Apogee v. State Street Litigation

January 26, 2009

Faegre & Benson LLP represents Apogee Enterprises, Inc. in a lawsuit entitled Apogee Enterprises, Inc., on behalf of the Apogee Enterprises, Inc. 401(k) Retirement Plan, Plaintiff, vs. State Street Bank and Trust Company; and ING Institutional Plan Services LLC, formerly known as CitiStreet LLC, Defendants, which is venued in the United States District Court for the District of Minnesota. In the lawsuit, Apogee seeks to recover certain losses the Apogee 401(k) Plan suffered in 2007. Those losses resulted from a substantial drop in value of the assets of the Daily Bond Market Fund managed by State Street. The Fund was an investment option under the Plan until August 30, 2007. A copy of the Complaint which Apogee filed in the lawsuit is attached here.

March 3, 2010

On March 3, 2010, Apogee Enterprises, Inc., received on behalf of the 401(k) Retirement Plan a payout from a Fair Fund that State Street Bank and Trust Company ("State Street") has set up as a result of a settlement between State Street and the Securities and Exchange Commission ("SEC"). The payout Apogee received from the Fair Fund is $3,486,351.33. Apogee has offset against this amount the attorneys' fees and costs it has incurred in its ongoing litigation against State Street and CitiStreet, which fees and costs total $909,408. The remaining $2,576,943.33 is being allocated among Apogee 401(k) Retirement Plan participants' individual accounts in proportion to the accounts' losses resulting from the Fund's drop in value (as required by the federal law governing the Plan, the Employee Retirement Income Security Act ("ERISA")). Further details regarding SEC Fair Fund and the plan of allocation are set out in the Notice to Participants that Apogee sent to affected participants, and in Participant Q&As sent by Apogee to affected plan participants.

Please note that this Fair Fund distribution does not impact Apogee's ongoing claims against State Street and CitiStreet to recover certain losses the 401(k) Plan suffered in 2007, other than to reduce the amount of damages Apogee may seek under those claims. Apogee estimates that after reducing its damages in the amount of its Fair Fund payout, Apogee has approximately another $1.5-2 million in investment losses that it will continue to pursue. In addition, Apogee intends to seek recovery of attorneys' fees expended, as permitted under federal statute. CitiStreet has challenged Apogee's claims, and has filed a motion to dismiss Apogee's complaint against it. This motion has been fully briefed and is before the court, awaiting decision. Copies of the briefs submitted to the court regarding this motion to dismiss, redacted for confidentiality, are attached here: Apogee memo, ING motion to dismiss and ING's reply brief. Apogee anticipates that once the court rules on CitiStreet's motion to dismiss, discovery will proceed and the parties will move to immediately schedule depositions.