Exhibit 10.5

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement” or “Employment Agreement”) is made
and entered into as of the 7th day of March, 2003, by and between INTERSTATE
BRANDS CORPORATION, a Delaware corporation (the “Company”), and Thomas S.
Bartoszewski (“Employee”).

 

The Company and Employee hereby mutually agree as follows:

 

1.             Employment.

 

(a)           The Company shall employ Employee, and Employee shall serve the
Company on the terms and subject to the conditions set forth herein for a period
commencing on January 1, 2003, and terminating on January 1, 2005 (the
“Expiration Date”), except as provided in Section 1(b) below.  Employee shall
serve in the capacity of Executive Vice President of the Eastern Division of the
Company.  The duties, responsibilities and authority of Employee shall be those
that are normally incident to the office to be held by Employee.  Employee shall
devote his best efforts and abilities and all his business time to the affairs
and interests of the Company (except as may be otherwise authorized by the Board
of Directors of the Company).  Employee’s principal office shall be at Kansas
City, Missouri.

 

(b)           On the first anniversary of the Effective Time (as defined in
paragraph 15) of the Employment Agreement and annually thereafter, the
Employment Agreement shall be automatically extended for an additional one (1)
year period unless

 

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terminated by either the Company or Employee by delivery, on or prior to June 1
of such year, of a termination notice to the other party.

 

2.             Compensation.     For his services to the Company, Employee shall
be entitled:

 

(a)           To receive (i) commencing January 1, 2003, an aggregate base
annual salary in the amount not less than One Hundred Eighty Five Thousand
dollars ($185,000) and (ii) an annual bonus pursuant to the terms of the
Incentive Compensation Plan (“Plan”) at the level specified for an Executive
Vice President under the Plan, as the same may be amended from time to time.  At
annual or approximate annual intervals, the Company shall conduct, or cause to
be conducted, a review of Employee’s salary, giving attention to all pertinent
factors, including without limitation the performance of the Company, the
performance of Employee and compensation practices inside and outside the
Company.  The Company shall, after such review, determine Employee’s base salary
to be paid until the completion of the next review.

 

(b)           To be covered by noncash benefit plans and programs of the Company
that are the same as those that are provided to executives with comparable
responsibilities and pay grade, including without limitation retirement plans
and programs, health and medical insurance coverage, long-term disability
insurance coverage and life insurance coverage.

 

(c)           To participate in any other benefit programs that are made
available to other executives of the Company.

 

(d)           To receive perquisites that are the same as those that are
provided to executives with comparable responsibilities and pay grade, including
without limitation monthly club dues, a new company car every three (3) years,
an annual

 

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allowance for financial counseling (any unused amount may be rolled over to the
next succeeding year provided that the amount available in any given year will
not exceed twice the annual allowance) and paid vacations.

 

3.             Termination; Effect of Termination.

 

(a)           Employee’s employment hereunder shall be terminated prior to the
Expiration Date if Employee dies or becomes permanently disabled under
circumstances in which he would be entitled to the benefits therefor under the
long-term disability insurance coverage referred to in Section 2(b), in which
case the Company and Employee shall be released from all further obligations and
liabilities hereunder (except as provided in this Section 3, for obligations
accrued but not yet paid, for those set forth in Section 5, for liability
arising from any breach of this Agreement occurring prior to such termination
and except that Employee and his beneficiaries shall be entitled to receive all
disability and other benefits payable upon his death or disability).

 

(b)           If Employee’s employment hereunder is terminated by the Company
without his consent or for any reason specified in Section 3(a) (each a
“Termination Event”), then the Company shall be obligated for a period of time
equal to the balance of the term of this Employment Agreement as set forth in
Section 1 remaining as of such Termination Event (the “Severance Period”) to
continue to make the full salary payments to Employee required by Section
2(a)(i).  The Company shall also continue to provide to Employee during such
Severance Period all health, medical, disability and insurance coverage provided
for in Section 2(b).

