John W. Comrie v. Ipsco, Incorporated, et al

Before EASTERBROOK, Chief Judge, and CUDAHY and ROVNER, Circuit Judges.

In 2005 IPSCO Enterprises, Inc., established a supplemental pension plan for top executives. This plan (the IPSCO Enterprises, Inc. U.S. Supplemental Executive Retirement Plan, which the parties call “the SERP” and we call “the Plan”) offers benefits exceeding those eligible for tax deferral under the Internal Revenue Code. Known colloquially as top- hat plans, such supplemental plans are unfunded (so there is no trust account; benefits come from the employer’s coffers). Feinberg v. RM Acquisition, LLC, No. 10-1890 (7th Cir. Jan. 6, 2011), slip op. 2, describes a similar plan. IPSCO’s Plan had two golden-parachute features. First, any executive whose employment is involuntarily terminated within two years of a change of control is eligible for benefits without regard to a cap that other-wise would apply. Second, the Plan defines “involuntary termination” as any material change in the executive’s “position, reporting relationship, overall responsibilities or authority”. A termination can be “involuntary” under this definition even if the executive quits to take a better offer elsewhere-or quits just to lock in the Plan’s extra benefits.