CINCINNATI FINANCIAL CORPORATION RESTRICTED STOCK UNIT AGREEMENT PERFORMANCE- BASED
Exhibit 10.1
[RECIPIENT NAME]
[RECIPIENT ADDRESS]
[RECIPIENT ADDRESS]
As of [Award Date], the Fair Market Value of the shares underlying this award was $ .
Cincinnati Financial Corporation (the “Company”) hereby grants to the associate
identified below (the “Participant”) a Restricted Stock Unit Award (the “Award”) under the
Company’s 2006 Stock Compensation Plan (the “Plan”) with respect to the number of Restricted Stock
Units (the “Units”) specified under the “Award Information” section below, all in accordance with
and subject to the provisions set forth in Part II — Terms and Conditions.
PART I. AWARD INFORMATION:
Participant Name:
Number of Units Awarded:
Award Date: , 20__
Vesting Criteria (when Units granted in the Award vest and shares are issued to the Participant):
| Number of Shares | Vesting Date and Performance Target | |
shs.
|
On ___, 20___ if the sum of “operating income” for the three calendar years ending December 31, 20___ equals or exceeds ___ percent of “operating income” for the calendar year ending December 31, 20___, the last completed calendar year prior to the Award Date. | |
| For purposes of this agreement, the calculation for “operating income,” shall not include the effects of capital gains and losses, accounting changes, and losses attributable to catastrophes which are assigned catastrophe numbers. |
Beneficiary
Designation (Optional — see Part II, Section 8):
THIS AWARD IS SUBJECT TO FORFEITURE AS PROVIDED IN THIS RESTRICTED STOCK UNIT AGREEMENT AND THE
PLAN.
By accepting this Award, the Participant acknowledges the receipt of a copy of this Restricted
Stock Unit Agreement (including Part II — Terms and Conditions) and a copy of the Prospectus and
agrees to be bound by all the terms and provisions contained in them and in the Plan.
IN WITNESS WHEREOF, this Restricted Stock Unit Agreement has been duly executed as of the
Award Date specified above.
| CINCINNATI FINANCIAL CORPORATION | ||||||
| By: | ||||||
ACCEPTED: |
||||||
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PART II. TERMS AND CONDITIONS
1. Restricted Stock Units. Each Unit represents a hypothetical share of the Company’s Common
Stock (the “Shares”), and each Unit will at all times be equal in value to one Share. The Units
will be credited to the Participant in an account established for the Participant and maintained by
the Company’s stock transfer department. If and when Units vest as provided below, Shares in an
amount equal to the number of vested Units will automatically be issued to the Participant and will
be evidenced by a stock certificate or a book entry account maintained by the Company’s stock
transfer department for the Common Stock.
2. Restrictions. Subject to Sections 3 and 4 below, the restrictions on the Units specified in
Part I — Award Information (the “Award Information”) shall lapse and such Units shall vest on the
vesting dates set forth in the Award Information (the “Vesting Date”), provided that: (a) the
Performance Target has been met; and (b) the Participant remains an employee of the Company (or a
subsidiary of the Company) during the entire period ending on and including the Vesting Date (the
“Restriction Period”) commencing on the Award Date set forth in the Award Information and ending on
the Vesting Date. Upon vesting, one Share shall be issued with respect to each vested Unit
3. Participant Death, Disability or Retirement During Restriction Period. In the event of the
termination of the Participant’s employment with the Company (and with all subsidiaries of the
Company) prior to a Vesting Date due to (a) death or Disability, the attainment of the Performance
Target is waived, all restrictions on the Units shall lapse, and all of the Units shall become
fully vested on the date of death or Disability, or (b) the Participant reaching eligibility for
Normal Retirement, restriction 2(b) concerning continuous employment during the Restriction Period
is waived and shall lapse and the Units shall remain subject to all other vesting requirements and
restrictions including the Vesting Date. Upon vesting, one Share shall be issued with respect to
each such vested Unit.
4. Other Termination of Employment During Restriction Period. If the Participant’s employment
with the Company (and with all subsidiaries of the Company) is terminated for any reason other than
death, Disability or Normal Retirement prior to the end of the Restriction Period, the Participant
shall forfeit all rights to any Units (and to the related Shares) as to which the Vesting Date has
not yet occurred. Notwithstanding the foregoing, the Compensation Committee of the Board of
Directors of the Company may, in its sole discretion, waive the restrictions on, and the vesting
requirements for, the Units.
5. Shareholder Rights. The Participant shall not have the right to vote any Shares or to
receive any cash dividends payable with respect to any Shares, or otherwise have any rights as a
shareholder with respect to any Shares, unless and until the Shares have actually been issued to
the Participant hereunder upon the vesting of Units as provided in this Agreement.
6. Transfer Restrictions. This Award and the Units (until they vest pursuant to the terms
hereof and Shares are issued with respect thereto) are non-transferable and may not be assigned,
hypothecated or otherwise pledged, except by will or the laws of descent and distribution, and
shall not be subject to execution, attachment or similar process. Upon any attempt to effect any
such disposition, or upon the levy of any such process, the Award shall immediately become null and
void and the Units shall be forfeited.
7. Withholding Taxes. The Company is authorized to satisfy the actual minimum statutory
withholding taxes arising from the vesting of this Award, by deducting the number of Shares having
an aggregate value equal to the amount of withholding taxes due from the total number of Shares
that would otherwise be issuable upon any Units vesting or otherwise becoming subject to current
taxation. Shares deducted from this Award in satisfaction of actual minimum withholding tax
requirements shall be valued at the Fair Market Value of the Shares on the date as of which the
amount giving rise to the withholding requirement first became includible in the gross income of
the Participant under applicable tax laws.
8. Death of Participant. If any of the Units shall vest upon the death of the Participant, the
Shares issued as a result of such vesting shall be registered in the name of the estate of the
Participant except that, if the Participant has designated a beneficiary where indicated in the
Award Information, the Shares shall be registered in the name of the designated beneficiary.
9. Other Terms and Provisions. The terms and provisions of the Plan (a copy of which will be
furnished to the Participant upon written request) are incorporated herein by reference. To the
extent any provision
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of this Award is inconsistent or in conflict with any term or provision of the Plan, the Plan
shall govern. For purposes of this Agreement, (a) the term “Disability” means permanent and total
disability as determined under procedures established by the Company from time to time, and (b) the
term “Normal Retirement” means retirement from active employment with at least 35 years of
continuous service with the Company or its subsidiaries or otherwise under a retirement plan of the
Company or any subsidiary or under an employment contract with any of them on or after the date
specified as the normal retirement age in the pension plan or employment contract, if any, under
which the Participant is at that time accruing retirement benefits for his or her current service
(or, in the absence of a specified normal retirement age, the age at which retirement benefits
under such plan or contract become payable without reduction for early commencement and without any
requirement of a particular period of prior service). In any case in which (i) the meaning of
“Normal Retirement” is uncertain under the definition contained in the prior sentence or (ii) a
termination of employment at or after age 65 would not otherwise constitute “Normal Retirement,” a
termination of the Participant’s employment shall be treated as a “Normal Retirement” under such
circumstances as the Committee, in its sole discretion, deems equivalent to retirement. In any
case in which the existence of a “Disability” is uncertain under the applicable definition and
procedures hereunder, a final and binding determination shall be made by the Committee in its sole
discretion.
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