Document:

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                                                                    Exhibit 10.2

                              JLG INDUSTRIES, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

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                           Effective February 16, 2000

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                              JLG INDUSTRIES, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                TABLE OF CONTENTS

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                                                                          PAGE

 SECTION 1.       ESTABLISHMENT AND PURPOSE OF THE PLAN ................... 1

         1.1      Establishment ........................................... 1
         1.2      Purpose ................................................. 1

 SECTION 2.       PARTICIPATION BY ELIGIBLE EXECUTIVES .................... 1

         2.1      Eligible Executives on Effective Date ................... 1
         2.2      Eligible Executives After Effective Date ................ 1
         2.3      Written Proof of Participation Required ................. 1

 SECTION 3.       ACCRUED BENEFIT ......................................... 1

         3.1      Definition .............................................. 1
         3.2      Applicable Percentage ................................... 1
         3.3      Final Average Compensation .............................. 2
         3.4      Required Reductions ..................................... 2

 SECTION 4.       RETIREMENT BENEFITS ..................................... 3

         4.1      Normal Retirement Benefit ............................... 3
         4.2      Late Retirement Benefit ................................. 3
         4.3      Early Retirement Benefit ................................ 3
         4.4      Vested Retirement Benefit ............................... 3
         4.5      Disability Retirement Benefit ........................... 3
         4.6      Joint & Survivor Annuity Option ......................... 4
         4.7      Lump Sum Option ......................................... 4

 SECTION 5.       PRERETIREMENT DEATH BENEFITS ............................ 4

         5.1      Lump Sum Benefit ........................................ 4
         5.2      Annuity Options Available to Spouse Beneficiaries ....... 4

 SECTION 6.       NATURE OF PARTICIPANT'S INTEREST IN PLAN ................ 4

         6.1      No Right to Assets ...................................... 4
         6.2      No Right to Transfer Interest ........................... 4
         6.3      No Employment Rights .................................... 5
         6.4      Withholding and Tax Liabilities ......................... 5

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TABLE OF CONTENTS
(CONTINUED)

                                                                            PAGE

 SECTION 7.       ADMINISTRATION, INTERPRETATION, AND
                     MODIFICATION OF PLAN ................................... 5

         7.1      Plan Administrator ........................................ 5
         7.2      Powers of Committee ....................................... 5
         7.3      Finality of Committee Determinations ...................... 5
         7.4      Incapacity ................................................ 5
         7.5      Amendment, Suspension, and Termination .................... 5
         7.6      Power to Delegate Board Authority ......................... 5
         7.7      Headings .................................................. 6
         7.8      Severability .............................................. 6
         7.9      Governing Law ............................................. 6
         7.10     Complete Statement of Plan ................................ 6

 SECTION 8.       TERMS USED IN THE PLAN .................................... 6

         8.1      Gender and Number ......................................... 6
         8.2      Definitions ............................................... 6

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                              JLG INDUSTRIES, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                           EFFECTIVE FEBRUARY 16, 2000

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SECTION 1. ESTABLISHMENT AND PURPOSE OF THE PLAN.

         1.1 ESTABLISHMENT. Effective June 1, 1995, the Company established the
Plan for the benefit of the Participants and, in the case of Participants
described in Section 2.1, for the purpose of replacing their benefits under the
Prior Plan.

         1.2 PURPOSE. The Plan is an unfunded plan maintained primarily for the
purpose of providing deferred compensation to a select group of management and
highly compensated employees. The Plan provides supplemental retirement income
to Participants in excess of their employer-provided benefits under certain
other plans and arrangements up to the maximum benefit specified in the Plan.
The Plan also provides supplemental survivor's income to Participant's
Beneficiaries.

SECTION 2. PARTICIPATION BY ELIGIBLE EXECUTIVES.

         2.1 ELIGIBLE EXECUTIVES ON EFFECTIVE DATE. An employee who is an
Eligible Executive on the Effective Date will become a Participant in the Plan
beginning on the Effective Date if he agrees in writing to waive all rights he
may have under the Prior Plan.

