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                                                                  EXHIBIT 10.b.2

                             EMPLOYMENT AGREEMENT


     EMPLOYMENT AGREEMENT (this "Agreement") dated as of April 1, 2001 between
Bay View Bank, N.A., a national banking association having its principal place
of business at 1840 Gateway Drive, San Mateo, CA 94404 ("BVB"), and Barbara H.
Teaford, an individual residing at 1323 Spyglass Lane, Naples, FL 34102 (the
"Executive").

                                  WITNESSETH:
                                  ----------

     WHEREAS, BVB desires to employ the Executive, and the Executive desires to
be employed by BVB, all in accordance with the terms and subject to the
conditions set forth herein; and

     WHEREAS, the parties are entering into this Agreement to set forth and
confirm their respective rights and obligations with respect to the Executive's
employment by BVB;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto, intending to be legally bound hereby,
mutually agree as follows:

     1.  Employment and Term.
         -------------------

         (a)  Effective on the later of the date hereof or the date of receipt
of all approvals from applicable regulatory agencies (or the waiver thereof)
required for the Executive's assumption of the Position (as hereafter defined)
(the "Effective Date"), BVB shall employ the Executive, and the Executive shall
be employed by BVB, as the Executive Vice President and Director of Business
Development of BVB (the "Position"), in accordance with the terms and subject to
the conditions set forth herein for a term (the "Term") that shall commence on
the Effective Date and, subject to paragraphs 1(b), 1(c), 1(d) and 1(e) hereof,
shall continue for a period of three years.

         (b)  Unless written notice in accordance with this paragraph 1
terminating the Executive's employment hereunder is given by BVB or the
Executive, on each day this Agreement is in effect, the Term shall be
automatically extended for one additional day so that at all times this
Agreement shall have a then current three-year Term.  Unless otherwise provided
herein or agreed by the parties hereto, all of the terms and conditions of this
Agreement shall continue in full force and effect throughout the Term and, with
respect to those terms and conditions that apply after the Term, after the Term.

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         (c)  Notwithstanding paragraph 1(b) hereof, BVB, by action of its Board
of Directors (the "Board") and effective as specified in a written notice
thereof to the Executive in accordance with the terms hereof, shall have the
right to terminate the Executive's employment hereunder at any time during the
Term hereof, for Cause (as defined herein) or other than for Cause or on account
of the Executive's death or Permanent Disability (as defined herein), subject to
the provisions of this paragraph 1.

              (i)  "Cause" shall mean (A) the Executive's willful and continued
failure substantially to perform her material duties with BVB as set forth in
this Agreement, or the commission by the Executive of any activities
constituting a violation or breach under any material federal, state or local
law or regulation applicable to the activities of BVB or Bay View Capital
Corporation ("Bay View"), BVB's parent, in each case, after notice thereof from
BVB to the Executive and a reasonable opportunity for the Executive to cease
such failure, breach or violation in all material respects, (B) fraud, breach of
fiduciary duty, dishonesty, misappropriation or other intentional material
damage to the property or business of BVB by the Executive, (C) the Executive's
repeated absences other than for physical or mental impairment or illness, (D)
the Executive's admission or conviction of, or plea of nolo contendere to, any
felony or any other crime referenced in Section 19 of the Federal Deposit
Insurance Act that, in the reasonable judgment of the Board, adversely affects
BVB's reputation or the Executive's ability to carry out her obligations under
this Agreement or (E) the Executive's non-compliance with the provisions of
paragraph 2(b) hereof after notice thereof from BVB to the Executive and a
reasonable opportunity for the Executive to cure such non-compliance.
Notwithstanding the foregoing, BVB may not terminate the Executive's employment
hereunder for Cause unless the Executive is given (A) written notice, in
accordance with the By-laws of BVB, of a special meeting of the Board to
consider the termination of the Executive's employment hereunder for Cause and
(B) the opportunity for the Executive to address such special meeting.

