EXECUTIVE EMPLOYMENT AGREEMENT
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NCN
GROUP MANAGEMENT
LTD
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I, SO,
Xxxx Xxxx, agree to the terms and conditions of employment with NCN Group
Management Limited (“Company”) set forth in this Employment Agreement
(“Agreement”). This Agreement supersedes all previous agreements,
promises, representations, understandings and negotiations between the parties,
whether written or oral, with respect to the subject matter hereof.
1. Nature
of Employment Relationship. My employment with the Company
commenced on June 1st 2006 pursuant
to
an employment contract signed under NCN Group Management Limited (the “Prior
Agreements”). This Agreement supersedes the Prior Agreement and any
other pre-existing agreement, understanding or consensus between the parties
in
relation to my employment with the Company, as of the date hereof. My
employment under this Agreement shall commence as of July 1, 2007 and shall
continue for an indefinite period until terminated by either the Company or
me
as provided in Section 5 of this Agreement, in which case I will be entitled
to
the compensation specified in that Section.
2. Nature
of Duties. I shall be the Company’s Managing Director
reporting to the Company’s Chief Executive Officer. I shall also be
the Managing Director of the Company’s ultimate parent company, Network CN Inc.
(“the Parent Company”). As such, I shall work exclusively for the Company, the
Parent Company, subsidiaries and affiliated companies (collectively “the Group”)
and shall have all of the customary powers and duties associated with this
position, including day-to-day operational control of the Company and the
Group. I shall devote my full business time and effort to the
performance of my duties for the Company and the Group, which I shall perform
faithfully and to the best of my ability. I shall be subject to the
Company’s policies, procedures and approval practices, as generally in effect
from time-to-time.
3. Place
of Performance. I shall be based in Hong Kong and/or China,
except for required travel on the Company’s business.
4. Compensation
and Related Matters.
(a) Base
Salary. The Company shall pay me a base salary of HK$80,000
per month. My base salary shall be paid in conformity with the
Company’s salary payment practices generally applicable to Company
executives. I will be eligible for pay increases as determined by the
Company’s Board of Directors (the “Board”).
(b) Bonuses
and Long Term Incentive Compensation. I will be eligible for
bonus compensation in an amount to be determined by the Board based on the
Company’s achievement of financial performance and other objectives established
by the Board each year. In addition, I will be eligible for long-term
incentive compensation, such as stock grants or additional options to purchase
shares of the Parent Company’s common stock, on such terms as established by the
Board and the Board of the Parent Company.
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GROUP MANAGEMENT
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(c) Stock
Grant. Upon the commencement of my employment under this
Agreement, I will be entitled to a stock grant (“Grant”) of 2,000,000 shares of
the Company’s common stock; certain percentage of the Grant shall vest and
become exercisable according to the following table if I remain employed
by the
Company and its subsidiaries through the vesting date.
Vesting
date
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Stock
grant
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December
31, 2007
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200,000
shares of the Company’s common stock
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December
31, 2008
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300,000
shares of the Company’s common stock
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December
31, 2009
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400,000
shares of the Company’s common stock
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December
31, 2010
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500,000
shares of the Company’s common stock
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December
31, 2011
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600,000
shares of the Company’s common
stock
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The
Grant
shall be subject to all terms of the Parent Company’s 2007 stock option/stock
issuance plan or any future stock option/stock issuance plan under which it
was
issued.
(d) Income
Tax Reimbursement. I shall receive a payment sufficient to
cover the Hong Kong personal income taxes resulting from my employment under
this Agreement.
(e) Standard
Benefits. During my employment, I shall be entitled to
participate in all employee benefit plans and programs, including twenty-four
(24) working days of annual leave after serving every period of twelve (12)
months, to the same extent generally available to Company executives, in
accordance with the terms of those plans and programs. The Company
shall have the right to terminate or change any such plan or program at any
time.
(f) Indemnification. The
Company shall extend to me the same indemnification arrangements that are
generally provided to directors or other similarly situated Company employees,
including after termination of my employment.
(g) Expense
Reimbursement. I shall be entitled to receive prompt
reimbursement for all reasonable and customary travel and business expenses
I
incur in connection with my employment, but I must incur and account for those
expenses in accordance with the policies and procedures established by the
Company.
(h) Xxxxxxxx-Xxxxx
Act Loan Prohibition. To the extent that any Company
benefit, program, practice, arrangement or this Agreement would or might
otherwise result in my receipt of a illegal loan (“Loan”), the Company shall use
reasonable efforts to provide me with a substitute for the Loan that is lawful
and of at least equal value to me. If this cannot be done, or if
doing so would be significantly more expensive to
the
Company than making the Loan, the Company need not make the Loan to me or
provide me a substitute for it.
