EXHIBIT 10.12

                           CHANGE IN CONTROL AGREEMENT

               THIS CHANGE IN CONTROL  AGREEMENT  is made and entered  into this
24th  of  November,  1998,  (this  "Agreement"),  by and  among  BAY  COMMERCIAL
SERVICES, a California corporation and bank holding company (the "Company"), BAY
BANK OF  COMMERCE,  a California  corporation  (the "Bank") (the Company and the
Bank are jointly and severally referred to herein as "Employers") and RICHARD M.
KAHLER (hereinafter referred to as "Executive"):

               WHEREAS, Executive currently is employed by each of the Employers
as President and Chief Executive Officer; and

               WHEREAS,  Executive is willing to continue to serve Employers but
desires that in the event of a change in control of  Employers,  he will be paid
change in control  benefits  irrespective of whether he is retained by Employers
or any successor to Employers;

               NOW,  THEREFORE,  in consideration of the promises and the mutual
agreements herein contained, Employers and Executive hereby agree as follows:

               1. TERM. This Agreement shall terminate,  except to the extent 
that any obligation of Employers hereunder remains unpaid as of such time, upon
the earliest of (a) the voluntary or involuntary  termination of Executive's  
employment with Employers or (b) the effective date of a Change in Control, as
defined in Section 2 hereof.

               2. CHANGE IN CONTROL OF THE COMPANY OR THE BANK. The term "Change
in  Control"  shall  mean a change in  control  of the  Company or the Bank of a
nature  that  would be  required  to be  reported  in  response  to Item 5(f) of
Schedule 14A of Regulation 14A promulgated under the Securities  Exchange Act of
1934 as in effect on the date of this Agreement (the "Exchange Act") or, if Item
5(f) is no longer in  effect,  any  regulations  issued  by the  Securities  and
Exchange  Commission  pursuant to the Exchange Act which serve similar purposes;
provided  that,  without  limitation,  such change in control shall be deemed to
have  occurred  if and when (A) any  "person"  (as such term is used in Sections
13(d) and  14(d)(2)  of the  Exchange  Act) is or  becomes a  beneficial  owner,
directly or indirectly, of securities of the Company or the Bank representing 25
percent or more of the combined voting power of the Company's or the Bank's then
outstanding  securities  or (B)  individuals  who were  members  of the Board of
Directors of the Company  immediately  prior to a meeting of the shareholders of
the  Company  involving  a  contest  for the  election  of  directors  shall not
constitute a majority of the Board of Directors following such election.

               3.  PAYMENT OF CHANGE IN CONTROL BENEFIT.

                         (1) Executive  shall be entitled to payment of a Change
in Control  Benefit under this Agreement upon a Change in Control.  Such payment
will be reduced by any required federal, state, and local income tax, employment
tax, and benefits withholdings. The Change in

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Control  Benefit  shall be paid as soon as  practicable  following  a Change  in
Control in the form of a single  sum  payment  or, if  elected by the  Executive
prior to said Change in Control,  in the form of an annuity with such term as is
elected  by the  Executive.  If the  Change  in  Control  Benefit  is paid as an
annuity, the annuity shall be purchased by the Bank and shall be held as part of
the Bank's general  assets.  The Bank's  obligation to pay said annuity shall be
considered unfunded as provided under Section 11 of this Agreement.

                         (2) In the event that any  payment or benefit  received
or to be  received  by  Executive  as a result  of a change of  control,  or the
termination of Executive's  employment (whether payable pursuant to the terms of
this Agreement or any other plan,  arrangement or agreement with Employers,  any
person  whose  actions  result in a change in control of Employers or any person
affiliated  with  Employers or such person  (together with the Change in Control
Benefit, the "Total Payments")) would not be deductible (in whole or in part) as
a result of Section 280G of the Internal  Code of 1986, as amended (the "Code"),
the Change in  Control  Benefit  shall be reduced  until no portion of the Total
Payments  is not  deductible  as a result of  Section  280G of the Code,  or the
Change in Control  Benefit is reduced to zero.  For purposes of this  limitation
(i) no  portion  of the  Total  Payments,  the  receipt  or  enjoyment  of which
Executive shall have effectively  waived in writing prior to the date of payment
of the Change in Control Benefit,  shall be taken into account;  (ii) no portion
of the Total Payments  shall be taken into account which,  in the opinion of tax
counsel selected by Employers' independent auditors and acceptable to Executive,
does not  constitute  a  "parachute  payment"  within  the  meaning  of  Section
280G(b)(2)  of the Code;  (iii) the Change in Control  Benefit  shall be reduced
only to the  extent  necessary  so that the Total  Payments  (other  than  those
referred  to in  clause  (i)  or  clause  (ii))  in  their  entirety  constitute
reasonable  compensation  for services  actually  rendered within the meaning of
Section 280G(b)(4) of the Code, in the opinion of the tax counsel referred to in
clause (ii); and (iv) the value of any non-cash  benefit or any deferred payment
or benefit  included in the Total  Payments  shall be  determined  by Employers'
independent  auditors in accordance  with the principles of Sections  280G(d)(3)
and (4) of the Code.

