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Form 8-K CINCINNATI FINANCIAL For: Apr 30

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May 2, 2016 4:12 PM EDT

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:  April 30, 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 5.07 Submission of Matters to a Vote of Security Holders
Item 7.01 Regulation FD Disclosure
On May 2, 2016, Cincinnati Financial Corporation issued the attached news release “Cincinnati Financial Corporation Holds Shareholders' and Directors' Meetings.” The news release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. On May 2, 2016, Cincinnati Financial Corporation issued the attached news release “Cincinnati Financial Corporation Declares Regular Quarterly Cash Dividend.” The news release is furnished as Exhibit 99.2 hereto and is incorporated herein by reference.
Final voting results on matters properly brought before the annual meeting of shareholders held on April 30, 2016, are set forth below:
Total Outstanding Shares as of Record Date:        164,353,605        
Shares Represented at Meeting:            146,133,602



Proposal 1—Election of Directors
 
For
Withhold
Broker Non-Votes
William F. Bahl
119,485,810
8,863,436
17,784,356
Gregory T. Bier
127,329,159
1,020,087
17,784,356
Linda W. Clement-Holmes
127,312,570
1,036,676
17,784,356
Dirk J. Debbink
127,810,368
538,878
17,784,356
Steven J. Johnston
127,072,600
1,276,646
17,784,356
Kenneth C. Lichtendahl
119,506,373
8,842,873
17,784,356
W. Rodney McMullen
124,269,602
4,079,644
17,784,356
David P. Osborn
127,849,228
500,018
17,784,356
Gretchen W. Price
126,486,786
1,862,460
17,784,356
John J. Schiff, Jr.
118,768,279
9,580,967
17,784,356
Thomas R. Schiff
118,435,176
9,914,070
17,784,356
Douglas S. Skidmore
119,568,049
8,781,197
17,784,356
Kenneth W. Stecher
118,749,621
9,599,625
17,784,356
John F. Steele, Jr.
120,009,775
8,339,471
17,784,356
Larry R. Webb
119,578,086
8,771,160
17,784,356

Proposal 2—Adopt Majority Voting Standard for Uncontested Director Elections
For
Against
Abstain
Broker Non-Votes
127,730,900
362,331
256,008
17,784,363

Proposal 3—Ratify Selection of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for 2016
For
Against
Abstain
Broker Non-Votes
144,543,442
1,409,697
180,463
-0-

Proposal 4 —Approve Cincinnati Financial Corporation 2016 Stock Compensation Plan
For
Against
Abstain
Broker Non-Votes
122,990,550
4,827,312
531,162
17,784,578

Proposal 5 —Approve Compensation for Named Executive Officers
For
Against
Abstain
Broker Non-Votes
125,118,047
2,497,859
733,118
17,784,578


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 99.1– News release dated May 2, 2016, titled “Cincinnati Financial Corporation Holds Shareholders' and Directors' Meetings”
Exhibit 99.2– News release dated May 2, 2016, 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:  May 2, 2016
/s/Michael J. Sewell
 
Michael J. Sewell, CPA
 
Chief Financial Officer, Senior Vice President and Treasurer
 
 




 
The Cincinnati Insurance Company n The Cincinnati Indemnity Company
The Cincinnati Casualty Company n The Cincinnati Specialty Underwriters Insurance Company
The Cincinnati Life Insurance Company n CFC Investment Company n CSU Producer Resources Inc.

Investor Contact: Dennis E. McDaniel, 513-870-2768
Media Contact: Betsy E. Ertel, 513-603-5323

Cincinnati Financial Corporation Holds Shareholders' and Directors' Meetings

Cincinnati, May 2, 2016 - Cincinnati Financial Corporation (Nasdaq: CINF) today announced that based on preliminary voting results at the company’s annual meeting on April 30, 2016, shareholders elected all directors for one‑year terms to the 15-member board. Shareholders also approved the amendment to the company’s Amended Articles of Incorporation to add majority voting standards for uncontested director elections; ratified the selection of Deloitte & Touche LLP as independent registered public accounting firm for 2016; approved the CFC Stock Compensation Plan of 2016; and approved a nonbinding resolution to approve the compensation for the company’s named executive officers.

Kenneth W. Stecher, chairman of the board, commented: “We thank shareholders for approving our proposals, our selection of Deloitte & Touche and our nominees to the board. Our directors leverage their experiences from differing business backgrounds to guide long-term strategic plans for Cincinnati Financial Corporation and to increase our long-term return to shareholders.”

Directors elected to the board for terms of one year are:
•
William F. Bahl, CFA, CIC, chairman of Bahl & Gaynor Investment Counsel Inc. and the independent lead director of Cincinnati Financial Corporation
•
Gregory T. Bier, CPA, managing partner (retired) of Deloitte LLP
•
Linda W. Clement-Holmes, chief information officer, The Procter & Gamble Company
•
Dirk J. Debbink, chairman and chief executive officer of MSI General Corporation
•
Steven J. Johnston, FCAS, MAAA, CFA, CERA, president and chief executive officer of Cincinnati Financial Corporation
•
Kenneth C. Lichtendahl, director of development and sales of Heliosphere Designs LLC
•
W. Rodney McMullen, chairman and chief executive officer of The Kroger Co.
•
David P. Osborn, CFA, president of Osborn Rohs Williams & Donohoe LLC
•
Gretchen W. Price, executive vice president, chief financial and administrative officer of Arbonne International LLC
•
John J. Schiff, Jr., CPCU, former chairman, president and chief executive officer of Cincinnati Financial Corporation
•
Thomas R. Schiff, chairman and chief executive officer of John J. & Thomas R. Schiff & Co. Inc.
•
Douglas S. Skidmore, chief executive officer of Skidmore Sales & Distributing Company Inc.
•
Kenneth W. Stecher, chairman of the board of Cincinnati Financial Corporation
•
John F. Steele, Jr., chairman and chief executive officer of Hilltop Basic Resources Inc.
•
Larry R. Webb, CPCU, president of Webb Insurance Agency Inc.

