        [Cite as Zalvin v. Ayers, 2020-Ohio-4021.]



                          IN THE COURT OF APPEALS
                 FIRST APPELLATE DISTRICT OF OHIO
                           HAMILTON COUNTY, OHIO


JOEL ZALVIN,                                         :   APPEAL NO. C-190285
                                                         TRIAL NO. A-1804888
    Plaintiff-Appellant,                             :

  vs.                                                :      O P I N I O N.

ANDREA J. AYERS,                                     :

CHERYL K. BEEBE,                                     :

RICHARD R. DEVENUTI,                                 :

JEFFREY H. FOX,                                      :

JOSEPH E. GIBBS,                                     :

                                                     :
JOAN E. HERMAN,
                                                     :
ROBERT E. KNOWLING, JR.,
                                                     :
THOMAS L. MONAHAN, III,
                                                     :
ROBERT L. NELSON,

  and

CONVERGYS CORP.,                                     :

    Defendants-Appellees.                            :



Civil Appeal From: Hamilton County Court of Common Pleas

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: August 10, 2020

The Brualdi Law Firm, P.C., Richard B. Brualdi and John F. Keating, Jr., and Altick
& Corwin Co. L.P.A. and Steven E. Bacon, for Plaintiff-Appellant,

Dinsmore & Shohl LLP and Mark A. Vander Laan, and Pillsbury Winthrop Shaw
Pittman LLP and Bruce A. Ericson, for Defendants-Appellees.
                     OHIO FIRST DISTRICT COURT OF APPEALS



Z A Y A S , Judge.

       {¶1}   Plaintiff-appellant Joel Zalvin appeals from the judgment of the

Hamilton County Court of Common Pleas, which dismissed his second amended

complaint.     Defendants-appellees in this case are Convergys Corporation

(“Convergys”) and nine of its directors (“defendant directors”): Andrea J. Ayers,

Cheryl K. Beebe, Richard R. Devenuti, Jeffrey H. Fox, Joseph E. Gibbs, Joan E.

Herman, Robert E. Knowling, Jr., Thomas L. Monahan, III, and Robert L. Nelson.

Zalvin, on behalf of a class of nominal shareholders, filed a shareholder derivative

class action against Convergys and the defendant directors alleging improprieties in

the sale of Convergys to Synnex Corporation. For the following reasons, we affirm

the trial court’s judgment.

                          I. Facts and Procedural History

       {¶2}   In June 2018, the Cincinnati-based Convergys publicly announced its

decision to merge with Synnex. In August 2018, Convergys and Synnex filed with the

Securities and Exchange Commission (“SEC”) a proxy statement, which was over

300-pages, explaining the merger, and asked their respective shareholders to vote on

it. In September 2018, Zalvin, who owned shares of Convergys’ common stock

continuously since May 2016, sued for breach of fiduciary duty and failure to

disclose. Zalvin alleged that the defendant directors had conflicts of interest in favor

of the transaction and that Convergys’s proxy statement was materially deficient.

Zalvin moved to enjoin the shareholder vote.

       {¶3}   Following a hearing on Zalvin’s motion for a preliminary injunction,

the motion was denied. The sale of Convergys to Synnex closed in early October

2018. For each share they owned, Convergys shareholders received $13.25 cash and

0.1263 shares of Synnex common stock, for a total value of $24.51 at closing.

                                           2
                     OHIO FIRST DISTRICT COURT OF APPEALS

       {¶4}   In November 2018, Zalvin filed his second amended complaint, adding

additional claims regarding the defendant directors’ alleged self-dealing and

omissions from the proxy statement. Zalvin also complained that the shareholders

were deprived of over $2 per share (as they received $24.51 per share rather than

$26.66, the high closing price of Convergys stock in 2017), or $600 million

collectively, because the defendant directors failed to include a floating exchange

ratio in the sale agreement. Zalvin asked the court to, among other things, rescind

the sale, award compensatory damages, and order the defendant directors to

disgorge the sums paid to them as a result of the sale.

