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                                                         Exhibit 10.3
                                               Chicago Mercantile Exchange Inc.
                                              Registration Statement on Form S-4


                          CHICAGO MERCANTILE EXCHANGE
                     DIRECTORS' DEFERRED COMPENSATION PLAN
                     -------------------------------------

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                               TABLE OF CONTENTS
                               -----------------

SECTION 1................................................................... 1
     General................................................................ 1
          Purpose and Effective Date........................................ 1
          Administration.................................................... 1
          Plan Year......................................................... 1
          Source of Benefit Payments........................................ 1
          Expenses.......................................................... 2
          Applicable Laws................................................... 2
          Gender and Number................................................. 2
          Notices........................................................... 2
          Evidence.......................................................... 2
          Action by Exchange................................................ 2

SECTION 2................................................................... 2
     Participation.......................................................... 2
          Participant....................................................... 2
          Plan Not Guarantee of Continued Service........................... 2

SECTION 3................................................................... 3
     Deferred Compensation; Plan Accounting................................. 3
          Deferred Compensation Account..................................... 3
          Deferral Election................................................. 3
          Adjustment of Accounts............................................ 3

SECTION 4................................................................... 4
     Payment of Plan Benefits............................................... 4
          Vesting........................................................... 4
          Termination of Service on the Board............................... 4
          Beneficiary Designation........................................... 4
          Distributions to Disabled Persons................................. 4
          Benefits May Not be Assigned...................................... 4

SECTION 5................................................................... 5
     Amendment and Termination.............................................. 5
          Administrative Amendments......................................... 5
          Amendments and Termination........................................ 5

                                       i

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                          CHICAGO MERCANTILE EXCHANGE
                     DIRECTORS' DEFERRED COMPENSATION PLAN
                     -------------------------------------

                                   SECTION 1
                                   ---------

                                    General
                                    -------

     1.1. Purpose and Effective Date. Effective as of February 1, 1996 (the
"Effective Date"), the Chicago Mercantile Exchange, an Illinois not-for-profit
corporation (the "Exchange"), adopted the Chicago Mercantile Exchange Directors'
Deferred Compensation Plan (the "Plan") to provide members of the Board of
Directors of the Exchange (the "Board") with the opportunity to defer receipt of
compensation, thereby assisting such members in planning for their future
security.

     1.2. Administration. The Exchange is the Plan Administrator of the Plan.
The Plan Administrator may delegate all or any part of its responsibilities and
powers to any person or persons selected by it. Any such delegation may be
revoked at any time. Until the Plan Administrator takes action to the contrary,
the President of the Exchange shall be delegated the power and responsibility to
take all actions assigned to or permitted to be taken by the Plan Administrator
under Sections 3 and 4 hereof. The Secretary of the Exchange (or, on behalf of
the Secretary of the Exchange, any Corporate Secretary or Assistant Secretary)
shall certify to any interested person the names of the employees of the
Exchange who are, from time to time, authorized to act on behalf of the Plan
Administrator and who are responsible for the day-to-day operation and
administration of the Plan. Any interpretation of the Plan by the Plan
Administrator and any decision made by the Plan Administrator or its delegate on
any other matter within its discretion is final and binding on all persons.

     1.3. Plan Year. The term "Plan Year" means the period commencing February
1, 1996 and ending December 31, 1996, and each calendar year commencing
thereafter.

     1.4. Source of Benefit Payments. Subject to the terms and conditions of the
Plan, any amount payable to or on account of a Participant under this Plan shall
be paid from the general assets of the Exchange or from one or more trusts, the
assets of which are subject to the claims of the Exchange's general creditors.
The amounts payable hereunder shall be reflected on the accounting records of
the Exchange but shall not be construed to create, or require the creation of, a
trust, custodial or escrow account. None of the individuals entitled to benefits
under the Plan shall have any preferred claim on, or any beneficial ownership
interest in, any assets of the Exchange or to any investment reserves, accounts,
trusts or funds that the Exchange may purchase, establish or accumulate to aid
in providing the benefits under the Plan, and any rights of such individuals
under the Plan shall constitute unsecured contractual rights only. Nothing
contained in the Plan shall constitute a guarantee by the Exchange that the
assets of the Exchange shall be sufficient to pay any benefits to any
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person. Nothing contained in the Plan and no action taken pursuant to its
provisions shall create a trust or fiduciary relationship of any kind between
the Exchange and any person.

     1.5. Expenses. The expenses of administering the Plan shall be borne by the
Exchange.

     1.6. Applicable Laws. The Plan shall be construed and administered in
accordance with the internal laws of the State of Illinois.

