FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

         This  Amendment  is made as of July 1,  1999,  by and  between  Olympic
Cascade Financial Corporation, a Delaware corporation (the "Company") and Robert
H. Daskal, an individual ("Executive").

         A. The Company and  Executive  are parties to an  Employment  Agreement
dated as of January 1, 1997 (the  "Agreement"),  pursuant  to which the  Company
employs  Executive as its Senior Vice  President  and Chief  Financial  Officer,
based in the Company's executive offices in Chicago, Illinois; and

         B. The Company and Executive desire to amend certain  provisions of the
Agreement, as set forth in this Amendment.

         NOW,  THEREFORE,  in consideration  of the mutual terms,  covenants and
conditions set forth below, the parties agree as follows:

1.   TERM OF  AGREEMENT.  Section 2 of the  Agreement  is hereby  deleted in its
     entirety and replaced with the ----------------- following:

         "The  term of this  Agreement  shall be for a period of three (3) years
         commencing  on July 1, 1999,  unless  terminated  earlier  pursuant  to
         Section 7 below."

2.   BASE SALARY. Section 3.1 of the Agreement is hereby deleted in its entirety
     and replaced with the following:

         "For all  services  rendered by  Executive  under this  Agreement,  and
         commencing  July 1, 1999,  the  Company  shall pay to  Executive a base
         salary  ("Base  Salary")  of  $240,000  per annum.  The Base  Salary is
         subject to increases  from time to time at the  discretion of the Board
         of Directors of the Company."

3.   CONFLICTING  ACTIVITIES.  Section 4.3 of the Agreement is hereby deleted in
     its entirety and replaced with the following:

         "4.3  CONFLICTING  ACTIVITIES.  For the term of this Agreement or until
         Executive's  employment hereunder  terminates,  whichever occurs first,
         Executive   hereby   agrees  to  promote  and   develop  all   business
         opportunities  that  come  to his  attention  relating  to  current  or
         anticipated future business of the Company, in a manner consistent with
         the  best  interest  of the  Company  and with his  duties  under  this
         Agreement.  If Executive becomes aware of a business opportunity during
         the performance of his Company duties, through the use of the Company's
         property or information,  or under  circumstances that would reasonably
         lead Executive to believe that the business opportunity was intended by
         the  offeror to be offered to the  Company,  he shall  first offer such
         opportunity to the Company.  Should the Chief Executive  Officer of the
         Company,  on behalf of the  Company,  not  exercise its right to pursue
         this business  opportunity  within a reasonable  period of time, not to
         exceed thirty (30) days, Executive may develop the business opportunity
         for himself;  provided,  however,  that such  development may in no way
         conflict or interfere  with the duties owed by Executive to the Company
         under this  Agreement.  Further,  Executive  may develop such  business
         opportunities  only on his  own  time,  and  may  not use any  service,
         personnel,  equipment,  supplies,  facility,  or trade  secrets  of the
         Company  in their  development.  As used  herein,  the  term  "business
         opportunity"  shall  not  include  business   opportunities   involving
         investment in publicly  traded stocks,  bonds or other  securities,  or
         other investments of a personal nature.

4.   SEVERANCE. Section 6 of the Agreement is hereby deleted in its entirety and
     replaced with the following: ---------

         "So  long as this  Agreement  is in  effect,  and  except  as  would be
         inconsistent   with  Section  7,  upon   termination   of   Executive's
         employment,  Executive  or  Executive's  designees  or  heirs  shall be
         entitled to a lump sum payment  equal to one year of  Executive's  Base
         Salary as then in effect (the "Severance Payment").

5. CHANGE OF CONTROL.  Section 7.1 of the Agreement shall be amended by adding a
new  subsection  (e) and a new  subsection  (f)  immediately  following  Section
7.1(d), as follows:

         "(e) Executive's  employment hereunder may be terminated by the Company
         or by  Executive  at  any  time  within  ninety  (90)  days  after  the
         occurrence  of a Change  in  Control  (as  defined  below).  Upon  such
         termination:

(i)  the Company shall pay to Executive as a lump-sum payment an amount equal to
     two (2) years' Base Salary in effect at the time of termination;

(ii) the Company shall provide Executive with a continuation of health insurance
     coverage,  existing  office space and existing  secretarial  and  telephone
     services,  in each case for a period of eighteen (18) months after the date
     of termination; and

(iii)all stock  options  issued by the Company to  Executive  shall  immediately
     vest and become  exercisable  for a period of at least two (2) years  after
     the date of termination,  notwithstanding  any provision to the contrary in
     the Company's  stock option plan or in any stock option  agreement  between
     the Company and Executive.