         2.2 ELIGIBLE EXECUTIVES AFTER EFFECTIVE DATE. An employee who first
becomes an Eligible Executive after the Effective Date will not become a
Participant in the Plan unless the Compensation Committee, in its sole
discretion, permits him to do so. If the Compensation Committee does permit him
to participate in the Plan, the Eligible Executive will become a Participant in
the Plan on the date specified by the Compensation Committee in its sole
discretion.

         2.3 WRITTEN PROOF OF PARTICIPATION REQUIRED. No employee will become a
Participant in the Plan unless he and the Company execute a copy of the Plan
document recognizing his participation in the Plan. The executed copy will
constitute an agreement between the Company and the employee that binds both of
them to the terms of the Plan. Their agreement will be binding on their heirs,
executors, administrators, successors, and assigns, both present and future. The
executed copy must be signed on the Company's behalf by an authorized officer
(other than the employee) and by the employee on his own behalf. In the case of
an employee who becomes a Participant under Section 2.1, the executed copy will
also constitute his written agreement to waive all rights he may have under the
Prior Plan.

SECTION 3. ACCRUED BENEFIT.

         3.1 DEFINITION. A Participant's Accrued Benefit under the Plan is a
monthly benefit equal to the Applicable Percentage of his Final Average
Compensation, payable in the form of a Ten-Year Certain Life Annuity beginning
on his Normal Retirement Date, and reduced in accordance with Section 3.4

         3.2 APPLICABLE PERCENTAGE. A Participant's Applicable Percentage is the
percentage that is specified by the Compensation Committee with respect to the
Participant for purposes of the Plan and that is reflected in the written
agreement between the Company and the Participant executed in accordance with
Section 2.3.

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         3.3 FINAL AVERAGE COMPENSATION. A Participant's Final Average
Compensation is one-twelfth the average of his Annual Compensation for the two
consecutive or nonconsecutive calendar years during which the average of his
Annual Compensation is the highest. The Annual Compensation of a Participant for
a calendar year is the amount of the Participant's base salary for the calendar
year and the amount of any cash bonus paid to him in the calendar year, each
including (i) amounts that are contributed, at the election of a Participant, on
behalf of the Participant to a cafeteria plan or a cash or deferred arrangement
and not included in the Participant's gross income for federal income tax
purposes by reason of section 125 or 402(e)(3) of the Code and (ii) compensation
deferred under the JLG Industries, Inc. Executive Deferred Compensation Plan (or
any successor thereto); provided that if a Change in Control occurs and his
employment terminates during the Participant's first two years of employment
with the Company, then the Annual Compensation of the Participant shall be
deemed to be his then current annual base salary rate and the bonus he would
have been entitled to for the applicable fiscal year under the then current
management incentive plan assuming target objectives had been achieved. Annual
Compensation earned more than 10 years before the year in which the
Participant's employment with the Company terminates is ignored. Annual
Compensation does not include any amount realized as a result of the grant,
modification, or exercise of a stock option.

         3.4 REQUIRED REDUCTIONS. The monthly installments otherwise included in
a Participant's Accrued Benefit will be reduced as follows:

                  (a) First, each monthly installment will be reduced by the
         monthly amount of a benefit that is the Actuarial Equivalent of all
         employer-provided benefits the Participant has received, is receiving,
         or is expected to receive under any defined benefit plan (other than
         this Plan), regardless of whether the defined benefit plan is
         maintained by the Company or another employer, including an unrelated
         employer. Employer-provided benefits provided to an alternate payee
         under a domestic relations order will be treated as if they were
         provided to the Participant.

                  (b) Second, each monthly installment will be further reduced
         by the monthly amount of a benefit that is the Actuarial Equivalent of
         all employer-provided account balances accumulated on the Participant's
         behalf under any defined contribution plan, regardless of whether the
         defined contribution plan is maintained by the Company or another
         employer, including an unrelated employer. Employer-provided account
         balances do not include any portion of an account balance attributable
         to salary reduction contributions made by the Participant, regardless
         of whether the contributions are made on a pre-tax or an after-tax
         basis. Account balances will be determined as of 30 days before the
         Participant's Benefit Starting Date. Distributions previously made from
         the Participant's accounts will be taken into account, plus interest
         from the date of distribution. Employer-provided account balances
         provided to an alternate payee under a domestic relations order will be
         treated as if they were provided to the Participant.