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5. Termination.
(a) Notice
Period. Either party has to provide a three-month advance
notice in writing to the other party for the termination of this employment
contract.
(b) Rights
and Duties. If my employment is terminated, I shall be
entitled to the amounts or benefits shown in the applicable row in the following
table, subject to the balance of this Section 5. The Company and I
shall have no further obligations to each other, except the Company’s ongoing
indemnification obligation under Section 4(e), my confidentiality and other
obligations to the Company, and our mutual arbitration obligations under Section
8, or as set forth in any agreement I subsequently enter into with the
Company.
DISCHARGE
FOR CAUSE
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Payment
or provision when due of (1) any unpaid base salary, expense
reimbursements, and vacation days accrued but not used prior to
termination of employment, and (2) other unpaid vested amounts or
benefits
under Company compensation, incentive and benefit
plans.
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DISABILITY
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Same
as for “Discharge for Cause”, EXCEPT that I also shall be potentially
eligible for disability benefits under any Company-provided disability
plan in which I then participate, and I shall be entitled to accelerated
vesting of all stock grants I have been granted that, as of the date
of
such disability, remain unexercised and unvested, to the extent
permissible by law.
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DISCHARGE
OTHER THAN FOR CAUSE OR DISABILITY
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Same
as for “Discharge for Cause”, EXCEPT that, in exchange for my execution of
a general release document in a form provided by and acceptable to
the
Company, my base salary payments at my annual salary rate at the
time, but
not my employment, shall (1) where there has been no Change In Control
(as
defined below), continue for 48 months, or (2) where there has been
a
Change in Control in the preceding one (1) year, continue for 60
months. Such payments shall be payable in one lump sum
immediately upon the termination of employment. In addition, I
shall be entitled to accelerated vesting of all stock grants, as
of the
date of such termination Other Than for Cause, remain unexercised
and
unvested, to the extent permissible by law.
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RESIGNATION
WITHOUT GOOD REASON
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Same
as for “Discharge for Cause”.
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RESIGNATION
WITH GOOD REASON
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Same
as for “Discharge Other Than for Cause or Disability”.
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DEATH
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Same
as for “Disability,” EXCEPT that payments shall be made to the person or
entity prescribed by me or Company
policies.
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GROUP MANAGEMENT
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(c) Change
in Control. “Change in Control” means (i) the acquisition of
more than 50% of the outstanding voting securities of the Company by an
individual person or an entity or a group of individuals or entities acting
in
concert, directly or indirectly, through one transaction or a series of related
transactions; (ii) a merger or consolidation of the Company with or into another
entity after which the stockholders of the Company immediately prior to such
transaction hold less than 50% of the voting securities of the surviving
entities; or (iii) a sale of all or substantially all of the assets of the
Company.
(d) Discharge
for Cause. The Company may terminate my employment at any
time if it believes in good faith that it has Cause to terminate
me. “Cause” shall include, but not be limited to:
(i) my
refusal to follow lawful directions or my material failure to perform my duties
(other than by reason of physical or mental illness, injury, or condition),
in
either case, after I have been given notice of my default and a reasonable
opportunity to cure it;
(ii) my
failure to comply with any Company policy;
(iii) my
engaging in conduct that is or may be unlawful, or to the possible detriment
of
the Company and its affiliates, and their predecessors and successors, or my
own
reputation; or
(iv) my
seeking, exploring or accepting a position with another business enterprise
or
venture without the Company’s written consent at any time before I have resigned
from the Company or been discharged.
If
I am
discharged for Cause, I will only receive the benefits to which I am entitled
under Section 5(b).
(e) Termination
for Disability. The Company may terminate my employment on
account of Disability, or may transfer me to inactive employment status, which
shall have the same effect under this Agreement as a termination for
Disability. “Disability” means a physical or mental illness, injury,
or condition that prevents me from performing substantially all of my duties
under this Agreement for at least 90 consecutive calendar days or for at least
120 calendar days, whether or not consecutive, in any 365 calendar day period,
or is likely to do so, as certified by a physician selected by the Company
or
its Board of Directors.