       {¶5}   Convergys and the defendant directors (collectively, “appellees”) filed

a motion to dismiss Zalvin’s second amended complaint pursuant to Civ.R. 12(B)(1)

and 12(B)(6). Appellees argued that the court did not have jurisdiction because

Zalvin had failed to bring a claim under R.C. 1701.85, Ohio’s appraisal statute, which

appellees contended provided the sole relief available to Zalvin for his complaint over

an “inadequate price.” Appellees argued that Zalvin did not state a claim upon which

relief can be granted because the conclusions in Zalvin’s second amended complaint

were unsupported. And, appellees argued that Zalvin had not properly pleaded all of

the requirements of Civ.R. 23.1 (governing shareholder derivative actions) because

he did not adequately establish demand futility—a requirement that a shareholder

exhaust his intra-corporate remedies before filing a derivative suit.       See In re

Lubrizol Shareholders Litigation, 2017-Ohio-622, 79 N.E.3d 579, ¶ 33 (11th Dist.).

       {¶6}   In April 2019, the trial court granted appellees’ motion to dismiss on

all three bases put forth in the motion.         Zalvin now appeals, asserting two

assignments of error.




                                           3
                       OHIO FIRST DISTRICT COURT OF APPEALS

                                       II. Analysis

       {¶7}     In his first assignment of error, Zalvin argues that the trial court erred

in dismissing the complaint with prejudice. Zalvin contends that the trial court’s

ruling was a decision otherwise than on the merits and thus the trial court should

have indicated that it was a dismissal without prejudice. In his second assignment of

error, Zalvin argues that the trial court erred in granting appellees’ motion to dismiss

pursuant to Civ.R. 12(B)(1) and 12(B)(6). We address Zalvin’s assignments of error

out of order.

                       Ohio’s Appraisal Statute – R.C. 1701.85

       {¶8}     We first consider the trial court’s dismissal of Zalvin’s complaint for

lack of subject-matter jurisdiction pursuant to Civ.R. 12(B)(1).         The trial court

concluded that Zalvin did not act in accordance with Ohio’s appraisal statute, R.C.

1701.85, and thus the court was without jurisdiction over the subject matter.

Appellees maintain, and the trial court agreed, that Zalvin’s complaint was in essence

a challenge to the value paid for his shares in the cash-out merger and was merely

disguised as a complaint for breach of fiduciary duty and failure to disclose. Such an

action must be brought under the appraisal statute. See Stepak v. Schey, 51 Ohio

St.3d 8, 553 N.E.2d 1072, 1075 (1990).

       {¶9}     “R.C. 1701.85, is designed to provide compensation for those

shareholders who dissented from the merger.” Stepak at 11, citing Armstrong v.

Marathon Oil Co., 32 Ohio St.3d 397, 513 N.E.2d 776 (1987). “It provides for the

payment of fair cash value to a shareholder for his or her shares as of the day prior to

the vote of the shareholders.” Id. “[A]n action for breach of fiduciary duty may be

maintained notwithstanding R.C. 1701.85; however, such action may not seek to

overturn or modify the fair cash value determined in a cash-out merger.” Stepak at

10. “A cause of action outside of the appraisal statute will not be recognized ‘where

                                            4
                        OHIO FIRST DISTRICT COURT OF APPEALS

the shareholder’s objection is essentially a complaint regarding the price which he

received for his shares.’ ” Smith v. Robbins & Myers, Inc., 969 F.Supp.2d 850, 861-

862 (S.D.Ohio 2013), quoting Stepak at 11. The plaintiff in Stepak “did not allege

that his shares were undervalued—rather he alleged that he should have received

more money for his shares—thus ‘[s]uch action, merely asking for more money, per

Armstrong must be brought under the appraisal statute.’ ” Smith at 862, quoting

Stepak at 11.