                  (c) Third, each monthly installment will be further reduced by
         the monthly amount of a benefit that is the Actuarial Equivalent of the
         Participant's Company Contribution Subaccount (within the meaning of
         the JLG Industries, Inc. Executive Deferred Compensation Plan), if any,
         and any investment return (or loss) credited to such subaccount
         pursuant to section 3.3 of such plan. The balance in the Participant's
         subaccount will be determined as of 30 days before the Participant's
         Benefit Starting Date. Previous distributions attributable to the
         Participant's accounts will be taken into account, plus interest from
         the date of distribution.

                  (d) Fourth, after the preceding reductions have been made,
         each monthly installment that is scheduled to be made after the
         Participant reaches Social Security Retirement Age will be further
         reduced by one-half the monthly amount of the federal Social Security
         old-age benefit he is entitled to begin receiving on his Social
         Security Retirement Age.

                  (e) Fifth, if the Participant elects to begin receiving
         benefits before his Normal Retirement Date, the monthly installment
         resulting after the preceding reductions have been made will be further
         reduced by one-half of one percent for each month during which benefits
         are scheduled to be paid before his Normal Retirement Date.

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                  (f) Sixth, after the preceding reductions have been made, the
         resulting monthly installment will be further reduced by multiplying it
         by the Participant's Vested Percentage. The Vested Percentage is 100
         percent in the case of a Participant with five or more Years of
         Service, 75 percent in the case of a Participant with four but less
         than five Years of Service, 50 percent in the case of a Participant
         with three but less than four Years of Service, 25 percent in the case
         of a Participant with two but less than three Years of Service, and
         zero percent in the case of a Participant with less than two Years of
         Service. A Participant is deemed to have completed five Years of
         Service if he dies or becomes Disabled, or if a Change in Control
         occurs, before his Benefit Starting Date.

                  (g) Seventh, after the preceding reductions have been made,
         each monthly installment made during a month for which the Participant
         receives benefits under a long-term disability plan maintained by the
         Company will be further reduced by the amount of the employer-provided
         long-term disability benefit he receives for that month.

SECTION 4. RETIREMENT BENEFITS.

         4.1 NORMAL RETIREMENT BENEFIT. A Participant who retires from service
with the Company on his Normal Retirement Date is entitled to a Normal
Retirement Benefit. Unless he elects otherwise, he will receive his Normal
Retirement Benefit in the form of a Ten-Year Certain Life Annuity beginning on
his Normal Retirement Date. The monthly installments made under his Normal
Retirement Benefit will be the same as the monthly installments under his
Accrued Benefit.

         4.2 LATE RETIREMENT BENEFIT. A Participant who retires from service
with the Company after his Normal Retirement Date is entitled to a Late
Retirement Benefit. Unless he elects otherwise, he will receive his Late
Retirement Benefit in the form of a Ten-Year Certain Life Annuity beginning on
the first day of the month after he retires from service with the Company. The
monthly installments made under his Late Retirement Benefit will be the same as
the monthly installments under his Accrued Benefit, beginning with the monthly
installment for the month that includes his Late Retirement Date. However, he
will not receive any monthly installments that would have been made under his
Accrued Benefit before his Late Retirement Date, and no adjustment will be made
in his Late Retirement Benefit to reflect the loss of these installments. For
purposes of calculating the Final Average Compensation of a Participant entitled
to a Late Retirement Benefit, Annual Compensation paid after the Participant's
Normal Retirement Date will be taken into account.

