerted effort to address the needs of carefully selected niche markets among
Fast Ethernet users.


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         Olicom's approach to penetrating the Fast Ethernet market is based on a
two-step, niche marketing approach to the business. During the first stage,
Olicom will target the subset of its highly loyal Token-Ring customer base that
has decided to begin using Fast Ethernet in data networks. The Company will
launch products that facilitate the transition of these Token-Ring users to the
Fast Ethernet environment. The Company will draw upon its broad understanding of
the needs of Token-Ring users to develop products that support Fast Ethernet and
other technologies in the local area network environment, while offering high
function availability.

         In the second stage, Olicom intends to build upon its anticipated
success in transitioning Token-Ring users to Fast Ethernet by targeting
medium-sized, mission critical Fast Ethernet installations. The Company expects
that its Fast Ethernet products should benefit from the competencies derived
from its leadership position in mission critical Token-Ring networks, where
availability and service responsiveness drive the buying decision.

         Olicom expects the medium size network market to grow substantially
over the next three to five years as a result of the networked global economy
encompassing electronic commerce and supply chain integration with the Internet.
In this complex, multi-topological networking environment, Olicom, with its
reputation for technological sophistication, combined with its existing base of
Token-Ring users, believes the Company will be well-positioned to succeed.

         o    ALLIANCES AND PARTNERSHIPS

         To exploit new and emerging technologies and to further develop the
Company's market reach in core businesses, Olicom intends to actively pursue
strategic alliances and partnerships. Pursuant to the strategy of focussing on
the Company's core businesses, in January 1999 Olicom divested its interest in
Lasat A/S ("Lasat"), a producer of PC modems.

         Additionally, in February 1999 the Company signed a letter of intent
with Cabletron Systems ("Cabletron") to establish a global marketing agreement
whereby Cabletron will OEM a variety of Olicom's Token-Ring Switch products, and
Olicom will OEM Cabletron's award-winning SmartSwitch Router 8000. The global
agreement enables both Olicom and Cabletron to enhance current product offerings
with complementary strengths. Olicom is the industry's price performance leader
in the Token-Ring Switch market and is recognized worldwide for its excellence
in engineering and design. Cabletron's SmartSwitch Router is considered best of
class in its product category, offering feature-rich, low-cost, high-performance
networking capabilities.

PRODUCTS

         The Company's strategic focus is to address the local area networking
needs of large and medium size corporations and organizations, as they
transition from shared, medium speed network topologies like 16 Mbps Token Ring
and 10 Mbps Ethernet to switched, high-speed networks. Olicom offers enterprises
using Token-Ring LANs a comprehensive migration strategy known as ClearStep(R),
to increase LAN capacity in a controlled, cost-effective manner, while preparing
the way for technologies such as ATM, Fast Ethernet, Gigabit Ethernet and
High-Speed Token-Ring. In addition to offering superior performance and
features, the Company's products are fully compatible with applicable industry
standards, adhere to all relevant IEEE standards, and provide connectivity among
all major PC architectures and network operating systems.


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         The Company selectively broadens its product line as the market for
specific networking and internetworking products develops, working closely with
key end-users to define emerging market requirements and features that should be
addressed.

         Desktop Network Interface Cards. Network Interface Cards ("NICs" or
"adapters") provide connectivity between a PC and the network. Olicom NICs
provide support for industry standard speeds and features, as well as support
for leading network operating systems developed by major vendors. In addition,
the Company continues to develop specially tuned high-performance versions of
its NIC software drivers and Application Specific Integrated Circuit ("ASIC")
technology, providing highly competitive performance and features.

         Notebook Connectivity Products. Olicom's GoCard(R) range of PC Card
(formerly called "PCMCIA") adapters provides network connection for the rapidly
growing portable computing market. Olicom offers GoCard(R) adapters for
Token-Ring and Ethernet networks.

         Network System Products. Olicom's network systems products include LAN
switches, routers, router switches and network management products. Together,
these products provide the high-speed solutions for implementing the Company's
ClearStep migration strategy.

         The CrossFire(R) family of switches provides cost-effective solutions
for building local area networks that connect desktop work groups and servers.
The Company's Token-Ring and Fast Ethernet switches also provide uplinks to
high-speed technologies such as ATM, High-Speed Token-Ring, Fast Ethernet and
Gigabit Ethernet. In addition, the CrossFire 8000 Chassis solution houses up to
eight modules for flexible networking solutions.

         The Company also markets chassis-based and stand-alone multi-protocol
routers for internetwork communication. In addition, Olicom's hubs and cabling
products provide a broad range of connectivity options, including Controlled
Access Units ("CAUs"), Controlled Attachment Modules ("CAMs") and Multistation
Access Units ("MAUs").

         With the purchase of CrossComm in 1997, Olicom acquired an advanced
network management system. This system, now called the ClearSight(TM) Network
Management System, has been further developed, providing end-to-end management
and diagnostic support for Olicom enterprise products. In addition, many Olicom
products are shipped with Simple Network Management Protocol (SNMP) software
utilities, allowing integration into industry-standard management systems such
as HP OpenView for Windows.

         Network Services. Olicom network services include network monitoring,
training, installation and on call site maintenance. These services are sold by
Olicom and performed by selected partners such as Vital Network Services and
other value added resellers around the world.

STRATEGIC RELATIONSHIPS

         The Company's strategy of working with third parties to develop new
product capabilities has resulted in either joint-development agreements,
joint-marketing agreements,  OEM sales agreements,


                                       6
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technology alliances or other types of relationships with several companies such
as Cabletron, Cisco Systems, Inc. ("Cisco"), Texas Instruments and International
Business Machines Corporation ("IBM").

         During 1996, Olicom and Cisco signed a long-term agreement to jointly
develop Token-Ring products and technology. Under this agreement, the two
companies have developed and launched several Token-Ring switches. These
products are offered separately and under each company's respective brand names.
Under the agreement, Cisco is purchasing core Token-Ring technology from Olicom,
including Olicom's PowerMACH(TM) software, for use in present and future Cisco
internetworking products. With this Token-Ring switch, Olicom intends to focus
on delivering industry leading price/performance. In connection with the license
of the Cisco technology, Olicom has agreed not to enter into direct
relationships with certain vendors for the licensing, distribution or
development of products based on, or using, Cisco technology or its derivatives.

PRODUCT SALES AND MARKETING

         Olicom markets and sells its products through carefully targeted
indirect distribution channels that include distributors, resellers (including
dealers, systems integrators, VARs and other resellers) and OEMs. The Company's
sales strategy is to create a demand for its products using a "push-pull"
strategy. The "push" factor is comprised of incentives for distributors and
resellers to sell Olicom products. The "pull" factor describes the Company's
efforts to generate demand from end users through extensive marketing efforts
and the creation of product awareness.

         The Company's resellers generally represent other lines of products
that are complementary to, or compete with, those of the Company. While the
Company encourages its resellers to focus on Olicom products through marketing
and support programs, there can be no assurance that these resellers will not
give higher priority to products of other suppliers, thereby reducing the
efforts devoted to selling the Company's products. As distributors, resellers
and OEMs have no long-term obligations to purchase products from the Company,
there is a risk of unanticipated declines in sales to the Company's material
customers for competitive reasons or because of the internalization of the
manufacture of products purchased from the Company on an OEM basis.

         The Company's marketing programs include generating sales leads for its
resellers, as well as supporting the efforts of its distributors, resellers and
OEMs. To this end, the Company provides sales tools, including demand creation
through telemarketing, an extensive training and support certification program,
and the creation of brand name recognition for Olicom and its products. Brand
name recognition is enhanced through frequent participation in industry trade
shows, seminars and meetings, advertisement in major trade and other
publications, ongoing communication with end users of Olicom products, and
participation in public benchmark testing. The Company undertakes mailings of
sales literature, technical articles and product evaluations, and provides sales
manuals and demonstration kits to end-users. In addition, the Company assists
its distributors, resellers and OEMs with on-site support by way of sales
presentations and product demonstrations.

         The Company's distributors, resellers and OEMs generally have
non-exclusive agreements with the Company, and purchase the Company's products
at discounts that are typical in the industry. As is common in the LAN industry,
distributor inventory is protected with respect to price as to inventories that
a distributor may have on hand at the time of a change in the published list
price, and with respect to the rotation of slow-moving inventory in exchange for
other products of equal value.


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         The Company has also developed a marketing presence on the Internet and
promotes its products and services through its own World Wide Web server. This
medium allows publicly available Olicom literature to be accessible to anyone
who has an Internet connection.

         The Company markets its products worldwide, with established
distribution channels in North and South America, Europe and the Asia-Pacific
region. The Company has sales representatives in the major metropolitan areas of
North America and on the major continents, including the key Western European
markets.

         During 1998, approximately 51% of the Company's total sales were
concentrated in North and South America (the "Americas"), while sales outside
the Americas accounted for approximately 49% of total sales. See note 13 to the
Consolidated Financial Statements for information relating to net sales during
1996, 1997 and 1998 by geographical market, as well as information regarding net
sales during 1996, 1997 and 1998 to major customers.

         The Company's international sales headquarters is located in greater
Copenhagen, Denmark. The marketing of products in North and South America is
coordinated through Olicom, Inc., which is headquartered in Richardson, Texas.
The Company also maintains regional sales offices in Australia, Canada, France,
Germany, Japan, the Netherlands, Poland, Spain, Sweden and the United Kingdom.

         The Company operates with a relatively short-term backlog, and
substantially all of its net sales in each quarter result from orders booked
within a generally short cycle between order and shipment (typically less than
45 days). Consequently, if near-term demand for the Company's products weakens
or if significant anticipated sales in any quarter are not realized as expected,
the Company's net sales for that quarter could be adversely affected. The
Company does not believe that its backlog as of a particular date is indicative
of future sales levels.

         The Company's net sales may fluctuate as a result of other factors,
including increased price and other competition, the timing of significant
orders, announcements of new products by the Company or its competitors,
variations in net revenues by product and distribution channel, decisions by
distributors and OEMs as to the quantity of the Company's products to be
maintained in inventories, delays in shipment of existing or new products, and
capital spending patterns of end-users.

PRODUCT SUPPORT

         The Company's distribution partners, who, in turn, have access to the
Company's sales support engineers and field engineers for end-user support,
support the Company's products. The Company's resellers and large accounts
receive sales and technical training from the Company at its training centers in
greater Copenhagen, Denmark, Marlborough, Massachusetts and Richardson, Texas,
as well as at resellers' offices. The Company conducts product training for
partners and large end-users of its products, in which features of such products
and their installation, aspects of networking principles and solutions are
addressed. The Company provides on-line information access through the World
Wide Web, electronic bulletin boards, CompuServe and the Internet, as well as
additional technical support, available by telephone and telefax during extended
business hours. Olicom also offers a number of maintenance and support contracts
that include on-site service and 24-hour telephone dial-in support.


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         Depending on the distribution channel, the Company's products generally
are warranted free of defects in materials and workmanship for one to three
years. Before and after the expiration of the product warranty period, the
Company offers factory-based support, parts replacement and repair services. To
date, the Company has not encountered any significant product maintenance
problems. During 1995, the Company introduced a limited lifetime warranty to
registered users of NIC products.

RESEARCH AND DEVELOPMENT

         Olicom is very focused on research and development and believes that
its future success depends in substantial part on the timely enhancement of
existing products, together with the development of new products that continue
to offer technological excellence. Included among the core technologies the
Company develops are advanced ASICs for Token-Ring, Ethernet switch and NIC
products, as well as advanced network management software, embedded switch
software (including software for routing Internet/Intranet TCP/IP protocols) and
ATM LAN emulation software. The Company is currently developing new products and
enhancements to existing products, with the goal of further improving
performance, increasing price competitiveness, assuring continued
interoperability and increasing market share.

         During 1998, the Company completed the development of a number of new
products and technologies, including 100 Mbps High-Speed Token-Ring products. In
1998 Olicom was the first company to introduce a High-Speed Token-Ring solution
comprising an uplink to its Token-Ring stackable switch and a server adapter.
The Token-Ring switch line has been expanded to include lower-cost desktop
switches and switches supporting fiber-optic links. The NIC product line for
Token-Ring has been updated to include Power Management, Wake-on-LAN, CardBus
adapter and other Microsoft Windows standards. In the Ethernet arena, the
Company released two new Fast Ethernet switches sourced from a third party and
new Fast Ethernet adapters with Power Management and Wake-on-LAN capabilities.
The Company released significant enhancements to its line of ATM products by
introducing a new high-capacity 32 port ATM switch, new higher speed (622 Mbps)
port modules for its ATM switches, and increased performance for ATM NICs. In
1998, the Company supported its ClearStep Token-Ring migration strategy with ATM
connectivity to its Token-Ring switch line. The ClearSession high-availability
strategy is supported by technologies for rapid recovery within ATM networks and
resilient server links.

         Research and development efforts are increasingly focused on Fast
Ethernet and Gigabit Ethernet switching, ClearStep migration strategies, and
ClearSession high-availability technologies. In March 1999 the Company announced
plans to release new high-performance, lower cost Ethernet switches (including
Layer 3 switch addressing) to the growing Intranet market. The ClearStep
strategy will be expanded to include Token-Ring to Fast Ethernet translation
modules, Fast Ethernet Translation switches and enhancements to the High-Speed
Token-Ring product line. The ClearSession strategy will be expanded to include
fast recovery methods for switched Ethernet and Token-Ring networks.

         During 1996, 1997, and 1998 the Company incurred expenses of
$11,218,000, $15,477,000 and $20,975,000, respectively, with respect to research
and development activities. In 1996, 1997 and 1998 the Company's research and
development expenditures were 7.9%, 7.4% and 10.1% of net sales, respectively.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."


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         Although the Company believes that it has certain technological and
other advantages over its competitors, maintaining such advantages will require
continued investment by the Company in product development and marketing. There
can be no assurance that the Company will be able to make the technological
advances necessary to maintain such competitive advantages. Further, there can
be no assurance that the Company's products will not be rendered obsolete by new
industry standards or changing technology.

         The Company's testing laboratories in Copenhagen, Denmark, and Gdansk,
Poland perform product benchmark testing, compatibility certification and
conduct ongoing tests for interoperability with other vendors' products. The
Company is a beta partner of IBM, Intel Corporation, Novell, Inc., and Microsoft
Corporation, which provides the Company with timely access to new versions of
these vendors' LAN operating system software while facilitating Olicom's
development of interoperable software drivers. The Company also participates in
interoperability testing sessions at several venues, including UNH (University
of New Hampshire) for ATM and Token-Ring testing, as well as PCI SIG (Special
Interest Group) interoperability testing.

         Schedules for the development of high technology products are
inherently difficult to predict, and there can be no assurance that the Company
will achieve its scheduled initial customer shipment dates. In addition, as the
Company's strategy is driven in significant part by customer demand, its product
development schedules are inherently subject to revision as a result of
indications of change in the requirements of its customers. The Company's
business, financial condition or results of operations could be adversely
affected if the Company were to incur significant delays or be unsuccessful in
developing these or other new products or enhancements, or if any such products
or enhancements did not gain market acceptance.

MANUFACTURING AND DISTRIBUTION

         Olicom outsources all of its manufacturing needs. Its products are
manufactured in fully automated, high-quality production lines utilizing Surface
Mounting Technology techniques, and are manufactured to meet Olicom
specifications on a turnkey basis. Olicom utilizes multiple manufacturers for
high volume products in order to decrease dependence on any single manufacturer.
Olicom requires that all its manufacturers be ISO 9002 certified.

         The Company's manufacturing strategy is to combine Far East-based
low-cost manufacturing with U.S.-compliant manufacturing for sales to
governmental agencies in the United States. The Company's manufacturing strategy
and goal is to achieve short time-to-market cycles of 7-12 weeks from completion
of product design to start of volume production. The Company manages quality
assurance of its products through extensive quality control procedures (which
the Company believes have been instrumental in achieving the superior
performance and reliability of its products).

         The Company's distribution strategy is to maintain finished goods
inventories at the Company's distribution centers at a level of typically 1-2
months of equivalent sales volume. Distribution effectiveness is optimized
through direct customer delivery and factory shipments to the Company's
distribution centers in Copenhagen, Denmark and Richardson, Texas.

         The Company's manufacturers procure components and sub-assemblies for
the Company's products directly from third party vendors, except for certain
critical components, including chipsets and


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ASICs. The Company has entered into a number of Volume Purchase Agreements
("VPAs") with major material vendors in order to secure material availability
and the most favorable worldwide terms and conditions for material procurement.

         The Company has not experienced any significant problems in obtaining
required supplies of sole or limited source components. However, the inability
to develop alternative sources of supply, if required, or a reduction or
interruption in supply or a significant increase in the price of one or more
critical components, could materially and adversely affect the Company's
business, financial condition or results of operations and could negatively
impact customer relationships.

         The Company has granted certain customers a non-exclusive license to
use, manufacture and sell products currently being manufactured and sold by the
Company on an OEM basis. Such licenses generally become effective in the event
that the Company discontinues manufacturing the products being purchased by such
customer, or is unable to provide specified quantities of products or levels of
quality, and/or upon the bankruptcy or insolvency of the Company. The grants of
manufacturing rights are not subject to payment of royalties.

COMPETITION

         Olicom's competition in the market for network interconnection products
is primarily derived from other vendors and manufacturers of LAN products (such
as IBM, Northern Telecom Limited, Cisco, Cabletron, Madge Networks N.V. and 3Com
Corporation).

