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 (Date of earliest event reported)		November 18, 2005
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
(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 1.01

Entry into a Material Definitive Agreement

On November 18, 2005, the compensation committee of the board of directors of Cincinnati Financial Corporation granted increases in 2006 annual base salaries and awarded 2005 cash bonuses to John J. Schiff, Jr., president and chief executive officer; James E. Benoski, chief insurance officer and senior vice president; Jacob F. Scherer, Jr., senior vice president; Kenneth W. Stecher, chief financial officer and senior vice president, secretary, treasurer; Thomas A. Joseph, senior vice president, who are the named executive officers in the Proxy Statement for the company's 2005 Annual Meeting of Shareholders. The bonuses are for the past efforts and services of these officers on behalf of the company while the salary increases provide for future services and for the benefits to the company as a result of these services. A current summary of Cincinnati Financial Corporation’s Named Executive Officer Annualized Salary is attached as Exhibit 10.1 and is incorporated herein by reference.  Subject to shareholder approval at the 2006 Annual Meeting of Shareholders, the Board also adopted the performance-based Executive Incentive Compensation Plan applicable to the chief executive officer and the next four highest compensated executive officers.  A copy of the plan is attached as Exhibit 10.2 and is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On November 21, 2005, Cincinnati Financial Corporation issued the attached news release “Cincinnati Financial Corporation Declares Regular Quarterly Cash Dividend.” The news release is furnished as Exhibit 99.1 hereto and is

incorporated herein by reference. This report should not be deemed an admission as to the materiality of any information contained in the news release.

The information furnished in Item 7.01 of this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01  Financial Statements and Exhibits

(c) Exhibits

Exhibit 10.1 – Summary of Cincinnati Financial Corporation’s Named Executive Officer Annual Compensation

Exhibit 10.2 – Executive Incentive Compensation Plan

Exhibit 99.2 – News release dated November 21, 2005, titled “Cincinnati Financial Corporation Declares Regular Quarterly Cash Dividend”

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: November 23, 2005

/s/ Kenneth W. Stecher                                              

Kenneth W. Stecher

Chief Financial Officer, Senior Vice President, Secretary and Treasurer

(Principal Accounting Officer)

EX-10

CINCINNATI  FINANCIAL  CORPORATION

Mailing Address:                  P.O. BOX 145496

CINCINNATI, OHIO  45250-5496

(513) 870-2000

Exhibit 10.1

Summary of Cincinnati Financial Corporation

Named Executive Officer Annual Compensation

On November 18, 2005, the compensation committee of the board of directors of Cincinnati Financial Corporation granted increases in 2006 annual base salaries and awarded 2005 cash bonuses to the below named officers, who are the named executive officers in the Proxy Statement for the company's 2005 Annual Meeting of Shareholders.  The bonuses are for the past efforts and services of these officers on behalf of the company while the salary increases provide for future services and for the benefits to the company as a result of these services.

As described in the charter for the compensation committee, the committee evaluates the performance of the chief executive officer and other management in light of the company's goals and objectives and establishes compensation levels for the chief executive officer and other management. In determining 2006 base salaries and 2005 bonuses, the committee considered, among other factors it deemed appropriate, the compensation of management of comparable companies, the compensation of management in prior years, the company’s performance and shareholder return. See the Report of the Compensation Committee in the Proxy Statement for the company’s 2005 Annual Meeting to Shareholders for a more detailed discussion of the compensation philosophy. Salaries may be changed at any time at the discretion of the compensation committee and/or board of directors of the company.

These salaries and bonuses do not include short-term and long-term incentive compensation amounts under shareholder-approved performance-based plans, the company’s contributions to defined contribution plans, the company’s contributions to other employee benefit programs on behalf of the named executive officers or any other form of compensation.

		Annual Compensation
Named Executive Officer		Salary	Bonus
John J. Schiff, Jr. Chairman, President and Chief Executive Officer Cincinnati Financial Corporation	2006* 2005** 2004 2003	$775,000 699,643 673,314 645,865	– $425,750 325,438 287,912
James E. Benoski Vice Chairman and Chief Insurance Officer Cincinnati Financial Corporation	2006* 2005** 2004 2003	$429,363 385,000 356,637 340,941	– $366,438 297,938 250,412
Jacob F. Scherer, Jr. Senior Vice President The Cincinnati Insurance Company	2006* 2005** 2004 2003	$364,344 322,632 308,451 286,852	– $325,474 259,832 221,109
Kenneth W. Stecher Chief Financial Officer and Senior Vice President, Secretary, Treasurer Cincinnati Financial Corporation	2006* 2005** 2004 2003	$407,807 364,323 329,501 312,629	– $266,683 200,143 140,117
Thomas A. Joseph Senior Vice President The Cincinnati Insurance Company	2006* 2005** 2004 2003	$319,752 306,752 288,550 270,053	– $226,071 185,620 142,166