         4.3 EARLY RETIREMENT BENEFIT. A Participant who retires from service
with the Company on or after age 55 but before his Normal Retirement Date is
entitled to an Early Retirement Benefit. Unless he elects otherwise, he will
receive his Early Retirement Benefit in the form of a Ten-Year Certain Life
Annuity beginning on his Normal Retirement Date. The monthly installments made
under his Early Retirement Benefit will be the same as the monthly installments
under his Accrued Benefit. However, he may elect to begin receiving his Early
retirement Benefit on the first day of any month before his Normal Retirement
Date and on or after the date he retires from service with the Company.

         4.4 VESTED RETIREMENT BENEFIT. A Participant whose employment with the
Company terminates for any reason before age 55 following a Change in Control is
entitled to a Vested Retirement Benefit. Unless he elects otherwise, he will
receive his Vested Retirement Benefit in the form of a Ten-Year Certain Life
Annuity beginning on his Normal Retirement Date. The monthly installments made
under his Vested Retirement Benefit will be the same as the monthly installments
under his Accrued Benefit. However, he may elect to begin receiving his Vested
Retirement Benefit on the first day of any month before his Normal Retirement
Date and on or after age 55.

         4.5 DISABILITY RETIREMENT BENEFIT. A Participant who becomes Disabled
before his employment with the Company terminates and before he satisfies the
requirements for another Retirement Benefit under this

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Section 4 is entitled to a Disability Retirement Benefit. Unless he elects
otherwise, he will receive his Disability Retirement Benefit in the form of a
Ten-Year Certain Life Annuity beginning on his Normal Retirement Date. The
monthly installments made under his Disability Retirement Benefit will be the
same as the monthly installments under his Accrued Benefit. However, he may
elect to begin receiving his Disability Retirement Benefit on the first day of
any month before his Normal Retirement Date and on or after age 55.

         4.6 JOINT & SURVIVOR ANNUITY OPTION. A Participant may elect to receive
his Retirement Benefit in the form of a Ten-Year Certain Joint & Survivor
Annuity rather than a Ten-Year Certain Life Annuity. The Ten-Year Certain Joint
& Survivor Annuity may begin on the first day of any month on which the
Participant is entitled to begin receiving his Retirement Benefit and will be
the Actuarial Equivalent of the Retirement Benefit that would have been payable
to him in the form of a Ten-Year Certain Life Annuity beginning on that day. Any
election under this Section 4.6 must be made before the Participant's Benefit
Starting Date and may not be changed or revoked after that date.

         4.7 LUMP SUM OPTION. Alternatively, a Participant may elect to receive
his Retirement Benefit in the form of a lump sum rather than a Ten-Year Certain
Life Annuity. The lump sum may be paid on the first day of any month on which
the Participant is entitled to begin receiving his Retirement Benefit and will
equal the Actuarial Present Value of the Retirement Benefit that would have been
payable to him in the form of a Ten-Year Certain Life Annuity beginning on that
day. Any election under this Section 4.7 must be made before the Participant's
Benefit Starting Date and may not be changed or revoked after that date.

SECTION 5. PRERETIREMENT DEATH BENEFITS.

         5.1 LUMP SUM BENEFIT. If a Participant dies before his Benefit Starting
Date, his Beneficiary is entitled to a Preretirement Death Benefit, even if the
Participant has not satisfied the requirements for a Retirement Benefit under
Section 4 at the time of his death. Except as provided in Section 5.2, the
Preretirement Death Benefit will be paid as soon as administratively feasible
after the Participant's death in the form of a lump sum equal to the Actuarial
Present Value of the first 120 monthly installments that would have been paid to
the Participant under a Ten-Year Certain Life Annuity that began on the earliest
date after his death on which he could have elected to begin receiving benefits
under Section 4, had he not died.

         5.2 ANNUITY OPTIONS AVAILABLE TO SPOUSE BENEFICIARIES. In lieu of the
lump sum described in Section 5.1, a Beneficiary who is married to the
Participant at the time of his death may elect to receive the Preretirement
Death Benefit in the form of either a Single Life Annuity or a Ten-Year Certain
Fixed Annuity. The Beneficiary may elect to begin receiving the Single Life
Annuity or Ten-Year Certain Fixed Annuity on any date after the Participant's
death on which the Participant could have elected to begin receiving benefits
under Section 4, had he not died. Any election under this Section 5.2 must be
made before the Beneficiary's Benefit Starting Date and may not be changed or
revoked after that date.