         The LAN industry is intensely competitive and is characterized by rapid
technological advances and evolving industry standards. The industry can be
significantly affected by new product introductions, increased product
capabilities, and improvements in the relative price and performance of
networking products, as well as by the market activities of industry
participants.

         The Company believes that, in order to successfully differentiate
Olicom from its competitors, Olicom products and systems must excel in product
quality and functionality, compatibility, interoperability, performance,
reliability, product support, customer satisfaction and price.

         IBM is both the dominant supplier of Token-Ring network products and an
established vendor of computer and networking systems and products to a
substantial number of existing and potential end-users of the Company's
products. As a result, the Company believes that, in order to compete
successfully in the market for Token-Ring network products, the Company's
products and systems must have more features, greater functionality and
performance, and/or lower prices than those offered by IBM. In addition, from
time to time IBM establishes strategic working relationships with independent
networking vendors relating to IBM's long-term product development programs. If
IBM were to select, on a preferential basis, one or more of the Company's
competitors for such relationships, the Company's business, financial condition
or results of operations could be materially and adversely affected.

         While the Company believes that it has been able to compete effectively
to date, competition in the industry is likely to intensify as current
competitors expand their product lines and new companies enter the market.


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         An increase in competition could have a material adverse effect on the
Company's business, financial condition or results of operations because of
price reductions and/or loss of market share. There can be no assurance that the
Company will be able to compete successfully in the future with these existing
or potential competitors. The Company believes that price competition has been
increasing and will continue to increase. Such price competition is the result,
in part, of price decreases announced by IBM and other competitors on
competitive products, as well as the success of the Company and its competitors
in successfully engineering cost reductions into their products and the entrance
of new competitors into the market. The Company's ability to compete
successfully with current and potential competitors will depend to a significant
extent on its ability to continue developing technologically superior products
and to adapt to changes in the marketplace. There can be no assurance that price
competition will not have a material adverse effect on the Company's business,
financial condition or results of operations.

LASAT A/S

         As part of its new strategy announced November 30, 1998, the Company
decided to divest its 75% holding in Lasat A/S ("Lasat"), a provider of PC
modems. On January 15, 1999, Olicom's 75% holding in Lasat was sold to a
consortium of Lasat management, employees and two Denmark-based venture funds.
The gain from the divestiture amounted to approximately $1.4 million, which will
be recognized in 1999.

INTELLECTUAL PROPERTY

         The Company's success is dependent on its proprietary technology. The
Company currently relies upon a combination of copyright and trade secret laws
to establish and maintain proprietary rights to its products. There can be no
assurance that such measures are or will be adequate to protect the Company's
proprietary technology. However, Olicom believes that these measures should be
sufficient to protect the Company's technology. The Company has a program to
file applications for and obtain patents in the United States. While the Company
has not been issued any patents to date, several patent applications are
currently pending. There can be no assurance that patents will be issued from
pending applications, or that claims allowed on any future patents will be
sufficiently broad to protect the Company's technology. In addition, to the
extent that patents are issued from pending applications, there can be no
assurance that any of such patents will not be challenged, invalidated or
circumvented, or that any rights granted thereunder will provide competitive
advantages to the Company. Although the Company believes that its products and
technology do not infringe the proprietary rights of others, and the Company
does not have any knowledge that its products infringe the proprietary rights of
any third parties, there can be no assurance that third parties will not assert
infringement claims in the future or that such claims will not be successful.

         The Company generally enters into confidentiality agreements with its
customers, suppliers and industry partners, and limits access to sensitive
information. Despite these precautions, it may be technologically possible for
competitors of the Company to "reverse engineer" or otherwise obtain information
regarding aspects of the Company's products that the Company regards as
proprietary. The laws of some foreign countries in which the Company sells or
may sell its products do not protect the Company's proprietary rights in its
products to the same extent, as do the laws of the Kingdom of Denmark and/or the
United States.

         The Company believes that, due to the rapid pace of innovation within
the LAN industry, factors such as the technological and creative skills of its
personnel, ongoing product support and


                                       12
<PAGE>   13


the management abilities of its employees are as important in establishing and
maintaining a leadership position within the industry as are the various legal
protections of its technology.

         Many of the Company's products are designed to include software or
other intellectual property licensed from third parties, and the loss of such
software or other rights might require significant changes in, or otherwise
disrupt or delay the distribution of, such products. While it may be necessary
in the future to seek or renew licenses relating to various aspects of its
products, the Company believes that, based upon past experience and standard
industry practice, such licenses generally could be obtained on commercially
reasonable terms. From time to time the Company receives communications from
third parties asserting that its use of trademarks, or that its products,
infringe or may infringe the rights of third parties. There can be no assurance
that any such claims will not result in protracted and costly litigation;
however, based upon general practice in the industry, the Company believes that
such matters can ordinarily be resolved without any material adverse impact on
its business, financial condition or results of operations. Nevertheless, there
can be no assurance that the necessary licenses would be available on acceptable
terms, if at all, or that the Company would prevail in any such challenge. The
inability to obtain certain licenses or other rights or to obtain such licenses
or rights on favorable terms, or litigation arising out of such other parties'
assertion, could have a material adverse effect on the business, financial
condition or results of operations of the Company.

TRADEMARK AGREEMENT

         The trademark "Olicom" (the "Trademark") is a registered trademark of
Ing. C. Olivetti & C., S.p.A. ("Olivetti"). Pursuant to a Trademark Agreement
dated December 11, 1998, Olivetti extended the grant to the Company of a
worldwide license to use the Trademark. The term of the Trademark Agreement
expires on September 1, 2009, with the Company having the right to extend the
term for an additional ten years. During the term of the Trademark Agreement and
for a period of one year after any termination thereof, Olivetti has agreed not
to use itself or grant to a third party any rights to use the Trademark on
products or services of the type manufactured, marketed or offered by the
Company. The Company has the right to terminate the Trademark Agreement for
convenience upon the provision of notice, as provided therein. The Trademark
Agreement supersedes a previous agreement between the Company and Olivetti.

         Olicom has trademarks on several selected products, such as
PowerMACH(TM), CellDriver(R), Lanscout(TM), RapidLan(TM) and WebSetGo(TM), and
on products and services included in the ClearStep(R) strategy such as
CrossFire(R), GoCard(R), RapidFire(R), ClearServer(TM), ClearSession(TM),
ClearSight(TM), ClearCare(TM), ClearPartner(TM) and ExpertWatch(TM).

EMPLOYEES

         In connection with corporate restructurings in September and November,
1998, the Company reduced its workforce by approximately 25%, primarily in sales
and marketing and in general and administrative functions (see note 8 to
Consolidated Financial Statements).

         As of March 1, 1999, the Company employed or retained (as employees or
independent contractors) approximately 615 persons, including 225 in sales and
marketing, 210 in product research and development, 85 in operations/production
(including quality assurance), and 95 in administration and finance. Of these
employees and independent contractors, approximately 190 were located in the
United States, 120 in Poland, 65 were located in the Company's offices in
Europe, Australia and Japan, and the remainder were located in Denmark


                                       13
<PAGE>   14


         Competition in the recruiting of highly qualified personnel in the
computer and communications industry is intense. The Company believes that its
future success will depend, in part, on its continued ability to hire, motivate
and retain qualified management, marketing and technical personnel. To date, the
Company has not experienced significant difficulty in attracting and retaining
qualified employees. The Company has entered into a local labor agreement
covering its warehouse employees in Denmark, a group comprised of approximately
20 persons. No other employees are represented by a labor union. The Company has
not experienced any work stoppages and considers its relations with its
employees to be good.


ITEM 2.  DESCRIPTION OF PROPERTY.

         The Company's principal administrative, marketing, product development,
support facilities, and training center, as well as a warehouse and distribution
facility, are located in a modernized three-story building and newly-constructed
adjacent buildings in Lyngby in the greater Copenhagen area where the Company
presently leases a total of approximately 125,000 square feet of floor space as
its international headquarters.

         The Company leases its international headquarters from a third-party
lessor pursuant to a lease that may be terminated by either party commencing in
2008, upon six months' notice, and which provides for increases in annual
rentals based on the increase in the Danish net price index, with an agreed
annual minimum increase of 2.5%. An immediately adjacent building that forms
part of the Company's headquarters complex is leased from a third party lessor
pursuant to a lease that may be terminated by either party commencing in 2006,
upon 12 months' notice, and which provides for an increase in annual rental
payments based on the increase in the Danish net price index, with an agreed
annual minimum increase of 2.5%. As a consequence of the Company's decision to
restructure its business as announced on November 30, 1998, it was decided to
sublet the adjacent building to a third party. Consequently, the Company has
entered into a contract with a local commercial real estate agent with the
purpose of identifying possible tenants and to conclude rental or sublease
agreements commencing in 1999. The Company has made provisions in the 1998
financial accounts to provide for lease payments for the estimated time required
to sublet the building (see note 8 to Consolidated Financial Statements). The
Company believes that its existing facilities are adequate for its current
needs. The Company believes that suitable space is available in the Copenhagen
area and that the three facilities should provide sufficient additional space
for foreseeable future expansion in Copenhagen.

         In December 1998, the Company entered into a 10 year lease agreement
with a third party for approximately 37,700 square feet of office space in
Gdansk, Poland, primarily for its Poland-based research and development
activities.

         The Company currently leases from third-party lessors an aggregate of
approximately 40,400 square feet of office space, together with warehouse space,
in metropolitan Dallas, Texas, to support North and South American sales and
marketing. Furthermore, the Company leases office space in numerous cities in
Europe to support sales and marketing, and also leases space for sales offices
in Singapore; Tokyo, Japan; Sydney, Australia; and Sandton, South Africa. The
Company believes that suitable additional space will be available in such
locations as required.


                                       14
<PAGE>   15


ITEM 3.  LEGAL PROCEEDINGS

         From time to time, the Company is involved in litigation relating to
claims arising out of its operations in the normal course of business. As of the
date of this Report, the Company was not a party to any legal proceedings, the
adverse outcome of which, in management's opinion, would have a material adverse
effect on the Company's business, results of operations or financial position.
See also "Description of Business -- Proprietary Rights."

         On or about September 13, 1996, Datapoint Corporation ("Datapoint")
commenced litigation in the United States District Court for the Eastern
District of New York against CrossComm Corporation (now known as Olicom, Inc.),
Cisco Systems, Inc., Plaintree Systems Corporation, Accton Technology
Corporation, Cabletron Systems, Inc., Bay Networks, Inc. and Asante
Technologies, Inc., individually, and as representatives of a putative class of
all manufacturers, vendors and users of Fast Ethernet dual protocol local-area
network products. In its complaint, Datapoint alleges that the defendants have
been, and still are, directly infringing U.S. Patent No. 5,077,732 by making,
using, selling and/or offering for sale products embodying inventions claimed in
that patent, and that the defendants are also infringing U.S. Patent No.
5,008,879 by using or selling products encompassed within that patent's claims.
On or about December 30, 1996, CrossComm filed its Answer and Counterclaims to
Datapoint's complaint by denying the essential allegations; asserting defenses
that the cited patents are invalid and void; and seeking declaratory judgment of
patent non-infringement and invalidity under applicable sections of the United
States Code. On October 9, 1998, the Court's magistrate adopted a special
master's claim construction, which favored a claim construction advocated by the
defendants. Subsequently, the parties entered into a Stipulated Order and
Judgment whereby the Court adopted the special master's claim construction in
total, and the Court granted summary judgment to the defendants, finding that
the accused products do not infringe Datapoint's patents involved in the
proceeding. On February 3, 1999, Datapoint appealed such judgment to the Court
of Appeals for the Federal Circuit. The outcome remains somewhat uncertain in
the event that the Court of Appeals were to reverse the lower court's judgment;
however, the Company does not believe that an adverse outcome to such litigation
would have a material adverse effect on the Company's business, financial
condition or results of operations.


ITEM 4.  CONTROL OF REGISTRANT

         As of March 22, 1999, the Company was not aware of any person who was
the beneficial owner of more than 10% of the outstanding shares of the Company,
nominal value DKK 0.25 per share ("Common Shares"). The following table sets
forth as of such date the number of Common Shares beneficially owned by all
directors and executive officers of the Company as a group:


                                       15
<PAGE>   16


<TABLE>
<CAPTION>
                                                           Amount of                    Percent of
                                                     Beneficial Ownership                Class (1)
                                                     --------------------               ----------
<S>                                                  <C>                                <C> 
All directors and executive officers
 as a group (consisting of 10 persons)                      276,748                         1.5%
</TABLE>

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

         (1)  Percentages in the foregoing table are based on 17,907,676 Common
              Shares issued and outstanding as of March 22, 1999, excluding
              667,340 Common Shares owned by the Company.


ITEM 5.  NATURE OF TRADING MARKET

         The Common Shares are traded on the Nasdaq National Market (under the
symbol OLCMF) and, since November 4, 1997, have been traded on the Copenhagen
Stock Exchange ("CSE"). The following table sets forth the high and low sales
prices of the Common Shares for the periods indicated, as reported by the Nasdaq
National Market ("Nasdaq") and the Copenhagen Stock Exchange.

<TABLE>
<CAPTION>
                                                     Nasdaq (1)                  CSE (1)       
                                                 --------------------       ------------------
                                                  High          Low          High        Low
                                                 ------        ------       ------      ------
<S>                                              <C>           <C>          <C>         <C>  
Calendar 1999
   First Quarter (through March 10, 1999)          8.00          3.88         52.4        25.9
Calendar 1998                                                                                  
   First Quarter                                  30.75         24.81        214.0       177.0
   Second Quarter                                 30.81         26.50        210.0       186.0
   Third Quarter                                  28.44         13.69        197.0        82.4
   Fourth Quarter                                 14.50          4.88         87.1        32.5
Calendar 1997
   First Quarter                                  19.63         14.50
   Second Quarter                                 18.75         13.50
   Third Quarter                                  30.00         15.50
   Fourth Quarter (2)                             34.63         25.00        212.0       175.0
</TABLE>

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

         (1)  Prices reported for Nasdaq are expressed in U.S. dollars; prices
              reported for the CSE are expressed in Danish kroner.

         (2)  The Common Shares began trading on the CSE on November 4, 1997.

         As of March 16, 1999, there were approximately 137 United States record
holders of Common Shares, who held approximately 83.7% of the outstanding Common
Shares as of such date. The foregoing includes 14,865,491 Common Shares held of
record by Depository Trust Company, as nominee for various beneficial holders of
the foregoing shares held of record by Depository Trust Company, on March 16,
1999, 13,021,223 Common Shares were held through the Danish Securities Center,
as nominee for various beneficial holders.


                                       16
<PAGE>   17


         In connection with the Company's acquisition of CrossComm on June 12,
1997, the Company issued three-year warrants ("Warrants") to purchase Common
Shares at an exercise price of $19.74 per whole Common Share. The Warrants are
traded only on the Nasdaq National Market (under the symbol OLCWF). The
following table sets forth the high and low sales prices of the Warrants for the
periods indicated, as reported by the Nasdaq National Market.


<TABLE>
<CAPTION>
                                                       Nasdaq
                                                  -----------------
                                                   High       Low
                                                  ------     ------
<S>                                               <C>        <C> 
Calendar 1999
   First Quarter (through March 10, 1999)           0.69       0.25
Calendar 1998
   First Quarter                                   12.75       8.13
   Second Quarter                                  12.00       7.25
   Third Quarter                                    9.00       1.00
    Fourth Quarter                                  1.50       0.13
Calendar 1997
   Second Quarter (1)                               4.00       3.00
   Third Quarter                                   12.00       3.50
   Fourth Quarter                                  15.25       8.25
</TABLE>

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

         (1) The warrants began trading on the Nasdaq National Market on June
13, 1997.

         As of March 16, 1999, there were approximately 94 United States record
holders of Warrants, who held approximately 99.9% of the outstanding Warrants as
of such date. The foregoing includes 918,823 Warrants held of record by
Depository Trust Company, as nominee for various beneficial holders.


ITEM 6.  EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS.

         There are no governmental laws, decrees or regulations of the Kingdom
of Denmark that restrict the export or import of capital (including, without
limitation, foreign exchange controls), or that affect the remittance of
dividends, interest or other payments to nonresident holders of Common Shares.
There are no limitations imposed by the laws of the Kingdom of Denmark or the
Company's Articles of Association (except for the Share Ownership Limit
described below) on the right of nonresident or foreign holders to hold or vote
Common Shares.

         The Articles of Association provide that no person, firm or entity
(each, a "person") may, without obtaining the approval of the Company's Board of
Directors, own more than 33% of the Company's share capital or votes at any time
(the "Share Ownership Limit"). The Company's Board of Directors may condition
its approval on the satisfaction of such conditions that it determines to be
appropriate. For the purpose of determining ownership of Common Shares or votes,
a person will generally be deemed to own Common Shares or votes which are
considered to be beneficially owned by such person under Rule 13d-3 under the
Exchange Act. A person who owns more than 33% of the Company's share capital or
votes at any time who has not obtained the approval of the Board of Directors
cannot be registered or otherwise accepted as a shareholder, and such person
will have no voting rights, rights to dividends or distributions,


                                       17
<PAGE>   18


or any other rights as a shareholder for the portion of such person's
shareholding that exceeds 33%. The Board of Directors may approve the ownership
by a person of more than 33% of the Company's share capital or votes in (i) the
event that such person has, prior to purchasing more than 33% of the Company's
share capital or votes, requested the approval by the Board of Directors to own
more than the Share Ownership Limit, (ii) the event that such person has made a
legally binding and irrevocable bona fide offer to all shareholders of the
Company (other than such person, to the extent that he or she is a shareholder)
to purchase all the Common Shares and votes in the Company at a price deemed
favorable by the Board of Directors, in its discretion, or (iii) in such other
circumstances, as determined by the Company's Board of Directors.