(f) Discharge
Other Than for Cause or Disability. The Company may
terminate my employment at any time for any reason, and without advance written
notice,
and I will receive the same benefits as specified for “Discharge for Cause” in
Section 5(b), above. If I am terminated by the Company other than for
Cause or for Disability, I will receive the payments described for “Discharge
Other Than For Cause Or For Disability” in the chart in Section 5(b) only if I
sign a general release form furnished to me by the Company within 60 days after
my employment ends, and I do not thereafter properly revoke the release, if
it
provides for revocation.
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GROUP MANAGEMENT
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(g) Resignation. I
may resign my employment with or without “Good Reason” at any
time. If I provide notice, the Company may advance the effective date
of my resignation if it does not need the amount of notice I
provide. If I resign without Good Reason, I will receive the same
payments as a “Discharge for Cause”, as described in the chart in Section
5(b). If I resign with Good Reason, I will receive the same payments
as a “Discharge Other Than for Cause or Disability”, described in the chart in
Section 5(b), if I sign a general release form furnished to me by the Company
and I do not thereafter properly revoke the release, if it provides for
revocation. “Good Reason” means that, without my express written
consent, one or more of the following events occurred after I sign this
Agreement:
(i) Demotion. My
duties or responsibilities are substantially and adversely diminished from
those
in effect immediately before the change in my position, other than merely as
a
result of the Company ceasing to be a public company, a change in my title,
or
my transfer to an affiliated company that assumes this Agreement.
(ii) Salary
Reduction. My annual base salary is reduced, other than as
part of across-the-board salary reductions affecting all executives of similar
status employed by the Company or any entity in control of the
Company.
(iii) Relocation. My
principal office is transferred to another location outside Hong Kong or which
is more than 60 highway miles from where my principal office is located when
I
sign this Agreement, unless I agree in writing to a relocation of a greater
distance.
(iv) Discontinuance
of Compensation Plan Participation. The Company fails to
continue, or continue my participation in, any employee benefit plan or
compensation plan in which I participated immediately before the event causing
my resignation, which discontinuance is material to my total compensation,
unless an equitable substitute arrangement has been adopted or made available
on
a basis not materially less favorable to me than the plan in effect immediately
before the event causing my resignation, whether as to the benefits I receive
or
my level of participation relative to other participants.
(v) Dilution
or Restructuring of Shares. Dilution or restructuring of the
equity or debenture capital of the Company thereby causing a substantial
depreciation of the market price or monetary worth of the shares of the Company
or otherwise substantially compromising the monetary value of the
Grant.
(vi) Defaults
on the part of the Company. The refusal or inability on the
part of the Company to provide Income Tax Reimbursement or Expense Reimbursement
under Section 4 hereof for income tax and expenses that were properly incurred
by me or to extend indemnification arrangement to me under Section
4.
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GROUP MANAGEMENT
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However,
an event that is or would constitute Good Reason shall cease to be Good Reason
if: (i) I do not terminate employment within 45 days after the event occurs;
(ii) before I terminate employment, the Company reverses the action or cures
the
default that constitutes Good Reason within 10 days after I notify it in writing
that Good Reason exists; or (iii) I was a primary instigator of the Good Reason
event and the circumstances make it inappropriate for me to receive Good Reason
resignation benefits under this Agreement (e.g., I agree temporarily to
relinquish my position on the occurrence of a merger transaction I
negotiate).
(h) Death. If
I die while employed under this Agreement, the payments required by Section
5(b)
in the event of my death shall be made.
(i) Transfers
to Affiliates or Successors. My transfer to an affiliate or
successor of the Company shall not be deemed a termination of my employment
under this Agreement, unless the affiliate or successor refuses to assume this
Agreement, in which case I will receive the continued salary payments described
in Section 5(b) for “Discharge Other Than for Cause or Disability,” if I sign a
general release form provided to me by the Company and I do not thereafter
properly revoke the release, if it provides for revocation.
(j) Offset. Any
amounts payable to me under this Section 5 shall first be offset against any
amounts I owe the Company at the time of termination.
6. Confidentiality. I
acknowledge that I currently possess or will acquire secret, confidential,
or
proprietary information or trade secrets concerning the operations, future
plans
and business methods of the Company (“Confidential Information”).
(a) Promise
Not to Disclose. I promise never to use or disclose any
Confidential Information before it has become generally known within the
industry through no fault of my own. I agree that this promise shall
never expire.
