Exhibit 10.11

                               EMPLOYMENT CONTRACT

BETWEEN:          TreeSource Industries, Inc.
                  (formerly WTD Industries, Inc.), an Oregon corporation
                                                                        Employer

AND:              Jess R. Drake, an individual                          Employee

DATE:             October 31, 1998

                                    AGREEMENT

1. Employment  Term. The term of employment  under this Agreement shall begin on
the 4th day of November, 1998, and continue until the third anniversary thereof,
unless earlier terminated as provided in paragraph 6.1 herein.

2. Employment Duties.  During the term of this Agreement,  Employee shall be the
President and Chief Executive  Officer of Employer,  and, subject to shareholder
approval, a voting member of the Board of Directors, and shall:

         2.1 Devote  Employee's  full  business time and attention to performing
services on behalf of Employer as may be assigned to Employee  from time to time
by the Board of Directors.

         2.2 Comply with the policies,  standards and regulations established by
Employer from time to time.

3.       Compensation.

         3.1 Base  Compensation.  Employer  shall pay  Employee an initial  base
compensation  of $350,000 per year payable in equal monthly  installments.  Each
year  thereafter  Employee  shall receive a reasonable  annual  increase in base
compensation  if such an  increase  is  provided  generally  to other  executive
employees of the company, or as deemed appropriate by the Board of Directors.

         3.2 Bonus.  Employee  shall  receive a signing  bonus of $100,000  upon
execution hereof by Employer and Employee.  In addition,  Employee shall receive
annual bonuses as follows:




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<PAGE>
               3.2.1  At the  end of  Employer's  fiscal  year,  Employee  shall
receive an annual bonus  conditioned  upon his performance  against  performance
objectives  and  target  goal,   which  target  goal  and  objectives  shall  be
achievable,  realistic,  reasonable,  and mutually  established in good faith by
Employer and Employee.

               3.2.2 If  Employee  meets the  target  goal  mutually  set at the
beginning of each year, he shall receive,  within ninety (90) days after the end
of each  fiscal  year,  a bonus  equal to 60% (the  "target  bonus") of his then
current annual salary (Employee's  "base").  If Employee exceeds the target goal
he shall receive a  correspondingly  greater bonus, up to three times the target
bonus amount.  The goals and objectives to be applied in determining  Employee's
eligibility  for a bonus during the first three full fiscal years of  employment
shall be developed in accordance with the following criteria:

                      (a) From the date of hire through April 30, 2000,  (i) the
target bonus shall be based solely upon non-financial goals, (ii) any bonus with
respect to an  additional  60% of  Employee's  base shall be based upon  equally
weighted  non-financial and financial goals, and (iii) any bonus with respect to
the third 60% of  Employee's  base shall be based solely upon  financial  goals.
Within ninety (90) days of the  commencement of Employer's next fiscal year, May
1,  1999,  Employee  shall be  eligible  to  receive a  prorated  bonus for work
performed from the date of hire to that time.

                      (b) During the fiscal year ending April 30, 2001,  (i) the
target bonus shall be based solely upon non-financial goals, (ii) any bonus with
respect  to an  additional  60% of  Employee's  base  shall  be  based  75% upon
financial  goals and 25% upon  non-financial  goals,  and  (iii) any bonus  with
respect to the third 60% of Employee's base shall be based solely upon financial
goals.

                      (c) During the fiscal year ending April 30, 2002,  (i) the
target bonus shall be based 80% upon financial goals and 20% upon  non-financial
goals, and (ii) any bonus with respect to the second and third 60% of Employee's
base shall be based solely upon financial goals.

         3.3 Stock Options. Upon execution hereof by the parties, and subject to
any corporate or shareholder  action required to permit such issuance,  Employee
shall receive stock options in a number sufficient to represent a potential $5.0
million gain based upon a stock price of $10.00 per share and an option exercise
price  equal to 85% of the  common  stock's  value as of the date of the  grant,
which  shares,  except  as  hereafter  provided,  shall  vest  according  to the
following  schedule:  (1) one-fourth  upon execution  hereof;  (2) an additional
one-fourth on each anniversary of this