         Other than the foregoing, there are no limitations by the Company's
Articles of Association on the right of holders to hold or vote Common Shares.


ITEM 7.  TAXATION.

         The following summary of certain United States federal and Danish tax
matters is based on tax laws of the United States and Denmark as in effect on
the date of this Report, and is subject to changes in United States and Danish
law, including changes that could have retroactive effect. The following summary
is also based on the current United States-Denmark Double Taxation Convention
which is subject to change. This discussion is based on current laws and
interpretations thereof, and there can be no assurance that future legislation,
regulations, administrative rulings or court decisions will not adversely affect
the accuracy of the statements contained herein.

         The following summary does not consider or discuss the tax laws of any
country other than the United States or Denmark. This summary does not describe
United States federal estate and gift tax considerations, nor state, local or
provincial tax considerations. Furthermore, this summary does not address United
States federal income tax or Danish tax considerations relevant to United States
holders of Common Shares or Warrants subject to taxing jurisdictions other than
or in addition to the United States, and does not address all possible
categories of United States holders, some of whom (such as financial
institutions, trusts, estates, insurance companies, dealers in securities,
certain retirement plans and tax exempt organizations) may be subject to special
rules.

         This summary contains a description of the material United States
federal income tax and Danish tax consequences of the purchase, ownership and
disposition of Common Shares and Warrants by a beneficial owner that (i) is an
individual citizen or resident in the United States (for United States federal
income tax purposes), a corporation or partnership organized under the laws of
the United States or any state thereof, or estates or trusts the income of which
is subject to United States federal income tax regardless of its source, (ii) is
not also a resident or corporation of Denmark and is not domiciled in Denmark,
(iii) does not hold Common Shares or Warrants in connection with any permanent
establishment or fixed base in Denmark, (iv) does not own, and has not owned
(directly, indirectly or by attribution) at any time, 10% or more of the total
combined voting power of the Company, and (v) holds Common Shares or Warrants as
capital assets. The term "United States holder," as used in this summary, means
a beneficial owner of Common Shares or Warrants meeting these requirements.
UNITED STATES HOLDERS OF COMMON SHARES OR WARRANTS SHOULD CONSULT THEIR OWN TAX
ADVISORS AS TO THE UNITED STATES, DANISH OR OTHER TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF COMMON SHARES AND WARRANTS.


                                       18
<PAGE>   19


UNITED STATES TAX CONSEQUENCES OF OWNERSHIP OF COMMON SHARES

         Dividends. For United States federal income tax purposes, the gross
amount of all dividends (that is, the amount before reduction for Danish
withholding tax) paid with respect to Common Shares out of the current or
accumulated earnings and profits of Olicom ("E&P") to a United States holder
will be subject to United States federal income taxation as foreign source
dividend income. United States corporations that hold Common Shares will not be
entitled to the dividends received deduction available for dividends received
from United States corporations. To the extent that a distribution exceeds E&P,
it will be treated first as a return of capital to the extent of the United
States holder's basis, and then, as gain from the sale of a capital asset.

         For United States federal income tax purposes, the amount of any
dividend paid in Danish kroner will be the United States dollar value of the
kroner at the exchange rate in effect on the date of receipt, whether or not the
kroner is converted into United States dollars at that time.

         The withholding tax imposed by Denmark generally is a creditable
foreign tax for United States federal income tax purposes. Therefore, a United
States holder generally will be entitled to include the amount withheld as
foreign tax paid in computing a foreign tax credit (or in computing a deduction
for foreign income taxes paid, if the United States holder does not elect to use
the foreign tax credit provisions of the Internal Revenue Code of 1986, as
amended (the "Code")). The Code, however, imposes a number of limitations on the
use of foreign tax credits, based on the particular facts and circumstances of
each taxpayer. United States holders who hold Common Shares should consult their
tax advisors regarding the availability of the foreign tax credit.

         A United States holder also may be subject to backup withholding at the
rate of 31% with respect to dividends paid on or proceeds from the sale or other
disposition of Common Shares, unless the United States holder (i) is a
corporation or comes within certain other exempt categories or (ii) provides a
taxpayer identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable requirements of the backup
withholding rules.

         Sale or Other Disposition of Common Shares. Gain or loss recognized by
a United States holder on the sale or other disposition of Common Shares will be
subject to United States federal income taxation as capital gain or loss in an
amount equal to the difference between such United States holder's basis in the
Common Shares and the amount realized upon such disposition. The capital gain or
loss will be long term or short term depending on whether the holder has held
the Common Shares for (i) more than 12 months (which is subject to a maximum
United States federal income tax rate of 20% for certain non-corporate
taxpayers) or (ii) not more than one year (which is subject to a maximum United
States federal income tax rate of 39.6% for certain non-corporate taxpayers).
Capital losses are generally deductible only against capital gains and not
against ordinary income.

         Capital gain recognized by a United States holder on the sale or other
disposition of Common Shares will be United States source gain. Treasury
Regulations have been finalized under which losses from the sale of Common
Shares would generally be sourced in the same manner as gains from the sale of
such Common Shares. However, the final regulations include a dividend recapture
rule and other exceptions that may apply. United States holders of Common Shares
should consult their tax advisors regarding the proper treatment of such losses.


                                       19
<PAGE>   20


UNITED STATES TAX CONSEQUENCES OF OWNERSHIP OF WARRANTS

         Exercise of Warrants. Generally, no gain or loss will be recognized for
United States federal income tax purposes upon exercise of a Warrant. A holder's
initial tax basis in a Warrant will be equal to the value of the Warrant at the
time the holder receives such Warrant. The tax basis of the Common Shares
acquired upon exercise of a Warrant will be equal to the sum of (i) the holder's
tax basis in such Warrant and (ii) the exercise price. The holding period of the
Common Shares acquired upon exercise of a Warrant will begin on the date of the
exercise of the Warrant.

         Disposition of Warrants. In general, the sale, exchange or other
taxable disposition of a Warrant will result in gain or loss to the holder in an
amount equal to the difference between the amount realized on such sale,
exchange or other disposition and the holder's tax basis in the Warrant. Such
gain or loss generally will be capital gain or loss (so long as the Warrant is a
capital asset in the hands of the holder) and such capital gain or loss will be
long term or short term depending on whether the holder has held the Warrant for
(i) more than 12 months (which is subject to a maximum United States federal
income tax rate of 20% for certain non-corporate taxpayers) or (ii) not more
than one year (which is subject to a maximum United States federal income tax
rate of 39.6% for certain non-corporate taxpayers).

         Expiration. The expiration of a Warrant should generally result in a
capital loss to the holder equal to the holder's tax basis in the Warrant if the
Common Shares issuable upon exercise of the Warrant would have been a capital
asset if acquired by such holder.

         Adjustments to Conversion Ratio. Adjustments made to the number of
Common Shares that may be acquired upon the exercise of a Warrant, or the
failure to make such adjustments, may result in a taxable distribution to the
holder of a Warrant pursuant to Section 305 of the Code.

DANISH TAX CONSEQUENCES OF OWNERSHIP OF COMMON SHARES

         Dividends. For Danish income tax purposes, the gross amount of all
distributions made by the Company to its shareholders prior to the fiscal year
in which the Company is completely liquidated and dissolved is taxed as a
dividend. Distributions made by the Company to its shareholders during the
fiscal year in which the Company is completely liquidated and dissolved are
taxed as capital gain. In addition, the gross amount paid by the Company to
redeem Common Shares owned by a shareholder generally is taxed as a dividend.
However, a shareholder may apply to Danish tax authorities for an exemption from
the dividend tax. If the exemption request is granted, the redemption will be
taxed as capital gain. The granting of bonus shares to shareholders, and the
right of shareholders to subscribe for Common Shares at a price that is less
than the current trading value of such Common Shares, are not considered taxable
distributions to shareholders.

         In general, a Danish withholding tax of 25% is levied on all dividends.
However, a United States holder may apply to the Danish tax authorities for a
partial refund of the dividends tax that has been withheld. If this refund
request is granted, the Danish withholding tax on such dividends is effectively
reduced to 15%. The Company does not presently contemplate the payment of any
cash dividends on Common Shares. However, should the Company decide to make
payment of a cash dividend, the Company will apply to the Danish tax authorities
for a blanket exemption that would allow the Company to withhold only 15% of all
dividends paid to a United States holder. While the Company believes that such
an exemption will be granted, there can be no assurance that this will occur.


                                       20
<PAGE>   21


         Sale or Other Disposition of Common Shares. Capital gains realized by
United States holders upon the sale or other disposition of Common Shares should
be exempt from Danish taxation.

DANISH TAX CONSEQUENCES OF OWNERSHIP OF WARRANTS

         Exercise of Warrants. Generally, a United States holder should not
recognize taxable gain or loss for Danish income tax purposes upon the exercise
of a Warrant.

         Sale of Warrants. Generally, a United States holder should not
recognize taxable gain or loss for Danish income tax purposes upon the sale of a
Warrant.

         Expiration. Upon the expiration of a Warrant, a United States holder
should not recognize taxable gain or loss for Danish income tax purposes.

DANISH SHARE TRANSFER DUTY

         No Danish share transfer duty is levied on the disposal of Common
Shares or Warrants by a United States holder.

DANISH ESTATE AND GIFT TAXES.

         Generally, if a United States holder acquires or disposes of Common
Shares or Warrants by inheritance, legacy or gift, such holder will not be
subject to Danish gift or inheritance taxes. If a United States holder should
make a gift of such Common Shares or Warrants to a close relative resident in
Denmark other than a spouse, the United States holder could be liable for Danish
gift tax; however the tax is subject to reduction under the United
States-Denmark Double Taxation Convention with respect to taxes on estates,
inheritance and gifts.


ITEM 8.  SELECTED FINANCIAL DATA.

         The following table sets forth certain financial information with
respect to the Company for the five years ended December 31, 1998. This
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Company's
Consolidated Financial Statements and related notes included elsewhere herein.


                                       21
<PAGE>   22


<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31,
                                                 -------------------------------------------------------------
                                                   1994         1995         1996         1997         1998
                                                 ---------    ---------    ---------    ---------    ---------
<S>                                              <C>          <C>          <C>          <C>          <C>      
                                                               (IN THOUSANDS, EXCEPT PER SHARE DATA)
STATEMENT OF OPERATIONS DATA:
   Net sales                                     $ 113,604    $ 127,469    $ 142,437    $ 209,985    $ 206,817
   Cost of sales                                    61,198       65,191       77,048      101,633      119,336
   Special charges related to inventories                0            0            0            0        3,463
                                                 ---------    ---------    ---------    ---------    ---------
   Gross profit                                     52,406       62,278       65,389      108,352       84,018
                                                 ---------    ---------    ---------    ---------    ---------
OPERATING EXPENSES:
   Sales and marketing                              23,783       31,660       37,399       50,204       68,216
   Research and development                          7,531        9,193       11,218       15,477       20,975
   General and administrative                        4,440        5,662        7,103       10,833       13,296
   Acquisition-related expenses                          0            0        3,787       40,917            0
   Restructuring charges                                 0            0            0            0        7,327
                                                 ---------    ---------    ---------    ---------    ---------
       Total operating expenses                     35,754       46,515       59,507      117,431      109,814
                                                 ---------    ---------    ---------    ---------    ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS            16,652       15,763        5,882       (9,079)     (25,796)
   Interest income, net                              2,411        3,211        1,672        3,037        2,425
   Foreign currency gains (losses)                      19          (31)        (632)      (2,483)         448
   Related party gain on sale of
      investment                                         0            0        2,878            0            0
   Settlement of litigation                         (4,200)           0            0            0            0
                                                 ---------    ---------    ---------    ---------    ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES                               14,882       18,943        9,800       (8,525)     (22,923)
   Provision for income taxes                        5,026        6,223        3,992       10,332         (153)
                                                 ---------    ---------    ---------    ---------    ---------
INCOME (LOSS) FROM CONTINUING OPERATIONS
  BEFORE CHANGE IN ACCOUNTING METHOD                 9,856       12,720        5,808      (18,857)     (22,770)
   Income (loss) from discontinued
      operations                                        51           86        1,617          736         (169)
   Cumulative effect of change in
     accounting methods, net of taxes                  161            0            0            0            0
                                                 ---------    ---------    ---------    ---------    ---------
NET INCOME (LOSS)$                               $  10,068    $  12,806    $   7,425    $ (18,121)   $ (22,939)
                                                 =========    =========    =========    =========    =========
DILUTED EARNINGS (LOSS) PER SHARE                $    0.66    $    0.87    $    0.50    $   (1.15)   $   (1.28)
                                                 =========    =========    =========    =========    =========
WEIGHTED AVERAGE SHARES OUTSTANDING
    EXCLUDING COMMON STOCK EQUIVALENTS
    IN 1997 AND 1998                                15,298       14,748       14,786       15,745       17,894
                                                 =========    =========    =========    =========    =========
</TABLE>

<TABLE>
<CAPTION>
                                                       DECEMBER 31,
                                     1994       1995       1996       1997       1998
                                   --------   --------   --------   --------   --------
                                                      (IN THOUSANDS)
<S>                                <C>        <C>        <C>        <C>        <C>     
BALANCE SHEET DATA:
   Working capital                 $ 66,427   $ 78,600   $ 79,827   $ 92,905   $ 71,848
   Total assets                     108,917    127,327    114,079    159,038    142,146
   Total shareholders' equity        78,191     90,127     90,945    125,559    103,023
</TABLE>


ITEM 9.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

         Certain statements included in this Report include trend analysis and
are forward-looking statements (within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act), including, without
limitation, statements containing the words "believes", "anticipates",
"expects", "plans", "may", "will", "should", "objective", "target", "goal",
"strategy" or "continue" or the negative of such terms or other words of similar
import. Such forward-looking statements relate to future


                                       22
<PAGE>   23


events, the future financial performance of the Company, and involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Prospective investors
should specifically consider the various factors identified in this Report that
could cause actual results to differ, including, without limitation, those
discussed in the following section, as well as in the section titled
"Description of Business". The Company is under no duty to update any such
factors or to update any of the forward-looking statements after the date of
this Report to conform such statements to actual results. The following
discussion should be read in conjunction with the Consolidated Financial
Statements and related notes.

OVERVIEW

         The Company's wholly-owned subsidiaries include Olicom Ventures A/S
("Olicom Ventures"), Olicom Finance Limited and Olicom Trading A/S. Olicom, Inc.
is a wholly-owned subsidiary of Olicom Trading A/S. Prior to the date of this
Report, Olicom Enterprise Products, Inc. (which formerly operated CrossComm)
merged with Olicom, Inc.

         On January 15, 1999, the Company closed the divestiture of its
shareholding in Lasat. The Consolidated Statements of Income for 1996, 1997 and
1998 include the results of operations of Lasat through December 1998 (the
measurement date), under the caption "Income (loss) from discontinued
operations, net of tax". Accordingly, the Consolidated Statements of Income do
not consolidate Lasat's operations with the Company's other operations during
such periods. The Consolidated Balance Sheets as of December 31, 1997 and 1998,
have been restated to segregate the Company's investment in Lasat under the
caption "Net assets of discontinued operations". The Consolidated Statements of
Cash Flows for the years ended December 31, 1996, 1997 and 1998, similarly have
been restated to reflect the results of operations of Lasat under the caption
"Income (loss) from discontinued operations". The gain from the divestiture
amounts to approximately $1.4 million, which will be recognized in 1999.

         The Company's functional currency is the U.S. dollar. The Company
prepares its financial statements in U.S. dollars and in accordance with
accounting principles generally accepted in the United States ("U.S. GAAP").
References herein to "U.S. dollars" or "$" are references to United States
currency, and references to "Danish kroner," "kroner" or "DKK" are references to
Danish currency.

RESULTS OF OPERATIONS

         The following table sets forth, for the periods indicated, certain
financial data as percentages of the Company's net sales. The Company believes
that period to period comparisons of its financial results are not necessarily
meaningful and should not be relied upon as an indicator of future performance:


                                       23
<PAGE>   24


<TABLE>
<CAPTION>
                                                       YEAR ENDED DECEMBER 31,         
                                                     --------------------------
                                                      1996      1997      1998
                                                     ------    ------    ------
<S>                                                  <C>       <C>       <C>   
Net sales ......................................      100.0%    100.0%    100.0%
Cost of sales ..................................       54.1      48.4      57.5
Special charges related to inventories .........         --       --        1.7
                                                     ------    ------    ------
   Gross profit ................................       45.9      51.6      40.6
Operating expenses:
   Sales and marketing .........................       26.3      23.9      33.0
   Research and development ....................        7.9       7.4      10.1
   Purchased research and development ..........         --        --        --
   General and administrative ..................        5.0       5.2       6.4
   Restructuring charges .......................         --        --       3.5
   Acquisition-related expenses ................        2.7      19.5        --
                                                     ------    ------    ------
   Total operating expenses ....................       41.8      55.9      53.1
                                                     ------    ------    ------
Income (loss) from continuing operations .......        4.1      (4.3)    (12.5)
   Interest income, net ........................        1.2       1.4       1.2
   Foreign currency gains (losses) .............       (0.4)     (1.2)      0.2
   Related party gain on sale of investment ....        2.0        --        --
                                                     ------    ------    ------
Income (loss) from continuing operations
before income taxes ............................        6.9      (4.1)    (11.1)
   Provision for income taxes ..................       (2.8)     (4.9)      0.1
                                                     ------    ------    ------
Income (loss) from discontinued operations .....        1.1       0.4      (0.1)
                                                     ------    ------    ------
Net income (loss) ..............................        5.2%     (8.6)%   (11.1)%
                                                     ======    ======    ======
</TABLE>


    YEARS ENDED DECEMBER 31, 1997 AND 1998

         Divestiture of Lasat A/S. As noted above, the Company has divested its
interest in Lasat. Therefore, for comparison reasons, the following discussion
of the years ended December 31, 1997 and 1998, excludes the results of
operations of Lasat.

