HERITAGE BANCSHARES, INC. AND SUBSIDIARY

                                                                    EXHIBIT 10.3

CHANGE OF CONTROL AGREEMENT

      CHANGE OF CONTROL AGREEMENT, dated this 30th day of October, 2003, between
Heritage Bancshares, Inc., a Delaware corporation (the "Corporation"), Heritage
Bank, SSB, a Texas chartered and a wholly owned subsidiary of the Corporation
(the "Bank"), and James C. Champion (the "Executive").

WITNESSETH

      WHEREAS, the Executive is presently an officer of the Corporation and the
Bank (together the "Employers");

      WHEREAS, the Employers desire to be ensured of the Executive's continued
active participation in the business of the Employers; and

      WHEREAS, in order to induce the Executive to remain in the employ of the
Corporation and Bank (the "Employers") and in consideration of the Executive's
agreeing to remain in the employ of the Employers, the parties desire to specify
the severance benefits which shall be due the Executive in the event that his
employment with the Employers is terminated under specified circumstances;

      NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereby agree as follows:

      1. Definitions. The following words and terms shall have the meanings set
      forth below for the purposes of this Agreement:

      (a) Base Salary. "Base Salary" shall have the meaning set forth in Section
      3 hereof.

      (b) Change in Control of the Corporation. "Change in Control of the
      Corporation " shall mean the occurrence of any of the following: (i) any
      "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange
      Act) is or becomes the "beneficial owner" (as defined in Rule 13d- under
      the Exchange Act), directly or indirectly, of securities of the
      Corporation representing 25% or more of the combined voting power of the
      Corporation's then outstanding securities; or (ii) a merger,
      consolidation, share exchange, division or other reorganization or
      transaction involving the Corporation is consummated and the voting
      securities of the Corporation outstanding immediately prior thereto do not
      continue to represent (either by remaining outstanding or by being
      converted into voting securities of the surviving entity) at least 50% of
      the combined voting power of the surviving entity immediately after such
      transaction.

      (c) Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.

      (d) Date of Termination. "Date of Termination" shall mean the later of (i)
      the date on which a Notice of Termination is given or (ii) the date
      specified in such Notice.

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                    HERITAGE BANCSHARES, INC. AND SUBSIDIARY

      (e) Good Reason. Termination by the Executive of the Executive's
      employment for "Good Reason" shall mean termination by the Executive
      within two years following a Change in Control of the Corporation where:

            (i)   Without the Executive's express written consent, the failure
                  to elect or to re- elect or to appoint or to re-appoint the
                  Executive to the office of Executive Vice President and Chief
                  Lending Officer of the Employers or a material adverse change
                  made by the Employers in the Executive's functions, duties or
                  responsibilities as Executive Vice President and Chief Lending
                  Officer of the Employers;

            (iii) Without the Executive's express written consent, a reduction
                  by either of the Employers in the Executive's Base Salary as
                  the same may be increased from time to time;

            (iii) Relocation of the principal executive office of either of the
                  Employers more than 50 statute miles outside of the city
                  limits of Terrell, Texas or, without the Executive's express
                  written consent, either of the Employers requiring the
                  Executive to be based anywhere other than an area in which the
                  Employers' principal executive office is located, except for
                  required travel on business of the Employers to an extent
                  substantially consistent with the Executive's present business
                  travel obligations;

            (iv)  Any purported termination of the Executive's employment which
                  is not effected pursuant to a Notice of Termination satisfying
                  the requirements of paragraph (g) below; or

            (v)   The failure by the Employers to obtain the assumption of and
                  agreement to perform this Agreement by any successor as
                  contemplated in Section 8 hereof.

      (f) IRS. IRS shall mean the Internal Revenue Service.

      (g) Notice of Termination. Any purported termination of the Executive's
      employment by the Employers for any reason shall be communicated by
      written "Notice of Termination" to the other party hereto. For purposes of
      this Agreement, a "Notice of Termination" shall mean a dated notice which
      (i) indicates the specific termination provision in this Agreement relied
      upon, (ii) specifies a Date of Termination, and (iii) is given in the
      manner specified in Section 9 hereof.

      2. Term of Agreement.

      This Agreement shall terminate two years after a Change in Control of the
      Corporation shall have occurred.

