At employers' insistence, though, an exception was made for so-called top-hat plans.

The draft of the top-hat plan shown to the board included a "bad boy" clause that denied Mr. Aramony benefits if he committed a felony.

In carving out an exemption from the pension law, "Congress assumed that top-hat plan participants would be financially sophisticated enough to negotiate their own 'golden parachutes' in the event of early termination," Judge Broderick wrote in his opinion.