Savory Summer Vegetable Bread Pudding

2 Tbsp. butter or margarine
1/2 cup sliced shallots or chopped onion
3 cloves garlic, minced
2 medium zucchini or summer squash, halved lengthwise and cut into 1/4-inch slices
1 red bell pepper, cut into thin strips
2 cups diced Canadian bacon or ham (optional)
5 Tbsp. chopped fresh basil, divided
1/2 tsp. salt
1/2 tsp. pepper or crushed red pepper flakes
12 oz. sliced Italian or sourdough bread, divided
2 cups (8 oz.) Sargento® Artisan Blends Shredded Double Cheddar Cheese
4 eggs
2-1/2 cups milk

Melt butter in large skillet. Add shallots and garlic; cook over medium heat 3 minutes. Add squash and bell pepper; cook 8 minutes or until vegetables are crisp-tender. Remove from heat; stir in Canadian bacon, if desired. Stir in 4 tablespoons basil, salt and pepper.
Cut bread slices in half if large; arrange on a large baking sheet. Bake in preheated 400°F oven 10 minutes. Layer half of the bread in greased 13 x 9-inch baking pan. Spoon half of squash mixture over bread; sprinkle with half of the cheese. Repeat.
Beat eggs and milk in medium bowl; pour over bread mixture. Bake in preheated 375°F oven 40 minutes or until knife inserted near center comes out clean. Let stand 5 minutes before cutting into squares; sprinkle with remaining basil.