8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report:  February 12, 2016 (Date of earliest event reported)
CINCINNATI FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Ohio	0-4604	31-0746871
(State or other jurisdiction  of incorporation)	(Commission  File Number)	(I.R.S. Employer  Identification No.)
6200 S. Gilmore Road, Fairfield, Ohio		45014-5141
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code:  (513) 870-2000
N/A (Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))

Item 5.02(e) Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On February 12, 2016, the compensation committee of the board of directors of Cincinnati Financial Corporation (Committee) approved grants of annual incentive compensation awards that may be earned if the specified performance goals are achieved for the annual performance period ending December 31, 2016 (2016 Awards). The 2016 Awards were granted under the Annual Incentive Compensation Plan of 2009, as amended on January 31, 2014 (Amended 2009 Plan). A copy of the complete Amended 2009 Plan can be found at Exhibit 10.1 to the company’s Current Report on Form 8-K dated February 3, 2014.

Item 9.01 Financial Statements and Exhibits

(c) Exhibits

Exhibit 10.1 – Annual Incentive Compensation Award agreement granted to Steven J. Johnston on February 12, 2016.

Exhibit 10.2 – Annual Incentive Compensation Award agreement granted to Jacob F. Scherer, Jr. on February 12, 2016

Exhibit 10.3 – Annual Incentive Compensation Award agreement granted to Michael J. Sewell on February 12, 2016

Exhibit 10.4 – Annual Incentive Compensation Award agreement granted to Martin F. Hollenbeck on February 12, 2016

Exhibit 10.5 - Annual Incentive Compensation Award agreement granted to Charles P. Stoneburner II on February 12, 2016

Safe Harbor Statement

This is our “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995. Our business is subject to certain risks and uncertainties that may cause actual results to differ materially from those suggested by the forward-looking statements in this report. Some of those risks and uncertainties are discussed in our 2014 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 33.

Factors that could cause or contribute to such differences include, but are not limited to:

• Unusually high levels of catastrophe losses due to risk concentrations, changes in weather patterns, environmental events, terrorism incidents or other causes

• Increased frequency and/or severity of claims or development of claims that are unforeseen at the time of policy issuance

• Inadequate estimates, assumptions or reliance on third-party data used for critical accounting estimates

• Declines in overall stock market values negatively affecting the company’s equity portfolio and book value

• Domestic and global events resulting in capital market or credit market uncertainty, followed by prolonged periods of economic instability or recession, that lead to:

o Significant or prolonged decline in the fair value of a particular security or group of securities and impairment of the asset(s)

o Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities

o Significant rise in losses from surety and director and officer policies written for financial institutions or other insured entities

• Prolonged low interest rate environment or other factors that limit the company’s ability to generate growth in investment income or interest rate fluctuations that result in declining values of fixed-maturity investments, including declines in accounts in which we hold bank-owned life insurance contract assets

• Recession or other economic conditions resulting in lower demand for insurance products or increased payment delinquencies

• Difficulties with technology or data security breaches, including cyberattacks, that could negatively affect our ability to conduct business and our relationships with agents, policyholders and others

• Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products

• Delays, inadequate data developed internally or from third parties, or performance inadequacies from ongoing development and implementation of underwriting and pricing methods, including telematics and other usage-based insurance methods, or technology projects and enhancements expected to increase our pricing accuracy, underwriting profit and competitiveness

• Increased competition that could result in a significant reduction in the company’s premium volume

• Changing consumer insurance-buying habits and consolidation of independent insurance agencies that could alter our competitive advantages

• Inability to obtain adequate ceded reinsurance on acceptable terms, amount of reinsurance coverage purchased, financial strength of reinsurers and the potential for nonpayment or delay in payment by reinsurers

• Inability to defer policy acquisition costs for any business segment if pricing and loss trends would lead management to conclude that segment could not achieve sustainable profitability

• Inability of our subsidiaries to pay dividends consistent with current or past levels