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                    HERITAGE BANCSHARES, INC. AND SUBSIDIARY

      3. Compensation.

      The Employers shall compensate and pay the Executive for his services
      during the term of this Agreement at a minimum base salary of $78,750 per
      year, which may be increased from time to time in such amounts as may be
      determined by the Boards of Directors of the Employers ("Base Salary") and
      may not be decreased without the Executive's express written consent.

      4. Termination.

      (a)   The Employers shall have the right, at any time upon prior Notice of
            Termination, to terminate the Executive's employment for any reason.

      (b)   In the event that:

            (i)   a Change in Control of the Corporation, as defined in Section
                  I (b) of this Agreement, shall occur, the Employers shall,
                  subject to the provisions of Section 5 hereof if applicable,
                  pay to the Executive a cash amount equal to $150,000, less the
                  Executive's balance, as determined on the date of the Change
                  in Control, in the Executive's Participant's Account (as such
                  term is defined in Section 1.39 of the Heritage Bancshares,
                  Inc., Employee Stock Ownership Plan), but in no event less
                  than zero, such payment to be made in either twenty-four (24)
                  equal monthly installments beginning with the first business
                  day of the month following the Change in Control of the
                  Corporation or in a lump sum within five business days of the
                  Change in Control of the Corporation and

            (ii)  within two years following a Change in Control of the
                  Corporation, as defined in Section 1 (b) of this Agreement,
                  the Executive's employment is terminated either (A) by the
                  Employers, or either of them, or (B) by the Executive for Good
                  Reason, then in either such case, and in addition to the
                  payment provided by Section 4(b)(i) above, the Employers
                  shall, subject to the provisions of Section 5 hereof, if
                  applicable, pay to the Executive, in either twenty-four (24)
                  equal monthly installments beginning with the first business
                  day of the month following the Date of Termination or in a
                  lump sum within five business days of the Date of Termination
                  (at the Executive's election), a cash severance amount equal
                  to twice the Executive's Base Salary paid by the Employers.

      5. Limitation of Benefits under Certain Circumstances. If the payments and
      benefits pursuant to Section 4 hereof, either alone or together with other
      payments and benefits which the Executive has the right to receive from
      the Employers, would constitute a "parachute payment" under Section 280G
      of the Code, the payments and benefits payable by the Employers pursuant
      to Section 4(b) hereof shall be reduced, in the manner determined by the
      Executive, by the amount, if any, which is the minimum necessary to result
      in no portion of the payments and benefits under Section 4(b) being
      non-deductible

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                    HERITAGE BANCSHARES, INC. AND SUBSIDIARY

      to either of the Employers pursuant to Section 280G of the Code and
      subject to the excise tax imposed under Section 4999 of the Code. The
      determination of any reduction in the payments and benefits to be made
      pursuant to Section 4(b) shall be based upon the opinion of independent
      tax counsel selected by the Employers and paid by the Employers. Such
      counsel shall be reasonably acceptable to the Employers and the Executive;
      shall promptly prepare the foregoing opinion, but in no event later than
      thirty (30) days from the Date of Termination; and may use such actuaries
      as such counsel deems necessary or advisable for the purpose. Nothing
      contained herein shall result in a reduction of any payments or benefits
      to which the Executive may be entitled upon termination of employment
      under any circumstances other than as specified in this Section 5, or a
      reduction in the payments and benefits specified in Section 4 below zero.

      6. Mitigation; Exclusivity of Benefits.

      (a) The Executive shall not be required to mitigate the amount of any
      benefits hereunder by seeking other employment or otherwise, nor shall the
      amount of any such benefits be reduced by any compensation earned by the
      Executive as a result of employment by another employer after the Date of
      Termination or otherwise.

      (b) The specific arrangements referred to herein are not intended to
      exclude any other benefits which may be available to the Executive upon a
      termination of employment with the Employers pursuant to employee benefit
      plans of the Employers or otherwise.

      7. Withholding. All payments required to be made by the Employers
      hereunder to the Executive shall be subject to the withholding of such
      amounts, if any, relating to tax and other payroll deductions as the
      Employers may reasonably determine should be withheld pursuant to any
      applicable law or regulation.