       {¶10} Here, Zalvin alleges that the shares were in fact undervalued. The

direct and derivative breach-of-fiduciary-duty claims challenge the defendant

directors’ fair dealing and the substantive fairness of the merger process. The second

amended complaint alleges that defendant directors breached their fiduciary duties

by approving the merger in order to secure personal benefits unrelated to the merits

of the transaction. Additionally, the second amended complaint alleges that the

defendant directors secured the unfair merger by soliciting shareholder votes with a

misleading and materially deficient proxy statement. See Smith at 862, citing Terry

v. Carney, 6th Dist. Ottawa No. OT-94-054, 1995 WL 763971, *6.

       {¶11} Accordingly, considering the second amended complaint in the light

most favorable to Zalvin, we find that his allegations are not simply disguised

attempts to modify the cash value received, and therefore the appraisal statute does

not bar this action.1

                         Dismissal for Failure to State a Claim

       {¶12} We next consider the trial court’s decision to dismiss Zalvin’s second




1 While we acknowledge that the second amended complaint repeatedly refers to complaints of a
lower than implied share price and that Convergys shareholders received $2 less per share from
the merger, Zalvin also alleges claims that are not based on the cash value of the merger.

                                              5
                     OHIO FIRST DISTRICT COURT OF APPEALS

amended complaint for the failure to state a claim upon which relief can be granted

pursuant to Civ.R. 12(B)(6).

       {¶13} The standard of review applied to dismissals for failure to state a claim

is de novo. Corrado v. Lowe, 11th Dist. Geauga No. 2014-G-3239, 2015-Ohio-1993, ¶

22. When considering a Civ.R. 12(B)(6) dismissal, the court must presume that all

factual allegations of the complaint are true, and it must make all reasonable

inferences in favor of the nonmoving party. It must then appear beyond doubt that

the nonmoving party can prove no set of facts entitling it to the requested relief in

the complaint.   Avery v. Rossford, Ohio Transp. Improvement Dist., 145 Ohio

App.3d 155, 164, 762 N.E.2d 388 (6th Dist.2001), citing Mitchell v. Lawson Milk Co.,

40 Ohio St.3d 190, 192, 532 N.E.2d 753 (1988). However, the court is not required to

presume the truth of conclusions in the complaint unsupported by factual

allegations. Guess v. Wilkinson, 123 Ohio App.3d 430, 434, 704 N.E.2d 328 (10th

Dist.1997); Swint v. Auld, 1st Dist. Hamilton No. C-080067, 2009-Ohio-6799, ¶ 3;

Maternal Grandmother v. Hamilton Cty. Dept. of Job & Family Services, 1st Dist.

Hamilton No. C-180662, 2020-Ohio-1580, ¶ 21. Additionally, the court may not rely

upon evidence outside of the complaint when considering a Civ.R. 12(B)(6) motion,

but “[m]aterial incorporated in a complaint may be considered part of the complaint

for purposes of determining a Civ.R. 12(B)(6) motion to dismiss.” State ex rel.

Crabtree v. Franklin Cty. Bd. of Health, 77 Ohio St.3d 247, 249, 673 N.E.2d 1281

(1997), fn. 1, citing State ex rel. Edwards v. Toledo City School Dist. Bd. of Edn., 72

Ohio St.3d 106, 109, 647 N.E.2d 799 (1995); see Henkel v. Aschinger, 167 Ohio

Misc.2d 4, 2012-Ohio-423, 962 N.E.2d 395, ¶ 8 (C.P.) (considering proxy statement




                                          6
                         OHIO FIRST DISTRICT COURT OF APPEALS

referred to in plaintiff’s complaint and publicly filed with the SEC in ruling on a

motion to dismiss).2

        {¶14} Zalvin’s second amended complaint alleges four causes of action: two

direct claims against the defendant directors individually for breach of fiduciary duty

(Count I) and failure to disclose (Count II), and two derivative claims on behalf of

Convergys against the defendant directors for breach of fiduciary duty (Count III)

and failure to disclose (Count IV). We will address Counts I and III together and

Counts II and IV together, as the same operative facts apply to these respective

causes of action.