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<PAGE>
agreement.  In the  event  that a senior  lender  under  Employer's  Credit  and
Security Agreement  declares Employer in default and accelerates,  or there is a
change in control (as defined herein), or Employer terminates  Employee,  except
under paragraphs 6.1.4 or 6.1.5 or under  circumstances  where Employee has been
grossly negligent or has exhibited willful  misconduct in the performance of his
duties,  the stock  options  will  immediately  vest.  Nothing  herein  shall be
construed  to  preclude  Employee  from  receiving  additional  grants  of stock
options,  to the extent deemed  appropriate by the Board,  if Employer  provides
other senior  management  employees  such grants.  Employee shall be eligible to
receive such other grants on a non-discriminatory  basis. A change of control is
defined as any sale,  transfer or  disposition of all or  substantially  all the
assets of Employer or the merger of Employer  with another  company that results
in the shareholders of Employer  obtaining less than 50% of the voting equity of
the resulting  company,  or an  individual or company in any manner  acquires or
controls more than 50% of the voting equity of Employer.

         3.4 Other Benefits.  Base  compensation and bonus  compensation paid to
Employee shall be in addition to any  contribution  made by the Employer for the
benefit of Employee to any  qualified  pension plan or 401k plan  maintained  by
Employer for the exclusive benefit of its employees or employee.  Employer shall
provide to Employee and  Employee's  spouse and dependent  children,  if any, at
least the same coverage and  participation  that the Employer  provides to other
management  personnel and their families with respect to accident  insurance and
disability  insurance.  If such  insurance  is  available  at standard  rates or
better,  Employer shall provide Employee extended disability  insurance coverage
in the amount  equal to 60% of  Employee's  annual base salary.  Employer  shall
provide  Employee with four weeks of paid vacation and such sick leave  benefits
that Employer provides to other management  employees.  The Employee will not be
eligible for any medical, dental or life insurance coverage.

4.  Relationship Is  Employer-Employee.  The  relationship  between Employer and
Employee is that of  employer-employee.  Employer  shall have the  authority  to
determine  the  assignment  of work  and  specific  duties  to be  performed  by
Employee.

5. Expenses.  Employee shall be entitled to reimbursement  from Employer for all
actual documented expenses incurred by Employee in the performance of Employee's
duties under this Agreement in accordance with Employer's policies for executive
employees.  In addition,  Employee's  reasonable actual expenses associated with
his relocation shall be paid by Employer. Such expenses include reasonable costs
associated with the sale of his home,  including real estate commissions,  costs
associated with temporary  living quarters not to exceed six months,  the search
for suitable housing, the closing costs incurred on account of the purchase of a
home,  and  reasonable  costs  associated  with  the move of his  furniture  and
furnishings, and storage, if any.

6.       Termination.

         6.1 Reasons for Termination.  Employee's employment with Employer shall
terminate only upon occurrence of any of the following events:

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<PAGE>
               6.1.1 Mutual written agreement between Employer and Employee;

               6.1.2 Employee's death;

               6.1.3 Employee shall suffer a permanent disability.  For purposes
of this  Agreement,  "permanent  disability"  shall  be  defined  as  Employee's
inability  due to  physical  or mental  illness or other  cause,  to perform the
majority of Employee's usual duties for a period of six (6) months or more;

               6.1.4  Employee's  willful and  continual  failure and refusal to
comply with the  reasonable  express  directives  of the Board of  Directors  of
Employer;

               6.1.5  Conviction  of a felony  or any crime  involving  fraud or
dishonesty in the performance  of, or that reflects upon  Employee's  ability to
perform, Employee's duties on behalf of Employer;

               6.1.6 Upon forty-five (45) days' prior written notice by Employer
or Employee to the other.

         6.2      Payment Upon Termination.

               6.2.1 If  Employee's  employment  is  terminated  pursuant to the
terms of paragraphs  6.1.4 or 6.1.5,  or if Employee  terminates  his employment
pursuant to paragraph  6.1.6,  and paragraph 6.3 does not otherwise  apply,  the
base  compensation  payable  to  Employee  pursuant  to  paragraph  3.1 shall be
prorated to the date of such  termination  and shall be payable on the first day
of the month following such termination date.