         Net sales. Net sales decreased from $210.0 million in 1997 to $206.8
million in 1998. Net sales in North and South America (the "Americas") decreased
from $112.3 million in 1997 to $106.0 million in 1998, while sales outside of
the Americas increased from $97.7 million in 1997 to $100.8 million in 1998.

         During fiscal 1998, Olicom brand-name sales (which increased 56% and 1%
during 1997 and 1998, respectively) constituted 92% of net sales, while sales to
OEMs (which decreased 2% and 3% in 1997 and 1998, respectively) accounted for 8%
of net sales.

         During 1998, the Company's revenues were favorably influenced by the
sales of Network Infrastructure Products, as to which net sales increased from
$49.2 million in 1997 to $64.9 million in 1998. This product group includes
Token-Ring and ATM switches and the product portfolio acquired from the former
CrossComm. In addition, the Company's revenues reflected 12 months operations of
the former CrossComm, while revenues during 1997 reflected only operations of
the former CrossComm subsequent to June 12, 1997.

         As a consequence, primarily due to increased price competition with
respect to Network Interface Cards, revenue derived from such products decreased
to $110.6 million, from $128.5 million in 1997, a decrease of 14%.


                                       24
<PAGE>   25


         Total service revenue during 1998 was $8.5 million, an increase of 43%
compared with 1997. However, the expansion of the Company's professional service
relationship with Vital Network Services during the fourth quarter of 1998,
resulted in decreased service revenue during such quarter, and is expected to
further decrease service revenue during 1999. It should be noted that levels of
service revenue during 1997 substantially related to revenue during the last six
months of such period, owing to the acquisition of the former CrossComm in June
1997 (and, as a result, service revenues during 1998 reflected revenues during a
longer period than in 1997).

         Sales to a single distributor were $24.7 million, or 11.8% of net
sales, in 1997, compared to $37.1 million, or 17.9% of net sales during 1998.

         Gross Profit. Gross profit decreased by 22.5%, from $108.4 million in
1997 to $84.0 million in 1998, and decreased as a percentage of net sales from
51.6% in 1997 to 40.6% in 1998. The decrease in gross margins was primarily due
to increased price competition for both the Network Interface Card and switch
markets, and the Company's inability during 1998 to sufficiently reduce
manufacturing costs in its product line to compensate for declines in selling
prices. In addition, during 1998 the Company incurred a $3.5 million special
charge, primarily related to write-offs of inventory of obsolete products.

         The Company will continue to seek reductions in manufacturing costs to
enable it to remain price competitive and to temper the impact that price
reductions may have on gross margins.

         Expenses. Total operating expenses decreased by $7.6 million during
1998; however, when adjusted for acquisition-related expenses in 1997 of $40.9
million and restructuring charges of $7.3 million in 1998, there would have been
a net increase in total operating expenses of $26.0 million during 1998, an
increase of 34% when compared to 1997. The main reason for this increase is that
1997 did not reflect a full year of inclusion of CrossComm's operations in the
Company's results of operations (such operations were included subsequent to
CrossComm's acquisition in June 1997). The major increases in expenses during
1998 related to employee costs as well as sales promotion. As a consequence of
revenue not developing as planned, the Company launched a new strategy on
November 30, 1998, in order to better align expenses to revised revenue
expectations.

         Employee Costs. Total employee costs rose 38% to $62.1 million in 1998.
This increase is mainly attributable to CrossComm's operations being included in
the Company's results during only the last six months of 1997, as well as a
higher average number of employees for the entire 12 months of 1998, when
compared to 1997 (when employee headcount increased during the last six months
of such year as a result of the CrossComm acquisition). During the first ten
months of 1998, the number of employees increased slightly, when compared to
1997; however, by December 31, 1998, employee headcount decreased to 671, a
16.9% reduction compared with the headcount at December 31, 1997.

         Depreciation and Amortization. Total depreciation and amortization,
which are included in the respective expense items, increased 51% during 1998,
to $8.9 million. The increase is attributable in part to the expense associated
with the amortization for a full 12 months during 1998 of goodwill recorded in
connection with the acquisition of CrossComm that was included only for six
months in 1997. The major part of the increase in depreciation and amortization
is due to increased investment in hardware and software in 1998, as well as
improvements associated with the lease of new premises in Lyngby, Denmark, in
late 1997. The depreciation of capitalized software relates to the further
implementation of the Company's integrated management information system.


                                       25
<PAGE>   26


         Sales and Marketing. Sales and marketing expenses increased 36%, from
$50.2 million in 1997 to $68.2 million in 1998. The increase in the amount of
sales and marketing expenses during 1998 was primarily due to increased
marketing activities in the United States, Europe and the Far East. In late
1998, the Company significantly reduced its headcount in this area, and expenses
relating to sales and marketing personnel are expected to decrease accordingly
in the future.

         Research and Development. Research and development expenses increased
36%, from $15.4 million in 1997 to $21.0 million in 1998. The increase in
research and development expenses is in line with the strategic decision to be a
leading supplier of Token-Ring solutions and ATM and Ethernet switching. The
Company considers research and development expenditures to be critical to future
net sales and intends to continue these expenditures at a level that constitutes
a significant percentage of net sales.

         General and Administrative. General and administrative expenses
increased 23%, from $10.8 million in 1997 to $13.3 million in 1998. The increase
is attributed to an increased average number of employees in 1998 compared to
1997, and to increased occupancy expense during 1998.

         Restructuring Charges. The Company incurred restructuring charges
related to two separate corporate actions. The expansion of the Company's
professional service relationship with Vital Network Services in September 1998
resulted in the transfer or termination of approximately 50 employees in
administrative functions. As a result thereof, the Company recorded charges of
$2.3 million related to staff reductions and fixed asset write-offs.

         The second corporate action was the implementation of a new strategy
designed to optimize the business model and the efficiency of the organization.
A result of this initiative was a reduction in the number of employees by
approximately 20%. As a result thereof, the Company recorded charges of $6.6
million related to staff reductions and fixed asset write-offs.

         Interest and Other Financial Income/Expenses. Net interest and other
financial income and expenses decreased from an income of $3.0 million in 1997
to $2.4 million in 1998. This decrease was primarily caused by a reduction in
cash and cash equivalents from $45.3 million as of the end of 1997 to $22.2
million as of the end of 1998.

         Income Taxes. The Company's income tax decreased from $10.3 million
during 1997 to a tax benefit of ($153,000) for 1998.

YEARS ENDED DECEMBER 31, 1997 AND 1996

         Divestiture of Lasat A/S. As noted above, the Company has divested its
interest in Lasat. Therefore, for comparison reasons, the following discussion
of the years ended December 31, 1996 and 1997, excludes the results of
operations of Lasat.

         Net sales. Net sales increased from $142.4 million in 1996 to $210
million in 1997, which was an increase of 47 %. Net sales in the Americas
increased from $61.7 million in 1996 to $112.3 million in 1997, while sales
outside of the Americas increased from $80.7 million in 1996 to $97.7 million in
1997. The increase in net sales in 1997 was primarily due to the inclusion,
since June 12, 1997, of the net sales of the former CrossComm, as well as
increase in the sales of Olicom products, particularly in the Americas.


                                       26
<PAGE>   27


         Gross Profit. Gross profit increased by 65.7%, from $65.4 in 1996 to
$108.4 million in 1997 and increased as a percentage of net sales from 45.9% in
1996 to 51.6% in 1997. The increase in gross margins was due to a more favorable
product mix and the inclusion of the former CrossComm in the results of the
Company's operations, as CrossComm operated at a higher average gross margin
than the Company had historically experienced. Also, gross margins were
favorable impacted by cost reductions resulting primarily from cost improved
product designs, volume-based component purchasing efficiencies, large-scale
manufacturing, and continued reductions in other material costs.

         Sales and Marketing. Sales and marketing expenses increased from $37.4
million in 1996 to $50.2 million in 1997, but decreased as a percentage of net
sales from 26.3% in 1996 to 23.9% in 1997. The increase in the amount of sales
and marketing expenses during 1997 was primarily due to increased marketing
activities in the United States, Europe and the Far East, including increased
travel, office and personnel expenses and due to the inclusion of the former
CrossComm's operations within the Olicom group. During 1997, the Company
committed significant additional resources to support its direct sales
organization and expand its marketing organization and programs both in the
United States and in Europe.

         Research and Development. Research and development expenses increased
from $11.2 million in 1996 to $15.4 million in 1997, but decreased as a
percentage of net sales from 7.9% in 1996 to 7.4% in 1997. The increase in
research and development expenses was primarily attributable to increased
personnel expenses associated with enhancements of current products and to
expenditures related to new product development, including ATM and LAN
switching.

         General and Administrative. General and administrative expenses
increased from $7.1 million in 1996 to $10.8 million in 1997 and increased as a
percentage of net sales from 5.0% in 1996 to 5.2% in 1997. These increased
expenses reflected the inclusion of the former CrossComm's operations within the
Company, together with the expense of salaries for additional personnel and
costs related to increases in volume.

         Acquisition Related Expenses and Other Charges and Income. During the
second quarter of 1997, the Company purchased the former CrossComm. For fiscal
1997, a $40.9 million non-recurring charge was taken as a result of the
write-off of in-process research and development projects of the former
CrossComm and other transaction related expenses.

         During 1997 the Company also exercised its option to acquire a 35%
interest in Digianswer A/S, a Danish high tech development company.

         Income Taxes. The Company's income tax increased from $4.0 million
during 1996 to $10.3 for 1997 despite the net loss for the year, as the one time
charges in 1997 relating to the CrossComm acquisition were not deductible for
tax purposes.


                                       27
<PAGE>   28


LIQUIDITY AND CAPITAL RESOURCES

         During 1998, Olicom had a negative cash flow of $16.1 million from
operating activities and made $9.6 million (net) in capital expenditures. The
Company's available cash and short-term investments totaled $22.2 million as of
December 31, 1998, which represented 15.7% of total assets.

         The Company had unsecured line of credit facilities for an aggregate
amount of $9.3 million at December 31, 1998, of which no advances were
outstanding at such date. These facilities support working capital requirements.
In addition, Olicom has established a committed facility for an aggregate amount
of $10 million to support the Company's future operations.

         The decrease in net cash provided by operating activities to $16.1
million in 1998 was due in significant part to the Company's net loss of $22.9
million and depreciation and amortization expense of $8.9 million. This decrease
was offset somewhat by a reduction in accounts receivable of $11.5 million, due
to decreased fourth quarter sales, and by an increase in inventories of $11.9
million, due to the decision made by the Company in the fourth quarter to reduce
channel inventory levels.

         Net cash used in investing activities during 1997 and 1998 was $5.9
million and $9.6 million, respectively, and consisted in large part of capital
expenditures associated with the expansion of sales and marketing, research and
development, and general and administrative activities. At December 31, 1998,
the Company had no material commitments for capital expenditures.

         The Company believes that cash presently at its disposal, together with
established credit facilities, will be sufficient to finance the Company's
operations and currently projected capital expenditures through 1999.

         To date, inflation has not had a material impact on the Company's
financial results.

         The Company presently intends to retain any earnings for use in its
business and, therefore, does not anticipate paying any cash dividends in the
foreseeable future. If and when dividends are paid, such payment will be made in
Danish kroner.

         Olicom believes that the financial resources presently at its disposal
will be sufficient to finance the Company's operations for the next twelve
months.

RECENT DEVELOPMENTS

         During the first quarter of 1999, the Company acquired an additional
31.9% interest in Digianswer A/S, a provider of technology for local wireless
communication, with competencies with respect to the design and development of
products and technologies for mobile communications, hands-free telephony, voice
recognition and software code for digital signal processing of voice. Digianswer
is involved in the development and implementation of the new "Bluetooth"
technology for local wireless communication, which is supported by major vendors
in the converging telecom and data networking industries.

         The Company recently reported results of operations for the first
quarter of 1999. Net sales for such period were $37.1 million, a 37.9% decrease
compared to the same period in 1998 (but, a 60.7% increase compared to the
fourth quarter of 1998). The net loss for the quarter was $5.8 million, compared


                                       28
<PAGE>   29


to $4.6 million in net income reported for the first quarter of 1998 (the
Company reported a net loss of $29.9 million during the fourth quarter of 1998).
The loss per share for the first quarter of 1999 was $0.32, compared to earnings
per share of $0.25 during the same period in 1998 (and a loss per share of $1.68
during the fourth quarter of 1998). The loss per share during the first quarter
of 1999 reflected a special charge of $1 million, and a $1.4 million gain on the
sale of discontinued operations.

         If the Token-Ring market continues to weaken, and with the
disappointing first quarter revenue, achievement of Olicom's financial targets
for full year 1999 will be more difficult. Achievement of Olicom's financial
goals is predicated on the Company's penetration of the Fast Ethernet switching
market, the successful establishment of strategic alliances, and its continued
leadership in Token-Ring.

YEAR 2000

         As is the case with many computer software systems, some of the
Company's systems use two digit data fields which recognize dates using the
assumption that the first two digits are "19". Therefore, the Company's date
critical functions relation to the Year 2000 and beyond, such as sales,
distribution, purchasing, inventory control, facilities, and financial systems
may be severely affected unless changes are made to these systems. Olicom has
since mid-1998 been in the process of reviewing the Company internal systems to
identify applications that are not Year 2000 compliant. The Company expects that
the initiatives currently being implemented will be sufficient in addressing
issues relating to internal systems.

         The Company does not anticipate that addressing the Year 2000 problem
for its internal information systems will have a material adverse effect on its
business, financial condition or results of operations. Costs incurred by the
Company to modify or replace non-compliant systems have not been material to
date. Based on current assessment, the Company does not foresee the remediation
costs to be material. The main contributions to such costs have been and are the
acceleration of system upgrades and application projects. However, there can be
no assurance that these costs will not be greater than anticipated, or that
corrective actions undertaken will be completed before any Year 2000 problems
could occur.

         The Company's business, financial condition and results of operations
also could be materially adversely affected if it were to be held responsible
for the failure of any products sold by the Company to be Year 2000 compliant

         The Year 2000 issue could negatively affect the demand for the Company
products especially in the fourth quarter of 1999. The costs can also be
negatively affected by the Year 2000 issue. These combining factors, while not
quantified, could have a material adverse effect on the Company's business,
financial condition and results of operations.

         The Company has certain key relationships with suppliers and certain
customers. If these suppliers or customers fail to adequately address the Year
2000 issue for their processes, this could have a material adverse effect the
Company's business, financial condition and results of operations. The Company
is still assessing the effect the Year 2000 issue will have on its suppliers and
customers, and at this time cannot determine the impact, if any, that it will
have.


                                       29
<PAGE>   30


COMMON EUROPEAN CURRENCY

         The Treaty on European Economic and Monetary Union provides for the
introduction of a single European currency, the Euro, in substitution for the
national currencies of the member states of the EU that adopt the Euro. The Euro
became a reality on January 1, 1999 when irrevocable conversion rates were set
between the national currencies of the 11 member states of the EU that have
qualified to participate, and have elected to participate, in the Euro at this
time and when foreign exchange operations in the Euro commenced. Of the European
countries in which Olicom maintains a presence, the Netherlands, France, Germany
and Spain are among such 11 member states. Sweden did not qualify, and the
United Kingdom and Denmark elected not to participate in the Euro at this time.
Poland is not currently a member state of the EU. In the near term, the
introduction of the Euro is not expected to impact the Company's business
significantly, as the Company plans to continue to conduct its operations
primarily in U.S. dollars, which is generally the functional currency in the
data networking industry. In the long term, however, management believes that
adoption of the Euro might reduce the Company's risk exposure to currency
exchange fluctuations, the Company's costs of maintaining different accounting
and other systems for different currencies, and the management of foreign
currency risk.

BUSINESS ENVIRONMENT AND RISK FACTORS

         The Company's future operating results may be affected by various
trends and factors, which the Company must successfully manage in order to
achieve favorable operating results. In addition, there are trends and factors
that are beyond the Company's control that may affect its operations.