• Events or conditions that could weaken or harm the company’s relationships with its independent agencies and hamper opportunities to add new agencies, resulting in limitations on the company’s opportunities for growth, such as:

o Downgrades of the company’s financial strength ratings

o Concerns that doing business with the company is too difficult

o Perceptions that the company’s level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace

o Inability or unwillingness to nimbly develop and introduce coverage product updates and innovations that our competitors offer and consumers expect to find in the marketplace

• Actions of insurance departments, state attorneys general or other regulatory agencies, including a change to a federal system of regulation from a state-based system, that:

o Impose new obligations on us that increase our expenses or change the assumptions underlying our critical accounting estimates

o Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations

o Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business

o Add assessments for guaranty funds, other insurance‑related assessments or mandatory reinsurance arrangements; or that impair our ability to recover such assessments through future surcharges or other rate changes

o Increase our provision for federal income taxes due to changes in tax law

o Increase our other expenses

o Limit our ability to set fair, adequate and reasonable rates

o Place us at a disadvantage in the marketplace

o Restrict our ability to execute our business model, including the way we compensate agents

• Adverse outcomes from litigation or administrative proceedings

• Events or actions, including unauthorized intentional circumvention of controls, that reduce the company’s future ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002

• Unforeseen departure of certain executive officers or other key employees due to retirement, health or other causes that could interrupt progress toward important strategic goals or diminish the effectiveness of certain longstanding relationships with insurance agents and others

• Events, such as an epidemic, natural catastrophe or terrorism, that could hamper our ability to assemble our workforce at our headquarters location

Further, the company’s insurance businesses are subject to the effects of changing social, global, economic and regulatory environments. Public and regulatory initiatives have included efforts to adversely influence and restrict premium rates, restrict the ability to cancel policies, impose underwriting standards and expand overall regulation. The company also is subject to public and regulatory initiatives that can affect the market value for its common stock, such as measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CINCINNATI FINANCIAL CORPORATION
Date:  February 18, 2016	/S/ Michael J. Sewell
	Michael J. Sewell, CPA
	Chief Financial Officer, Senior Vice President and Treasurer

EX-10.1

CINCINNATI FINANCIAL CORPORATION

ANNUAL INCENTIVE COMPENSATION PLAN OF 2009

(AS AMENDED JANUARY 31, 2014)

PERFORMANCE-BASED AWARD AGREEMENT

CINCINNATI FINANCIAL CORPORATION (the Company) hereby grants to the associate identified below (the Participant) an award in the form of a cash bonus in the amount indicated below under the Cincinnati Financial Corporation Annual Incentive Compensation Plan of 2009, as amended January 31, 2014 (the Amended Plan), to be payable only upon achievement of the Performance Goal during the Performance Period as specified below. The Compensation Committee of the Board of Directors (Committee) retains complete negative discretion (within the meaning of the applicable rules of the Internal Revenue Service under Section 162(m) of the Code) to reduce the amount of or eliminate part or all of the Award otherwise earned by the Participant upon the attainment of the Performance Goal in light of factors deemed appropriate by the Committee.

This award is forfeited if the Participant’s employment with the Company terminates for any reason other than death or retirement during the Performance Period. If the Participant terminates employment with the Company due to death or retirement during the Performance Period and the Performance Goal is satisfied, the Participant may be entitled to the payment of the Award at the discretion of the Committee. In no event shall the Award be paid later than two months and fifteen days following the close of the calendar year in which the Performance Goal is satisfied.

This award is subject to the terms and conditions of the Plan, which the Participant expressly accepts.

AWARD INFORMATION:

Participant Name: Steven J. Johnston

Target Award Amount: $1,060,896

Award Date: February 12, 2016

Performance Period: Calendar Year Ending December 31, 2016

Performance Goal: As described on Page 2 of this Agreement, Final Award Placement determined by Relative VCR*, Revenue as measured by Property Casualty Net Written Premium Growth** and Underwriting Profitability as measured by Combined Ratio**.

Vesting Level	Performance Target	Award Level
Threshold	The Company’s Final Award Placement is greater than 3.	30% of Target
Target	The Company’s Final Award Placement is equal to or greater than 5, but less than 7.	100% of Target
Maximum	The Company’s Final Award Placement is equal to or greater than 7.	200% of Target

* As defined by the Amended Plan

** As reported in the Company’s financial statements for the Performance Period.

IN WITNESS WHEREOF, this award has been duly executed as of the Award Date specified above.

