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                                                                   EXHIBIT 10.12

                        CINCINNATI FINANCIAL CORPORATION

                                 P.O. BOX 145496

                            CINCINNATI, OH 45250-5496
                                 (513) 870-2000
                            STOCK OPTION PLAN NO. VII

                             STOCK OPTION AGREEMENT
                            FOR NON-QUALIFIED OPTIONS

THIS AGREEMENT, made this [DATE] day of [MONTH], [YEAR], by and between
CINCINNATI FINANCIAL CORPORATION, an Ohio Corporation, 6200 South Gilmore Road,
Fairfield, Ohio 45014 (hereafter called "CFC") and [Optionee_Name], an employee
of CFC or one of its affiliates (hereinafter called the "Employee") residing at:
[OPTIONEE_ADDRESS], [OPTIONEE_CITY], [OPTIONEE_STATE] [OPTIONEE_ZIP]

WITNESSETH:

WHEREAS, the Board of Directors of CFC is of the opinion that the interests of
CFC will be advanced by enabling key employees of CFC and its affiliates, upon
whose judgment, initiative and efforts CFC is largely dependent for the
successful conduct of its business, to acquire shares or additional shares of
CFC's stock; and

WHEREAS, the Board of Directors of CFC has established Stock Option Plan Number
VII for employees of CFC and its affiliated companies;

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants
hereinafter set forth, and of other good and valuable consideration, CFC and
Employee enter into this Stock Option Agreement (hereinafter called the
"Option") as follows:

      1.    CFC hereby grants to the Employee the right and option to purchase
            up to [OPTIONS_GRANTED] shares of the presently authorized but
            unissued common stock of CFC at the purchase price of
            $[OPTION_PRICE] per share. This is a Non-Qualified option grant and
            subject to applicable payroll taxes at the time of exercise. No
            partial exercise of this Option may be for less than 25 whole shares
            or the number of shares remaining subject to the Option, whichever
            is smaller.

      2.    Except in cases of retirement or death of Employee, this Option
            shall be exercisable only in accordance with the following schedule.

            (1)   After the expiration of one year of continuous employment with
                  CFC or an affiliate of CFC immediately following the date of
                  grant, this Option shall be exercisable to the extent of
                  one-third of the number of shares originally subject hereto;

            (2)   After the expiration of two years of continuous employment
                  with CFC or an affiliate of CFC immediately following the date
                  of grant, this Option shall be exercisable to the extent of
                  two-thirds of the number of shares originally subject hereto,
                  less the number of shares previously purchased pursuant
                  hereto; and

            (3)   After the expiration of three years of continuous employment
                  with CFC or an affiliate of CFC following the date of grant,
                  this Option shall be exercisable in full.

Upon termination of employment of the Employee prior to the effective date of
exercise of this Option, the unexercised portion hereof shall terminate unless
such termination of employment is due to (i) retirement with the approval of the
Board of Directors of CFC for disability, (ii) retirement on the attainment of
age 65 or 35 years of service, whichever occurs first, or (iii) death of the
employee. In each of those events, any unmatured installments shall be
accelerated and the Option shall be exercisable in full. In the cases of
retirement due to disability, attainment of age 65 or having completed 35 years
of service, the period within which CFC must receive the notice of exercise and
payment shall be extended to whichever date occurs earlier, five (5) years after
the date of retirement of the employee or ten (10) years from the date of this
Option. In the case of the death of the Employee, whether before or after
retirement, the time within which CFC must receive the notice of exercise and
payment shall be six (6) months after the date of death, but in no case later
than the earlier to occur of five (5) years after the date of retirement or ten
(10) years from the date of this Option.

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3.    Except as otherwise provided in paragraph 2 hereof, this Option can be
      exercised only if the Employee is in the employment of CFC or one of its
      affiliates on the effective date of exercise.

4.    In order to exercise all or any part of this Option, the Employee or other
      person having the right to exercise this Option shall give written notice
      to CFC at its principal place of business. The notice shall indicate the
      number of whole shares purchased and shall be accompanied by payment in
      full for the number of shares to be purchased. The payment may be cash or
      through transfer of free and clear shares of CFC stock, previously
      acquired by the Employee, valued at the current market value on the date
      of transfer, or by a combination of both cash and such shares. Exercise of
      the Non-Qualified Option shall be effective on the date of receipt by CFC
      of the written notice and payment (the "effective date of exercise"). The
      effective date of the exercise of this Option must be within ten (10)
      years from the date hereof.