              (ii)  "Permanent Disability" shall mean a physical or mental
disability such that the Executive is substantially unable to perform those
duties that she would otherwise be expected to continue to perform and the
nonperformance of such duties has continued for a period of 240 consecutive
days, provided, however, that in order to terminate the Executive's employment
hereunder on account of Permanent Disability, BVB must provide the Executive
with written notice of the Board's good faith determination to terminate the
Executive's employment hereunder for reason of Permanent Disability not less
than 30 days prior to such termination, which notice shall specify the date of
termination. Until the specified effective date of termination by reason of
Permanent Disability, the Executive shall continue to receive compensation at
the rates set forth in paragraph 3 hereof. No termination of the Executive's
employment hereunder because of Permanent Disability shall impair any rights of
the Executive under any disability insurance policy maintained by BVB at the
commencement of the aforesaid 240-day period.

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         (d)  The Executive shall have the right to terminate her employment
hereunder at any time during the Term hereof for Good Reason or in the event a
Change in Control occurs.  As used herein:

              (i)  "Good Reason" shall mean (A) the Executive's Position or the
scope of the Executive's authority, duties or responsibilities as described in
this Agreement are materially diminished without the Executive's written
consent, excluding for this purpose any action not taken by BVB in bad faith and
that is remedied by BVB promptly following written notice thereof from the
Executive to BVB; (B) a material breach by BVB of its obligations to the
Executive under this Agreement, which breach is not cured in all material
respects to the reasonable satisfaction of the Executive within 30 days (except
in the case of a payment default for which the cure period shall be 10 days), in
each case following written notice thereof from the Executive to BVB or (C) any
termination of the Executive's employment hereunder without Cause; and

              (ii)  "Change of Control" shall mean (A) the acquisition of
shares of Bay View by any "person" or "group" (as such terms are used in Rule
13d-3 under the Securities Exchange Act of 1934 as now or hereafter amended) in
a transaction or series of transactions that result in such person or group
directly or indirectly first owning beneficially more than 25% of Bay View's
Common Stock after the date of this Agreement, (B) the consummation of a merger
or other business combination after which the holders of voting capital stock of
Bay View do not collectively own 60% or more of the voting capital stock of the
entity surviving such merger or other business combination or the sale, lease,
exchange or other transfer in a transaction or series of transactions of all or
substantially all of the assets of BVB, but excluding therefrom the sale and
reinvestment of BVB's investment portfolio or (C) as the result of or in
connection with any cash tender offer or exchange offer, merger or other
business combination, sale of assets or contested election of directors or any
combination of the foregoing transactions (a "Transaction"), the persons who
constituted a majority of the members of the Board on the Effective Date and
persons whose election as members of the Board was approved by such members then
still in office or whose election was previously so approved after the Effective
Date, but before the event that constitutes a Change of Control, no longer
constitute such a majority of the members of the Board then in office. A
Transaction constituting a Change in Control shall only be deemed to have
occurred upon the closing of the Transaction.

         (e)  (i)  If (A) BVB terminates the Executive's employment hereunder
for any reason other than for Cause and such termination occurs as of a date
that is within 270 days preceding or within 180 days after the consummation of a
Change in Control (such 270-day period and such 180-day period being hereinafter
collectively referred to as a "Change in Control Period"), (B) this Agreement is
terminated as a result of the death or Permanent Disability of the Executive
effective as

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of a date within a Change of Control Period, (C) the Executive terminates her
employment hereunder for Good Reason effective as of a date within a Change in
Control Period or (D) the Executive terminates her employment hereunder within
180 days after the consummation of a Change in Control, BVB shall pay to the
Executive or her estate promptly after the event giving rise to such payment
occurs an amount equal to the sum of (x) (1) the Executive's Base Salary (as
defined herein) accrued through the date the termination of the Executive's
employment hereunder is effective, (2) any Bonus (as defined herein) required to
be paid to the Executive pursuant to paragraph 3(b) hereof and (3) any amount in
respect of excise taxes required to be paid to the Executive pursuant to
paragraph 1(f) hereof, with such payments, rights and benefits described in
clauses (x)(1), (x)(2) and (x)(3) hereof being collectively referred to herein
as the "Accrued Obligations," (y) an amount equal to the aggregate premiums that
would be payable by the Executive to maintain in effect throughout the period
(the "Subsequent Period") from the date of the Executive's termination through
the remainder of the Term had the Executive remained employed (assuming no
increase in insurance premium rates) the same medical, health, disability and
life insurance coverage provided to the Executive by BVB immediately prior to
the date of such termination (the "Benefit Obligations") and (z) a severance
payment equal to 2.99 times the sum of (1) the Executive's annual Base Salary as
of the effective date of termination of the Executive's employment hereunder and
(2) the Bonus payable to the Executive pursuant to paragraph 3(b) hereof for the
year in which such termination is effective.