(b) Promise
Not to Solicit. To prevent me from inevitably breaking this
promise, I further agree that, while this Agreement is in effect and for 6
months after its termination: (i) as to any customer or supplier of the Company
with whom I had dealings or about whom I acquired Confidential Information
during my employment, I will not solicit or attempt to solicit (or assist others
to solicit) the customer or supplier to do business with any person or entity
other than the Company; and (ii) I will not solicit or attempt to solicit (or
assist others to solicit) for employment any person who is, or within the
preceding 6 months was, an officer, manager, employee or consultant of the
Company.
(c) Promise
Not to Engage in Certain Employment. I agree that, while
this Agreement is in effect and for 6 months after its termination, I will
not
accept any employment or engage in any activity, without the written consent
of
the Board, if the loyal and complete fulfillment of my duties in such employment
would inevitably require me to reveal or utilize Confidential Information,
as
reasonably determined by the Board.
(d) Return
of Information. When my employment with the Company ends, I
will promptly deliver to the Company, or, at its written instruction, will
destroy, all documents, data, drawings, manuals, letters, notes, reports,
electronic mail, recordings, and copies of such materials, of or pertaining
to
the Company or any of its affiliated entities which are in my possession or
control. In addition, during my employment with the
Company, and thereafter, I agree to meet with Company personnel as reasonably
requested by the Board, and, based on knowledge or insights I gained during
my
employment with the Company, answer any question they may have related to the
Company’s business and operations.
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(e) Intellectual
Property. Intellectual property (including such things as
all ideas, concepts, inventions, plans, developments, software, data,
configurations, materials (whether written or machine-readable), designs,
drawings, illustrations and photographs that may be protectable, in whole or
in
part, under any patent, copyright, trademark, trade secret, or other
intellectual property law), developed, created, conceived, made or reduced
to
writing or practice during my employment with the Company, except intellectual
property that has no relation to the Company or any of its customers that I
developed purely on my own time and at my own expense, shall be the sole and
exclusive property of the Company, and I hereby assign all my rights, title
and
interest in any such intellectual property to the Company.
(f) Enforcement
of this Section. This Section shall survive the termination
of this Agreement for any reason. I acknowledge that (i) my services
are of a special, unique and extraordinary character and it would be very
difficult and impossible to replace them, (ii) this Section’s terms are
reasonable and necessary to protect the Company’s legitimate interest, (iii)
this Section’s restrictions will not prevent me from earning or seeking a
livelihood, (iv) this Section’s restrictions shall apply wherever permitted by
law, and (v) my violation of any of this Section’s terms would irreparably harm
the Company. Accordingly, I agree that, if I violate any of the
provisions of this Section, or the Confidentiality Agreement, the Company or
any
of its affiliated entities shall be entitled to, in addition to other remedies
available to it, an injunction to be issued by any court of competent
jurisdiction restraining me from committing or continuing any such violation,
without the need to prove the inadequacy of money damages or post any bond
or
for any other undertaking.
7. Notice.
(a) To
the Company. I will send all communications to the Company
in writing, addressed as follows (or in any other manner the Company notifies
me
to use):
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If
Mailed: NCN Group Management
Limited
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Attn: Chief
Executive Officer
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21st
Floor,
Chinachem Century Tower, 000 Xxxxxxxxxx Xxxx Xxxx
Xxxx
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If
Faxed: NCN Group Management
Limited
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Attn: Chief
Executive Officer
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Fax: (000)-00000000
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Tel.: (000)-00000000
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(b) To
Me. All communications from the Company to me relating to
this Agreement must be sent to me in writing at my Company office or in any
other manner I notify the Company to use.
(c) Time
Notice Deemed Given. Notice shall be deemed to have been
given when delivered or, if earlier (1) when mailed by certified or registered
mail, return receipt
requested, postage prepaid, or (2) faxed with confirmation of delivery, in
either case, addressed as required in this Section.
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8. Arbitration
of Disputes. If any legally actionable dispute arises which
cannot be resolved by mutual discussion between the Company and me, we each
agree to resolve that dispute by binding arbitration before an arbitrator
experienced in employment law. Said arbitration will be conducted in
accordance with the rules applicable to employment disputes of Judicial
Arbitration and Mediation Services or such other arbitration service as we
agree
upon, and the law of Hong Kong. The Company will be responsible for
paying any filing fee and the fees and costs of the arbitrator, unless I
initiate the claim, in which case I will contribute an amount equal to the
filing fee for a claim initiated in a court of general jurisdiction in Hong
Kong. The Company and I agree that this promise to arbitrate covers
any disputes that the Company may have against me, or that I may have against
the Company and/or its related entities and/or their owners, directors, officers
and employees, arising out of or relating to this Agreement, the employment
relationship or termination of employment, including any claims concerning
the
validity, interpretation, effect or violation of this Agreement; discrimination,
harassment or retaliation in violation of any federal, state or local law;
and
any other aspect of my compensation, training, or employment. The
Company and I further agree that arbitration as provided in this Section shall
be the exclusive and binding remedy for any such dispute and will be used
instead of any court action, which is hereby expressly waived, except for any
request by either of us for temporary or preliminary injunctive relief pending
arbitration in accordance with applicable law, or an administrative claim with
an administrative agency. The Company and I also agree that any such
arbitration shall be conducted in Hong Kong, unless otherwise mutually
agreed.