*

2006 Salary is the salary awarded by the compensation committee on November 18, 2005.

**

2005 Salary is the estimated base salary as of January 1, 2005.

EX-10

Exhibit 10.2

CINCINNATI FINANCIAL CORPORATION

INCENTIVE COMPENSATION PLAN

I.

Purpose

The purpose of the Cincinnati Financial Corporation Incentive Compensation Plan (“Plan”) is to provide the president and chief executive officer and the four most highly compensated officers other than the president and chief executive officer (“Participants”) of Cincinnati Financial Corporation and its subsidiaries on a consolidated basis (“Company”) with bonus compensation based upon the achievement of pre-established performance goals, as well as to maintain the Company’s income tax deduction for the entire amount of the annual compensation paid to the Participants pursuant to Section 162(m) of the Internal Revenue Code.

II.

Administration of Plan

The Plan shall be administered by the Company’s Compensation Committee (“Committee”), which shall at all times consistent of two or more outside directors, as defined in Internal Revenue Service regulations.  The Committee shall have full power and authority to administer and interpret the Plan and to establish rules for its administration.  The Committee, in making any determination under or referred to in the Plan, shall be entitled to rely on opinions, reports or statements of officers, employees, legal counsel and the public accountants of the Company, and upon the published financial reports of the Company’s Peer Group, as the term is hereinafter defined.

III.

Eligibility

Eligibility for participation in the Plan is limited to the president and chief executive officer and the four most highly compensated officers other than the president and chief executive officer of Cincinnati Financial Corporation and its subsidiaries on a consolidated basis, as more fully described by the regulations adopted by the Securities and Exchange Commission under the Securities’ Exchange Act of 1934.

IV.

Effective Date of Plan

The Plan shall go into effect on the date of approval by the Company’s Board of Directors, conditioned upon shareholder approval at the next Annual Meeting of Shareholders.

V.

Awards

Each Participant is eligible to receive an award of up to $1,000,000 annually pursuant to the Performance-Based Formula set forth in Section VI.  If, because of death, retirement, termination, or other reason, more than one employee holds the office of president and chief executive officer in any calendar year, the Committee retains discretion to divide, as it deems appropriate, any award under this Plan among those employees.  In no event will the total amount awarded to employees who held the same office exceed $1,000,000 in any calendar year.

VI.

Performance-Based Formula

A.

Awards under the Plan shall be earned upon the achievement by the Company of any two of the following performance goals:

1.

a specified percentage increase in gross direct written premiums for the calendar year over those for the prior year;

2.

a specified percentage increase in operating income for the calendar year over that of the prior year (In calculating the Company’s operating income, the effects of capital gains and losses and accounting changes shall not be considered nor will losses attributable to catastrophes which are assigned catastrophe numbers by the American Insurance Services Offices);

3.

exceeding the median annual percentage increase in earnings per share for the Company’s Peer Group for the calendar year, including the effects of catastrophic losses, but excluding the effects of capital gains and losses and accounting changes.

As soon as practicable either before or within 90 days after the beginning of each calendar year, the Committee shall establish written targets for the percentage increases described in Paragraphs 1 and 2 above.

For purposes of Paragraph 3 above, the Company’s Peer Group includes the following:  Chubb, Ohio Casualty, St. Paul Companies, Safeco and Selective Insurance Company.

B.

Notwithstanding anything to the contrary in this Plan, the Committee retains complete discretion to reduce the amount of or eliminate the award for any Participant in light of factors deemed appropriate by the Committee, but in no event may any award be increased beyond $1,000,000 for any calendar year.

VII.

Determination and Payment of Award

Awards shall be determined by the Committee and paid by the Company as soon as practicable after the Committee is able to certify that at least two of the three performance goals established under Section VI are in fact satisfied. In no event shall the Awards be paid later than two and one-half months following the close of the calendar year in which the performance goals are satisfied.

VIII.

Miscellaneous

A.

