Under the joint venture agreement, Xtep held the option to purchase a 40% minority ownership interest in the entity that owns the Saucony intellectual property in China if the business met certain financial targets. Due to the early success and profitability of Saucony in China, the Company and Xtep have agreed to accelerate the exercise of this purchase option. The Company and Xtep have also agreed for the Company to sell its equity interest in the Merrell and Saucony joint venture entities to a wholly-owned subsidiary of Xtep, transitioning the business from a joint venture model to a license and distribution rights model under which Xtep will exclusively carry out the development, marketing and distribution of footwear, apparel and accessories for the Saucony and Merrell brands in China. This evolution underscores the growth prospects of these two brands in China, and is the result of the early success and maturity of the joint venture.