9. Golden
Parachute Limitation. I agree that my payments and benefits
under this Agreement, and all other contracts, arrangements or programs, shall
not, in the aggregate, exceed the maximum amount that may be paid to me without
triggering golden parachute penalties under Section 280G and related provisions
of the Internal Revenue Code, as determined in good faith by the Company’s
independent auditors. If any benefits must be cut back to avoid
triggering such penalties, my benefits shall be cut back in the priority order
designated by the Company. If an amount in excess of the limits set
forth in this Section is paid to me, I will repay the excess amount to the
Company upon demand, with interest at the rate provided for in Internal Revenue
Code Section 124(b)(2)(B). The Company and I agree to cooperate with
each other in connection with any administrative or judicial proceedings
concerning the existence or amount of golden parachute penalties with respect
to
payments or benefits I receive.
10. Amendment. No
provisions of this Agreement may be modified, waived, or discharged except
by a
written document signed by me and a duly authorized Company
officer. Thus, for example, promotions, commendations, and/or bonuses
shall not, by themselves, modify, amend, or extend this Agreement. A
waiver of any conditions or provisions of this Agreement in a given instance
shall not be deemed a waiver of such conditions or provisions at any other
time.
11. Interpretation
and Exclusive Forum. The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws
of
the Hong Kong (excluding any that mandate the use of another jurisdiction’s
laws). Any arbitration (unless otherwise mutually agreed), litigation
or similar proceeding with respect to such matters only may be brought within
Hong Kong, and all parties to this Agreement submit to the jurisdiction of
the
courts of law in Hong Kong.
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GROUP MANAGEMENT
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12. Successors. This
Agreement shall be binding upon, and shall inure to the benefit of, me and
my
estate, but I may not assign or pledge this Agreement or any rights arising
under it, except to the extent permitted under the terms of the benefit plans
in
which I participate. Without my consent, the Company may assign this
Agreement to any affiliate or successor that agrees in writing to be bound
by
this Agreement, after which any reference to the “Company” in this Agreement
shall be deemed to be a reference to the affiliate or successor, and the
Company
thereafter shall have no further primary, secondary or other responsibilities
or
liabilities under this Agreement of any kind.
13. Validity. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
14. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together shall constitute the same
instrument.
15. Entire
Agreement. All oral or written agreements or
representations, express or implied, with respect to the subject matter of
this
Agreement are set forth in this Agreement.
I
ACKNOWLEDGE THAT ALL UNDERSTANDINGS AND AGREEMENTS BETWEEN THE
COMPANY AND
ME RELATING TO THE SUBJECTS COVERED IN THIS AGREEMENT ARE CONTAINED
IN IT
AND THAT I HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY AND NOT
IN
RELIANCE ON ANY PROMISES OR REPRESENTATIONS BY THE COMPANY OTHER
THAN
THOSE CONTAINED IN THIS AGREEMENT ITSELF.
I
FURTHER ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS AGREEMENT,
THAT I
UNDERSTAND ALL OF IT, AND THAT I HAVE BEEN GIVEN THE OPPORTUNITY
TO
DISCUSS THIS AGREEMENT WITH MY PRIVATE LEGAL COUNSEL AND HAVE AVAILED
MYSELF OF THAT OPPORTUNITY TO THE EXTENT I WISHED TO DO SO. I
UNDERSTAND THAT BY SIGNING THIS AGREEMENT I AM GIVING UP MY RIGHT
TO A
JURY TRIAL.
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GROUP MANAGEMENT
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Date:
July 23,
2007
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By:
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/s/ SO, Xxxx Xxxx | |
SO, Xxxx Xxxx | |||
NCN
Group Management Limited
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Date:
July 23, 2007
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By:
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/s/ HUI, Xxxx Xxxx Xxxxxxx | |
XXX,
Xxxx Xxxx Xxxxxxx
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Its: Chief Executive Officer |
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