The Court of Appeals for the Fourth Circuit recently upheld a defense judgment in a 401(k) employer stock case following a bench trial on breach of fiduciary claims. The appellate court's analysis of the Eastern District of Virginia's 58-page opinion presents a roadmap for how plan sponsors and fiduciaries should deal with employer stock in defined contribution plans. The Fourth Circuit's affirmance of the judgment in favor of the employer embraces many of the arguments put forth by defendants in seeking dismissal of similar 401(k) "stock-drop" cases: Congress's preference for employee investments in employer stock in defined contribution plans; the exemption of employer stock funds from the duty of prudence to the extent it requires diversification; evaluation of the prudence of fiduciary conduct without regard to hindsight or results; and that a mere decline in the price of a plan investment -- even a big drop -- does not implicate a breach of fiduciary duty.