                        Counts I and III – Breach of Fiduciary Duty

        {¶15} Directors of a corporation owe a fiduciary duty to the corporation and

to the corporation’s shareholders. R.C. 1701.59(E).                 R.C. 1701.59(B) defines a

director’s fiduciary duties as follows:

        A director shall perform his duties as a director, including his duties as

        a member of any committee of the directors upon which he may serve,

        in good faith, in a manner he reasonably believes to be in or not

        opposed to the best interests of the corporation, and with the care that

        an ordinarily prudent person in a like position would use under similar

        circumstances.



2 The allegations in Zalvin’s second amended complaint regarding the defendant directors’ actions
explicitly refer to Convergys’s proxy statement and characterizes the contents of that document.
Elsewhere in the complaint, Zalvin directly quotes from the proxy statement. Accordingly, the
court takes judicial notice of that public disclosure, which the defendants filed with their motion
to dismiss. See In re Alloy, Inc., No. 5626-VCP, 2011 WL 4863716, *3 (Del.Ch. Oct. 13, 2011)
(taking judicial notice of a publicly-disclosed preliminary proxy statement when ruling on
motions to dismiss plaintiffs’ complaint); In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d
162, 169 (Del.2006) (“When a complaint partially quotes or characterizes what a disclosure
document says, a defendant is entitled to show the trial court the actual language or the complete
context in which it was used [on a motion to dismiss].”); Solomon v. Armstrong, 747 A.2d 1098,
1122 (Del.Ch.1999), fn. 72 (taking judicial notice of facts publicly available in SEC disclosures and
documents incorporated by reference into the complaint when considering a motion to dismiss).


                                                 7
                      OHIO FIRST DISTRICT COURT OF APPEALS

“The fiduciary relationship between a corporation’s directors and the corporation

and its shareholders has also been described to include ‘a duty of good faith, a duty of

loyalty, a duty to refrain from self-dealing and a duty to disclosure.’ ” Thompson v.

Cent. Ohio Cellular, Inc., 93 Ohio App.3d 530, 540-541, 639 N.E.2d 462 (8th

Dist.1994), quoting Wing Leasing, Inc. v. M & B Aviation, Inc., 44 Ohio App.3d 178,

181, 542 N.E.2d 671 (1988).

       {¶16} “In shareholder actions alleging the breach of fiduciary duties, ‘the

general rule * * * [is] that directors carry the burden of showing that a transaction is

fair and in the best interests of shareholders only after the plaintiff [or aggrieved

shareholder] has made a prima facie case showing that the directors have acted in

bad faith or without the requisite objectivity.’ ” Stepak, 51 Ohio St.3d at 14, 553

N.E.2d 1072, quoting Radol v. Thomas, 772 F.2d 244, 257 (6th Cir.1985); citing

American Law Institute, Principles of Corporate Governance, Section 4.01, at 6

(protections of the business judgment rule removed only if a challenging party can

sustain his burden of showing the director was not acting in good faith or with

disinterest, or was not informed as to the subject of his business judgment).

       {¶17} Accordingly, directors may not, in breach of their fiduciary duties, act

unfairly to the disadvantage of their corporation or its shareholders. For example,

“within the bidding process of a corporate takeover or merger, the directors may not

rig, control or stifle such bidding to their own advantage.” Stepak at 14. However,

“the directors are not held to a duty to the shareholders to obtain, like an auctioneer,

the highest price possible for their shares of the corporation.” Id.