CINCINNATI FINANCIAL CORPORATION

By: /s/ Steven J. Johnston                

Steven J. Johnston, FCAS, MAAA, CFA, CERA

President and Chief Executive Officer

ACCEPTED:                    

/s/ Steven J. Johnston                

Steven J. Johnston, FCAS, MAAA, CFA, CERA

1

Final Award Placement shall be determined as follows:

Step 1: Baseline award placement shall be determined by the Value Creation Ratio* Compared with Peer Group*. When the Company’s VCR exceeds the VCR of one or more of the companies in the Peer Group, the company’s baseline award placement shall increase by 1 for each Peer Group company exceeded.

Step 2: If the Company’s reported Property Casualty Net Written Premium growth is 2 percent or more, then the Company’s Final Award Placement shall be determined as described in Step 3. If the Company’s reported Property Casualty Net Written Premium growth is less than 2 percent, then Step 3 shall be disregarded and the award placement determined by Step 1 shall be the Final Award Placement for determining the Vesting Level.

Step 3: The Company’s Final Award Placement shall be determined as follows:

a) If the Company’s reported combined ratio is 95.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 1 placement.

b) If the company’s reported combined ratio is 93.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 2 placements.

c) If the company’s reported combined ratio is 91.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 3 placements.

In no event shall any additional award placements achieved in Step 3 cause the Vesting Level to increase by more than one level.

2

EX-10.2

CINCINNATI FINANCIAL CORPORATION

ANNUAL INCENTIVE COMPENSATION PLAN OF 2009

(AS AMENDED JANUARY 31, 2014)

PERFORMANCE-BASED AWARD AGREEMENT

CINCINNATI FINANCIAL CORPORATION (the Company) hereby grants to the associate identified below (the Participant) an award in the form of a cash bonus in the amount indicated below under the Cincinnati Financial Corporation Annual Incentive Compensation Plan of 2009, as amended January 31, 2014 (the Amended Plan), to be payable only upon achievement of the Performance Goal during the Performance Period as specified below. The Compensation Committee of the Board of Directors (Committee) retains complete negative discretion (within the meaning of the applicable rules of the Internal Revenue Service under Section 162(m) of the Code) to reduce the amount of or eliminate part or all of the Award otherwise earned by the Participant upon the attainment of the Performance Goal in light of factors deemed appropriate by the Committee.

This award is forfeited if the Participant’s employment with the Company terminates for any reason other than death or retirement during the Performance Period. If the Participant terminates employment with the Company due to death or retirement during the Performance Period and the Performance Goal is satisfied, the Participant may be entitled to the payment of the Award at the discretion of the Committee. In no event shall the Award be paid later than two months and fifteen days following the close of the calendar year in which the Performance Goal is satisfied.

This award is subject to the terms and conditions of the Plan, which the Participant expressly accepts.

AWARD INFORMATION:

Participant Name: Jacob F. Scherer

Target Award Amount: $580,286

Award Date: February 12, 2016

Performance Period: Calendar Year Ending December 31, 2016

Performance Goal: As described on Page 2 of this Agreement, Final Award Placement determined by Relative VCR*, Revenue as measured by Property Casualty Net Written Premium Growth** and Underwriting Profitability as measured by Combined Ratio**.

Vesting Level	Performance Target	Award Level
Threshold	The Company’s Final Award Placement is greater than 3.	30% of Target
Target	The Company’s Final Award Placement is equal to or greater than 5, but less than 7.	100% of Target
Maximum	The Company’s Final Award Placement is equal to or greater than 7.	200% of Target

* As defined by the Amended Plan

** As reported in the Company’s financial statements for the Performance Period.

IN WITNESS WHEREOF, this award has been duly executed as of the Award Date specified above.