               6.2.2 If Employer  terminates  Employee's  employment pursuant to
paragraph 6.1.6, Employee shall receive the following:

                      (a)  Employer  shall pay  Employee  payments  as  provided
herein.  If Employee is  terminated  prior to the  scheduled  expiration of this
Agreement, an amount equal to two times Employee's last base annual salary and a
pro-rata  share of that year's target bonus amount,  to the extent earned at the
date of termination,  based upon Employee's  length of service that year, within
thirty (30) days of the date of Employee's termination.

                      (b)  Within  thirty  (30)  days of the date of  Employee's
termination, Employer shall pay Employee all of Employee's accrued vacation.

                      (c) To  the  extent  permitted  under  Employer's  benefit
plans, Employer shall continue to provide Employee with the same accident, basic
disability insurance,  and additional disability insurance which was provided to
Employee during the term of Employee's employment. Employer shall, to the extent
permitted, continue to

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<PAGE>
provide those benefits until Employee finds other employment,  or for a one year
period, whichever date first occurs.

         6.3 In the  event  Employee  is  demoted  or his title or  position  is
otherwise  materially  adversely  changed by Employer,  Employee is removed as a
voting  member of the Board of  Directors  (other than by  shareholder  action),
Employer reduces  Employee's annual salary or reduces Employee's bonus potential
to less than three times target (60% of annual salary), Employee, at his option,
may give  notice to the board of his  intention  to  terminate  as  provided  in
paragraph  6.1.6 and receive the benefits  provided in paragraph  6.2.2. In such
event the sums to be paid to Employee  pursuant to said paragraph 6.2.2 shall be
placed  by  Employer  in an  escrow  account  within  15 days of said  notice by
Employee with escrow instructions to release said sums to Employee at the end of
the 45-day notice period.

         6.4 Employer agrees and represents that it has obtained agreements from
its lenders to subordinate their claims to those of Employee, so that Employee's
claims for  payment of any kind  provided  for  hereunder  would  receive  first
priority  over  theirs,  and to  except  from any  contractual  restrictions  on
Employer its  agreements  with Employee as provided for herein.  Copies of those
agreements are attached as Exhibit A hereto.

7.  Confidentiality.  Employee  acknowledges  that  during  the  course  of  his
employment  by  Employer  he may be exposed to or have  disclosed  to him or may
develop  information  which  is  proprietary  to  the  Employer   ("Confidential
Information").   Confidential   Information  may  include,  without  limitation,
information  concerning trade secrets,  source code, designs,  licenses,  costs,
customer lists,  profits,  markets,  marketing  plans,  price data and any other
information  of a similar  nature to the extent not  generally  known within the
trade. Employee shall not make use of any Confidential Information except in the
performance of his duties for Employer,  he shall  maintain such  information in
confidence and he shall not use any of such  information in connection  with any
other employment.

8.  Nonsolicitation.  During the severance period,  Employee will not within the
United States of America solicit any employee to work for a direct competitor of
Employer.  Nothing  herein shall be construed  to prevent  Employee  from hiring
persons who respond to advertisements of general circulation, or whose names are
independently  developed by an employment  firm,  or who initiate  contacts with
Employee about  employment  with Employee.  Employee shall not be prevented from
providing a reference  for any  Employer  employee  seeking a position  with any
company or offering advice to that company about said employee if requested.

9. Confidentiality and Nonsolicitation  After Termination of Employment.  All of
the terms of  paragraphs  7 and 8 shall  remain in full  force and  effect for a
period of two (2) years after the  termination  of Employee's  employment if all
payments as provided herein have been timely made to Employee.

10. Notice.  Any notices  permitted or required  under this  Agreement  shall be
given in writing and may be delivered  and served  personally  upon  Employee or
upon an officer of 

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Employer, or alternatively,  may be deposited in the United States mail, postage
prepaid by certified or registered mail,  addressed to the parties at their last
known  address.  Such  notice,  if mailed  within the state of Oregon,  shall be
deemed  delivered upon the second day following the date  postmarked.  If mailed
outside the state of Oregon, the notice shall be deemed delivered upon the fifth
day following the date postmarked.

11. Waiver of Breach.  The waiver by either  Employer or Employee of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other provision or of any subsequent  breach of the same provision by either
Employer or Employee.