     For  purposes  of this  Agreement,  a "Change  in  Control"  shall mean the
     occurrence of any of the following events:

                           (x) the  acquisition  by any  individual,  entity  or
                  group  (within the meaning of Section  13(d)(3) or 14(d)(2) of
                  the Securities Exchange Act of 1934, as amended (the "Exchange
                  Act")  (collectively,  a "person") of Beneficial ownership (as
                  such  term is  defined  in Rule  13d-3  promulgated  under the
                  Exchange Act), directly or indirectly,  of twenty-five percent
                  (25%) or more of the then  outstanding  shares of common stock
                  of   the   Company   or   National   Securities    Corporation
                  (collectively,  the  "Outstanding  Common  Stock");  provided,
                  however,  that the following  shall not constitute a Change of
                  Control:  (i) any  acquisition by an Underwriter (as such term
                  is defined in Section 2(11) of the  Securities Act of 1933, as
                  amended) for the purpose of making a public offering;  or (ii)
                  any  acquisition  by any  employee  benefit  plan (or  related
                  trust)  sponsored  or  maintained  by the  Company or National
                  Securities  Corporation or any  corporation  controlled by the
                  Company or National Securities Corporation;

                    (y)  the sale or liquidation of all or substantially  all of
                         the assets of the

                  Company or National Securities Corporation; or

                    (z)  any transaction or series of transactions  which result
                         in Steven A.  Rothstein  directly or indirectly  owning
                         less than ten percent (10%) of the  Outstanding  Common
                         Stock.

          (f)  Notwithstanding  anything  contained  herein,  or  in  any  other
               agreement  between  the  Company  and  Executive,  or  benefit or
               compensation plan under which the Executive participates,  to the
               contrary,  in the event that any amounts due Executive under this
               Section 7.1, or under any other plan or program of the Company or
               other  agreement  between the Company and  Executive,  constitute
               "parachute  payments,"  within the meaning of section 280G of the
               Internal  Revenue Code of 1986, as amended (the "Code"),  and the
               amount of such  parachute  payments,  when reduced by the federal
               excise taxes due and owing on such parachute payments, if any, is
               less than the amount Executive would receive if he were paid only
               three (3) times his "base  amount,"  as that term is  defined  in
               section 280G of the Code, then, in lieu of all payments hereunder
               which are parachute  payments,  Executive shall be paid, in cash,
               an  amount  equal to three (3)  times  his base  amount  less one
               dollar  ($1.00).  The  determinations  to be made with respect to
               this  Section  7.1(f)  shall  be made by an  independent  auditor
               jointly selected by the parties."

6.  NONCOMPETE.  Section 8 of the  Agreement  is hereby  amended by deleting the
first sentence of such Section and replacing it with the following:

         "Executive covenants and agrees that during the terms of his employment
         hereunder   and  for  a  period  of  one  (1)  year   thereafter   (the
         "Noncompetition  Period"),  Executive shall not, directly or indirectly
         recruit, solicit or otherwise induce any customer,  officer or employee
         of  the  Company  or its  affiliates,  or  any  independent  contractor
         associated  with the Company or its  affiliates,  to  discontinue  such
         relationship with the Company or its affiliates."

7. GOVERNING LAW. Section 9.3 of the Agreement is hereby deleted in its entirety
and replaced with the following:

         "This Agreement is made under and shall be construed in accordance with
the  laws  of the  State  of  Illinois,  without  regard  to  conflict  of  laws
principles.  The Company and Executive hereby consent and agree to be subject to
the  jurisdiction  of the  federal  and state  courts  of the State of  Illinois
sitting in Chicago,  Illinois,  in any suit, action or proceeding arising out of
this Agreement or the transactions contemplated hereby."

8. AFFECT ON AGREEMENT. Except as set forth in this Amendment, the Agreement and
each of the  parties'  respective  obligations  thereunder  shall remain in full
force and effect,  and shall not be waived,  modified,  superseded  or otherwise
affected by this Amendment.  This Amendment is not to be construed as a release,
waiver or modification  of any of the terms,  conditions,  covenants,  rights or
remedies set forth in the Agreement, except as specifically set forth herein.

9.  COUNTERPARTS.  This  Amendment may be executed in two or more  counterparts,
each of which  shall be  deemed  an  original  and all of which  together  shall
constitute one and the same instrument.

10.  GOVERNING  LAW.  This  Amendment  is made under and shall be  construed  in
accordance with the laws of the State of Illinois, without regard to conflict of
laws principles.

IN WITNESS  WHEREOF,  the parties have  executed  this  Amendment as of the date
first above written.

OLYMPIC CASCADE FINANCIAL CORPORATION

By:________________________________
Its:________________________________

EXECUTIVE

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Robert H. Daskal