              (ii)  If (A) BVB terminates the Executive's employment hereunder
for any reason other than for Cause effective as of a date that is not within a
Change in Control Period or (B) the Executive terminates her employment
hereunder for Good Reason effective as of a date that is not within a Change in
Control Period, BVB shall pay the Executive, provided the Executive concurrently
signs and delivers a general release in a form mutually acceptable to BVB and
the Executive, an amount equal to the sum of (w) the Accrued Obligations, (x)
the Benefit Obligations and (y) the amount of Base Salary the Executive would
have received had she remained employed hereunder during the Subsequent Period.

              (iii)  If (A) BVB terminates the Executive's employment hereunder
for Cause, (B) the Executive terminates her employment hereunder for any reason
other than Good Reason, her death or Permanent Disability or (C) this Agreement
is terminated by BVB as a result of the death or Permanent Disability of the
Executive effective as of a date that is not within a Change in Control Period,
the sole obligation of BVB shall be to pay the Accrued Obligations to the
Executive.

              (iv)  Notwithstanding anything to the contrary contained in this
Agreement, BVB shall have the right, upon prior written notice delivered to the
Executive on or prior to August 27, 2002, to terminate Executive's employment
without Cause effective as of September 27, 2002.  In the event of a termination
under this Section 1(e)(iv), BVB shall pay the Executive, provided the Executive
concurrently signs

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and delivers a general release in a form mutually acceptable to BVB and the
Executive, an amount equal to the sum of (w) the Accrued Obligations, (x) an
amount equal to the aggregate premiums that would be payable by the Executive to
maintain in effect throughout the period (the "Calculation Period") from the
date of the Executive's termination through March 26, 2004 had the Executive
remained employed (assuming no increase in insurance premium rates) the same
medical, health, disability and life insurance coverage provided to the
Executive by BVB immediately prior to the date of such termination, (y) the
amount of Base Salary the Executive would have received had she remained
employed hereunder during the Calculation Period and (z) the Bonus payable to
the Executive pursuant to paragraph 3(b) hereof for the year in which such
termination is effective.

         (f)  In the event that the independent public accountants of either of
BVB or the Internal Revenue Service determines that any payment, coverage or
benefit provided to the Executive pursuant hereto is subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") or any successor provision thereof or any interest or penalties incurred
by the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), BVB, within 30 days thereafter, shall pay to the Executive, in
addition to any other payment, coverage or benefit due and owing hereunder, an
amount determined by multiplying the rate of Excise Tax then imposed by Section
4999 by the amount of the "excess parachute payment" received by the Executive,
determined without regard to any payments made to the Executive pursuant to this
paragraph 1(f), and dividing the product so obtained by the amount obtained by
subtracting the aggregate local, state and federal income and FICA and health
insurance taxes applicable to the receipt by the Executive of the "excess
parachute payment" and taking into account the deductibility for federal income
tax purposes of the payment of state and local income taxes thereon (as affected
by those provisions of the Code that act to reduce the deductibility of itemized
deductions), from the amount obtained by subtracting from 1.00 the rate of
Excise Tax then imposed by Section 4999 of the Code, it being the intention of
the parties hereto that the Executive's net after tax position (after taking
into account any interest or penalties imposed with respect to such taxes) upon
the receipt of the payments provided for by this Agreement be no less
advantageous to the Executive than the net after tax position to the Executive
that would have been obtained had Sections 280G and 4999 of the Code not been
applicable to such payments.  Except as otherwise provided herein, all
determinations to be made under this paragraph 1(f) shall be made by tax counsel
whose selection shall be reasonably acceptable to the Executive and BVB and
whose fees and costs shall be paid for by BVB.

         (g)  Any notice of termination of this Agreement by BVB to the
Executive or by the Executive to BVB shall be given in accordance with the
provisions of paragraph 10 hereof.

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         (h)  BVB agrees to reimburse the Executive for the reasonable fees and
expenses of the Executive's attorneys and for court and related costs in any
proceeding to enforce the provisions of this Agreement in which the Executive is
successful on the merits.