                         (3)  BENEFICIARY.  "Beneficiary"  means  the  person or
persons  whom the  Executive  shall  designate  in writing (on the for  attached
hereto as Exhibit A) to receive the Change in Control Benefit provided hereunder
in the event of his death following a Change in Control and prior to
the Bank's  purchase  of an  annuity  (if so  elected  by the  Executive).  Such
designation  shall  be  valid  only if it is made on  said  form,  and the  Bank
receives said form prior to the Executive's death.

                         (4)  CHANGE IN  CONTROL  BENEFIT.  "Change  in  Control
Benefit" means the total amount of Executive's  Annual  Compensation  (including
Salary, Bonus and Other Annual Compensation),  calculated in accordance with the
definitions and requirements of Item 402(b) of Regulation S-B, for the Company's
two (2) most  recent  fiscal  years  ended  preceding  the date of the Change in
Control.

               4. NO EFFECT ON  EMPLOYMENT  RIGHTS.  Nothing  contained  in this
Agreement  or any  modification  or  amendment  hereto,  or the  payment  of any
benefit,  gives or shall be deemed  to give  Executive  any  right to  continued
employment, or any legal or equitable right against Employers or any employee of
Employers.  Moreover, nothing contained in this Agreement or any modification or
amendment  hereto, or the payment of any benefit shall modify, or otherwise have
any effect on, Executive's employment relationship with Employers.
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               This Agreement shall also not affect Executive's rights under any
employee   benefit   plan  offered  by   Employers,   such  as  any  pension  or
profit-sharing, medical, dental or hospitalization, life insurance, AD&D, bonus,
incentive  compensation,  stock option, or vacation pay plan. Executive's rights
under those plans are  governed  solely by their  terms,  and  Executive  should
review  those  plans  to  ascertain  his  rights  under  them.  In   particular,
Executive's receipt of a Change in Control Benefit under this Agreement does not
change the date of his  termination  of employment  for purposes  under any such
plans.

               5. NOTICES.  Any notices to be given hereunder by either party to
the other may be  effected in writing  either by  personal  delivery or by mail,
registered or certified,  postage prepaid with return receipt requested. Notices
to Employers  shall be given to the Bank at its then current  principal  office,
c/o Chairman of the Board of  Directors.  Notices to Executive  shall be sent to
Executive's then current personal residence.  Notices delivered personally shall
be deemed  communicated  as of actual  receipt;  mailed  notices shall be deemed
communicated as of five (5) days after mailing.

               6. ENTIRE AGREEMENT.  This Agreement supersedes any and all other
agreements,  either oral or in writing,  between the parties hereto with respect
to  severance  benefits or benefits  tied to a Change in Control.  Each party to
this Agreement  acknowledges that no representations,  inducements,  promises or
agreements,  oral or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not embodied herein, and that no other agreement,
statement or promise not contained in this Agreement shall be valid and binding.
Any  modification  of this  Agreement will be effective only if it is in writing
signed by all parties to this Agreement.

               7.  SEVERABILITY.  In  the  event  that  any  term  or  condition
contained  in this  Agreement  shall,  for  any  reason,  be held by a court  of
competent  jurisdiction to be invalid,  illegal or unenforceable in any respect,
such  invalidity,  illegality or  non-enforceability  shall not affect any other
term or condition of this Agreement, but this Agreement shall be construed as if
such  invalid or  illegal  or  unenforceable  term or  condition  had never been
contained herein.

               8.  ADMINISTRATION.  Employers  shall  have the  power,  in their
discretion, to interpret and make all determinations as to the right to a Change
in Control Benefit under this Agreement.  Their interpretation or determinations
thereof in good faith shall be final and conclusive,  and subject to review only
to the extent a court or arbitrator  concludes that any such  interpretation  or
determination is arbitrary or capricious.

               9. CHOICE OF LAW AND FORUM.  This Agreement  shall be governed by
and construed in accordance with the laws of the State of California,  except to
the extent preempted by the laws of the United States.  Any action or proceeding
brought  upon,  or arising out of, this  Agreement or its  termination  shall be
brought in a forum located within the State of California,  and Executive hereby
agrees to be subject to service of process in the State of California.