         Such trends and factors include, without limitation, the following:
conditions within the networking industry, and economic conditions generally;
rapid technological change, frequent product introductions, changes in customer
needs and evolving industry standards, which require that the Company continue
to add engineering refinements to its existing products and develop and
introduce new products which achieve market acceptance; difficulties or delays
in the development, production and marketing of products, including, without
limitation, any failure to ship new products and technologies when anticipated
and a failure of manufacturing economies to develop when planned; fluctuations
in the Company's revenues and operating results from quarter to quarter, due to
a variety of factors, including, among others, the timing of significant orders,
the timing of product introductions by the Company or its competitors,
variations in net revenues by product and distribution channel, increased price
and other competition, and decisions by distributors and OEMs as to the quantity
of the Company's products to be maintained in inventories; the failure of the
Company to timely and successfully execute material aspects of its revised
business strategy; pricing, purchasing, operational and promotional decisions by
distributors, value added resellers and OEMs, which could affect their supply
of, or end-user demand for, the Company's products; the absence of long-term
obligations on the part of distributors and OEMs to purchase products from the
Company (and the implicit risk of any unanticipated declines in sales to any of
the Company's material customers for competitive reasons or because of the
internalization of production of products purchased from the Company on an OEM
basis); the Company's shipment of products shortly after receipt of a purchase
order, with the result that a substantial portion of the Company's revenues for
any quarter results from orders received during such quarter, and minor shifts
in the timing of purchase orders can have a significant effect on net sales for
any quarter; the Company's failure to accurately anticipate the demand for its
products, due to, among other things, the fact that the Company's expectations
of future net sales as well as its expenditures are based largely on its own
estimate of future demand and not on firm customer orders; declines in the
demand for Desktop Network Interface Cards,


                                       30
<PAGE>   31


which accounted for approximately 53.5% of the Company's net sales during 1998;
the effect that consolidation in the LAN industry may have on the competitive
position of the Company and its revenues and operating results; the acquisition
of assets and businesses and the making or incurring of any expenditures and
expenses in connection therewith, including, without limitation, any research
and development expenses relating thereto; the ability of the Company to reduce
product and other costs; the activities of any parties with whom the Company has
an agreement or understanding, including, without limitation, issues affecting
joint development projects in which the Company is a participant; unexpected
changes in regulatory requirements, tariffs and other trade barriers, longer
accounts receivable payment cycles and other risks associated with international
operations; the ability or inability of the Company to hedge against foreign
currency, exchange rates and fluctuations in such rates; and a change in the
value of the U.S. dollar (the Company's functional currency) relative to other
currencies.

         In light of the foregoing factors, as well as other factors affecting
the Company's operating results, past trends should not be used by investors or
others to anticipate future trends, and prior operating performance may not be
an accurate indicator of future performance.


ITEM 9A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

         As the Company conducts its business world-wide, the Company's sales
may be affected by changes in demand resulting from fluctuations in currency
exchange rates, as well as by governmental controls and other risks associated
with international sales (such as export licenses, political instability, trade
restrictions and changes in tariff and freight rates). The Company generates
sales primarily in U.S. dollars and incurs expenses in a number of currencies,
principally in U.S. dollars and Danish kroner. Although the Company seeks to
manage its foreign currency exposures by matching non-dollar revenues and
expenses and by entering into hedging transactions, there can be no assurance
that exchange rate fluctuations will not have a material adverse effect on the
Company's business, financial condition or results of operations. See also
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Common European Currency".

         At December 31, 1998, the effect of a hypothetical uniform 10%
strengthening in the value of the U.S. dollar relative to the Danish kroner
would result in an increase in operating income of approximately $8.7 million
for the year ending December 31, 1999. Comparatively, at December 31, 1997, the
effect of a hypothetical uniform 10% strengthening in the value of the dollar
relative to the Danish kroner would have resulted in an increase in operating
income of approximately $4.6 million for the year-ended December 31, 1998. In
addition to the direct effects of changes in exchange rates, which are a changed
dollar value of the resulting expenses, changes in exchange rates also might
affect the volume of sales outside the US. The Company's sensitivity analysis of
the effects of changes in foreign currency exchange rates does not factor in a
potential change in sales levels.


ITEM 10. OFFICERS AND DIRECTORS OF THE REGISTRANT.

         As of March 22, 1999, the members of the Company's Board of Directors,
the executive officers of the Company, and other key employees are as follows:


                                       31
<PAGE>   32


<TABLE>
<CAPTION>
Name                                      Age       Position
----                                      ---       --------
<S>                                       <C>       <C>
Jan Bech...........................       59        Chairman of the Board of Directors
Bo F. Vilstrup.....................       56        Deputy Chairman of the Board of Directors
Frank G. Petersen..................       66        Member of the Board of Directors
Michael J. Peytz...................       42        Member of the Board of Directors
Anders Knutsen.....................       52        Member of the Board of Directors
Soren Bjerre-Nielsen...............       46        Member of the Board of Directors

Niels Christian Furu...............       42        President and Chief Executive Officer
Lars Larsen........................       34        Executive Vice President and Chief Financial Officer
Niels E.L. Jorgensen...............       42        Chief Technology Officer and Executive Vice President of
                                                    Research, Development and Engineering
Per Bruno Larsen ..................       46        Executive Vice President of Global Marketing of the
                                                    Company and President of Olicom, Inc.
Per Friis..........................       36        Vice President, Operations
Jorgen Hog.........................       52        Vice President of Network Product Marketing
Kristian Thyregod..................       37        Vice President of Global Marketing & EMEA Sales
William A. Harper..................       52        Vice President of Sales, Americas
Prem Athwal .......................       39        Vice President of Sales, Asia-Pacific
Michael W. Jackman.................       40        Vice President, Sales and Marketing Operations
Mette R.L. Fogt....................       36        Director of Legal Affairs
David Harrell......................       41        Vice President of Information Technology
</TABLE>


         Mr. Bech has been Chairman of the Company's Board of Directors since
1985. He serves as Chairman of the Board and Managing Director of ARCO-TECH
Ltd., a company engaged in the business of consulting in strategic marketing.
Mr. Bech previously served as a Vice President of Ing. C. Olivetti & C., S.p.A.,
with responsibility for its commercial activities in Scandinavia (from 1985 to
1992).

         Mr. Vilstrup has been a member of the Board of Directors since 1992 and
Deputy Chairman of the Board since 1994. He is an attorney and was a partner in
the law firm of Lett, Vilstrup & Partnere, Copenhagen, Denmark (from 1972 to
1999).

         Mr. Petersen has been a director of the Company since 1996. He was
employed by IBM from 1957 until his retirement in 1994. At the time of his
retirement, he served as Chairman and President of IBM Nordic AB, with
responsibility for IBM's commercial activities in Scandinavia. Mr. Petersen is
Chairman of Dansk Erhvervsudvikling A/S, Aretex A/S, Delfin Software A/S, Club
La Santa A/S and Lalago ApS and a director of Dan Net A/S, Gretoma Style
Furniture ApS, Bay Jacobsen A/S and PAS Scandinavia ApS.

         Mr. Peytz has been a director of the Company since 1996. He has served
as Managing Director and Chief Executive Officer of EuroCom Industries A/S since
1997. Mr. Peytz previously served as Division Director for Alcatel Kirk A/S,
with responsibility for Alcatel's space electronics business in Denmark (from
1994 to 1997). He previously was a management consultant with McKinsey & Company
(from 1985 to 1994).


                                       32
<PAGE>   33


         Mr. Knutsen has been a director of the Company since 1997. He has
served as Managing Director and Chief Executive Officer of Bang & Olufsen A/S
since 1991, a company that develops and markets audio and visual products.

         Mr. Bjerre-Nielsen has been a director of the Company since May 7,
1998. He has served as Vice Executive Officer and Chief Financial Officer of
Danisco A/S (since 1995), a food ingredients conglomerate. Prior thereto, he was
a state-authorized Public Accountant, being a partner at Deloitte & Touche (from
1982 to 1995) and managing partner (from 1986 to 1995). Mr. Bjerre-Nielsen is
also a director of Velux Industri A/S and Velux A/S, companies engaged in the
business of global manufacturing of skylights.

         Mr. Furu was appointed as President and Chief Executive Officer in
October 1998. He joined the Company in 1997 as Executive Vice President and
Chief Operating Officer. Prior to joining the Company, Mr. Furu served as Vice
President of IBM Denmark A/S and Director of Nordic PC Sales (from 1995 to
1997). Prior thereto, he served as Director of Sales for Finance and
Telecommunications for IBM Denmark A/S (from 1993 to 1995) and as Assistant to
the General Manager of Marketing, IBM Europe (from 1991 to 1993).

         Mr. Lars Larsen has been employed by the Company since February 1999 as
Executive Vice President and Chief Financial Officer. Prior to joining the
Company, Mr. Larsen was Director of Health Care, Finance and Information
Technology (and prior thereto, Director of Corporate Planning & Economy) at Novo
Nordisk A/S, a Danish pharmaceuticals manufacturer (from 1995 to 1999). Prior
thereto, he was Group Controller at Baltica Holding A/S (from 1991 to 1995).

         Mr. Jorgensen has been employed by the Company since 1988 and was
appointed Chief Technology Officer and Executive Vice President of Research,
Development and Engineering in April 1998. He has had primary responsibility for
the Company's Project Development Group since joining the Company, and served as
Director of Engineering from 1990 and became Vice President of Research,
Development and Engineering in November 1994.

         Mr. Per Bruno Larsen has been employed by the Company since April 1998,
as Executive Vice President of Global Marketing, and President of Olicom, Inc.
Prior to joining the Company, he served as Vice President, Brand Marketing,
Mobile Computing with IBM Corporation (from 1994 to 1998). Prior thereto, he
held various positions within IBM.

         Mr. Friis has been employed by the Company since November 1998 as Vice
President, Operations. Prior to joining the Company, Mr. Friis was Vice
President of Logistics in DanaData A/S (July 1995 to 1998). Prior thereto, he
served as Purchasing Manager for computer equipment in a Danish retail chain.

         Mr. Hog has been employed by the Company since 1994, having served as
its Director of Business Development. In May 1996, Mr. Hog became Vice President
of Strategic Marketing. Prior to joining the Company, Mr. Hog was the President
of CR Systems A/S, a Danish data communications company.

         Mr. Thyregod was employed by the Company as Vice President of Corporate
Marketing in May 1998 and was appointed Vice President of Global Marketing &
EMEA Sales in December 1998. Prior to joining the Company, Mr. Thyregod served
as Vice President Commercial Operations and Marketing Manager International
Operations at Navision Software A/S, an enterprise resource planning software
company (from 1995 to 1998). From 1991 to 1995, Mr. Thyregod was Marketing
Manager at Ingram Micro A/S, a network products distributor.


                                       33
<PAGE>   34


         Mr. Harper has been employed by the Company since September 1998 as
Vice President of Sales, Americas. Prior to joining the Company, Mr. Harper was
the Vice President of Network Integration for Racal Datacom, Inc. (from 1997 to
1998). Prior thereto, he served as Director of Worldwide Vertical Sales &
Marketing for Equant International (from 1996 to 1997). Prior thereto, he served
as Director of Network Integration for BellSouth Corporation (from 1989 to
1996).

         Mr. Athwal was appointed Vice President of Sales for Asia-Pacific
(APAC) in January 1998. He has been with the Company since January 1994 and
previously served as Assistant Vice President of Corporate Marketing, and
earlier as Director of Commercial Marketing. Prior to joining the Company, Mr.
Athwal held various marketing positions at Cray Communications in the UK and NEC
in Germany.

         Mr. Jackman has been employed by the Company since January 1999 as Vice
President of Global Sales and Marketing Operations. Prior to joining the
Company, he served as Vice President of Systems and Technology, IBM Corporation
(from 1997 to 1998). Prior thereto, he served as Director of Mobile Computing
Brand Operations, IBM Corporation (from 1991 to 1996). Prior thereto, he held
various positions within IBM.

         Ms. Fogt has served as Director of Legal Affairs since 1997. Prior to
joining the Company, Ms. Fogt served as Secretary to the Management at Jacob
Holm & Sons A/S, a Danish manufacturer of fiber products, primarily for the
hygiene industry (from 1995 to 1997). Prior thereto, Ms. Fogt was an attorney at
the law firm Kromann & Munter (from 1988 to 1995).

         Mr. Harrell was appointed Vice President of Information Technology in
July 1998. He has been with the Company since June 1996 and has previously
served as Director of Information Technology and earlier as Director of Support
Services, Americas. Prior to joining the Company, he was Assistant Vice
President of LAN Services for USLIFE, from 1993 to 1996.

         Except for Messrs. Harper, Athwal, Harrell and Jackman, all directors
and members of corporate management are Danish citizens. There are no family
relationships among directors and executive officers of the Company or its
subsidiaries.

         The Company's Articles of Association provide for a Board of Directors
of four to eight members, to be elected by the shareholders to serve one-year
terms. In addition, directors may be elected for four-year terms by the
Company's employees, in accordance with Danish law. The statutory rights of the
Company employees to elect directors have not been exercised to date. Officers
of the Company serve at the discretion of the Board of Directors.

LIMITATION OF LIABILITY AND INDEMNIFICATION AGREEMENTS

         The Company has entered into Indemnification Agreements with its
directors, executive officers and key employees. Each such Indemnification
Agreement provides for indemnification of the Company's directors, executive
officers and key employees to the fullest extent permitted by the Companies Act
of the Kingdom of Denmark (the "Companies Act"). Additionally, Olicom, Inc., has
entered into Indemnification Agreements with its directors, executive officers
and key employees. Each such


                                       34
<PAGE>   35


Indemnification Agreement provides for indemnification of the directors,
executive officers and key employees of Olicom, Inc., to the fullest extent
permitted by the Delaware General Corporation Law. Further, such Indemnification
Agreements permit advancing attorney's fees and all other costs, expenses,
obligations, fines and losses paid or incurred by a director, executive officer
or key employee generally in connection with the investigation, defense or other
participation in any threatened, pending or completed action, suit or proceeding
or any inquiry or investigation thereof, whether conducted by or on behalf of
the Company or any other party. If it is later determined that the director,
executive officer or key employee is or was not entitled to indemnification
under applicable law, the Company will be entitled to reimbursement by the
director, executive officer or key employee.

         The Indemnification Agreements further provide that in the event of a
change in control of the Company or Olicom, Inc., with respect to all matters
thereafter arising concerning the rights of directors, executive officers and
key employees to indemnity payments and expense advances, all determinations
regarding claims will be made only by a court of competent jurisdiction or by
special independent legal counsel selected by the director, executive officer or
key employee and approved by the Company or Olicom, Inc., as appropriate.

         To the extent that the Board of Directors of the Company or Olicom,
Inc., or their respective shareholders may in the future wish to limit or repeal
the ability of the Company or Olicom, Inc., to indemnify directors, executive
officers and key employees, such repeal or limitation may not be effective as to
directors, executive officers and key employees who are parties to such
Indemnification Agreements, because their rights to full protection will be
contractually assured by the Indemnification Agreements. It is anticipated that
similar contracts may be entered into, from time to time, with future directors,
executive officers and key employees of the Company and Olicom, Inc.


ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS.

         An aggregate of approximately $1,056,326 was paid by the Company to its
directors and executive officers as a group (9 persons) for services rendered
during fiscal year 1998 in all capacities, and approximately $841,000 was paid
by the Company during fiscal year 1998 to its senior management, consisting of
the Company's President and Chief Executive Officer, its Chief Financial Officer
and its Chief Technology Officer, registered with the Commercial and Companies
Agency of the Kingdom of Denmark.


ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES.

         At March 22, 1999, the Company had outstanding options to its employees
and directors, and employees and directors of Olicom, Inc., to purchase an
aggregate of 2,570,38 Common Shares (the foregoing includes options assumed by
the Company in connection with the acquisition of CrossComm). The exercise price
for such options ranges from $3.35 to $30.25. Such options terminate on various
dates through December 14, 2003.

         At March 22, 1999, options to purchase an aggregate of 740,800 Common
Shares were held by directors and executive officers of the Company.


                                       35
<PAGE>   36


         On December 10, 1998, the exercise prices of 482,300 outstanding
options issued in March 1998 (314,500 options) and August 1998 (167,800 options)
were reset with reference to the then prevailing market price for the Company's
Common Shares. The original exercise prices for the options reset were $26.25
and $19.50, respectively. The new exercise price for these options is $10.00.
The market price for the Company's Common Shares at the date of the reset was
$5.25.


ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS.

         See "Officers and Directors of the Registrant -- Limitation of
Liability and Indemnification Agreements."

         In connection with the repricing of options on December 10, 1998, the
exercise prices of options issued to officers and directors were adjusted. Of
the options held by officers and directors, the exercise price for 184,000
options issued in 1998 were reset to $10.00 (a premium to the $5.25 market price
for the Common Shares on the date of repricing).

         The Company's policy is to require that all transactions between the
Company and its officers, directors and other affiliates be on terms no less
favorable to the Company than could be obtained from unaffiliated third parties,
and that all such transactions be approved by a majority of the disinterested
members of the Company's Board of Directors.


                                       36
<PAGE>   37


                                     PART II


         Not applicable.


                                    PART III


ITEM 15. DEFAULTS UPON SENIOR SECURITIES

         Not applicable.


ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED 
         SECURITIES.

         Not applicable.


                                     PART IV


ITEM 17. FINANCIAL STATEMENTS.

         The Company has responded to Item 18 in lieu of responding to this
Item.


                                       37
<PAGE>   38


ITEM 18. FINANCIAL STATEMENTS.


                         Report of Independent Auditors

The Board of Directors and Shareholders,
Olicom A/S

We have audited the accompanying consolidated balance sheets of Olicom A/S and
subsidiaries as of December 31, 1997 and 1998, and the related consolidated
statements of income, comprehensive income, shareholders' equity and cash flows
for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Olicom A/S and
subsidiaries at December 31, 1997 and 1998, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with accounting principles generally
accepted in the United States of America.