 

(c)           For purposes hereof, during the Severance Period Employee shall be
deemed to be in service and shall continue to accrue benefits under any
retirement plan of the Company and any supplemental retirement benefits
agreement in effect

 

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between the Company and Employee immediately prior to the Severance Period.  All
such payments shall be made without reference to or deduction for any subsequent
employment obtained or obtainable by Employee.  In the event that Employee would
be ineligible to participate in or be covered by any noncash benefit plan or
program by reason of such termination of his employment, the Company shall
provide substantially similar benefits or coverage through other sources.

 

(d)           During the Severance Period the Company shall continue to make all
payments of their portion of the premiums for the life insurance in effect with
respect to Employee’s life.  Employee shall also be entitled to receive or
exercise during the Severance Period all other benefits and rights available
under any benefit plans or programs to terminated or discharged employees.

 

(e)           Notwithstanding any of the other provisions of this Employment
Agreement to the contrary, in the event that the Employee is convicted in a
court of competent jurisdiction, or the Employee pleads guilty or makes a plea
of nolo contendere of any felony crime, the Employee’s employment with the
Company shall be terminated and all of the Employee’s rights to any and all
compensation and benefits provided under and pursuant to the terms of this
Employment Agreement, except to the extent protected by law, shall terminate.

 

4.             Travel Expense.       Employee’s duties under this Agreement may
require a reasonable amount of travel and the incurrence of travel and other
business expenses.  The Company shall pay or reimburse Employee for all such
reasonable expenses incurred or paid by him upon presentation of expense
statements or vouchers and such other information as the Company may reasonably
require.

 

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5.             Confidentiality.     Employee shall not at any time during or
after the term of this Agreement (and without regard to the circumstances under
which this Agreement or Employee’s employment hereunder may have terminated),
directly or indirectly, disclose or permit those under his control to disclose,
or use, or permit those under his control to use, except as shall be necessary
in the performance of his duties hereunder, any trade secrets or other
proprietary information owned by or confidential to the Company or any of its
affiliates (as affiliate is defined in Rule 144 promulgated under the Securities
Act of 1933 (“Affiliate”)) without the prior written consent of the Company
including but not limited to (i) any confidential information concerning the
business, affairs, properties, management or prospects (financial or otherwise)
of the Company or any of its Affiliates that he may have acquired in the course
of, or as an incident to, his employment by the Company or any of its Affiliates
or predecessors or (ii) any confidential information entrusted to the Company or
any of its Affiliates or predecessors which any such company is obligated to
keep confidential.

 

6.             Restrictions.        Period the Employee will not, as an
individual or as a partner, employee, agent, advisor, consultant or in any other
capacity of or to any person, firm, corporation or other entity (excluding the
Company or one of its Affiliates), directly or indirectly, other than as a 2% or
less shareholder of a publicly traded corporation, do any of the following:

 

(a)           carry on any business, or become involved in any business
activity, which is competitive with the business conducted by the Company (or
one of its Affiliates) immediately prior to a Termination Event; or

 

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(b)           induce or attempt to induce, or assist anyone else to induce or
attempt to induce, any customer of the Company (or one of its Affiliates) to
discontinue its business with the Company (or one of its Affiliates) or disclose
to anyone else any confidential information relating to the identities,
preferences, and/or requirements of any such customer.

 

The Employee agrees (i) that the restraints contained in this Section 6, both
separately and in total, are reasonable in view of the legitimate interests of
the Company in protecting its trade secret information and business
relationships; and (ii) to disclose to any potential future employer during the
Severance Period, the terms of the restrictions against competition contained in
this Section 6.

 

If any provision or subpart of this Section 6 is adjudicated to be invalid or
unenforceable under applicable law, the validity or enforceability of the
remaining provisions and subparts shall be unaffected.  If any provision or
subpart of this Section 6 is adjudicated to be invalid or unenforceable because
it is overbroad or unreasonable, that provision or subpart shall not be void but
rather shall be limited to the extent required to make it reasonable and shall
be enforced as so limited.

 

In the event of a breach of this Section 6, the Company (i) shall have no
further liability for any of the severance benefits described in Section 3(b)
that have not been paid as of the date of the breach, and (ii) shall be
entitled, in addition to any other legal or equitable remedies it may have, to
temporary, preliminary and permanent injunctive relief restraining such breach.