     2.  Duties of the Executive.
         -----------------------

         (a)  Subject to the ultimate control and discretion of the Board of
BVB, the Executive shall serve in the Position and perform all duties and
services commensurate with the Position.  Throughout the Term, the Executive
shall perform all duties reasonably assigned or delegated to her under the By-
laws of BVB or from time to time by the Board or the Chief Executive Officer of
BVB consistent with the Position.  Except for travel normally incidental and
reasonably necessary to the business of BVB and the duties of the Executive
hereunder, the duties of the Executive shall be performed in the greater San
Francisco, California metropolitan area.

         (b)  The Executive shall devote substantially all of the Executive's
business time and attention to the performance of the Executive's duties
hereunder and, during the term of her employment hereunder, the Executive shall
not engage in any other business enterprise that requires any significant amount
of the Executive's personal time or attention, unless granted the prior
permission of the Board.  The foregoing provision shall not prevent the
Executive's purchase, ownership or sale of any interest in, or the Executive's
engaging (but not to exceed an average of five hours per week) in, any business
that does not compete with the business of BVB or the Executive's involvement in
charitable or community activities, provided, that the time and attention that
the Executive devotes to such business and charitable or community activities
does not materially interfere with the performance of her duties hereunder and
that a material portion of the time devoted by the Executive to charitable or
community activities are devoted to charitable or community activities within
BVB's market area and further provided that such conduct complies in all
material respects with applicable policies of BVB.

         (c)  The Executive shall be entitled to 30 days of vacation leave
during each calendar year with full compensation, and to be taken at such time
or times, as the Executive and BVB shall mutually determine.  Earned but unused
vacation shall be accrued in accordance with BVB's vacation policy.

     3.  Compensation.  For all services to be rendered by the Executive
         ------------
hereunder:

         (a)  Base Salary.  BVB shall pay the Executive a base salary (the "Base
              -----------
Salary") at an annual rate of Two Hundred Forty Thousand Dollars ($240,000),
plus such other compensation as may, from time to time, be determined by BVB.
At the end of each fiscal year of BVB, BVB shall review the amount of the
Executive's Base Salary,

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and shall increase such Base Salary for the following year to such amount as the
Board may determine in its discretion. Such Base Salary and other compensation
shall be payable in accordance with BVB's normal payroll practices as in effect
from time to time.

         (b)  Annual Bonus.  BVB agrees that the Executive shall receive, in
              ------------
accordance in all material respects with applicable policies of BVB's relating
to incentive compensation for executive officers, an annual bonus (the "Bonus")
payable in cash, at the same time as bonuses are paid to other executive
officers of BVB, in such amount as may be fixed by the Board in its discretion
based upon the performance of BVB and the contributions of the Executive to such
performance, provided, however, that the Executive shall receive a Bonus of not
less than $120,000 in respect of the services to be rendered by the Executive
during the first year of the Term.

         (c)  Stock Options.  Subject to any required stockholder approval, Bay
              -------------
View hereby grants the Executive options (the "Options"), which shall be non-
qualified stock options, to purchase an aggregate of 200,000 shares of Bay
View's Common Stock at a price per share equal to the lesser of (i) the tangible
book value per share of Bay View's Common Stock as of March 31, 2001 or (ii) 85%
of the closing price of Bay View's Common Stock on the New York Stock Exchange
on the day before the day on which the prospectus supplement relating to an
offering by Bay View of certain transferable rights permitting the holders of
the rights to subscribe for and purchase additional shares of Common Stock
becomes effective (the "Exercise Price").  The Options shall have the following
other principal terms:

              (i)  the Options shall become exercisable and be vested, and
remain exercisable and vested for a term of five years from and after the
Effective Date, in three cumulative installments as follows:

                   (A)  the first installment, consisting of 66,667 shares of
Bay View's Common Stock, shall become exercisable from and after the Effective
Date;

                   (B)  the second installment, consisting of 66,667 shares of
Bay View's Common Stock, shall become exercisable from and after the first
anniversary of the Effective Date; and

                   (C)  the third installment, consisting of 66,666 shares of
Bay View's Common Stock, shall become exercisable from and after the second
anniversary of the Effective Date;

