**Exhibit10.5**

**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 asfollows:

 

1.             Employment.

 

(a)           TheCompany shall employ Employee, and Employee shall serve the Company on theterms and subject to the conditions set forth herein for a period commencing onJanuary 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 theEastern Division of the Company.  Theduties, responsibilities and authority of Employee shall be those that arenormally incident to the office to be held by Employee.  Employee shall devote his best efforts andabilities 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 theCompany).  Employee’s principal officeshall be at Kansas City, Missouri.

 

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

 

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

 

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

 

(a)           Toreceive (i) commencing January 1, 2003, an aggregate base annual salary in theamount 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, orcause to be conducted, a review of Employee’s salary, giving attention to allpertinent factors, including without limitation the performance of the Company,the performance of Employee and compensation practices inside and outside theCompany.  The Company shall, after suchreview, determine Employee’s base salary to be paid until the completion of thenext review.

 

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

 

(c)           Toparticipate in any other benefit programs that are made available to otherexecutives of the Company.

 

(d)           Toreceive perquisites that are the same as those that are provided to executiveswith comparable responsibilities and pay grade, including without limitationmonthly 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 rolledover to the next succeeding year provided that the amount available in anygiven year will not exceed twice the annual allowance) and paid vacations.

 

3.             Termination;Effect of Termination.

 

(a)           Employee’semployment hereunder shall be terminated prior to the Expiration Date ifEmployee dies or becomes permanently disabled under circumstances in which hewould be entitled to the benefits therefor under the long-term disabilityinsurance coverage referred to in Section 2(b), in which case the Company andEmployee shall be released from all further obligations and liabilitieshereunder (except as provided in this Section 3, for obligations accrued butnot yet paid, for those set forth in Section 5, for liability arising from anybreach of this Agreement occurring prior to such termination and except thatEmployee and his beneficiaries shall be entitled to receive all disability andother benefits payable upon his death or disability).

 

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

 

(c)           Forpurposes hereof, during the Severance Period Employee shall be deemed to be inservice and shall continue to accrue benefits under any retirement plan of theCompany and any supplemental retirement benefits agreement in effect

 

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between the Company and Employee immediately prior to the SeverancePeriod.  All such payments shall be madewithout reference to or deduction for any subsequent employment obtained orobtainable by Employee.  In the eventthat Employee would be ineligible to participate in or be covered by anynoncash benefit plan or program by reason of such termination of hisemployment, the Company shall provide substantially similar benefits orcoverage through other sources.

 

(d)           Duringthe Severance Period the Company shall continue to make all payments of theirportion of the premiums for the life insurance in effect with respect toEmployee’s life.  Employee shall also beentitled to receive or exercise during the Severance Period all other benefitsand rights available under any benefit plans or programs to terminated ordischarged employees.

 

(e)           Notwithstandingany of the other provisions of this Employment Agreement to the contrary, inthe 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 felonycrime, the Employee’s employment with the Company shall be terminated and allof the Employee’s rights to any and all compensation and benefits providedunder and pursuant to the terms of this Employment Agreement, except to theextent protected by law, shall terminate.

 

4.             Travel Expense.       Employee’s duties under this Agreementmay require a reasonable amount of travel and the incurrence of travel andother business expenses.  The Company shallpay or reimburse Employee for all such reasonable expenses incurred or paid byhim upon presentation of expense statements or vouchers and such otherinformation as the Company may reasonably require.

 

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5.             Confidentiality.     Employee shall not at any time during orafter the term of this Agreement (and without regard to the circumstances underwhich 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 necessaryin the performance of his duties hereunder, any trade secrets or otherproprietary information owned by or confidential to the Company or any of itsaffiliates (as affiliate is defined in Rule 144 promulgated under theSecurities Act of 1933 (“Affiliate”)) without the prior written consent of theCompany including but not limited to (i) any confidential informationconcerning the business, affairs, properties, management or prospects(financial or otherwise) of the Company or any of its Affiliates that he mayhave acquired in the course of, or as an incident to, his employment by theCompany or any of its Affiliates or predecessors or (ii) any confidentialinformation entrusted to the Company or any of its Affiliates or predecessorswhich any such company is obligated to keep confidential.

 

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

 

(a)           carry on any business, or becomeinvolved in any business activity, which is competitive with the businessconducted by the Company (or one of its Affiliates) immediately prior to aTermination Event; or

 

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(b)            induce or attempt to induce, orassist 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 oneof its Affiliates) or disclose to anyone else any confidential informationrelating to the identities, preferences, and/or requirements of any suchcustomer.