     1.7. Gender and Number. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.

     1.8. Notices. Any notice or document required to be given to or filed with
the Plan Administrator will be properly filed if delivered or mailed by
registered mail, postage prepaid, to the Secretary of the Exchange, at its
principal executive offices. The Plan Administrator may, by advance written
notice to affected persons, revise such notice procedure from time to time. Any
notice required under the Plan may be waived by the person entitled to notice.

     1.9. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

     1.10. Action by Exchange. Any action required or permitted to be taken by
the Exchange shall be by resolution of its Board of Directors or its Executive
Committee, or by a duly authorized officer of the Exchange.

                                   SECTION 2
                                   ---------

                                 Participation
                                 -------------

     2.1. Participant. Each member of the Board (a "Director") may become a
"Participant" in the Plan by making a deferral election in accordance with
subsection 3.2.

     2.2. Plan Not Guarantee of Continued Service. Participation in the Plan
will not give any Director the right to be retained as a member of the Board nor
any right or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan.

                                       2
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                                   SECTION 3
                                   ---------

                    Deferred Compensation; Plan Accounting
                    --------------------------------------

     3.1. Deferred Compensation Account. The Plan Administrator shall maintain,
or cause to be maintained, an Account in the name of each Participant which
shall reflect the sum of the following amounts:

     (a)  the amount of stipend deferred by the Participant in accordance with
          the provisions of subsection 3.2; and

     (b)  the assumed rate of earnings to be credited to the Participant's
          Account in accordance with subsection 3.3.

     3.2. Deferral Election. Subject to such terms, conditions, and limitations
as the Plan Administrator may, from time to time, impose, each Director of the
Exchange may make an irrevocable election to defer receipt of all or a portion
of the stipend otherwise payable to him by the Exchange for any Plan Year, by
filing a deferral election in writing with the Plan Administrator at such time
and in such manner as the Plan Administrator shall provide, but in no case later
than the day preceding the first day of such Plan Year. Notwithstanding the
preceding sentence, for the Plan Year commencing February 1, 1996, a Director's
deferral election shall be made no later than February 29, 1996 and shall be
effective as of the first day of the month following the date such election is
filed with the Plan Administrator. The Account of each Participant shall be
credited with the amount of stipend deferred by the Participant as of the date
on which such amount would otherwise have been paid to the Participant or such
other date as the Plan Administrator may reasonably provide.

     3.3. Adjustment of Accounts. The amounts credited to a Participant's
Account in accordance with subsection 3.2 shall be adjusted from time to time in
accordance with uniform procedures established by the Plan Administrator to
reflect the value of an investment equal to the Participant's Account balance
in one or more assumed investments that the Plan Administrator offers from time
to time, and which the Participant directs the Plan Administrator to use for
purposes of adjusting his Account. Such amount shall be determined without
regard to taxes that would be payable with respect to any such assumed
investment. The Plan Administrator may eliminate any assumed investment
alternative at any time; provided, however, that the Plan Administrator may not
retroactively eliminate any assumed investment alternative. To the extent
permitted by the Plan Administrator, the Participant may elect to have different
portions of his Account balance for any period adjusted on the basis of
different assumed investments. Notwithstanding the election by Participants of
certain assumed investments and the adjustment of their Accounts based on such
investment decisions, the Plan does not require, and no trust or other
instrument maintained in connection with the Plan shall require, that any assets
or amounts which are set aside in trust or otherwise for the purpose of paying
Plan benefits shall actually be invested in the investment alternatives selected
by Participants.

                                       3
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                                   SECTION 4
                                   ---------

                           Payment of Plan Benefits
                           ------------------------

     4.1. Vesting. A Participant shall have at all times a fully vested and
nonforfeitable interest in the amounts theretofore credited or required to be
credited to his Account under Section 3.

     4.2. Termination of Service on the Board. Upon a Participant's death or
termination of service on the Board, the Participant's entire Account balance
shall be paid to or on account of the Participant in a single lump sum payment
as soon as practicable after his date of death or termination of service on the
Board.

     4.3. Beneficiary Designation. Each Participant from time to time, by
signing a form furnished by the Plan Administrator, may designate any legal or
natural person or persons (who may be designated contingently or successively)
to whom his benefits under the Plan are to be paid if he dies before he receives
all of his benefits. A beneficiary designation form will be effective only when
the signed form is filed with the Plan Administrator while the Participant is
alive and will cancel all beneficiary designation forms filed earlier. Except as
otherwise specifically provided in this subsection 4.3, if a deceased
Participant failed to designate a beneficiary as provided above, or if the
designated beneficiary of a deceased Participant dies before him or before
complete payment of the Participant's benefits, his benefits shall be paid to
the legal representative or representatives of the estate of the last to die of
the Participant and his designated beneficiary.