CINCINNATI FINANCIAL CORPORATION

By: /s/ Steven J. Johnston                

Steven J. Johnston, FCAS, MAAA, CFA, CERA

President and Chief Executive Officer

ACCEPTED:                    

/s/ Jacob F. Scherer                

Jacob F. Scherer

1

Final Award Placement shall be determined as follows:

Step 1: Baseline award placement shall be determined by the Value Creation Ratio* Compared with Peer Group*. When the Company’s VCR exceeds the VCR of one or more of the companies in the Peer Group, the company’s baseline award placement shall increase by 1 for each Peer Group company exceeded.

Step 2: If the Company’s reported Property Casualty Net Written Premium growth is 2 percent or more, then the Company’s Final Award Placement shall be determined as described in Step 3. If the Company’s reported Property Casualty Net Written Premium growth is less than 2 percent, then Step 3 shall be disregarded and the award placement determined by Step 1 shall be the Final Award Placement for determining the Vesting Level.

Step 3: The Company’s Final Award Placement shall be determined as follows:

a) If the Company’s reported combined ratio is 95.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 1 placement.

b) If the company’s reported combined ratio is 93.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 2 placements.

c) If the company’s reported combined ratio is 91.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 3 placements.

In no event shall any additional award placements achieved in Step 3 cause the Vesting Level to increase by more than one level.

2

EX-10.3

CINCINNATI FINANCIAL CORPORATION

ANNUAL INCENTIVE COMPENSATION PLAN OF 2009

(AS AMENDED JANUARY 31, 2014)

PERFORMANCE-BASED AWARD AGREEMENT

CINCINNATI FINANCIAL CORPORATION (the Company) hereby grants to the associate identified below (the Participant) an award in the form of a cash bonus in the amount indicated below under the Cincinnati Financial Corporation Annual Incentive Compensation Plan of 2009, as amended January 31, 2014 (the Amended Plan), to be payable only upon achievement of the Performance Goal during the Performance Period as specified below. The Compensation Committee of the Board of Directors (Committee) retains complete negative discretion (within the meaning of the applicable rules of the Internal Revenue Service under Section 162(m) of the Code) to reduce the amount of or eliminate part or all of the Award otherwise earned by the Participant upon the attainment of the Performance Goal in light of factors deemed appropriate by the Committee.

This award is forfeited if the Participant’s employment with the Company terminates for any reason other than death or retirement during the Performance Period. If the Participant terminates employment with the Company due to death or retirement during the Performance Period and the Performance Goal is satisfied, the Participant may be entitled to the payment of the Award at the discretion of the Committee. In no event shall the Award be paid later than two months and fifteen days following the close of the calendar year in which the Performance Goal is satisfied.

This award is subject to the terms and conditions of the Plan, which the Participant expressly accepts.

AWARD INFORMATION:

Participant Name: Michael J. Sewell

Target Award Amount: $511,963

Award Date: February 12, 2016

Performance Period: Calendar Year Ending December 31, 2016

Performance Goal: As described on Page 2 of this Agreement, Final Award Placement determined by Relative VCR*, Revenue as measured by Property Casualty Net Written Premium Growth** and Underwriting Profitability as measured by Combined Ratio**.

Vesting Level	Performance Target	Award Level
Threshold	The Company’s Final Award Placement is greater than 3.	30% of Target
Target	The Company’s Final Award Placement is equal to or greater than 5, but less than 7.	100% of Target
Maximum	The Company’s Final Award Placement is equal to or greater than 7.	200% of Target

* As defined by the Amended Plan

** As reported in the Company’s financial statements for the Performance Period.

IN WITNESS WHEREOF, this award has been duly executed as of the Award Date specified above.

CINCINNATI FINANCIAL CORPORATION

By: /s/ Steven J. Johnston                

Steven J. Johnston, FCAS, MAAA, CFA, CERA

President and Chief Executive Officer

ACCEPTED:                    

/s/ Michael J. Sewell                    

Michael J. Sewell, CPA

1

Final Award Placement shall be determined as follows:

Step 1: Baseline award placement shall be determined by the Value Creation Ratio* Compared with Peer Group*. When the Company’s VCR exceeds the VCR of one or more of the companies in the Peer Group, the company’s baseline award placement shall increase by 1 for each Peer Group company exceeded.