The board also met on April 30 and announced committee service for the coming year, in line with the independence requirements of applicable law and the listing standards of Nasdaq:
•
Audit - Gretchen W. Price (chairperson), William F. Bahl, Gregory T. Bier, Linda W. Clement-Holmes, Dirk J. Debbink, Kenneth C. Lichtendahl, David P. Osborn, Douglas S. Skidmore and John F. Steele, Jr.
•
Compensation - W. Rodney McMullen (chairperson), William F. Bahl, Gregory T. Bier, Dirk J. Debbink and Gretchen W. Price
•
Executive - Steven J. Johnston (chairperson), William F. Bahl, W. Rodney McMullen, Kenneth W. Stecher, John F. Steele, Jr. and Larry R. Webb
•
Investment - Kenneth W. Stecher (chairperson), William F. Bahl, Gregory T. Bier, Steven J. Johnston, W. Rodney McMullen, David P. Osborne, John J. Schiff, Jr., Thomas R. Schiff and Larry R. Webb; Richard M. Burridge, CFA, continues to serve as committee adviser
•
Nominating - William F. Bahl (chairman), Linda W. Clement-Holmes, Kenneth C. Lichtendahl, Gretchen W. Price and Douglas S. Skidmore





About Cincinnati Financial
Cincinnati Financial Corporation offers business, home and auto insurance, our main business, through The Cincinnati Insurance Company and its two standard market property casualty companies. The same local independent insurance agencies that market those policies may offer products of our other subsidiaries, including life and disability income insurance, fixed annuities and surplus lines property and casualty insurance. For additional information about the company, please visit cinfin.com.

Mailing Address:                            Street Address:
P.O. Box 145496                                6200 South Gilmore Road
Cincinnati, Ohio 45250-5496                        Fairfield, Ohio 45014-5141

Safe Harbor
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 2015 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 26.

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:
◦
Significant or prolonged decline in the fair value of a particular security or group of securities and impairment of the asset(s)
◦
Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities
◦
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:
◦
Downgrades of the company’s financial strength ratings
◦
Concerns that doing business with the company is too difficult
◦
Perceptions that the company’s level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace




◦
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:
◦
Impose new obligations on us that increase our expenses or change the assumptions underlying our critical accounting estimates
◦
Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations
◦
Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business
◦
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
◦
Increase our provision for federal income taxes due to changes in tax law
◦
Increase our other expenses
◦
Limit our ability to set fair, adequate and reasonable rates
◦
Place us at a disadvantage in the marketplace
◦
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.
***






 
The Cincinnati Insurance Company n The Cincinnati Indemnity Company
The Cincinnati Casualty Company n The Cincinnati Specialty Underwriters Insurance Company
The Cincinnati Life Insurance Company n CFC Investment Company n CSU Producer Resources Inc.


Investor Contact: Dennis E. McDaniel, 513-870-2768
Media Contact: Betsy E. Ertel, 513-603-5323

Cincinnati Financial Corporation Declares Regular Quarterly Cash Dividend

Cincinnati, May 2, 2016 - Cincinnati Financial Corporation (Nasdaq: CINF) announced that, at its regular meeting on April 30, 2016, the board of directors declared a 48-cents-per-share regular quarterly cash dividend. The dividend is payable July 15, 2016, to shareholders of record as of June 22, 2016.

Steven J. Johnston, president and chief executive officer, commented, “Cincinnati Financial has reported several consecutive quarters of strong operating performance. The company remains well positioned to reward shareholders in the near term and long term, in large part due to the efforts of our associates and the outstanding independent insurance agents who offer Cincinnati products. The board continues to favor regular dividends as the primary means of returning capital to shareholders. It also intends to maintain a prudent amount of capital to support future growth of insurance operations, as the company aims to increase shareholder value over time.”

About Cincinnati Financial
Cincinnati Financial Corporation offers business, home and auto insurance, our main business, through The Cincinnati Insurance Company and its two standard market property casualty companies. The same local independent insurance agencies that market those policies may offer products of our other subsidiaries, including life and disability income insurance, fixed annuities and surplus lines property and casualty insurance. For additional information about the company, please visit cinfin.com.

Mailing Address:                            Street Address:
P.O. Box 145496                                6200 South Gilmore Road
Cincinnati, Ohio 45250-5496                    Fairfield, Ohio 45014-5141

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 2015 Annual Report on Form 10-K, Item 1A, Risk Factors, Page 26.
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:
◦
Significant or prolonged decline in the fair value of a particular security or group of securities and impairment of the asset(s)
◦
Significant decline in investment income due to reduced or eliminated dividend payouts from a particular security or group of securities
◦
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:
◦
Downgrades of the company’s financial strength ratings
◦
Concerns that doing business with the company is too difficult
◦
Perceptions that the company’s level of service, particularly claims service, is no longer a distinguishing characteristic in the marketplace
◦
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:
◦
Impose new obligations on us that increase our expenses or change the assumptions underlying our critical accounting estimates
◦
Place the insurance industry under greater regulatory scrutiny or result in new statutes, rules and regulations
◦
Restrict our ability to exit or reduce writings of unprofitable coverages or lines of business
◦
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
◦
Increase our provision for federal income taxes due to changes in tax law
◦
Increase our other expenses
◦
Limit our ability to set fair, adequate and reasonable rates
◦
Place us at a disadvantage in the marketplace
◦
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.
* * *




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