SECTION 6. NATURE OF PARTICIPANT'S INTEREST IN PLAN.

         6.1 NO RIGHT TO ASSETS. Participation in the Plan does not create, in
favor of any Participant or Beneficiary, any right or lien in or against any
asset of the Company. Nothing contained in the Plan, and no action taken under
its provisions, will create or be construed to create a trust of any kind, or a
fiduciary relationship, between the Company and a Participant or any other
person. The Company's promise to pay benefits under the Plan will at all times
remain unfunded as to each Participant and Beneficiary, whose rights under the
Plan are limited to those of a general and unsecured creditor of the Company.

         6.2 NO RIGHT TO TRANSFER INTEREST. Rights to benefits payable under the
Plan are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, or encumbrance. However, the Administrative

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Committee may permit a Participant or Beneficiary to enter into a revocable
arrangement to pay all or part of his benefits under the Plan to a revocable
grantor trust (a so-called "living trust"). In addition, the Administrative
Committee may recognize the right of an alternate payee named in a domestic
relations order to receive all or part of a Participant's benefits under the
Plan, but only if (a) the domestic relations order would be a "qualified
domestic relations order" within the meaning of section 414(p) of the Code (if
section 414(p) applied to the Plan), (b) the domestic relations order does not
attempt to give the alternate payee any right to any asset of the Company, (c)
the domestic relations order does not attempt to give the alternate payee any
right to receive payments under the Plan at a time or in an amount that the
Participant could not receive under the Plan, and (d) the amount of the
Participant's benefits under the Plan are reduced to reflect any payments made
or due the alternate payee.

         6.3 NO EMPLOYMENT RIGHTS. No provisions of the Plan and no action taken
by the Company, the Board of Directors, the Compensation Committee, or the
Administrative Committee will give any person any right to be retained in the
employ of the Company, and the Company specifically reserves the right and power
to dismiss or discharge any Participant.

         6.4 WITHHOLDING AND TAX LIABILITIES. The amount of any withholdings
required to be made by any government or government agency will be deducted from
benefits paid under the Plan to the extent deemed necessary by the
Administrative Committee. In addition, the Participant or Beneficiary (as the
case may be) will bear the cost of any taxes not withheld on benefits provided
under the Plan, regardless of whether withholding is required.

SECTION 7. ADMINISTRATION, INTERPRETATION, AND MODIFICATION OF PLAN.

         7.1 PLAN ADMINISTRATOR. The Administrative Committee will administer
the Plan.

         7.2 POWERS OF COMMITTEE. The Administrative Committee's powers include,
but are not limited to, the power to adopt rules consistent with the Plan; the
power to decide all questions relating to the interpretation of the terms and
provisions of the Plan; and the power to resolve all other questions arising
under the Plan (including, without limitation, the power to remedy possible
ambiguities, inconsistencies, or omissions by a general rule or particular
decision). The Administrative Committee has discretionary authority to exercise
each of the foregoing powers.

         7.3 FINALITY OF COMMITTEE DETERMINATIONS. Determinations by the
Administrative Committee and any interpretation, rule, or decision adopted by
the Administrative Committee under the Plan or in carrying out or administering
the Plan will be final and binding for all purposes and upon all interested
persons, their heirs, and their personal representatives.

         7.4 INCAPACITY. If the Administrative Committee determines that any
person entitled to benefits under the Plan is unable to care for his affairs
because of illness or accident, any payment due (unless a duly qualified
guardian or other legal representative has been appointed) may be paid for the
benefit of such person to his spouse, parent, brother, sister, or other party
deemed by the Administrative Committee to have incurred expenses for such
person.