      8. Assignability. The Employers may assign this Agreement and their rights
      and obligations hereunder in whole, but not in part, to any corporation,
      bank or other entity with or into which the Employers may hereafter merge
      or consolidate or to which the Employers may transfer all or substantially
      all of their assets, if in any such case said corporation, bank or other
      entity shall by operation of law or expressly in writing assume all
      obligations of the Employers hereunder as fully as if it had been
      originally made a party hereto, but may not otherwise assign this
      Agreement or its rights and obligations hereunder. The Executive may not
      assign or transfer this Agreement or any rights or obligations hereunder.

      9. Notice. For the purposes of this Agreement, notices and all other
      communications provided for in this Agreement shall be in writing and
      shall be deemed to have been duly given when delivered or mailed by
      certified or registered mail, return receipt requested, postage prepaid,
      addressed to the respective addresses set forth below:

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                    HERITAGE BANCSHARES, INC. AND SUBSIDIARY

      To the Employers: Board of Directors
                        Heritage Bancshares, Inc.
                        102 West High Street
                        Terrell, Texas 75160

                        Board of Directors
                        Heritage Bank, SSB
                        102 West High Street
                        Terrell, Texas 75160

      To the Executive: James C. Champion
                        208 Brookhollow
                        Terrell, Texas 75160

      10. Amendment; Waiver. No provisions of this Agreement may be modified,
      waived or discharged unless such waiver, modification or discharge is
      agreed to in writing and signed by the Executive and such officer or
      officers as may be specifically designated by the Boards of Directors of
      the Employers to sign on their behalf. No waiver by any party hereto at
      any time of any breach by any other party hereto of, or compliance with,
      any condition or provision of this Agreement to be performed by such other
      party shall be deemed a waiver of similar or dissimilar provisions or
      conditions at the same or at any prior or subsequent time.

      11. Governing Law. The validity, interpretation, construction and
      performance of this Agreement shall be governed by the laws of the United
      States where applicable and otherwise by the substantive laws of the State
      of Texas.

      12. Nature of Obligations. Nothing contained herein shall create or
      require the Employers to create a trust of any kind to fund any benefits
      which may be payable hereunder, and to the extent that the Executive
      acquires a right to receive benefits from the Employers hereunder, such
      right shall be no greater than the right of any unsecured general creditor
      of the Employers.

      13. Headings. The section headings contained in this Agreement are for
      reference purposes only and shall not affect in any way the meaning or
      interpretation of this Agreement.

      14. Validity. The invalidity or unenforceability of any provision of this
      Agreement shall not affect the validity or enforceability of any other
      provisions of this Agreement, which shall remain in full force and effect.

      15. Counterparts. This Agreement may be executed in one or more
      counterparts, each of which shall be deemed to be an original but all of
      which together will constitute one and the same instrument.

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                    HERITAGE BANCSHARES, INC. AND SUBSIDIARY

      16. Regulatory Prohibition. Notwithstanding any other provision of this
      Agreement to the contrary, any payments made to the Executive pursuant to
      this Agreement, or otherwise, are subject to and conditioned upon their
      compliance with Section 18(k) of the FDIA (12 V.S.C. ss.1828(k)) and the
      regulations promulgated thereunder, including 12 C.F.R. Part 359.

      17. Payment of Costs and Legal Fees and Reinstatement of Benefits. In the
      event any dispute or controversy arising under or in connection with the
      Executive's termination is resolved in favor of the Executive, whether by
      judgment, arbitration or settlement, the Executive shall be entitled to
      the payment of (a) all legal fees incurred by the Executive in resolving
      such dispute or controversy, and (2) any back-pay, including Base Salary.

      18. Entire Agreement. This Agreement embodies the entire agreement between
      the Employers and the Executive with respect to the matters agreed to
      herein. All prior agreements between the Employers and the Executive with
      respect to the matters agreed to herein are hereby superseded and shall
      have no force or effect.

      IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.

Attest:                                           HERITAGE BANCSHARES, INC.


/s/ Lisa Stuart                                   By: /s/ J. Pat Baker
---------------                                       --------------------------
Lisa Stuart                                       J. Pat Baker
Assistant Secretary                               Chairman

Attest:                                           HERITAGE BANK, SSB


/s/ Lisa Stuart                                   By: /s/ J. Pat Baker
---------------                                       --------------------------
Lisa Stuart                                       J. Pat Baker
Assistant Secretary                               Chairman

                                    EXECUTIVE



                                                  By: /s/ James C. Champion
                                                     ---------------------------
                                                     James C. Champion