       {¶18} Zalvin’s second amended complaint contains three principle

arguments for breaches of fiduciary duty. First, he alleges that director and chief

executive officer, Andrea J. Ayers, secretly and unilaterally—without board of

directors’   authorization—pursued     a   merger    to   prevent      the   forfeiture   of

                                           8
                     OHIO FIRST DISTRICT COURT OF APPEALS

approximately $10.1 million of unvested stock upon her planned departure from

Convergys.    Second, he alleges that the defendant directors “promoted an

undervalued transaction to secure personal benefits” as they were “motivated to

complete a sale, any sale, no matter how unfavorable to Convergys shareholders and

even after Synnex reduced its offer price, to prevent the forfeiture of over $1 million

in unvested equity compensation, collectively.” And, third, Zalvin alleges that “[t]he

decision to enter into the Sale Agreement was also driven by Convergys’ directors

desire to appease an activist investor and New York based hedge fund, Elliott

Management.”

       {¶19} In regard to his first two arguments, Zalvin’s second amended

complaint contains conflicting allegations. Zalvin alleges that Ayers’s pursuit of a

merger was done in secret but concedes in later paragraphs that the proxy statement

discloses her initial meetings regarding a possible merger. Zalvin alleges that Ayers’s

pursuit was unilateral, but the proxy statement reveals that Ayers was accompanied

by Convergys’s chief financial officer, Andre Valentine, at her first meeting with a

potential bidder. The proxy statement also contains a chronological timeline of

Ayers’s and Convergys’s contacts with potential bidders, beginning in early 2017.

Zalvin alleges that the vesting of unvested stock upon the sale of Convergys

demonstrates a conflict of interest, but concedes in later paragraphs that Ayers’s and

the other defendant directors’ compensation was stock-based compensation, in

which their interests were generally aligned with the shareholders.         See In re

Micromet, Inc. S’holders Litig., C.A. No. 7197-VCP2, 2012 WL 681785, * 13 fn. 64

(Del.Ch. Feb. 29, 2012) (rejecting argument that directors were interested due to

vesting of stock options because “the directors’ interests would be aligned with the

shareholders in seeking the highest price for their shares reasonably available”).

Furthermore, the defendant directors’ compensation was revealed in detail to the

                                          9
                      OHIO FIRST DISTRICT COURT OF APPEALS

shareholders in the proxy statement and was subject to a separate shareholder vote—

i.e., a vote separate and apart from the vote on the merger such that the shareholders

could have approved the merger and rejected the defendant directors’ compensation.

The proxy statement describes in a section entitled, “Interests of Convergys’

Directors and Executive Officers in the Mergers,” the directors’ compensation and

their interests in the merger that might differ from the shareholders, and describes

their equity compensation over several pages.

       {¶20} In regard to Zalvin’s third argument, that the decision to proceed with

the sale was based on threats from “activist investor” Elliott Management, there are

no set of facts to indicate that Elliott Management’s role in the merger, regardless of

his purported motivations or modus operandi, led to a breach of the defendant

directors’ fiduciary duties. Allegations that Elliott Management actually threatened a

proxy fight, leading the defendant directors to take action adverse to the

shareholders, are not within the second amended complaint.

       {¶21} In sum, Zalvin’s claims against the defendant directors for breaches of

fiduciary duty fail to state a claim upon which relief could be granted. Even drawing

all reasonable inferences on behalf of Zalvin, he has failed to plead facts under which

it is reasonably conceivable that he could recover.

                        Counts II and IV – Failure to Disclose

       {¶22} The duty of disclosure applies when a corporation seeks shareholder

approval of fundamental corporate changes, such as a merger, “but the adequacy of

disclosure is captured under the well-defined concept of materiality.” Henkel, 167

Ohio Misc.2d 4, 2012-Ohio-423, 962 N.E.2d 395, at ¶ 33.

       {¶23} “Securities law regards a fact as material when there is a substantial

likelihood that it would have been viewed by a reasonable investor as having

significantly altered the total mix of information available.” Id. at ¶ 34; see Basic Inc.