                                      -3-
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               10. WAIVER. The parties hereto shall not be deemed to have waived
any of their  respective  rights  under this  Agreement  unless the waiver is in
writing and signed by such  waiving  party.  No delay in  exercising  any rights
shall be a waiver nor shall a waiver on one occasion operate as a waiver of such
right on a future occasion.

               11. EXECUTIVE'S RIGHTS UNSECURED. The Agreement is intended to be
unfunded for purposes of the Code.  The Bank's  obligation  under this Agreement
shall be that of an unfunded and  unsecured  promise by the Bank to pay money in
the  future.  All  distributions  under  this  Agreement  shall be paid from the
general  assets of the Bank.  The right of the Executive or any  Beneficiary  to
receive a distribution  under this Agreement shall be an unsecured claim against
the general  assets of the Bank,  and neither the Executive nor any  Beneficiary
shall have any rights in or against any assets of the Employers.

               12.  NONASSIGNABLE.  Neither the  Executive  nor his  Beneficiary
shall  have any power or right to  transfer,  assign,  anticipate,  hypothecate,
mortgage,  commute, modify, or otherwise encumber in advance any of the benefits
payable hereunder,  nor shall any of said benefits be subject to seizure for the
payment of any debts,  judgments,  alimony, or separate  maintenance owed by the
Executive or his  Beneficiary,  or be  transferrable  by operation of law in the
event of bankruptcy, insolvency, or otherwise.

               13.  ASSUMPTION.  The  surviving  or resulting  corporation,  the
transferee of  Employers'  assets,  or  Employers,  as the case may be, shall be
bound by the provisions of this Agreement. Employers shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially  all of the business and/or assets of either  Employer,  by
agreement in form and substance  satisfactory to Executive,  to expressly assume
and agree to perform  this  Agreement  in the same manner and to the same extent
that Employers  would be required to perform it if no such  succession had taken
place.  As  used  in  this  Agreement,   "Employers"  shall  mean  Employers  as
hereinbefore  defined and any successor to Employers'  business and/or assets as
aforesaid which executes and delivers the agreement provided for in this Section
13 or which  otherwise  becomes  bound by all the terms and  provisions  of this
Agreement by operation of law.

               14.  CAPTIONS AND  PARAGRAPH  HEADINGS.  Captions  and  paragraph
headings used herein are for  convenience and ready reference only and are not a
part  of  this  Agreement  and  shall  not  be  used  in  the   construction  or
interpretation thereof.

                                      -4-

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               15.  ARBITRATION.  Any  controversy  or claim  arising  out of or
relating to this  Agreement,  or breach of this  Agreement,  shall be settled by
arbitration in accordance with the Employment  Arbitration Rules of the American
Arbitration  Association,  and judgment on the award rendered by the arbitrators
may  be  entered  in  any  court  having  jurisdiction.  There  shall  be  three
arbitrators,  one to be chosen directly by each party,  and the third arbitrator
to be selected by the two  arbitrators so chosen.  Each party shall pay the fees
of the  arbitrator  he or it selects  and of his or its own  attorneys,  and the
expenses  of him  or  its  witnesses  and  all  other  expenses  connected  with
representing him or its case. Other costs of the arbitration, including the cost
of any record or transcripts of the arbitration, administrative fees, the fee of
the third  arbitrator,  and all other fees and costs,  shall be borne equally by
the parties.

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               EXECUTED on the day and year first-above written.

EMPLOYERS:                                  EXECUTIVE:

BAY COMMERCIAL SERVICES                     /s/ Richard M. Kahler
                                            ---------------------              
                                            Richard M. Kahler
                                        
By /s/ Joshua Fong
   ----------------------------------
   Joshua Fong, Chairman of the Board


BAY BANK OF COMMERCE


By /s/ Dimitri Koroslev
   -----------------------------------
Dimitri Koroslev, Chairman of the Board

                                      -6-
                                      
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                                  EXHIBIT 10.12
                                    EXHIBIT A

                         DESIGNATION OF BENEFICIARIES

               I, Richard M. Kahler, hereby designate the following person(s) as
my  Beneficiary(ies)  under the Change in  Control  Agreement  ("Agreement")  to
receive any amounts that might be payable as of the date of my death:

               Primary Beneficiary     

               Name:                    Percentage:   100%
               Address:

               Alternate Beneficiary

               Name:                    Percentage:   50%
               Address:
               Name:                    Percentage:   50%
               Address:

This designation supersedes all prior Beneficiary designations I have made under
the Agreement.

DATED:________ ___, ________.            _____________________________________
      Richard M. Kahler