         7.5 AMENDMENT, SUSPENSION, AND TERMINATION. The Board of Directors has
the right by written resolution to amend, suspend, or terminate the Plan at any
time. However, no amendment, suspension, or termination will apply to an
employee who already is a Participant in the Plan without his express written
consent.

         7.6 POWER TO DELEGATE BOARD AUTHORITY. The Board of Directors may, in
its sole discretion, delegate to any person or persons all or part of its
authority and responsibility under the Plan, including, without limitation, the
authority to amend the Plan.

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         7.7 HEADINGS. The headings used in this document are for convenience of
reference only and may not be given any weight in interpreting any provision of
the Plan.

         7.8 SEVERABILITY. If any provision of the Plan is held illegal or
invalid for any reason, the illegality or invalidity of that provision will not
affect the remaining provisions of the Plan, and the Plan will be construed and
enforced as if the illegal or invalid provision had never been included in the
Plan.

         7.9 GOVERNING LAW. The Plan will be construed, administered, and
regulated in accordance with the laws of the Commonwealth of Pennsylvania,
except to the extent that those laws are preempted by federal law.

         7.10 COMPLETE STATEMENT OF PLAN. This Plan supersedes the Prior Plan
with respect to the Participants. This Plan contains a complete statement of its
terms. The Plan may be amended, suspended, or terminated only in writing and
then only as provided in Section 7.5. A Participant's right to any benefit of a
type provided under the Plan will be determined solely in accordance with the
terms of the Plan. No other evidence, whether written or oral, will be taken
into account in interpreting the provisions of the Plan. Notwithstanding the
preceding provisions of this Section 7.10, for purposes of determining benefits
with respect to a Participant, this Plan will be deemed to include (a) the
provisions of the written agreement between the Company and the Participant
executed in accordance with Section 2.3, and (b) the provisions of any other
written agreement between the Company and the Participant to the extent such
other agreement explicitly provides for the incorporation of some or all of its
terms into this Plan.

SECTION 8. TERMS USED IN THE PLAN.

         8.1 GENDER AND NUMBER. Words used in the masculine gender in the Plan
are intended to include the feminine and neuter genders, where appropriate.
Words used in the singular form in the Plan are intended to include the plural
form, where appropriate, and vice versa.

         8.2 DEFINITIONS. When used in capitalized form in the Plan, the
following words and phrases have the following meanings, unless the context
clearly indicates that a different meaning is intended:

                  "ACCRUED BENEFIT" means the benefit described in Section 3.

                  "ACTUARIAL EQUIVALENT" means the following: an amount or
         benefit is the "Actuarial Equivalent" of, or is "Actuarially
         Equivalent" to, another amount or benefit as of a specified date, if
         the Actuarial Present Value as of the specified date of the first
         amount or benefit equals the Actuarial Present Value as of the
         specified date of the second amount or benefit, when calculated using
         the same actuarial assumptions. Actuarial Equivalence under Section 3.4
         will be determined as of the Participant's Normal Retirement Date, and
         the resulting benefit will be expressed in the form of a Ten-Year
         Certain Life Annuity beginning on the Participant's Normal Retirement
         Date. Actuarial Equivalence under Section 4.6 will be determined as of
         the Participant's Benefit Starting Date, and the resulting benefit will
         be expressed in the form of a Ten-Year Certain Joint & Survivor Annuity
         beginning on the Participant's Benefit Starting Date. Actuarial
         Equivalence under the definition of "Single Life Annuity" in this
         Section 8.2 will be determined as of the Beneficiary's Benefit Starting
         Date, and the resulting benefit will be expressed in the form of a
         Single Life Annuity beginning on the Beneficiary's Benefit Starting
         Date.

                  "ACTUARIAL PRESENT VALUE" means the value as of a specified
         date of an amount or a series of amounts due before or thereafter,
         where each amount is multiplied by the probability that the condition
         or conditions on which payment of the amount is contingent will be
         satisfied, and where each amount so multiplied is then increased (if
         due before) or discounted (if due thereafter) according to an assumed
         rate of interest to reflect the time value of money. Unless the Plan
         specifies otherwise, the mortality table and interest rate used to
         calculate the Actuarial Present Value of an amount or series of amounts
         will be the

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         mortality table and interest rate in effect under section
         417(e)(3)(A)(ii) of the Code 90 days before the Participant's Benefit
         Starting Date.