                                           10
                       OHIO FIRST DISTRICT COURT OF APPEALS

v. Levinson, 485 U.S. 224, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988). “In setting this

standard, the [United States] Supreme Court acknowledged a concern that a lesser

standard might bury shareholders in an avalanche of trivial information.” Henkel at

¶ 34, citing Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 38, 131 S.Ct. 1309,

179 L.Ed.2d 398 (2011), and TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438,

448-449, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976). In addition, federal securities law

“do[es] not create an affirmative duty to disclose any and all material information.

Disclosure is required * * * only when necessary to make statements made, in the

light of the circumstances under which they were made, not misleading.” Matrixx at

44 (“Silence, absent a duty to disclose, is not misleading [under federal securities

law]”).

          {¶24} Ohio uses the same approach to materiality in a fraud or breach-of-

fiduciary-duty claim. See Henkel at ¶ 35, citing Saxe v. Dlusky, 10th Dist. Franklin

No. 09AP-673, 2010-Ohio-5323, ¶ 51 (“materiality in a fraud claim is essentially the

same as the definition used for materiality in a federal securities claim”).

          {¶25} Accordingly, Convergys and its defendant directors were obligated to

convey only material information in connection with the proposed transaction.

There was no requirement that it “overload shareholders with meaningless detail or

offer all available information that might be deemed helpful by some hypothetical

reader.” Henkel at ¶ 33. For instance, a board of directors is ordinarily not obligated

to disclose “the panoply of possible alternatives to a course of action it is proposing,

because too much information can be as misleading as too little.” Id., citing In re

3Com Shareholders Litigation, No. 5067-CC, 2009 WL 5173804, *6 (Del.Ch. Dec.

18, 2009). “Omitted facts are not material simply because they might be helpful.”

Skeen v. Jo-Ann Stores, Inc., 750 A.2d 1170, 1174 (Del.2000). “So long as the proxy

statement, viewed in its entirety, sufficiently discloses and explains the matter to be

                                           11
                     OHIO FIRST DISTRICT COURT OF APPEALS

voted on, the omission or inclusion of a particular fact is generally left to

management’s business judgment.” In re 3Com at *1. Furthermore, the law “does

not require that a fiduciary disclose its underlying reasons for acting.” In re Sauer-

Danfoss, Inc. Shareholders Litigation, No. 5162-VCL, 2011 WL 2519210, *12

(Del.Ch. May 3, 2011).

       {¶26} Zalvin’s second amended complaint contains five principle arguments

for the failures to disclose, basing his claims on material misrepresentations and

omissions. First, he alleges that Ayers “shopped Convergys to Synnex and others

without the knowledge or authorization of the Board,” which he alleges was not

disclosed to shareholders. It is clear from the proxy statement that Ayers did in fact

disclose her meetings with potential bidders, but it is omitted whether she first had

specific board approval. The proxy statement only describes that around the same

time as Ayers’s first meeting with potential bidders, “Convergys’ board of directors

discussed Convergys’ near- and long-term strategy and, as part of its ongoing

strategic planning, engaged a management consultant to conduct a strategic review

of Convergys’ business.” However, Zalvin does not allege facts to demonstrate the

materiality of this omission to the shareholder vote, and we do not see how this

omission “would have been viewed by the reasonable investor as having significantly

altered the ‘total mix’ of information made available.” See TSC Industries, Inc. v.

Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976). Zalvin

merely speculates in a series of questions that allegedly unauthorized discussions

affected negotiations in the sale agreement in a way that was not mentioned in an

over 300-page, remarkably thorough proxy statement.