5.    In order to pay all federal and state taxes to be withheld or collected
      upon exercise of this Option, the Employee or other person having the
      right to exercise this Option may satisfy all or any portion of such tax
      obligation by delivering to CFC, free and clear shares of CFC which are
      acquired through exercise of this Option, valued at the current market
      value on the date of transfer, but only to the extent of the minimum
      amount required to be withheld under applicable laws or regulations. This
      election, if any, must be made on or before the date that the amount of
      tax to be withheld is determined.

6.    Neither the Employee nor the legal representative, legatee or distributee
      of the Employee shall be or be deemed the holder of any shares subject to
      this Option, unless and until the exercise of the Option has become
      effective and a certificate has been issued by CFC for the shares so
      purchased.

7.    The rights and privileges conferred by this Option shall not be
      transferred except by Will or by the laws of descent and distribution, in
      which event the notice of the exercise required under Section 4 must be
      properly executed by the deceased Employee's legal representative or by
      the person who acquired the right to exercise the Option by reason of the
      death of the Employee. During the lifetime of the Employee, the Option may
      be exercised only by the Employee.

8.    In the event of a merger, consolidation, reorganization, recapitalization,
      stock dividend, or other change in corporate structure or capitalization
      affecting CFC's stock, such appropriate adjustment shall be made in the
      number of shares to which this Option applies and also in the Option price
      of said shares as may be determined by the Compensation Committee of the
      Board of Directors.

9.    This option shall not be exercisable except for shares the sell of which
      by CFC complies with applicable securities laws at the time of sale.

10.   This Agreement shall be binding upon and inure to the benefit of the
      parties hereto and any successors to the business of CFC, but neither this
      Option nor any rights hereunder shall be assignable by the Employee. The
      Employee agrees by acceptance of this option to be bound by the terms and
      restrictions of the Stock Option Plan VII.

Dated at Fairfield, Ohio                       CINCINNATI FINANCIAL CORPORATION

                                                   By:

                                                     Chairman, President
ATTEST:

Chief Financial Officer
Secretary & Treasurer                             ACCEPTED:

                                                    ___________________________
<PAGE>


                        CINCINNATI FINANCIAL CORPORATION

                                 P.O. BOX 145496

                            CINCINNATI, OH 45250-5496
                                 (513) 870-2000
                            STOCK OPTION PLAN NO. VII

                             STOCK OPTION AGREEMENT
                            FOR INCENTIVE OPTIONS

THIS AGREEMENT, made this [DATE] day of [MONTH], [YEAR], by and between
CINCINNATI FINANCIAL CORPORATION, an Ohio Corporation, 6200 South Gilmore Road,
Fairfield, Ohio 45014 (hereafter called "CFC") and [Optionee_Name], an employee
of CFC or one of its affiliates (hereinafter called the "Employee") residing at:
[OPTIONEE_ADDRESS], [OPTIONEE_CITY], [OPTIONEE_STATE] [OPTIONEE_ZIP]

WITNESSETH:

WHEREAS, the Board of Directors of CFC is of the opinion that the interests of
CFC will be advanced by enabling key employees of CFC and its affiliates, upon
whose judgment, initiative and efforts CFC is largely dependent for the
successful conduct of its business, to acquire shares or additional shares of
CFC's stock; and

WHEREAS, the Board of Directors of CFC has established Stock Option Plan Number
VII for employees of CFC and its affiliated companies;

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants
hereinafter set forth, and of other good and valuable consideration, CFC and
Employee enter into this Stock Option Agreement (hereinafter called the
"Option") as follows:

      1.    CFC hereby grants to the Employee the right and option to purchase
            up to [OPTIONS_GRANTED] shares of the presently authorized but
            unissued common stock of CFC at the purchase price of
            $[OPTION_PRICE] per share.  No partial exercise of this Option may
            be for less than 25 whole shares or the number of shares remaining
            subject to the Option, whichever is smaller.

      2.    Except in cases of retirement or death of Employee, this Option
            shall be exercisable only in accordance with the following schedule.