No Participant shall have any claim or right to be granted an award under the Plan and there shall be no obligation on behalf of the Company or the Committee for uniformity of treatment among Participants.  Awards under the Plan may not be attached, assigned or alienated in any manner.

B.

Neither the Plan nor any action taken hereunder shall be construed as giving to any Participant any right to be retained in the employ of the Company.

C.

The Company shall have the right to deduct from any award to be paid under the Plan any Federal, state or local taxes required by law to be withheld with respect to such payment.

D.

The Plan shall be governed by the laws of the State of Ohio and by applicable Federal Laws.

E.

The Board of Directors of the Company may modify or terminate the Plan at any time, except that no modification shall affect awards previously granted.  Any such modification shall be effective at such date as the Board may determine.

EX-99

CINCINNATI  FINANCIAL  CORPORATION

Mailing Address:                  P.O. BOX 145496

CINCINNATI, OHIO  45250-5496

              (513) 870-2000

Investor Contact: Heather J. Wietzel

(513) 870-2768

Media Contact: Joan O. Shevchik

(513) 603-5323

Cincinnati Financial Corporation Declares Regular Quarterly Cash Dividend

CINCINNATI, November 21, 2005 -- Cincinnati Financial Corporation (Nasdaq: CINF) today announced that the board of directors has declared a 30½ cents per share regular quarterly cash dividend payable January 17, 2006, to shareholders of record on December 23, 2005. In January, the board raised the 2005 indicated annual cash dividend payout by 15 percent, including the effect of the 5 percent stock dividend distributed in April.

Chairman and Chief Executive Officer John J. Schiff, Jr., CPCU commented, “Cincinnati reported results for the first nine months of 2005 that maintained our record of above-average growth and industry-leading profitability. We believe we can sustain that record, building value for shareholders over the longer term.”

Cincinnati Financial Corporation offers property and casualty insurance, its main business, through The Cincinnati Insurance Company, The Cincinnati Indemnity Company and The Cincinnati Casualty Company. The Cincinnati Life Insurance Company markets life and disability income insurance and annuities. CFC Investment Company offers commercial leasing and financing services. CinFin Capital Management Company provides asset management services to institutions, corporations and individuals.

This is a “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995. Certain forward-looking statements contained herein involve potential risks and uncertainties. The company’s future results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to:

·

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

·

Ability to obtain adequate reinsurance on acceptable terms, amount of reinsurance purchased and financial strength of reinsurers

·

Increased frequency and/or severity of claims

·

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

Downgrade of the company’s financial strength ratings,

o

Concerns that doing business with the company is too difficult or

o

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

·

Increased competition that could result in a significant reduction in the company’s premium growth rate

·

Underwriting and pricing methods adopted by competitors that could allow them to identify and flexibly price risks, which could decrease our advantage in these areas

·

Insurance regulatory actions, legislation or court decisions or legal actions that increase expenses or place us at a disadvantage in the marketplace

·

Delays in the development, implementation, performance and benefits of technology projects and enhancements

·

Inaccurate estimates or assumptions used for critical accounting estimates, including loss reserves

·

Events that reduce the company’s ability to maintain effective internal control over financial reporting under the Sarbanes-Oxley Act of 2002 in the future

·

Recession or other economic conditions or regulatory, accounting or tax changes resulting in lower demand for insurance products

·

Sustained decline in overall stock market values negatively affecting the company’s equity portfolio; in particular a sustained decline in the market value of Fifth Third Bancorp shares, a significant equity holding

·

Events that lead to a significant decline in the value of a particular security and impairment of the asset

·

Prolonged low interest rate environment or other factors that limit the company’s ability to generate growth in investment income

·

Adverse outcomes from litigation or administrative proceedings

·

Effect on the insurance industry as a whole, and thus on the company’s business, of the recent actions undertaken by the Attorney General of the State of New York and other regulators against participants in the insurance industry, as well as any increased regulatory oversight that might result

·

Limited flexibility in conducting investment activities if the restrictions imposed by the Investment Company Act of 1940 were to become applicable to the parent company or the application for exemptive relief is not approved

Further, the company’s insurance businesses are subject to the effects of changing social, 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 recent measures affecting corporate financial reporting and governance. The ultimate changes and eventual effects, if any, of these initiatives are uncertain.

Readers are cautioned that the company undertakes no obligation to review or update the forward-looking statements included herein.

6200 S. Gilmore Road, Fairfield, Ohio  45014-5141