/s/ Ernst & Young

Ernst & Young
Statsautoriseret Revisionsaktieselskab

Copenhagen, February 4, 1999


                                       38
<PAGE>   39


                                   Olicom A/S
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                               DECEMBER 31
                                                         1997               1998
                                                       ---------          ---------
<S>                                                    <C>                <C>    
ASSETS                                                         (In thousands)
Current assets:
  Cash and cash equivalents                             $ 45,305            $22,246
  Short-term investments (Note 4)                            915                  0
  Accounts receivable, less allowance of
    $3,170 in 1997 and $2,522 in 1998                     50,527             39,035
Inventories:
    Finished goods                                        17,397             29,345
    Raw materials                                          7,692              7,605
                                                       ---------          ---------
                                                          25,089             36,950

Deferred income taxes (Note 6)                             2,150              4,335
Prepaid expenses and other current assets                  2,398              8,405
                                                       ---------          ---------
Total current assets                                     126,384            110,971

Net assets of discontinued operations (Note 7)             7,300              4,044
Investments in affiliated companies                          733                958

Property and equipment:
  Leasehold improvements                                   2,858              4,269
  Equipment                                               30,290             33,900
                                                       ---------          ---------
                                                          33,148             38,169
Accumulated depreciation                                 (17,699)           (19,165)
                                                       ---------          ---------
                                                          15,449             19,004

Goodwill, net of accumulated amortization of
   $1,638 in 1997 and $3,641 in 1998                       9,172              7,169
                                                       ---------          ---------
Total assets                                           $ 159,038          $ 142,146
                                                       =========          =========
</TABLE>


See accompanying notes


                                       39
<PAGE>   40


                                   Olicom A/S
                          Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                              DECEMBER 31
                                                                           1997         1998
                                                                         ---------    ---------
                                                                             (In thousands)
<S>                                                                      <C>          <C>      
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
  Accounts payable                                                       $  18,458    $  22,027
  Accrued payroll and related expenses                                       3,815        6,051
  Accrued product warranty expense                                           1,118        1,123
  Deferred revenue                                                           2,942          611
  Accrued restructuring costs                                                    0        4,935
  Other accrued expenses                                                     7,101        4,376
  Income taxes payable                                                          45            0
                                                                         ---------    ---------
Total current liabilities                                                   33,479       39,123

Shareholders' equity:
 Common stock, DKK 0.25 nominal value
  Authorized and issued - 18,495 in 1997 and in 18,594 1998                    712          715
  Additional paid-in capital                                               102,633      104,364
  Retained earnings                                                         38,728       15,789
  Treasury stock - 940 in 1997 and  in 731 1998                            (14,988)     (17,462)
  Unearned compensation                                                     (1,594)        (383)
  Other comprehensive income                                                    68            0

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

Total shareholders' equity                                                 125,559      103,023

                                                                         ---------    ---------
Total liabilities and shareholders' equity                               $ 159,038    $ 142,146

                                                                         =========    ==========
</TABLE>

See accompanying notes


                                       40
<PAGE>   41


                                   Olicom A/S
                        Consolidated Statements of Income

<TABLE>
<CAPTION>
                                                                                YEAR ENDED DECEMBER 31
                                                                           1996         1997         1998 
                                                                         ---------    ---------    ---------
                                                                                   (In thousands
                                                                             except per share amounts)
<S>                                                                      <C>          <C>          <C>      
Net sales                                                                $ 142,437    $ 209,985    $ 206,817
Cost of sales                                                               77,048      101,633      119,336
Special charges related to inventories (Note 8)                                  0            0        3,463
                                                                         ---------    ---------    ---------
Gross profit                                                                65,389      108,352       84,018
                                                                         ---------    ---------    ---------
Operating expenses:
Sales and marketing                                                         37,399       50,204       68,216
Research and development                                                    11,218       15,477       20,975
General and administrative                                                   7,103       10,833       13,296
Restructuring charges (Note 8)                                                   0            0        7,327
Acquisition-related expenses                                                 3,787       40,917            0
                                                                         ---------    ---------    ---------
Total operating expenses                                                    59,507      117,431      109,814
                                                                         ---------    ---------    ---------
Income (loss) from continuing operations
before interest and income taxes                                             5,882       (9,079)     (25,796)

Interest and other financial income                                          2,441        3,611        2,881
Interest and other financial expense                                          (769)        (574)        (456)
Foreign currency gains (losses)                                               (632)      (2,483)         448
Related party gain on sale of investment (Note 12)                           2,878            0            0
                                                                         ---------    ---------    ---------
Income (loss) from continuing operations before income taxes                 9,800       (8,525)     (22,923)

Income taxes (Note 6)                                                        3,992       10,332         (153)
                                                                         ---------    ---------    ---------
Income (loss) from continuing operations                                     5,808      (18,857)     (22,770)

Income (loss) from discontinued operations net of
   tax of $551 in 1996, $268 in 1997 and $(283) in 1998 (Note 7)             1,617          736         (169)
                                                                         ---------    ---------    ---------

Net income (loss)                                                        $   7,425    $ (18,121)   $ (22,939)
                                                                         =========    =========    =========
Earnings (loss) per share from continuing operations:

Basic earnings (loss) per share                                          $    0.40    $   (1.19)   $   (1.27)
                                                                         =========    =========    =========
Weighted average shares outstanding                                         14,653       15,821       17,894
                                                                         =========    =========    =========
Diluted earnings (loss) per share                                        $    0.39    $   (1.19)   $   (1.27)
                                                                         =========    =========    =========
Weighted average shares outstanding including
   common stock equivalents in 1996                                         14,786       15,821       17,894
                                                                         =========    =========    =========
</TABLE>

See accompanying notes


                                       41
<PAGE>   42


                                   Olicom A/S
                  Consolidated Statements of Income (continued)

<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31
                                                       1996       1997         1998   
                                                      -------   --------     -------
                                                               (In thousands
                                                         except per share amounts)
<S>                                                   <C>       <C>          <C>     
Earnings (loss) per share:

Basic earnings (loss) per share                       $  0.51   $  (1.15)    $ (1.28)
                                                      =======   ========     =======
Weighted average shares outstanding                    14,653     15,821      17,894
                                                      =======   ========     =======
Diluted earnings (loss) per share                     $  0.50   $  (1.15)    $ (1.28)
                                                      =======   ========     =======
Weighted average shares outstanding including
   common stock equivalents in 1996.                   14,786     15,821      17,894
                                                      =======   ========     =======
</TABLE>



                                   Olicom A/S
                 Consolidated Statements of Comprehensive Income


<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31
                                                                        1996        1997        1998 
                                                                      --------    --------    --------
                                                                              (In thousands)
<S>                                                                   <C>         <C>         <C>      
Net income (loss)                                                     $  7,425    $(18,121)   $(22,939)

Other comprehensive income (loss), net of tax:
    Currency translation adjustments                                      (617)          0           0

    Change in unrecognized gain (loss)
    on short-term investments

    Unrealised holding gains (losses) arising during period               (213)        660          30
    Less: reclassification adjustment for gains included in
             net income                                                      0        (121)        (98)
                                                                      --------    --------    --------

Comprehensive net income (loss)                                       $  6,595    $(17,582)   $(23,007)
                                                                      ========    ========    ========
</TABLE>


                                       42
<PAGE>   43


                                   Olicom A/S
                           Consolidated Statements of
                              Shareholders' Equity
<TABLE>
<CAPTION>
                                                                                                             Other
                                                        Additional                              Unearned   compre-
                                                Common     paid-in   Retained     Treasury       compen-   hensive
                                                stock      capital   earnings        stock        sation    income      Total
                                               -------  ----------  ----------    ---------     --------   --------   ---------
                                                                (In thousands)
<S>                                            <C>      <C>         <C>           <C>           <C>        <C>        <C>      
BALANCE AT DEC. 31, 1995                       $   610  $   51,754  $   49,424    $ (12,020)    $      0   $    359   $  90,127

Net income for 1996                                                      7,425                                            7,425
Purchase of treasury stock -
   3 common stock                                                                       (28)                                (28)
Options and warrants exercised -
   23 common stock                                             (10)                     217                                 207
Warrants exercised -
   101 common stock                                  4         604                                                          608
Change in unrealized gains (losses)                                                                            (213)       (213)
Currency translation adjustments                                                                               (617)       (617)
                                               -------  ----------  ----------    ---------     --------   ---------  ---------
BALANCE AT DEC. 31, 1996                       $   614  $   52,348  $   56,849    $ (11,831)    $      0   $   (471)  $  97,509

Net (loss) for 1997                                                    (18,121)                                         (18,121)
Issuance of 2,537 common stock to
   acquire CrossComm                                97      38,691                                                       38,788
Issuance of 1,023 warrants to
  acquire CrossComm                                          3,806                                                        3,806
Exchange of vested CrossComm
   options for Olicom options                                3,834                                                        3,834
Exchange of unvested CrossComm
   options for Olicom options                                1,859                                (1,859)                     0
Purchase of treasury stock -
   630 common stock                                                                 (15,716)                            (15,716)
320 common stock sold through offering
   at Copenhagen Stock Exchange                              5,295                    3,030                               8,325
Options exercised -
   626 common stock                                         (3,326)                   9,529                               6,203
Warrants exercised -
   20 common stock                                   1         126                                                          127
Change in unrealized gains (losses)                                                                             539         539
Amortization of unearned compensation                                                                265                    265
                                               -------  ----------  ----------    ---------     --------   --------   ---------
BALANCE AT DEC. 31, 1997                       $   712  $  102,633  $   38,728    $ (14,988)    $ (1,594)  $     68   $ 125,559

Net (loss) for 1998                                                    (22,939)                                         (22,939)
Purchase of treasury stock -
    400 common stock                                                                (10,358)                            (10,358)
Options exercised -
    609 common stock                                           (12)                   7,884                               7,872
Warrants exercised -
    99 common stock                                  3       1,950                                                        1,953
Change in unrealized gains (losses)                                                                           (68)          (68)
Amortization of unearned compensation                         (207)                                1,211                  1,004
                                               -------  ----------  ---------     ---------     --------   --------   ---------
BALANCE AT DEC. 31, 1998                       $   715  $  104,364  $  15,789     $ (17,462)    $   (383)  $     0    $ 103,023
                                               -------  ----------  ---------     ---------     --------   --------   ---------
</TABLE>

See accompanying notes


                                       43
<PAGE>   44


                                   Olicom A/S
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31
                                                                     1996        1997        1998
                                                                   --------    --------    --------
                                                                             (In thousands)
<S>                                                                <C>         <C>         <C>      
OPERATING ACTIVITIES
Net income (loss)                                                  $  7,425    $(18,121)   $(22,939)
Less: Income (loss) from discontinued operations                     (1,617)       (736)        169
                                                                   --------    --------    --------
Income (loss) from continuing operations                              5,808     (18,857)    (22,770)
Adjustments to reconcile net income (loss) to net
  cash provided by (used in) operating activities:
   Depreciation                                                       2,259       4,654       6,942
   Amortization                                                       1,326       1,262       2,003
   Non cash compensation                                                  0         265       1,004
   Gain on sale of investment                                        (2,878)       (121)        (98)
   Deferred income taxes                                             (1,141)       (994)     (2,185)
   Share of net income (loss) of affiliates                               0        (206)       (225)
   Acquisition-related expenses                                       2,170      40,917           0
   Changes in operating assets and liabilities:
     Accounts receivable                                              4,771     (14,713)     11,492
     Inventories                                                     12,136      (2,810)    (11,861)
     Prepaid expenses and other current assets                          (39)       (523)     (6,007)
     Accounts payable                                                (9,800)      1,971       3,569
     Accrued payroll and related expenses                            (3,684)        350       2,236
     Accrued product warranty expense                                   119        (886)          5
     Deferred revenue                                                     0        (638)     (2,331)
     Accrued restructuring costs                                          0           0       4,935
     Other accrued liabilities                                        4,957       6,782      (2,724)
     Income taxes payable                                               831        (301)        (45)
                                                                   --------    --------    --------
Net cash provided by/(used in) operating activities                  16,835      16,152     (16,060)

INVESTING ACTIVITIES
Capital expenditures                                                 (8,587)     (7,964)    (12,410)
Proceeds from sale of property and equipment                              0         136       1,912
Proceeds from sale of investments                                     7,193      42,089         945
Business acquisitions - net of cash acquired
  and other investments                                              (2,545)    (40,161)          0
                                                                   --------    --------    --------
Net cash used in investing activities                                (3,939)     (5,900)     (9,553)
</TABLE>


See accompanying notes


                                       44
<PAGE>   45


                                   Olicom A/S
                Consolidated Statements of Cash Flows (continued)

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31
                                                                       1996        1997        1998 
                                                                     --------    --------    --------
                                                                            (In thousands)
<S>                                                                  <C>         <C>         <C>     
FINANCING ACTIVITIES
Change in short-term borrowings                                      $ (6,451)   $      0    $      0
Proceeds from sale of treasury stock -
  Copenhagen Stock Exchange                                                 0       8,325           0
Proceeds from options and warrants exercised                              816       6,330       9,825
Purchase of treasury stock                                                (28)    (15,716)    (10,358)
                                                                     --------    --------    --------
Net cash used in financing activities                                  (5,663)     (1,061)       (533)
Cash flows provided by/(used in) discontinued operations                 (697)     (1,883)      3,087
Effects of exchange rates on cash                                        (689)       (915)          0
                                                                     --------    --------    --------
Net increase (decrease) in cash and cash equivalents                    5,847       6,393     (23,059)
Cash and cash equivalents at beginning of year                         33,065      38,912      45,305
                                                                     --------    --------    --------

Cash and cash equivalents at end of year                             $ 38,912    $ 45,305    $ 22,246
                                                                     ========    ========    ========

Interest paid during the year                                        $    187    $     58    $     50
                                                                     ========    ========    ========
Income taxes paid during the year                                    $  4,819    $ 10,645    $  6,566
                                                                     ========    ========    ========
</TABLE>

         In 1997, the Company exercised an option to acquire 35% of the equity
in Digianswer A/S, through conversion of a note receivable, recorded at December
31, 1996, at $681. The acquisition of CrossComm Corporation was completed partly
as a non-cash transaction. See Note 2.


See accompanying notes


                                       45
<PAGE>   46


                                   Olicom A/S

                   Notes to Consolidated Financial Statements

1. ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS
     The Company is a world-wide vendor of Asynchronous Transfer Mode, Token
Ring, Ethernet and multi-protocol routing products used in local area and wide
area networks. The Company designs, develops, markets and supports software and
hardware products which permit computer users operating different types of
equipment to communicate, exchange data and share computing resources.

REPORTING CURRENCY
     Although the Company and its subsidiaries maintain their books and records
in local currencies, as required by law, the Consolidated Financial Statements
have been prepared in U.S. dollars because the U.S. dollar is the currency of
the primary economic environment in which the Company and its subsidiaries
conduct their operations.

     The majority of the Company's sales are billed and collected in U.S.
dollars, and the majority of the Company's purchases of raw materials and
finished goods inventories are invoiced and paid in U.S. dollars.

PRINCIPLES OF CONSOLIDATION
     The consolidated financial statements include the accounts of Olicom A/S
and its majority-owned subsidiaries (the Company). The Company's investments in
20-50% owned companies are accounted for by the equity method of accounting.

USE OF ESTIMATES
     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions, which affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

     The Company's inventories and capitalized technologies consist primarily of
items which are susceptible to technological obsolescence, a fact which has been
considered in determining asset valuation reserves as of December 31, 1998.
However, in the event of certain circumstances, such as the emergence of
otherwise unforeseen new technologies and significant changes in anticipated
market requirements and conditions, additional reserves related to assets held
as of December 31, 1998 could be required in the future.

CASH AND CASH EQUIVALENTS
     Cash and cash equivalents represent cash and short-term deposits with
maturities of less than three months at the time of purchase.

SHORT-TERM INVESTMENTS
     Management determines the appropriate classification of securities at the
time of purchase and reevaluates such designation as of each balance sheet date.
Short-term investments not classified as held-to-maturity are classified as
available-for-sale. Short-term investments available-for-sale are carried at
fair value, with the unrealized gains and losses, net of tax, reported as other
comprehensive income. Realized


                                       46
<PAGE>   47


gains and losses and declines in value judged to be other than temporary on
available-for-sale short-term investments are included in interest income. The
cost of short-term investments is based on the average cost method. Interest and
dividends on short-term investments classified as available-for-sale are
included in interest income.

INVENTORIES
     Inventories are stated as the lower of cost or market with cost determined
on the basis of the first in, first out method. Raw materials inventories are
sold at the Company's cost to subcontractors who assemble products to the
Company's specifications. Finished goods inventories include completed products
purchased from subcontractors.

LEASEHOLD IMPROVEMENTS AND EQUIPMENT
     Leasehold improvements and equipment are carried at cost. Depreciation is
charged on a straight-line basis to costs and expenses over the expected useful
lives of the assets. Equipment is depreciated over four years, and leasehold
improvements are amortized over the shorter of their estimated lives or
non-cancelable term of the lease.

GOODWILL
     Cost in excess of net assets of businesses acquired (goodwill) represents
the unamortized excess of the cost of acquiring a business over the fair value
of the assets acquired at the date of acquisition. Amortization is computed by
the straight-line method over the estimated life of the benefit received, which
is five to seven years.