     4.4. Distributions to Disabled Persons. Notwithstanding the provisions of
this Section 4, if, in the Plan Administrator's opinion, a Participant or
beneficiary is under a legal disability or is in any way incapacitated so as to
be unable to manage his financial affairs, the Plan Administrator may direct
that payment be made to a relative or friend of such person for his benefit
until claim is made by a conservator or other person legally charged with the
care of his person or his estate, and such payment shall be in lieu of any such
payment to such Participant or beneficiary. Thereafter, any benefits under the
Plan to which such Participant or beneficiary is entitled shall be paid to such
conservator or other person legally charged with the care of his person or his
estate.

     4.5. Benefits May Not be Assigned. Benefits payable under the Plan are
expressly declared to be unassignable and non-transferable. Neither the
Participant nor any other person shall have any voluntary or involuntary right
to commute, sell, assign, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey in advance of actual receipt, any benefits
payable under the Plan. No part of the benefits payable shall be, prior to
actual payment, subject to seizure or sequestration for payment of any debts,
judgements, alimony or separate maintenance owed by the Participant or any other
person, or be transferred by operation of law in the event of the Participant's
or any other person's bankruptcy or insolvency.

                                       4
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                                   SECTION 5
                                   ---------

                           Amendment and Termination
                           -------------------------

     5.1  Administrative Amendments. The President, Executive Vice President
Chief Administration Officer or Chief Financial Officer of the Exchange may make
minor or administrative amendments to the Plan.

     5.2  Amendments and Termination. The Exchange may amend the Plan at any
time. The Exchange may terminate the Plan at any time provided that it has made
adequate provisions for any amount payable by it under the terms of the Plan as
in effect on the date it terminates the Plan. Upon termination of the Plan, the
Exchange may, in its discretion applied in a uniform manner to all Participants,
cause a lump sum payment of all benefits for all Participants at substantially
the same time.

  Dated this 23 day of February, 1996.

                                CHICAGO MERCANTILE EXCHANGE

                                By /s/ Gerald Beyer
                                   --------------------------------
                                Its   EVP
                                   --------------------------------

                                       5
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                                FIRST AMENDMENT
                                       TO
                          CHICAGO MERCANTILE EXCHANGE
                     DIRECTORS' DEFERRED COMPENSATION PLAN
                     -------------------------------------

     By virtue and in exercise of the amending authority reserved to the Chicago
Mercantile Exchange (the "Exchange") by the provisions of subsection 5.2 of the
Chicago Mercantile Exchange Directors' Deferred Compensation Plan (the "Plan"),
and pursuant to the authority delegated to the undersigned officer of the
Exchange by resolutions of its Board of Directors adopted on November 4, 1998
and November 16, 1998, the Plan is amended by adding the following new
subsection to the Plan to follow immediately after subsection 3.3 thereof,
effective November 16, 1998:

     "3.4. Cash-Out Election. Prior to a Participant's termination of service on
the Board, the Participant may make a one-time election (a 'Cash-Out Election')
to have his entire Account balance distributed to him, in a single lump sum
payment, in cash, within 15 days following the date that such election is filed
with the Exchange, subject to the following:

     (a)  The amount actually distributed to an electing Participant under this
          subsection 3.4 shall be equal to the Participant's entire Account
          balance, reduced by an amount equal to 10 percent of such balance. The
          portion of the Participant's Account balance that is not distributed
          to the Participant pursuant to this paragraph (a) shall be forfeited
          as a penalty.

     (b)  Notwithstanding the foregoing provisions of this Section 3, for the
          remainder of the Plan Year in which the Cash-out Election is effective
          and for the next following Plan Year, no deferral election by the
          Participant under subsection 3.2 shall be given effect.

Notwithstanding the foregoing provisions of this subsection 3.4, and without
limiting the amending authority reserved to the Exchange by the provisions of
Section 5 of the Plan, the Exchange may amend this subsection 3.4 at any time
and in any respect, even as to amounts previously credited to a Participant's
Account, to the extent that the Exchange determines that such amendment is
necessary or desirable by reason of any change in tax laws or regulations or
interpretations thereof, provided, however, that no such amendment shall apply
with respect to amounts actually distributed under this subsection 3.4 before
the later of the date on which the amendment is adopted or effective."
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  IN WITNESS WHEREOF, the undersigned officer of the Exchange has caused
these presents to be executed on behalf of the Exchange this 8th day of
December, 1998.

                                CHICAGO MERCANTELE EXCHANGE



                                By  /s/ Craig S. Donohue
                                  --------------------------------
                                   Its  SVP & General Counsel
                                      ----------------------------

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