Clement v. Solta Medical CA1/5

I. BACKGROUND

In reviewing the trial court’s order sustaining the demurrer, we accept as true properly pleaded factual allegations of the complaint. (Kotlar v. Hartford Fire Ins. Co. (2000) 83 Cal.App.4th 1116, 1120.) Where a complaint incorporates terms of a contract, we consider those terms as part of the pleading. (Ibid.) Clement’s original and first amended complaints, each with the Merger Agreement attached, set forth the following facts. A. The Merger Agreement CLRS developed and produced dermatologic treatments based on intense pulsed light and heat including CLARO, which used intense pulsed light to treat acne. In October 2010, CLRS1 and Solta signed the Merger Agreement whereby a Solta subsidiary (Solta Temp, Inc.) merged into CLRS. CLRS became the surviving company but with the articles, bylaws, officers and board of directors of Solta Temp, Inc.2 Under the Merger Agreement, existing CLRS shareholders exchanged their CLRS stock for the right to receive certain “earnout” payments triggered by specified revenue or operating income milestones during “earnout periods” that spanned from January 1 to December 31, 2011. Two former CLRS managers, Richard Oberreiter…