     On an annual basis, an impairment test is performed on the basis of future
undiscounted operating cash-flows expected in respect of the assets to which the
goodwill relates. Should the amount of these undiscounted operating cash-flows
exceed the carrying amount of the related assets, an impairment write-off would
be recorded based on discounted expected operating cash-flows.

REVENUE RECOGNITION
     Revenue is recognized when products are shipped. Service revenues are
deferred and recognized ratably over the contractual periods. Certain sales have
been made allowing a limited right of return.

ACCRUED PRODUCT WARRANTY EXPENSE
     The Company provides for the estimated cost of warranty at the time of
product shipment.

RESEARCH AND DEVELOPMENT COSTS
     Research and development costs, including costs of developing software
products, are expensed as incurred. Application of Statement of Financial
Accounting Standards No. 86, "Accounting for the Costs of Computer Software to
Be Sold, Leased, or Otherwise Marketed," has not had any material effect on the
Company's consolidated financial position or results of operations.

FOREIGN CURRENCY TRANSLATION
     Gains and losses resulting from non-U.S. dollar transactions, and the
remeasurement of foreign currency balances and accounts denominated in
currencies other than the U.S. dollar, are included in the determination of net
income in the period in which they occur, in accordance with the requirements of
Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation".


                                       47
<PAGE>   48


     Gains and losses resulting from translation of the Company's equity
investments into U.S. dollars are included as other comprehensive income.

INCOME TAXES
     The Company accounts for income taxes by the liability method, as required
by Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes".

ADVERTISING
     Costs associated with advertising the Company's products and services are
expensed as incurred. Advertising costs for the years ended December 31, 1996,
1997 and 1998 approximated $1,355,000, $1,398,000 and $2,464,000, respectively.

RECLASSIFICATION
     The prior year amounts have been reclassified to conform to the current
year presentation.

RECENT ACCOUNTING STANDARDS
      In June 1998, the Financial Accounting Standards Board issued Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities", which
is required to be adopted in years beginning after June 15, 1999. Management
does not anticipate that the adoption of the new Statement will have a
significant impact on earnings or the financial position of the Company.

2. BUSINESS COMBINATIONS
      In June 1997, the Company consummated its acquisition of CrossComm
Corporation, a provider of ATM and multi-protocol router technology for
mission-critical SNA/Token-Ring environments. The consideration, which was a
combination of $47.6 million in cash, 2,537,423 Common Shares and 1,022,771
three-year warrants to purchase Common Shares, totalled approximately $96.0
million.

      The acquisition was accounted for as a purchase. Accordingly, the results
of operations of the acquired business and the fair market values of the
acquired assets and assumed liabilities were included in the Company's financial
statements as of the effective date. This accounting treatment resulted in
approximately $9.7 million of intangible assets that will be amortized over
their estimated period of benefit. Approximately $40.9 million of the
acquisition cost represented purchased in process research and development,
which was determined through known valuation techniques in the high-technology
communications industry and was immediately expensed in the period of
acquisition because technological feasibility had not been established and no
alternative commercial use had been identified.

      The following summary, prepared on a pro forma basis, combines the results
of operations as if CrossComm had been acquired as of the beginning of the
periods presented. The summary includes the impact of certain adjustments such
as goodwill amortization and estimated changes in interest income because of
cash outlays associated with the transaction and the related income tax effect:


                                       48
<PAGE>   49


<TABLE>
<CAPTION>
                                                          DECEMBER 31
                                                     1996            1997
                                                  -------------------------
                                                        (In thousands,
                                                  except per share amounts)
                                                         (Unaudited)
<S>                                               <C>             <C>      
Net sales                                         $ 213,102       $ 254,781
Net income (loss)                                    (1,433)         18,832
Basic earnings (loss) per share                       (0.08)           1.11
Diluted earnings (loss) per share                     (0.08)           1.06
</TABLE>

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

3. WARRANTS
        In connection with the acquisition of CrossComm Corporation, the
Company's shareholders approved the issuance of three-year warrants, each whole
warrant being the right to acquire a Common Share at a price of $19.74 per each
full Common Share. During 1998, 98,947 warrants were exercised at a price of
$19.74 per share. The holders of the remaining 923,158 outstanding warrants as
of December 31, 1998, may exercise a warrant, at a price of $19.74 per share, no
later than June 12, 2000. In the event that all or any part of the warrants are
not exercised by June 12, 2000, then such warrants will expire. The warrants are
listed on the Nasdaq National Market (OLCWF).

4. SHORT-TERM INVESTMENTS
     The following is a summary of available-for-sale securities held as current
assets:

<TABLE>
<CAPTION>
                                                   UNREALIZED   UNREALIZED BOOK
                                      COST         GAINS        LOSSES    VALUE        
                                     ------------------------------------------
                                                       (In thousands)
<S>                                  <C>           <C>          <C>       <C>     
     Equity securities               $ 847           $ 127       $ 59     $ 915   
                                     ------------------------------------------
     December 31, 1997               $ 847           $ 127       $ 59     $ 915   
                                     ==========================================
</TABLE>

     The equity securities were sold in 1998 at a gain of $98,000.

     The net adjustment to unrealized holding gains/(losses) on
available-for-sale short-term investments included as a separate component of
shareholders' equity totalled $(471,000), $68,000 and $0 in 1996, 1997 and 1998,
respectively.

5. LINES OF CREDIT
     The Company has unsecured lines of credit with two banks, providing maximum
facilities as of December 31, 1997 and 1998 of $10.7 million and $9.3 million,
respectively. The credit lines were unused as of December 31, 1998.


                                       49
<PAGE>   50


6. INCOME TAXES
     Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets as of December 31, 1997 and
1998 are as follows:

<TABLE>
<CAPTION>
                                                            1997        1998
                                                          --------    --------
                                                             (In thousands)
<S>                                                       <C>         <C>     
Deferred tax liabilities
   Tax over book depreciation                             $  1,497    $  1,373
   Inventory write down                                        646           0
         Other                                                 819         343
                                                          --------    --------
                                                             2,962       1,716
Deferred tax assets
  Book over tax depreciation                                   960       2,314
  Allowance for uncollectible receivables                      935         316
  Inventory valuations                                       3,205       4,467
  Net operating losses carried forward (NOL)                 9,877      12,936
        Tax credit carryforwards                             1,207       1,710
        Other accruals                                       3,829       2,546
                                                          --------    --------
      Deferred tax assets, gross                            20,013      24,289
                                                          --------    --------
      Net deferred tax liabilities (assets) before
        valuation allowance                               $(17,051)   $(22,573)
      Valuation allowance                                 $ 14,901    $ 18,238 
                                                          --------    --------
      Net deferred tax liabilities (assets)               $ (2,150)   $ (4,335)
                                                          ========    ========
</TABLE>


      The deferred tax asset valuation allowance, taken over at the acquisition
of CrossComm, is primarily attributed to U.S. federal and state deferred tax
assets. Management believes sufficient uncertainty exists regarding the
realizability of these items that a valuation allowance is required.

      As of December 31, 1998 the Company has approximately $31.1 million of
United States federal net operating loss carryover. Of this amount approximately
$25 million is subject to limitation under Section 382 of the United States
Internal Revenue Code. In addition, the Company has approximately $1.2 million
of research and development credit carryover at December 31, 1998, subject to
limitation under Section 383 of the Internal Revenue Code.

      As of December 31, 1998 the Company also has net operating losses for its
Danish operations of approximately $11.2 million. These losses can be carried
forward and offset against taxable income of the Danish operations for the
following five years.

      For financial reporting purposes, income before income taxes includes the
following components:


                                       50
<PAGE>   51


<TABLE>
<CAPTION>
                                              1996        1997        1998
                                            --------    --------    --------
                                                    (In thousands)
<S>                                         <C>         <C>         <C>      
      Pretax income:
       Denmark                              $  6,143    $(33,151)   $(22,639)
       United States                           3,657      24,626        (284)
                                            --------    --------    --------
                                            $  9,800    $ (8,525)   $(22,923)
                                            ========    ========    ========
</TABLE>

      Significant components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
                                              1996        1997        1998
                                            --------    --------    --------
                                                    (In thousands)
<S>                                         <C>         <C>         <C>      
      Current:
        Denmark                             $  2,944    $    747    $  3,147
        United States                          2,189      10,579      (1,115) 
                                            --------    --------    --------
                                               5,133      11,326       2,032
                                            --------    --------    --------

      Deferred:
        Denmark                                 (312)      1,298      (2,185)
        United States                           (829)     (2,292)          0
                                            --------    --------    --------
                                              (1,141)       (994)     (2,185)
                                            --------    --------    --------
                                            $  3,992    $ 10,332    $   (153)
                                            ========    ========    ========
</TABLE>


      The reconciliation of income tax computed at the Danish statutory tax
rates to income tax expense is:

<TABLE>
<CAPTION>
                                                 1996             1997              1998 
                                               -------------------------------------------------
                                                                 (In thousands)
                                                           %                %                %
<S>                                            <C>        <C>   <C>        <C>    <C>       <C> 
     Danish tax                                $  3,332   34    $ (2,899)  (34)   $ (7,794) (34)
     Goodwill amortization                          247    2         411     6       2,003    9
     Increase in valuation allowance                  0    0           0     0       3,337   15
     Acquisition-related expenses                   336    2      12,827   179           0    0
     Benefit of foreign tax relief                 (117)  (1)       (112)   (2)          0    0
     United States taxes net of credits             118    1           0     0        (304)  (1)
     Adjustments prior years                          0    0           0     0       2,496   11
     Other net                                       76   (1)        105     0         109    0
                                               -------------------------------------------------

                                               $  3,992   37    $ 10,332   149    $   (153)   0
                                               =================================================
</TABLE>

     Undistributed earnings of the Company's United States subsidiaries amounted
to $78.9 million in 1998. Those earnings are considered to be indefinitely
reinvested. Upon distribution of those earnings in the form of dividends, the
amount thereof would be subject only to withholding tax at a rate of 5% in
accordance with the provisions of the Denmark/United States double tax treaty.

7. DISCONTINUED OPERATIONS
      As part of its new strategy announced November 30, 1998, the Company
decided to divest its 75% holding in Lasat A/S ("Lasat"), a provider of PC
modems. On January 15, 1999, Olicom's 75% holding in


                                       51
<PAGE>   52


Lasat was sold to a consortium of Lasat management, employees and two
Denmark-based venture funds. The gain from the divestiture amounted to
approximately $1.4 million, which will be recognized in 1999.

      The results of Lasat A/S have been reported separately as income from
discontinued operations, net of tax, in the Consolidated Statements of Income.
Prior year Consolidated Statements of Income have been restated accordingly.

      The Consolidated Balance Sheets as of December 31, 1997 and 1998 have been
restated to segregate the Company's investment in Lasat A/S. On the Consolidated
Statements of Cash Flows, the Company's share of income of Lasat A/S in 1996,
1997 and 1998 are reported as Income from discontinued operations.

      Sales in Lasat A/S were $26 million, $28 million and $22 million in 1996,
1997 and 1998, respectively. On December 31, 1998, the assets of Lasat A/S
consisted primarily of inventories, accounts receivable and fixed assets
amounting to approximately $7.7 million, and liabilities amounted to
approximately $3.7 million.

8. SPECIAL CHARGES AND RESTRUCTURING CHARGES
      On September 9, 1998, the Company announced plans to discontinue its U.S.
based Research and Development activities and to consolidate all such activities
in Denmark and Poland. Also, the Company expanded its professional service
relationship with Vital Network Services. Vital has according to the agreement
assumed responsibility for certain of the Company's professional services. As
part of the agreement Vital purchased the resources and assets of Olicom's North
American professional service operations. The actions were part of a global
consolidation, which resulted in the release of approximately 50 employees in
Administrative functions, Marketing, Research & Development and Operations. As a
consequence of these actions the Company has recorded special charges of
approximately $1 million, related to inventory write-offs, and restructuring
charges of $2.3 million, primarily related to staff reductions and fixed asset
write-offs.

      On November 30, 1998, the Company announced its strategy for 1999 and
forward. This included a major corporate restructuring in the fourth quarter of
1998. The restructuring included a staff reduction of approximately 20 percent,
the closing of some offices and discontinuation of certain of products. The
Company recorded special charges of $2.5 million in connection with the
restructuring, related primarily to discontinued product write-offs.
Furthermore, restructuring charges of $5 million were recorded, primarily
related to the staff reduction and fixed asset write-offs.

      The total restructuring charges and special charges are specified as
follows:


                                       52
<PAGE>   53


<TABLE>
<CAPTION>
                                                                                    Accrued
                                                      Total expenses          Dec. 31, 1998
                                                      -------------------------------------
                                                                  (In thousands)
<S>                                                   <C>                     <C>    
              Employee expenses                             $  3,939                $ 1,207
              Other expenses                                   3,388                  2,727
                                                      -------------------------------------

              Restructuring charges                            7,327                  3,934
              Special charges related to inventories           3,463                  1,001
                                                      -------------------------------------

                                                            $ 10,790                $ 4,935
                                                      =====================================
</TABLE>


        Employees terminated in connection with the implementation of the new
strategy announced November 30, 1998 were distributed as follows:

<TABLE>
<S>                                                        <C>
              Operations                                      29
              Sales and marketing                             81
              General and administrative                      11
                                                           -----

              Total number of employees terminated           121
                                                           =====
</TABLE>

9. EMPLOYEE STOCK OPTION PLANS
     The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for its employee stock options because, as
discussed below, the alternative fair value accounting provided for under FASB
Statement No. 123, "Accounting for Stock-Based Compensation", requires use of
option valuation models that were not developed for use in valuing employee
stock options and warrants. Under APB 25, because the exercise price of the
Company's employee stock options equals or exceeds the market price of the
underlying stock on the date of grant, no compensation expense is recognized.

1994, 1996 AND 1997 SHARE INCENTIVE PLANS
     The Company's 1994, 1996 and 1997 Share Incentive Plans have authorized the
grant of options to directors, executives and key employees for up to 425,000,
1,000,000 and 2,000,000 shares, respectively, of the Company's common stock. The
majority of options granted have 5 year terms and vest and become fully
exercisable at the end of 4 years of continued employment.

CROSSCOMM STOCK OPTIONS EXCHANGED FOR OLICOM STOCK OPTIONS
     At the acquisition of CrossComm approximately 1,500,000 CrossComm stock
options were exchanged for 905,511 Olicom stock options ("CrossComm options"),
with comparable exercise prices and terms.

PRO FORMA INFORMATION
     Pro forma information regarding net income and earnings per share is
required by Statement 123, and has been determined as if the Company had
accounted for its employee stock options under the fair value method of that
Statement. The fair value for these options was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-average
assumptions for 1996, 1997 and 1998: risk-free interest rates of 6.5%; dividend
yields of 0%; volatility factors of the expected market price of the Company's
common stock of 0.4; 25% of these options granted are expected to expire without
being exercised; and weighted-average expected life of the options of 5 years.


                                       53
<PAGE>   54


     The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options that have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of fair value of its employee stock options.

     For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the options' vesting period. The Company's
pro forma information follows:

<TABLE>
<CAPTION>
                                                                1996           1997               1998    
                                                              -------------------------------------------
                                                                (In thousands, except earnings per share)
<S>                                                           <C>            <C>                <C>      
  Net income (loss) - as reported                             $  7,425       $(18,121)          $(22,939)
  Net income (loss) - pro forma                               $  7,156       $(20,307)          $(25,792)
  Basic earnings (loss) per share - as reported               $   0.51       $  (1.15)          $  (1.28)
  Basic earnings (loss) per share - pro forma                 $   0.49       $  (1.28)          $  (1.44)
  Diluted earnings (loss) per share -
   as reported                                                $   0.50       $  (1.15)          $  (1.28)
  Diluted earnings (loss) per share - pro forma               $   0.48       $  (1.28)          $  (1.44)
</TABLE>

SUMMARY OF STOCK OPTION ACTIVITY
      On December 10, 1998, the exercise prices of 482,300 outstanding options
issued in March 1998 (314,500 options) and August 1998 (167,800 options) were
reset with reference to the then prevailing market price for the Company's
Common Shares. The original exercise prices for the options reset were $26.25
and $19.50, respectively. The new exercise price for these options is $10.00.
The market price for the Company's Common Shares at the date of the reset was
$5.25.