Step 2: If the Company’s reported Property Casualty Net Written Premium growth is 2 percent or more, then the Company’s Final Award Placement shall be determined as described in Step 3. If the Company’s reported Property Casualty Net Written Premium growth is less than 2 percent, then Step 3 shall be disregarded and the award placement determined by Step 1 shall be the Final Award Placement for determining the Vesting Level.

Step 3: The Company’s Final Award Placement shall be determined as follows:

a) If the Company’s reported combined ratio is 95.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 1 placement.

b) If the company’s reported combined ratio is 93.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 2 placements.

c) If the company’s reported combined ratio is 91.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 3 placements.

In no event shall any additional award placements achieved in Step 3 cause the Vesting Level to increase by more than one level.

2

EX-10.4

CINCINNATI FINANCIAL CORPORATION

ANNUAL INCENTIVE COMPENSATION PLAN OF 2009

(AS AMENDED JANUARY 31, 2014)

PERFORMANCE-BASED AWARD AGREEMENT

CINCINNATI FINANCIAL CORPORATION (the Company) hereby grants to the associate identified below (the Participant) an award in the form of a cash bonus in the amount indicated below under the Cincinnati Financial Corporation Annual Incentive Compensation Plan of 2009, as amended January 31, 2014 (the Amended Plan), to be payable only upon achievement of the Performance Goal during the Performance Period as specified below. The Compensation Committee of the Board of Directors (Committee) retains complete negative discretion (within the meaning of the applicable rules of the Internal Revenue Service under Section 162(m) of the Code) to reduce the amount of or eliminate part or all of the Award otherwise earned by the Participant upon the attainment of the Performance Goal in light of factors deemed appropriate by the Committee.

This award is forfeited if the Participant’s employment with the Company terminates for any reason other than death or retirement during the Performance Period. If the Participant terminates employment with the Company due to death or retirement during the Performance Period and the Performance Goal is satisfied, the Participant may be entitled to the payment of the Award at the discretion of the Committee. In no event shall the Award be paid later than two months and fifteen days following the close of the calendar year in which the Performance Goal is satisfied.

This award is subject to the terms and conditions of the Plan, which the Participant expressly accepts.

AWARD INFORMATION:

Participant Name: Martin F. Hollenbeck

Target Award Amount: $422,016

Award Date: February 12, 2016

Performance Period: Calendar Year Ending December 31, 2016

Performance Goal: As described on Page 2 of this Agreement, Final Award Placement determined by Relative VCR*, Revenue as measured by Property Casualty Net Written Premium Growth** and Underwriting Profitability as measured by Combined Ratio**.

Vesting Level	Performance Target	Award Level
Threshold	The Company’s Final Award Placement is greater than 3.	30% of Target
Target	The Company’s Final Award Placement is equal to or greater than 5, but less than 7.	100% of Target
Maximum	The Company’s Final Award Placement is equal to or greater than 7.	200% of Target

* As defined by the Amended Plan

** As reported in the Company’s financial statements for the Performance Period.

IN WITNESS WHEREOF, this award has been duly executed as of the Award Date specified above.

CINCINNATI FINANCIAL CORPORATION

By: /s/ Steven J. Johnston                

Steven J. Johnston, FCAS, MAAA, CFA, CERA

President and Chief Executive Officer

ACCEPTED:                    

/s/ Martin F. Hollenbeck                

Martin F. Hollenbeck

1

Final Award Placement shall be determined as follows:

Step 1: Baseline award placement shall be determined by the Value Creation Ratio* Compared with Peer Group*. When the Company’s VCR exceeds the VCR of one or more of the companies in the Peer Group, the company’s baseline award placement shall increase by 1 for each Peer Group company exceeded.

Step 2: If the Company’s reported Property Casualty Net Written Premium growth is 2 percent or more, then the Company’s Final Award Placement shall be determined as described in Step 3. If the Company’s reported Property Casualty Net Written Premium growth is less than 2 percent, then Step 3 shall be disregarded and the award placement determined by Step 1 shall be the Final Award Placement for determining the Vesting Level.