              (ii)  the Options shall become immediately exercisable and shall
remain exercisable for the remainder of their term in the event of (A) a Change
in Control, (B) a termination of this Agreement by BVB without Cause or (C) a
termination of this Agreement by the Executive for Good Reason;

                                      -7-
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              (iii)  the Options shall terminate immediately in the event of (A)
a termination of this Agreement by BVB for Cause or (B) a termination of this
Agreement by the Executive without Good Reason;

              (iv)  the Options shall remain exercisable until the earlier of
the expiration of their term or three years after the termination of this
Agreement by BVB because of the Executive's death or Permanent Disability and
the Options shall become immediately exercisable if such termination occurs
during the 270 days preceding consummation of a Change in Control;

              (v)  the Options are transferable by gift to members of the
Executive's family or to entities controlled by such family members or by will
or by the laws of descent and distribution;

              (vi)  in the event that the outstanding shares of Common Stock
subject to the Options are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares of Bay View or other
securities of Bay View or of another corporation by reason of a reorganization,
merger, consolidation, reclassification, stock split, reverse stock split, stock
dividend or combination of shares of Common Stock, the Board of Directors of Bay
View shall make an appropriate and equitable adjustment in the number and kind
of shares as to which the Options or portion thereof then unexercised shall be
exercisable and in the Exercise Price. Such adjustment in the Options shall be
made without any change in the total price applicable to the unexercised portion
of the Options, except for any change in the aggregate price resulting from
rounding-off of share amounts or prices, and with any necessary corresponding
adjustment in the Exercise Price. In the event that Bay View from time to time
hereafter issues its Common Stock at a price less than the then prevailing
market price on the New York Stock Exchange on the date of any such issuance
(the "Prevailing Market Price"), the Board of Directors of Bay View shall reduce
the Exercise Price of that portion of the Options not then exercised to the
price determined by multiplying the Exercise Price as then in effect by a
fraction the numerator of which shall be that price per share at which Bay View
issued its Common Stock at a price less than the Prevailing Market Price and the
denominator of which shall be such Prevailing Market Price. Any such adjustment
made by the Board of Directors shall be final and binding upon the Executive,
Bay View and their respective successors in interest;

              (vii)  if Bay View adopts an option plan for its employees that
provides for terms more favorable to the optionees thereunder than the terms of
the Options to the Executive, then, in such event, the terms of the Options
shall be amended so that the terms thereof incorporate such more favorable terms
of such option plan; and

                                      -8-
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              (viii)  subject to any required stockholder approval, Bay View
shall promptly file a Form S-8 registration statement with respect to the
Options with the Securities and Exchange Commission and shall use its best
efforts to cause such registration statement to remain effective for as long as
any of the Options remain exercisable.

         (d)  Other Benefits.  From and after the date hereof and throughout the
              --------------
Term:

              (i)  BVB shall provide the Executive with an automobile at BVB's
sole cost and expense. Such automobile shall be owned or leased by BVB. BVB
shall bear all gas, insurance, repairs, maintenance, car telephone and other
operating expenses for the automobile.

              (ii)  In connection with her relocation to the greater San
Francisco area, the Executive shall be entitled to receive: (A) reimbursement of
all reasonable expenses incurred by the Executive in establishing a residence in
the San Francisco, California area, including, without limitation, travel,
moving and relocation expenses, (B) reimbursement of the cost of round-trip
first-class or business-class airfares for "house-hunting" trips for Executive's
spouse and (C) $4,000 per month for temporary housing in the greater San
Francisco area until the earlier to occur of twelve months from the Effective
Date or the date on which the Executive takes possession of a purchased
residence in the greater San Francisco area; provided, however, that upon
expiration of such twelve-month period, the Compensation Committee of BVB shall
consider an extension of the temporary housing allowance if so requested by the
Executive.

              (iii)  BVB shall reimburse the Executive for the cost of not more
than two round-trip first-class or business-class airfares per month for the
Executive or Executive's spouse from San Francisco, California to destinations
in the eastern half of the United States.