       {¶27} Second, Zalvin alleges that the proxy statement is silent as to the steps

the defendant directors “took to obtain a floating exchange rate for the stock portion

of the Sale consideration.” But again, the proxy statement does disclose in over ten

                                         12
                      OHIO FIRST DISTRICT COURT OF APPEALS

pages the negotiations between Convergys and Synnex regarding the steps the

defendant directors took to obtain the ratio for the stock. And, Zalvin admits in his

complaint that this information was disclosed, he just wants the reasoning for not

having a fixed ratio (instead of the floating exchange ratio). While a fiduciary is not

required to disclose its underlying reasons for acting, the proxy statement

nonetheless discloses the underlying reasoning—in a section entitled, “Convergys’

Reasons for the Mergers,” stating:

       the collar structure of the consideration, which balances protection of

       the value of the stock component of the merger consideration in the

       event of a decline in SYNNEX’s stock price during the pendency of the

       transaction while providing for a fixed exchange ratio in the event of

       significant increases in SYNNEX’s stock price that will not be adjusted

       for fluctuations in the market price of shares of SYNNEX common

       stock or Convergys common shares, and will give Convergys

       shareholders greater certainty as to the number of shares of SYNNEX

       common stock to be issued to them in the transaction.

Thus, the floating exchange ratio was perceived to be the less risky option through

the pending merger.

       {¶28} Third, Zalvin alleges that the substance of the defendant directors’

interactions with Elliott Management was omitted from the proxy statement, but the

proxy statement summarizes a continued dialogue with Elliott Management over the

course of three pages. And, as discussed in the preceding section, Zalvin’s complaint

does not allege that Elliott Management threatened a proxy fight. Zalvin does allege

that Convergys entered into a standstill agreement with Elliott Management, but

provided no other allegations to demonstrate that further disclosures regarding the

standstill agreement would be useful to shareholders for considering the merger. We

                                          13
                      OHIO FIRST DISTRICT COURT OF APPEALS

agree with the court in In re Novell, Inc. Shareholder Litigation, 2013 WL 322560,

No. 6032-VCN, *13 (Del.Ch. Jan. 3, 2013), which dismissed similar disclosure claims

in a complaint regarding Elliott Management, holding:

       As a minority shareholder, Elliott [Management’s] conduct does not

       rise to the level of assuming “actual significance in the deliberations of

       the reasonable shareholder.” The actions of a minority (less than ten

       percent) holder with no representative on the board simply do not

       require the disclosures that the Plaintiffs argue would have been

       material. * * * [T]he Board had no effective control over what Elliott

       did and, as set forth above, how a perceived fear of Elliott may have

       influenced the sales process, once initiated, is not backed by any

       specific factual allegations.

       {¶29} Fourth, Zalvin alleges that the proxy statement failed to disclose a

conflict of interest regarding a financial advisor and investment bank called

Centerview Partners, which was advising Convergys with respect to the fairness of

the price to be paid by Synnex. Zalvin alleges that Centerview Partners’ employees

might own Synnex stock, and also that the proxy statement was misleading because

it said that Centerview Partners’ employees might own Synnex stock.            In other

words, Zalvin’s allegations here are speculative. Moreover, it is unclear how the

disclosure of more information than already disclosed in the proxy statement

regarding the potential conflict of interest of Centerview Partners’ employees would

have had practical value for a shareholder vote.

       {¶30} Finally, Zalvin alleges that the proxy statement does not disclose the

Synnex management financial projections and analyst estimates used by Centerview

Partners to generate its “fairness opinion”—i.e., the investment bank’s endorsement

of the fairness of the transaction.      However, the proxy statement provided a

                                          14
                      OHIO FIRST DISTRICT COURT OF APPEALS

summary of the financial projections of the merger over the course of three pages.

When the board of directors relies on the advice of a financial advisor in making a

decision that requires shareholder action, those shareholders “are entitled to receive

in the proxy statement a fair summary of the substantive work performed by the

investment bankers upon whose advice the recommendations of their board as to

how to vote on a merger or tender rely.” (Emphasis added.) In re Trulia, Inc.