 

7.             Arbitration.       Any controversy or claim arising out of or
relating to this Agreement, or the breach or asserted breach of its terms, will
be settled by arbitration

 

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before a single arbitrator in Kansas City, Missouri, in accordance with the
rules then in effect under the Federal Arbitration Act, and judgment upon the
award rendered may be entered in any court having jurisdiction thereof.  No
claim may be arbitrated unless written notice of the basis of the claim is
received within 180 days after the party first knew of the existence of the
general facts upon which the claim is based.  All arbitration hearings must
commence within 90 days after the written notice of the claim.  Employee and the
Company shall share equally any fees and expenses of any arbitrator.  The
arbitrator will decide what amount, if any, of the prevailing party’s legal fees
and expenses will be paid by the non-prevailing party.  For all purposes, this
Agreement will be interpreted and enforced under Missouri and United States law,
as respectively applicable.

 

8.             Entire Agreement.         This Agreement is the entire agreement
between the parties hereto with respect to Employee’s employment and shall not
be amended, altered or modified in any manner whatsoever, except by a written
instrument executed by the parties hereto.  This Agreement supersedes all prior
agreements between the Company (or one of its Affiliates) and Employee and all
such prior agreements shall be void and of no further force or effect as of the
Effective Time.

 

9.             No Continuous Waiver.      The waiver by any party hereto of a
breach of any provision of this Agreement by the other party hereto shall not
operate or be construed as a waiver of any subsequent breach by such party.

 

10.           Governing Law.    This Agreement shall be subject to, and be
governed by, the laws of the State of Missouri.

 

11.           Transfer, Assignment, Modification, etc.        This Agreement may
not be transferred, assigned, modified, amended or waived without the prior
written

 

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consent of all parties except that the Company may assign this Agreement without
the consent of the Employee in the event any person, corporation or other
entity, by merger, consolidation, purchase of assets, liquidation, voluntary or
involuntary assignment or otherwise, acquires all or a substantial part of the
assets of the Company (or one of its Affiliates) or succeeds to one or more
lines of business of the Company (or one of its Affiliates.)

 

12.           Severability.          If any one or more of the provisions of
this Agreement, as applied to any party or any circumstance, shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained in the Agreement. 
If any one or more of the provisions of this Agreement shall, for any reason, be
held to be unenforceable as to duration, scope, activity or subject, such
provision shall be construed by limiting and reducing it so as to make such
provision enforceable to the extent compatible with the then existing applicable
law.

 

13.           Notices.         All notices hereunder shall be in writing, shall
be delivered personally or sent by certified or registered mail, postage
prepaid, return receipt requested, or by overnight delivery utilizing a
recognized national express delivery carrier such as FedEx, if to Employee, to
his attention at the principal office of the Company, and if to the Company, to
its principal office, Attention:  General Counsel.  No notice shall be effective
if given otherwise than as provided herein.

 

14.           Effect of Management Continuity Agreement.         In the event of
a Qualifying Termination, as defined under the Management Continuity Agreement
dated

 

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February 3, 2003, by and between Interstate Bakeries Corporation, a Delaware
corporation, and the Employee (the “Continuity Agreement”), all of the
Employee’s rights to any compensation and benefits to be provided to Employee in
connection with such Qualifying Termination shall be solely governed by and paid
pursuant to the terms of the Continuity Agreement and the Employee shall have no
rights to any of the compensation and benefits provided for under this
Agreement.

 

15.           Effective Time.      This Agreement may be signed in any number of
counterparts each of which shall be an original and all of which, when taken
together, shall constitute one and the same instrument and shall become
effective as of January 1, 2003 (the “Effective Time”) upon the execution and
delivery hereof by the parties hereto.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the day and year first above written.

 

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.

 

 

 

 

 

 

INTERSTATE BRANDS CORPORATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/  James R. Elsesser

 

 

 

 

 

 

Title:  Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/  Thomas S. Bartoszewski

 

 

 

 

 

 

 

Thomas S. Bartoszewski

 

 

 

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