              (iv)  The compensation provided for in this paragraph 3 shall be
in addition to such rights as the Executive may have, during the Executive's
employment hereunder or thereafter, to participate in and receive benefits from
or under any benefit plans BVB may in its discretion establish for its employees
or executives. To the extent any of such benefits are taxable to the Executive,
the Executive shall be solely responsible for such taxes.

     4.  Expenses.  BVB shall promptly reimburse the Executive for (a) all
         --------
reasonable expenses paid or incurred by the Executive in connection with the
performance of the Executive's duties and responsibilities hereunder, upon
presentation of expense vouchers or other appropriate documentation therefor,
(b) all reasonable professional expenses, such as licenses and dues and
professional educational expenses, paid or

                                      -9-
<PAGE>

incurred by the Executive during the Term and (c) the costs of a personal
computer, cellular telephone and fax machine for the Executive's residence in
the San Francisco, California area, including the monthly fees related to such
devices.

     5.  Indemnification.  Notwithstanding anything in BVB's charter or its By-
         ---------------
laws to the contrary, the Executive shall at all times during her employment by
BVB, and thereafter, be indemnified by BVB to the fullest extent permitted by
applicable law for any matter in any way relating to the Executive's affiliation
with BVB, Bay View and/or its subsidiaries; provided, however, that if the
Executive's employment shall have been terminated by BVB for Cause, then BVB
shall have no obligation whatsoever to indemnify the Executive for any claim
arising out of the matter for which her employment shall have been terminated
for Cause or for any conduct of the Executive not within the scope of the
Executive's duties under this Agreement.

     6.  Confidential Information.  The Executive understands that in the course
         ------------------------
of her employment by BVB the Executive will receive confidential information
concerning the business of BVB and that BVB desires to protect.  The Executive
agrees that she will not at any time during or after the period of her
employment by BVB reveal to anyone outside BVB or Bay View, or use for her own
benefit, any such information that has been designated as confidential by BVB or
understood by the Executive to be confidential without specific written
authorization by BVB.  Upon termination of this Agreement, and upon the request
of BVB, the Executive shall promptly deliver to BVB any and all written
materials, records and documents, including all copies thereof, made by the
Executive or coming into her possession during the Term and retained by the
Executive containing or concerning confidential information of BVB and all other
written materials furnished to and retained by the Executive by BVB for her use
during the Term, including all copies thereof, whether of a confidential nature
or otherwise.

     7.  Representation and Warranty of the Executive.  The Executive represents
         --------------------------------------------
and warrants that she is not under any obligation, contractual or otherwise, to
any other firm or corporation, which would prevent her entry into the employ of
BVB or her performance of the terms of this Agreement.

     8.  Entire Agreement; Amendment.  This Agreement contains the entire
         ---------------------------
agreement between BVB and the Executive with respect to the subject matter
hereof, and may not be amended, waived, changed, modified or discharged except
by an instrument in writing executed by the parties hereto.

     9.  Assignability.  The services of the Executive hereunder are personal in
         -------------
nature, and neither this Agreement nor the rights or obligations of BVB
hereunder may be assigned by BVB, whether by operation of law or otherwise,
without the Executive's prior written consent.  This Agreement shall be binding
upon, and inure to the benefit of, BVB and its permitted successors and assigns
hereunder.  This Agreement shall not

                                      -10-
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be assignable by the Executive, but shall inure to the benefit of the
Executive's heirs, executors, administrators and legal representatives.

     10.  Notice.  Any notice that may be given hereunder shall be in writing
          ------
and be deemed given when hand delivered and acknowledged or, if mailed, one day
after mailing by registered or certified mail, return receipt requested, or if
delivered by an overnight delivery service, one day after the notice is
delivered to such service, to either party hereto at their respective addresses
stated above, or at such other address as either party may by similar notice
designate.  Copies of such notices also shall be sent to BVB's attention:
General Counsel, 1840 Gateway Drive, San Mateo, California 94404 and to the
Executive's counsel, attention:  Frederick W. Dreher, Esq., Duane, Morris &
Heckscher LLP, 4200 One Liberty Place, Philadelphia, Pennsylvania 19103-7396.

     11.  Specific Performance.  The parties agree that irreparable damage would
          --------------------
occur in the event that any of the provisions of paragraph 6 hereof were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of paragraph 6 hereof and to enforce
specifically the terms and provisions of paragraph 6 hereof, this being in
addition to any other remedy to which any party is entitled at law or in equity.