Step 3: The Company’s Final Award Placement shall be determined as follows:

a) If the Company’s reported combined ratio is 95.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 1 placement.

b) If the company’s reported combined ratio is 93.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 2 placements.

c) If the company’s reported combined ratio is 91.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 3 placements.

In no event shall any additional award placements achieved in Step 3 cause the Vesting Level to increase by more than one level.

2

EX-10.5

CINCINNATI FINANCIAL CORPORATION

ANNUAL INCENTIVE COMPENSATION PLAN OF 2009

(AS AMENDED JANUARY 31, 2014)

PERFORMANCE-BASED AWARD AGREEMENT

CINCINNATI FINANCIAL CORPORATION (the Company) hereby grants to the associate identified below (the Participant) an award in the form of a cash bonus in the amount indicated below under the Cincinnati Financial Corporation Annual Incentive Compensation Plan of 2009, as amended January 31, 2014 (the Amended Plan), to be payable only upon achievement of the Performance Goal during the Performance Period as specified below. The Compensation Committee of the Board of Directors (Committee) retains complete negative discretion (within the meaning of the applicable rules of the Internal Revenue Service under Section 162(m) of the Code) to reduce the amount of or eliminate part or all of the Award otherwise earned by the Participant upon the attainment of the Performance Goal in light of factors deemed appropriate by the Committee.

This award is forfeited if the Participant’s employment with the Company terminates for any reason other than death or retirement during the Performance Period. If the Participant terminates employment with the Company due to death or retirement during the Performance Period and the Performance Goal is satisfied, the Participant may be entitled to the payment of the Award at the discretion of the Committee. In no event shall the Award be paid later than two months and fifteen days following the close of the calendar year in which the Performance Goal is satisfied.

This award is subject to the terms and conditions of the Plan, which the Participant expressly accepts.

AWARD INFORMATION:

Participant Name: Charles P. Stoneburner, II

Target Award Amount: $430,291

Award Date: February 12, 2016

Performance Period: Calendar Year Ending December 31, 2016

Performance Goal: As described on Page 2 of this Agreement, Final Award Placement determined by Relative VCR*, Revenue as measured by Property Casualty Net Written Premium Growth** and Underwriting Profitability as measured by Combined Ratio**.

Vesting Level	Performance Target	Award Level
Threshold	The Company’s Final Award Placement is greater than 3.	30% of Target
Target	The Company’s Final Award Placement is equal to or greater than 5, but less than 7.	100% of Target
Maximum	The Company’s Final Award Placement is equal to or greater than 7.	200% of Target

* As defined by the Amended Plan

** As reported in the Company’s financial statements for the Performance Period.

IN WITNESS WHEREOF, this award has been duly executed as of the Award Date specified above.

CINCINNATI FINANCIAL CORPORATION

By: /s/ Steven J. Johnston                

Steven J. Johnston, FCAS, MAAA, CFA, CERA

President and Chief Executive Officer

ACCEPTED:                    

/s/ Charles P. Stoneburner, II            

Charles P. Stoneburner, II

1

Final Award Placement shall be determined as follows:

Step 1: Baseline award placement shall be determined by the Value Creation Ratio* Compared with Peer Group*. When the Company’s VCR exceeds the VCR of one or more of the companies in the Peer Group, the company’s baseline award placement shall increase by 1 for each Peer Group company exceeded.

Step 2: If the Company’s reported Property Casualty Net Written Premium growth is 2 percent or more, then the Company’s Final Award Placement shall be determined as described in Step 3. If the Company’s reported Property Casualty Net Written Premium growth is less than 2 percent, then Step 3 shall be disregarded and the award placement determined by Step 1 shall be the Final Award Placement for determining the Vesting Level.

Step 3: The Company’s Final Award Placement shall be determined as follows:

a) If the Company’s reported combined ratio is 95.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 1 placement.

b) If the company’s reported combined ratio is 93.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 2 placements.

c) If the company’s reported combined ratio is 91.0 percent or better, then the Final Award Placement shall be the sum of the baseline award placement determined in Step 1 plus 3 placements.

In no event shall any additional award placements achieved in Step 3 cause the Vesting Level to increase by more than one level.

2