            (1)   After the expiration of one year of continuous employment with
                  CFC or an affiliate of CFC immediately following the date of
                  grant, this Option shall be exercisable to the extent of
                  one-third of the number of shares originally subject hereto;

            (2)   After the expiration of two years of continuous employment
                  with CFC or an affiliate of CFC immediately following the date
                  of grant, this Option shall be exercisable to the extent of
                  two-thirds of the number of shares originally subject hereto,
                  less the number of shares previously purchased pursuant
                  hereto; and

            (3)   After the expiration of three years of continuous employment
                  with CFC or an affiliate of CFC following the date of grant,
                  this Option shall be exercisable in full.

Upon termination of employment of the Employee prior to the effective date of
exercise of this Option, the unexercised portion hereof shall terminate unless
such termination of employment is due to (i) retirement with the approval of the
Board of Directors of CFC for disability, (ii) retirement on the attainment of
age 65 or 35 years of service, whichever occurs first, or (iii) death of the
employee. In each of those events, any unmatured installments shall be
accelerated and the Option shall be exercisable in full. In the cases of
retirement due to disability, attainment of age 65 or having completed 35 years
of service, CFC must receive notice of exercise and payment within ninety (90)
days after the date of termination of employment. In the event of death, CFC
must receive the notice of exercise and payment within six (6) months after the
date of death.
<PAGE>


3.    Except as otherwise provided in paragraph 2 hereof, this Option can be
      exercised only if the Employee is in the employment of CFC or one of its
      affiliates on the effective date of exercise.

4.    In order to exercise all or any part of this Option, the Employee or other
      person having the right to exercise this Option shall give written notice
      to CFC at its principal place of business. The notice shall indicate the
      number of whole shares to be purchased and shall be accompanied by payment
      in full in cash. The exercise of this Option shall be effective upon the
      30th day after receipt by CFC of such written notice and payment
      ("effective date of exercise"), at which time the Employee or the person
      entitled to receive shares issuable upon exercise, shall be issued a
      certificate of stock representing the number of shares purchased. If for
      any reason (such as termination of employment during the 30-day waiting
      period for reasons other than those referred to in Paragraph 2 above), the
      exercise of the Option does not become effective, CFC shall refund only
      the amount paid for the shares. In any event, the effective date of the
      exercise of this Option must be within 10 years from the date of this
      Option.

5.    In order to receive the tax benefits of an Incentive Stock Option, the
      Option must be exercised during employment or within three (3) months
      after termination of employment (for the reason referred to in paragraph
      2 above) as an employee by CFC or one of its subsidiaries. The stock
      purchased pursuant to this Option must be held for a minimum of one (1)
      year from the date of purchase and two (2) years from the date of this
      Option Agreement.

6.    Neither the Employee nor the legal representative, legatee or distributee
      of the Employee shall be or be deemed the holder of any shares subject to
      this Option, unless and until the exercise of the Option has become
      effective and a certificate has been issued by CFC for the shares so
      purchased.

7.    The rights and privileges conferred by this Option shall not be
      transferred except by Will or by the laws of descent and distribution, in
      which event the notice of the exercise required under Section 4 must be
      properly executed by the deceased Employee's legal representative or by
      the person who acquired the right to exercise the Option by reason of the
      death of the Employee. During the lifetime of the Employee, the Option may
      be exercised only by the Employee.

8.    In the event of a merger, consolidation, reorganization, recapitalization,
      stock dividend, or other change in corporate structure or capitalization
      affecting CFC's stock, such appropriate adjustment shall be made in the
      number of shares to which this Option applies and also in the Option price
      of said shares as may be determined by the Compensation Committee of the
      Board of Directors.

9.    This option shall not be exercisable except for shares the sell of which
      by CFC complies with applicable securities laws at the time of sale.

10.   This Agreement shall be binding upon and inure to the benefit of the
      parties hereto and any successors to the business of CFC, but neither this
      Option nor any rights hereunder shall be assignable by the Employee. The
      Employee agrees by acceptance of this option to be bound by the terms and
      restrictions of the Stock Option Plan VII.

Dated at Fairfield, Ohio                       CINCINNATI FINANCIAL CORPORATION

                                                   By:

                                                     Chairman, President
ATTEST:

Chief Financial Officer
Secretary & Treasurer                             ACCEPTED:

                                                    ___________________________