Stockholder Litigation, 129 A.3d 884, 900 (Del.Ch.2016). There was no requirement

that the defendant directors “overload shareholders with meaningless detail or offer

all available information that might be deemed helpful by some hypothetical reader.”

Henkel, 167 Ohio Misc.2d 4, 2012-Ohio-423, 962 N.E.2d 395, at ¶ 33.

       {¶31} Zalvin therefore failed to plead the materiality of any of the purported

disclosure violations. Accordingly, Zalvin’s claims against the defendant directors

for failure to disclose fail to state a claim upon which relief could be granted.

       {¶32} Convergys’s proxy statement set out a thorough but straightforward

narrative of how the corporation initiated negotiations with Synnex during 2017 and

planned to effectuate a merger. Zalvin essentially ignored that detailed background

in mounting his case. The merger went forward with a majority of shareholders

voting for both the merger and the defendant directors’ compensation. That, and

similarly important facts, cannot be trumped by unsupported allegations such as the

claim that the defendant directors acted in breach of their obligations.

                               Dismissal with Prejudice

       {¶33} In his first assignment of error, Zalvin argues that the trial court’s

ruling was a decision otherwise than on the merits and therefore the dismissal

should have been without prejudice. We disagree.

       {¶34} A determination as to whether a dismissal is with or without prejudice

rests within the discretion of the trial court. Quonset Hut, Inc. v. Ford Motor Co., 80

                                            15
                      OHIO FIRST DISTRICT COURT OF APPEALS

Ohio St.3d 46, 47, 684 N.E.2d 319 (1997). However, “[b]ecause a dismissal with

prejudice forever bars a plaintiff review of the merits of his claim, appellate ‘abuse of

discretion’ review is heightened when reviewing decisions that forever deny a review

of a claim’s merits.” Grippi v. Cantagallo, 11th Dist. Ashtabula No. 2011-A-0054,

2012-Ohio-5589, ¶ 11.

       {¶35} Civ.R. 41(B)(1), which governs involuntary dismissals, provides that

when a plaintiff fails to comply with the civil rules, the court may dismiss the action,

either on the motion of a defendant or on its own motion. Civ.R. 41(B)(3) provides

that “any dismissal not provided for in this rule * * * operates as an adjudication

upon the merits unless the court, in its order for dismissal, otherwise specifies.” A

dismissal under Civ.R. 12(B)(6) for failure to state a claim is a dismissal under Civ.R.

41(B)(1) for failure to comply with the civil rules. See Customized Solutions, Inc. v.

Yurchyk & Davis, CPA’s, Inc., 7th Dist. Mahoning No. 03MA38, 2003-Ohio-4881, ¶

23. Therefore, a dismissal under Civ.R. 12(B)(6) operates as an adjudication on the

merits and properly results in a dismissal with prejudice. See Reasoner v. City of

Columbus, 10th Dist. Franklin No. 04AP-800, 2005-Ohio-468, ¶ 8-10.

       {¶36} The trial court’s order dismissing Zalvin’s second amended complaint

under Civ.R. 12(B)(1) and 12(B)(6) did not specify that it was not an adjudication on

the merits, but nonetheless pursuant to Civ.R. 41(B)(1) and 41(B)(3), it was an

adjudication on the merits. Accordingly, dismissal with prejudice was appropriate.

                                      Conclusion

       {¶37} Based on the foregoing, we conclude that Zalvin’s complaint was

properly dismissed with prejudice under Civ.R. 12(B)(6) and decline to consider the

remaining basis for dismissal.     Therefore, we overrule Zalvin’s first and second

assignments of error and affirm the judgment of the trial court.



                                           16
                     OHIO FIRST DISTRICT COURT OF APPEALS

                                                                   Judgment affirmed.

MOCK, P.J., and CROUSE, J., concur.

Please note:

       The court has recorded its own entry on the date of the release of this opinion.




                                          17