      A summary of the Company's stock option activity, and related information
for the three years ended December 31, 1998, follows:


                                       54
<PAGE>   55


<TABLE>
<CAPTION>
                                       Outstanding      Exercisable       Weighted-average   Weighted-average
                                        number of        number of             exercise        fair value of
                                         options          options               price         option granted 
                                       -----------      -----------       ----------------   ----------------
<S>                                    <C>              <C>               <C>                <C>
      January 1, 1996                      291,500           47,250                      9

      Granted                              466,100                                   11.49             $ 3.63
      Exercised                            (23,000)                                      9
      Expired                              (68,875)                                      9 
                                       -----------                                  ------
      December 31, 1996                    665,725           77,875                  10.74

      CrossComm options                    905,511                                   10.52
      Granted                              710,200                                   14.79             $ 6.36
      Exercised                           (589,794)                                   9.98
      Expired                             (170,814)                                  16.87 
                                       -----------                                  ------
       December 31, 1997                 1,520,828          326,699                 $12.11

      Granted                            1,001,605                                   12.24             $ 7.99
      Exercised                           (608,910)                                  12.89
      Expired                             (246,349)                                  15.48 
                                       -----------                                  ------
       December 31, 1998                 1,667,174          425,960                 $11.53
                                       ===========      ===========                 ======
</TABLE>


The following table summarizes the status of the Company's stock options,
outstanding and exercisable at December 31, 1998:

<TABLE>
<CAPTION>
                                   Outstanding    Weighted-average  Weighted-average  Exercisable   Weighted-average
      Range of                      number of        remaining          exercise       number of       exercise
      Exercise Prices                shares       contractual life       price           shares           price    
      ---------------              -----------    ----------------- ----------------  -----------   ----------------
<S>                                <C>            <C>               <C>               <C>           <C>   
      $ 3.35 - $ 6.00                   96,268           2.93 years          $  5.46          268         $ 3.36
      $ 8.40 - $ 9.00                  261,351           4.45 years          $  8.66      214,892         $ 8.70
      $ 9.00 - $12.00                  868,405           3.58 years          $ 10.31       81,347         $11.30
      $14.00 - $17.00                  356,650           2.92 years          $ 14.62      126,453         $15.62
      $26.25 - $30.25                   84,500           3.15 years          $ 26.75        3,000         $29.79
                                   -----------                                        -----------
                                     1,667,174                                            425,960
</TABLE>

10. EMPLOYEE BENEFIT PLANS
      The Company's subsidiaries in the U.S. have a 401(k) Plan. The Plan has 
been in place since May 1, 1993. Effective January 1, 1997, the Plan allows for
both the Company and eligible employees to contribute. All employees over 21
years of age are eligible to participate. The Company's contribution equals 50%
of an employee's contribution that does not exceed 6% of compensation. The
Company's contribution expenses for 1997 and 1998, were $255,759 and $ 398,106,
respectively.

      The Company does not provide its employees with other post-retirement and
post-employment benefits.

11. LEASE COMMITMENTS
      The Company leases its headquarters and main warehouse facility under
noncancellable operating leases which expire during the period from 2006 to
2008. The leases contain escalation clauses.


                                       55
<PAGE>   56


Additionally, the Company and its subsidiaries are lessees in other
noncancellable lease arrangements for office buildings and warehouses, expiring
on different dates.

      The total future minimum lease payments under the foregoing leases at
December 31, 1998, are:

<TABLE>
<CAPTION>
                                 Headquarters       Other        Total
                                 -------------------------------------
                                             (In thousands)
<S>                              <C>           <C>             <C>    
              1999                   $ 2,192     $  2,589      $  4,781
              2000                     1,991        2,093         4,084
              2001                     2,041        1,810         3,851
              2002                     2,092        1,745         3,837
              2003                     2,144        1,287         3,431
              Remaining               11,766        4,237        16,003
                                 --------------------------------------

                                    $ 22,226     $ 13,761      $ 35,987
                                 ======================================
</TABLE>

Total lease amounts charged to expense are $ 2,294,000 in 1996, $3,488,000 in
1997 and $3,892,000 in 1998.

12. RELATED PARTY TRANSACTIONS
      On January 23, 1996 the Company completed the sale of its 35.6% investment
in Contex A/S to Nilex Systems ApS, a related party, for a cash consideration of
$7.2 million (DKK 41.0 million). The sale resulted in a gain of $2,878,000 net
of taxes.

13. SEGMENT INFORMATION
      The Company currently operates in the data networking industry, primarily
within the following technologies: Asynchronous Transfer Mode, Token-Ring and
Fast Ethernet. The Company considers its products being one group of similar
products.

      The Company manages its business primarily in two separate geographical
areas: Americas, incorporating North and South America, and International,
incorporating Europe and Asia Pacific.

      Information about the Company's operations by reportable segments is as
follows:


                                       56
<PAGE>   57


<TABLE>
<CAPTION>
                                      INTER-                     ELIMI-       CONSO-
                                      NATIONAL     AMERICAS      NATIONS      LIDATED
                                      ---------    ---------    ---------    ---------
                                                         (In thousands)
<S>                                   <C>          <C>          <C>          <C>      
1998
Net sales:
External customers                    $ 100,828    $ 105,989    $       0    $ 206,817
Intercompany                             76,588       10,471      (87,059)   $       0
                                      ---------    ---------    ---------    ---------

Total                                 $ 177,416    $ 116,460    $ (87,059)   $ 206,817
                                      =========    =========    =========    =========

Depreciation and amortization         $   6,982    $   1,963    $       0    $   8,945
                                      =========    =========    =========    =========

Operating income (loss)               $ (20,568)   $  (3,447)   $  (1,781)   $ (25,796)
                                      =========    =========    =========    =========

Investments in affiliated companies   $     958    $       0    $       0    $     958
                                      =========    =========    =========    =========
Total assets                          $  71,174    $  84,313    $ (44,516)   $ 110,971
                                      =========    =========    =========    =========
Long-lived assets                     $  12,677    $   6,327    $       0    $  19,004
                                      =========    =========    =========    =========


1997
Net sales:
External customers                    $  97,716    $ 112,269    $       0    $ 209,985
Intercompany                             49,825        6,076      (55,901)           0
                                      ---------    ---------    ---------    ---------

Total                                 $ 147,541    $ 118,345    $ (55,901)   $ 209,985
                                      =========    =========    =========    =========

Depreciation and amortization         $   4,589    $   1,327    $       0    $   5,916
                                      =========    =========    =========    =========

Operating income (loss)               $ (30,843)   $  22,955    $  (1,191)   $  (9,079)
                                      =========    =========    =========    =========

Investments in affiliated companies   $     733    $       0    $       0    $     733
                                      =========    =========    =========    =========
Total assets                          $ 111,143    $  57,397    $ (42,156)   $ 126,384
                                      =========    =========    =========    =========
Long-lived assets                     $  11,964    $   3,485    $       0    $  15,449
                                      =========    =========    =========    =========

1996
Net sales:
External customers                    $  80,716    $  61,721    $       0    $ 142,437
Intercompany                             22,002            0      (22,002)           0
                                      ---------    ---------    ---------    ---------

Total                                 $ 102,718    $  61,721    $ (22,002)   $ 142,437
                                      =========    =========    =========    =========

Depreciation and amortization         $   3,136    $     449    $       0    $   3,585
                                      =========    =========    =========    =========

Operating income (loss)               $   3,193    $   3,657    $    (968)   $   5,882
                                      =========    =========    =========    =========
</TABLE>


                                       57
<PAGE>   58


      In the year 1996, no single customer exceeded 10% of sales. In the year
1997, sales to a single customer exceeded 10% of sales, amounting to $24.7
million. In the year 1998, sales to one customer exceeded 10% of sales,
amounting to $37.1 million

14. FINANCIAL INSTRUMENTS

A. FAIR VALUE OF FINANCIAL INSTRUMENTS

      The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:

              Cash and cash equivalents: The carrying amount reported in the
       balance sheet for cash and cash equivalents approximates its fair value.

              Short-term investments: The fair values for short-term investments
       are based on quoted market prices.

              Foreign currency exchange contracts: The fair value of the
       Company's foreign currency exchange contracts are based on quoted market
       prices.

The carrying amounts and fair values of the Company's financial instruments at
December 31, 1997 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                        1997                             1998      
                                               -----------------------          ----------------------
                                                Carrying         Fair            Carrying        Fair
                                                 amount          value            amount         value
                                               -----------------------          ----------------------
                                                                     (In thousands)
<S>                                            <C>            <C>               <C>            <C>     
    Cash and cash equivalents                  $ 45,305       $ 45,305          $ 22,246       $ 22,246
    Short-term investments                          915            915                 0              0
    Foreign currency exchange contract                0           (222)                0          1,251
</TABLE>

B. OFF-BALANCE SHEET RISK
      The Company enters into forward currency exchange contracts and options to
hedge foreign currency transactions on a continuing basis for periods consistent
with its foreign currency exposures. The objective of this practice is to reduce
the impact of foreign exchange movements on the Company's operating results. The
Company's hedging activities do not create exchange rate risk because gains and
losses on these contracts generally offset losses and gains on the assets,
liabilities and transactions being hedged.

      At December 31, 1997 and 1998 the stated or notional amounts of the
Company's forward currency exchange contracts amounted to $12.0 million and
$21.4 million, respectively.

C. CONCENTRATIONS OF CREDIT RISK
      The Company's financial instruments that are exposed to concentrations of
credit risk consist primarily of cash and cash equivalents, short-term
investments and accounts receivable.


                                       58
<PAGE>   59


      Cash is maintained with major banks in Denmark and the United States.
Foreign currency exchange contracts and options are entered into with a major
bank in Denmark.

      The Company markets its products principally to distributors, value added
resellers and original equipment manufacturers in the computer industry.

      Concentrations of credit risk with respect to accounts receivable from
customers located outside Denmark are limited under the terms of an agreement
entered into with the company "EKR CreditInsurance A/S". This agreement
guarantees up to 90% of the amount of the related receivables. The amounts so
covered at December 31, 1997 and 1998 were $23,791,000 and $18,728,000,
respectively.

15. LITIGATION
      From time to time, the Company is involved in litigation relating to
claims arising out of its operations in the normal course of business. As of
December 31, 1998, the Company is not a party to any legal proceedings, the
adverse outcome of which, in management's opinion, would have a material adverse
effect on the Company's results of operations or financial position.


ITEM 19.      FINANCIAL STATEMENTS AND EXHIBITS.

      (a) The following consolidated financial statements are filed as part of
this Annual Report:

<TABLE>
<CAPTION>
                                                                                       Page no
                                                                                       -------
<S>                                                                                    <C>
1.  Consolidated Financial Statements
    Report of Independent Auditors                                                          38
    Consolidated Balance Sheets at December 31, 1997 and 1998                               39
    Consolidated Statements of Income for the years
         ended December 31, 1996, 1997 and 1998                                             41
    Consolidated Statements of Comprehensive Income for the years
         ended December 31, 1996, 1997 and 1998                                             42
    Consolidated Statements of Shareholders' Equity for the years
         ended December 31, 1996, 1997 and 1998                                             43
    Consolidated Statements of Cash Flows for the years
         ended December 31, 1996, 1997 and 1998                                             44
    Notes to Consolidated Financial Statements                                              46
</TABLE>

      All other supplementary schedules relating to the Company are omitted
because they are not required or because the required information, where
material, is contained in the Consolidated Financial Statements or Notes
thereto.


                                       59
<PAGE>   60


      (b) The following exhibits are filed as part of this Annual Report:

<TABLE>
<CAPTION>
      Exhibit
      Number                      Description of Exhibits
      -------                     -----------------------
<S>           <C>  <C> 
          1.1 --   Articles of Association of the Company, as amended (1).

          1.2 --   Rules of Procedure for the Board of Directors (2).

          2.1 --   1994 Share Incentive Plan, as amended (3).

          2.2 --   1996 Share Incentive Plan (4).

          2.3 --   1997 Share Incentive Plan (4).

          3.1 --   Agreement of Substitution (License Agreement) dated as of
                   September 1, 1990, between Willemijn Houdstermaatschappij BV
                   and the Company (5).+

          3.2 --   Form of Indemnification Agreement between the Company
                   and/or Olicom, Inc.) and Jan Bech, Lars Stig Nielsen, Bo Vilstrup,
                   Frank G. Petersen, Michael Peytz, Soren Bjerre-Nielsen, Boje Rinhart,
                   Niels Jorgensen, Jorgen Hog, Steen B. Lohse, Per Bruno Larsen,
                   Niels Christian Furu, Lars Larsen, Per Friis, Kristian Thyregod,
                   William A. Harper, Prem Athwal, Michael W. Jackman,
                   Mette R.L. Fogt and David Harrell (5).

          3.3 --   Service Contract dated August 31, 1992, between the
                   Company and Lars Stig Nielsen (5).

          3.4 --   Trademark Agreement effective as of December 11, 1998,
                   between the Company and Ing. C. Olivetti & C., S.p.A.

          3.5 --   License Agreement dated October 19, 1988, between the Company
                   and Texas Instruments France, as amended by Amendment to
                   License Agreement dated November 29, 1989, together with
                   Texas Instruments Program License Agreement dated October 11,
                   1989, between the Company and Texas Instruments A/S,
                   Amendment to License Agreements dated October 6, 1992,
                   between the Company and Texas Instruments France, and
                   Amendment to License Agreement(s) dated January 1, 1992,
                   between the Company and Texas Instruments Trade Corporation (5).+

          3.6 --   Share Purchase Agreement dated January 23, 1996, between the Company
                   and Nilex Systems ApS.(1).
</TABLE>


                                       60
<PAGE>   61

<TABLE>
<S>           <C>  <C> 
          3.7 --   Agreement and Plan of Reorganization dated as of March
                   20, 1997, among the Company, PW Acquisition Corporation and
                   CrossComm Corporation (1).

          3.8 --   Agreement re sale of shareholding in Lasat.
</TABLE>

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

           (1)    Incorporated herein by reference to the Company's registration
                  statement on Form F-4, registration no. 333-24655.

           (2)    Incorporated herein by reference to the Company's Annual
                  Report on Form 20-F for the fiscal year ended December 31,
                  1997, file no. 0-20738.

           (3)    Incorporated herein by reference to the Company's registration
                  statement on Form S-8, registration no. 33-93684.

           (4)    Incorporated herein by reference to the Company's Annual
                  Report on Form 20-F for the fiscal year ended December 31,
                  1996, file no. 0-20738.

           (5)    Incorporated herein by reference to the Company's registration
                  statement on Form F-1, registration no. 33-51818.

           (6)    Incorporated herein by reference to the Company's Annual
                  Report on Form 20-F for the fiscal year ended December 31,
                  1993, file no. 0-20738.

           +      Confidential treatment granted as to portions thereof.



                                       61
<PAGE>   62


                                   SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant certifies that it meets all of the requirements for filing
on Form 20-F and has duly caused this annual report to be signed on its behalf
by the undersigned, thereunto duly authorized.


                                    OLICOM A/S


                                    By:  /s/ Niels Christian Furu     
                                         ----------------------------
                                         Niels Christian Furu
                                         President and Chief Executive Officer


April 28, 1999



                                       62
<PAGE>   63


                                 Exhibit Index


<TABLE>
<CAPTION>
      Exhibit
      Number                      Description of Exhibits
      -------                     -----------------------
<S>           <C>  <C> 
          1.1 --   Articles of Association of the Company, as amended (1).

          1.2 --   Rules of Procedure for the Board of Directors (2).

          2.1 --   1994 Share Incentive Plan, as amended (3).

          2.2 --   1996 Share Incentive Plan (4).

          2.3 --   1997 Share Incentive Plan (4).

          3.1 --   Agreement of Substitution (License Agreement) dated as of
                   September 1, 1990, between Willemijn Houdstermaatschappij BV
                   and the Company (5).+

          3.2 --   Form of Indemnification Agreement between the Company
                   and/or Olicom, Inc.) and Jan Bech, Lars Stig Nielsen, Bo Vilstrup,
                   Frank G. Petersen, Michael Peytz, S0ren Bjerre-Nielsen, Boje Rinhart,
                   Niels J0rgensen, J0rgen H0g, Steen B. Lohse, Per Bruno Larsen,
                   Niels Christian Furu, Lars Larsen, Per Friis, Kristian Thyregod,
                   William A. Harper, Prem Athwal, Michael W. Jackman,
                   Mette R.L. Fogt and David Harrell (5).

          3.3 --   Service Contract dated August 31, 1992, between the
                   Company and Lars Stig Nielsen (5).

          3.4 --   Trademark Agreement effective as of December 11, 1998,
                   between the Company and Ing. C. Olivetti & C., S.p.A.

          3.5 --   License Agreement dated October 19, 1988, between the Company
                   and Texas Instruments France, as amended by Amendment to
                   License Agreement dated November 29, 1989, together with
                   Texas Instruments Program License Agreement dated October 11,
                   1989, between the Company and Texas Instruments A/S,
                   Amendment to License Agreements dated October 6, 1992,
                   between the Company and Texas Instruments France, and
                   Amendment to License Agreement(s) dated January 1, 1992,
                   between the Company and Texas Instruments Trade Corporation (5).+

          3.6 --   Share Purchase Agreement dated January 23, 1996, between the Company
                   and Nilex Systems ApS.(1).
</TABLE>



<PAGE>   64

<TABLE>
<S>           <C>  <C> 
          3.7 --   Agreement and Plan of Reorganization dated as of March
                   20, 1997, among the Company, PW Acquisition Corporation and
                   CrossComm Corporation (1).

          3.8 --   Agreement re sale of shareholding in Lasat.
</TABLE>

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

           (1)    Incorporated herein by reference to the Company's registration
                  statement on Form F-4, registration no. 333-24655.

           (2)    Incorporated herein by reference to the Company's Annual
                  Report on Form 20-F for the fiscal year ended December 31,
                  1997, file no. 0-20738.

           (3)    Incorporated herein by reference to the Company's registration
                  statement on Form S-8, registration no. 33-93684.

           (4)    Incorporated herein by reference to the Company's Annual
                  Report on Form 20-F for the fiscal year ended December 31,
                  1996, file no. 0-20738.

           (5)    Incorporated herein by reference to the Company's registration
                  statement on Form F-1, registration no. 33-51818.

           (6)    Incorporated herein by reference to the Company's Annual
                  Report on Form 20-F for the fiscal year ended December 31,
                  1993, file no. 0-20738.

           +      Confidential treatment granted as to portions thereof.