12. Binding  Effect and  Assignment.  This  Agreement  shall be binding upon and
inure  to the  benefit  of both  Employer  and  Employee  and  their  respective
successors, heirs and legal representatives,  but neither this Agreement nor any
rights  hereunder  may be  assigned by either  Employer or Employee  without the
prior written consent of the other party.

13.  Amendment.  No amendment or variation of the terms and  conditions  of this
Agreement  shall be valid  unless  the same is in  writing  and  signed  by both
Employer and Employee.

14.  Integration.  This Agreement  embodies the entire  agreement of the parties
with respect to  Employee's  employment  with  Employer.  There are no promises,
terms,  conditions  or  obligations  other than  those  contained  herein.  This
Agreement  shall  supersede  all  prior   communications,   representations   or
agreements, either verbal or written, between the parties.

15. Paragraph  Headings.  The paragraph headings appearing in this Agreement are
not to be  construed  as  interpretations  of the  text,  but are  inserted  for
convenience of and reference by the reader only.

16.  Interpretation.  This Employment Contract shall be interpreted according to
the laws of the state of Oregon.


EMPLOYER:                                                     EMPLOYEE:

TREESOURCE INDUSTRIES, INC.

By: /s/ Robert J. Riecke                        /s/ Jess R. Drake
    --------------------------------            --------------------------------
Title:Vice President-Administration
      ------------------------------
Date:           11/3/98                      Date:          10/31/98           
     -------------------------------             -------------------------------




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<PAGE>
                                                                       Exhibit A

                            Consent and Subordination



         THE  UNDERSIGNED  LENDER is one of the secured  creditors of TreeSource
Industries,  Inc.  (formerly  WTD  Industries,  Inc.),  pursuant to a Credit and
Security Agreement dated as of November 30,1992. Lender agrees as follows:

         1. Lender has reviewed the  Employment  Contract (in the form  attached
hereto as Exhibit A and without any subsequent  amendment or  modification,  the
"Employment  Contract"),  by  and  between  TreeSource  Industries,   Inc.  (the
"Employer") and Jess R. Drake (the Employee").

         2. Lender hereby consents to the provisions of the Employment  Contract
and agrees that the same shall be exempt from any contractual  restrictions  set
forth in the Credit and Security Agreement.

         3. Upon the  occurrence of an event  entitling  employee to give notice
pursuant to  paragraph  6.3 or a breach by Employer of the  Employment  Contract
("Trigger Event") and following written notice of such Trigger Event provided to
Lenders,  the  Lenders  agree that  Employee  shall be  entitled  to receive any
amounts owed under Section 6 of the  Employment  Contract up to a maximum amount
not to exceed  $1,100,000,  prior to any payment to the Lenders on their  claims
under the Credit and Security Agreement.  The Lenders shall be subrogated to the
rights of Employee to receive payment from Employer to the extent of any payment
or  distribution  made to Employee  under this  paragraph to which Lenders would
otherwise be entitled. No payment or distribution made to Employee,  directly or
indirectly, of any cash, property or securities (including,  without limitation,
any proceeds of Lenders'  collateral  under the Credit and  Security  Agreement)
pursuant to this paragraph, to which Lender would otherwise be entitled shall be
deemed a payment  or  distribution  by  Employer  to Lenders on account of their
claims  under the Credit  and  Security  Agreement.  Nothing  contained  in this
paragraph is intended to or shall: (a) impair, as among Employer,  its creditors
other than Employee,  and the Lenders,  the obligations  owed by Employer to the
Lenders;  (b) affect the relative rights, as against Employer and the collateral
under the Credit and  Security  Agreement,  of the Lenders and the  creditors of
Employer  other than  Employee;  or (c) prevent the Lenders from  exercising all
rights and remedies otherwise  permitted under applicable law and the Credit and
Security Agreement, subject only to the rights of Employee under this paragraph,
if any, to receive  payment  otherwise  payable to the  Lenders.  The failure of
Employer to comply with the terms of the Employment Contract shall constitute an
Event of Default under Section 7.01E of the Credit and Security Agreement.




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         4. This Consent and  Subordination  shall become effective upon receipt
by Employer of identical agreements executed by each of Employer's Lenders under
the Credit and Security Agreement.



         Dated this 29 day of October, 1998.
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By:
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Its: 
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