 

The Employee agrees (i) that the restraints containedin this Section 6, both separately and in total, are reasonable in view of thelegitimate interests of the Company in protecting its trade secret informationand business relationships; and (ii) to disclose to any potential futureemployer during the Severance Period, the terms of the restrictions againstcompetition contained in this Section 6.

 

If any provision or subpart of this Section 6 isadjudicated to be invalid or unenforceable under applicable law, the validityor enforceability of the remaining provisions and subparts shall beunaffected.  If any provision or subpartof this Section 6 is adjudicated to be invalid or unenforceable because it isoverbroad or unreasonable, that provision or subpart shall not be void butrather shall be limited to the extent required to make it reasonable and shallbe enforced as so limited.

 

In the event of a breach of this Section 6, theCompany (i) shall have no further liability for any of the severance benefitsdescribed 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 equitableremedies it may have, to temporary, preliminary and permanent injunctive reliefrestraining such breach.

 

7.             Arbitration.       Any controversy or claim arising out ofor 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 withthe rules then in effect under the Federal Arbitration Act, and judgment uponthe award rendered may be entered in any court having jurisdictionthereof.  No claim may be arbitratedunless written notice of the basis of the claim is received within 180 daysafter the party first knew of the existence of the general facts upon which theclaim is based.  All arbitrationhearings must commence within 90 days after the written notice of theclaim.  Employee and the Company shallshare equally any fees and expenses of any arbitrator.  The arbitrator will decide what amount, ifany, of the prevailing party’s legal fees and expenses will be paid by thenon-prevailing party.  For all purposes,this Agreement will be interpreted and enforced under Missouri and UnitedStates law, as respectively applicable.

 

8.             Entire Agreement.         This Agreement is the entire agreementbetween the parties hereto with respect to Employee’s employment and shall notbe amended, altered or modified in any manner whatsoever, except by a writteninstrument executed by the parties hereto. This Agreement supersedes all prior agreements between the Company (orone of its Affiliates) and Employee and all such prior agreements shall be voidand of no further force or effect as of the Effective Time.

 

9.             NoContinuous Waiver.      The waiver byany party hereto of a breach of any provision of this Agreement by the otherparty hereto shall not operate or be construed as a waiver of any subsequentbreach by such party.

 

10.           GoverningLaw.    This Agreement shall besubject to, and be governed by, the laws of the State of Missouri.

 

11.           Transfer,Assignment, Modification, etc.        ThisAgreement may not be transferred, assigned, modified, amended or waived withoutthe prior written

 

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consent of all parties except that the Company may assign thisAgreement 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 ora substantial part of the assets of the Company (or one of its Affiliates) orsucceeds to one or more lines of business of the Company (or one of itsAffiliates.)

 

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

 

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

 

14.           Effect of Management ContinuityAgreement.         In the event of aQualifying Termination, as defined under the Management Continuity Agreementdated

 

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February 3, 2003, by and between Interstate Bakeries Corporation, aDelaware corporation, and the Employee (the “Continuity Agreement”), all of theEmployee’s rights to any compensation and benefits to be provided to Employeein connection with such Qualifying Termination shall be solely governed by andpaid pursuant to the terms of the Continuity Agreement and the Employee shallhave no rights to any of the compensation and benefits provided for under thisAgreement.

 

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

 

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IN WITNESS WHEREOF, the parties hereto have dulyexecuted and delivered this Agreement as of the day and year first abovewritten.

** **

**THISCONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THEPARTIES**.

 
|   |   |   |   |   | INTERSTATE BRANDS CORPORATION         |                        |   |
|--------|--------|--------|--------|--------|---------------------------------------|-----------------------------|--------|
|   |   |   |   |   |                                  |                        |   |
|   |   |   |   |   |                                  |                        |
|   |   |   |   |   | By:                                   | /s/  James R. Elsesser |   |
|   |   |   |   |   | Title:  Chief  Executive Officer |                        |   |
|   |   |   |   |   |                                  |                        |   |
|   |   |   |   |   |                                  |                        |   |
|   |   |   |   |   | /s/  Thomas S. Bartoszewski      |                        |   |
|   |   |   |   |   | Thomas S. Bartoszewski                |                        |   |
|        |        |        |        |        |                                       |                             |        |  |  |

 

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