     12.  No Third Party Beneficiaries.  Nothing in this Agreement, express or
          ----------------------------
implied, is intended to confer upon any person or entity other than the parties
(and the Executive's heirs, executors, administrators and legal representatives
and the permitted transferees of the Options) any rights or remedies of any
nature under or by reason of this Agreement.

     13.  Successor Liability.  BVB shall require any subsequent successor,
          -------------------
whether direct or indirect, by purchase, merger, consolidation or otherwise, to
all or substantially all of the business or assets of BVB to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that BVB would be required to perform it if no such succession had taken place.

     14.  Mitigation.  The Executive shall not be required to mitigate the
          ----------
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided for in
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer or by retirement benefits payable after
the termination of this Agreement, except that BVB shall not be required to
provide the Executive and her eligible dependents with medical insurance
coverage as long as the Executive and her eligible dependents are receiving
comparable medical insurance coverage from another employer.

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<PAGE>

     15.  Arbitration.  Any dispute that may arise between the parties hereto,
          -----------
including, without limitation, any dispute arising out of or relating to this
Agreement, shall be submitted to binding arbitration in accordance with the
Rules of the American Arbitration Association, except for any dispute excluded
from arbitration by law; provided that any such dispute shall first be submitted
to the Boards in an effort to resolve such dispute without resort to
arbitration, and provided, further, that the Boards shall have a period of 60
days within which to respond to the Executive's submitted dispute, and if the
Boards fail to respond within said time, or the Executive's dispute is not
resolved, the matter shall then be submitted for arbitration.  The results of
any arbitration pursuant to this Agreement shall be final and binding on the
parties hereto.

     16.  Waiver of Breach.  The failure at any time to enforce or exercise any
          ----------------
right under any of the provisions of this Agreement or to require at any time
performance by the other parties of any of the provisions hereof shall in no way
be construed to be a waiver of such provisions or to affect either the validity
of this Agreement or any part hereof, or the right of any party hereafter to
enforce or exercise its rights under each and every provision in accordance with
the terms of this Agreement.

     17.  No Attachment.  Except as required by law, no right to receive
          -------------
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this
paragraph 17 shall preclude the assumption of such rights by executors,
administrators or other legal representatives of the Executive or her estate and
their assigning any rights hereunder to the person or persons entitled hereto.

     18.  Severability.  The invalidity or unenforceability of any term, phrase,
          ------------
clause, paragraph, restriction, covenant, agreement or other provision hereof
shall in no way affect the validity or enforceability of any other provision, or
any part thereof, but this Agreement shall be construed as if such invalid or
unenforceable term, phrase, clause, paragraph, restriction, covenant, agreement
or other provision had never been contained herein unless the deletion of such
term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision would result in such a material change as to cause the covenants and
agreements contained herein to be unreasonable or would materially and adversely
frustrate the objectives of the parties as expressed in this Agreement.

     19.  Survival of Benefits.  Any provision of this Agreement that provides a
          --------------------
benefit to the Executive and that by the express terms hereof does not terminate
upon the expiration of the Term shall survive the expiration of the Term and
shall remain binding upon BVB until such time as such benefits are paid in full
to the Executive or her estate.

                                      -12-
<PAGE>

     20.  Construction.  This Agreement shall be governed by and construed in
          ------------
accordance with the internal laws of the State of California, without giving
effect to principles of conflict of laws.  All headings in this Agreement have
been inserted solely for convenience of reference only, are not to be considered
a part of this Agreement and shall not affect the interpretation of any of the
provisions of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.


                                BAY VIEW BANK, N.A.


                                By: /s/ Robert B. Goldstein
                                   ------------------------
                                   Name: Robert B. Goldstein
                                   Title: President and Chief
                                          Executive Officer


                                /s/ Barbara H. Teaford
                                -----------------------
                                Barbara H. Teaford


    The undersigned hereby acknowledges and agrees to be bound by the
obligations set forth in Section 3(c) of this Agreement.


                                BAY VIEW CAPITAL CORPORATION


                                By: /s/ Robert B. Goldstein
                                ------------------------
                                Name: Robert B. Goldstein
                                Title: President and Chief
                                       Executive Officer

                                      -13-