                  "ADMINISTRATIVE COMMITTEE" means the Administrative Committee
         appointed to administer the JLG Industries, Inc. Employees' Retirement
         Savings Plan. However, following a Change in Control, "Administrative
         Committee" means the trustee under the grantor trust maintained by the
         Company in connection with the Plan.

                  "ANNUAL COMPENSATION" has the meaning assigned to that term in
         Section 3.3.

                  "APPLICABLE PERCENTAGE" has the meaning assigned to that term
         in Section 3.2.

                  "ASSOCIATE" has the meaning assigned to that term for purposes
         of Rule 12b-2 of the General Rules and Regulations under the Securities
         Exchange Act.

                  "BENEFICIAL OWNER" means the following: a Person is deemed to
         be the "Beneficial Owner" of, to "Beneficially Own," and to have
         "Beneficial Ownership" of, any securities:

                           (1) which such Person or any of such Person's
                  Securities Law Affiliates or Associates beneficially owns,
                  directly or indirectly;

                           (2) which such Person or any of such Person's
                  Securities Law Affiliates or Associates has (A) the right or
                  obligation to acquire (whether such right or obligation is
                  exercisable or effective immediately or only after the passage
                  of time) pursuant to any agreement, arrangement, or
                  understanding (whether or not in writing) or upon the exercise
                  of conversion rights, exchange rights, rights, warrants or
                  options, or otherwise; provided that a Person shall not be
                  deemed the "Beneficial Owner" of, or to "Beneficially Own," or
                  to have "Beneficial Ownership" of, securities tendered
                  pursuant to a tender or exchange offer made by such Person or
                  any of such Person's Securities Law Affiliates or Associates
                  until such tendered securities are accepted for purchase or
                  exchange; or (B) the right to vote pursuant to any agreement,
                  arrangement, or understanding (whether or not in writing);
                  provided that a Person shall not be deemed the "Beneficial
                  Owner" of, or to "Beneficially Own," or to have "Beneficial
                  Ownership" of, any security under this clause (B) if the
                  agreement, arrangement, or understanding to vote such security
                  (i) arises solely from a revocable proxy given in response to
                  a public proxy or consent solicitation made pursuant to, and
                  in accordance with, the applicable rules and regulations of
                  the Securities Exchange Act, and (ii) is not also then
                  reported by such Person on Schedule 13D under the Securities
                  Exchange Act (or any comparable or successor report); or

                           (3) which are beneficially owned, directly or
                  indirectly, by any other Person (or any Securities Law
                  Affiliate or Associate thereof) with which such Person or any
                  of such Person's Securities Law Affiliates or Associates has
                  any agreement, arrangement, or understanding (whether or not
                  in writing) or with which such Person or any of such Person's
                  Securities Law Affiliates or Associates have otherwise formed
                  a group for the purpose of acquiring, holding, voting (except
                  pursuant to a revocable proxy as described in clause (B)(i) of
                  paragraph (2), above), or disposing of any securities of the
                  Company.

                  "BENEFICIARY" means the person designated in writing by a
         Participant to receive benefits under the Plan after the Participant's
         death. If a Participant dies before his Benefit Starting Date and he
         has failed to designate a Beneficiary or his designated Beneficiary
         fails to survive him, his Beneficiary will be the person to whom he is
         married at the time of his death, or if he is not married at that time,
         his Beneficiary will be the executor of his will or the administrator
         of his estate. If a Participant who has elected a Ten-Year Certain
         Life Annuity dies on or after his Benefit Starting Date and he has
         failed to designate a Beneficiary or his Beneficiary fails to survive
         him, his Beneficiary will be the person to whom he is

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         married at the time of his death, or if he is not married at that time,
         the Actuarial Present Value of the payments (if any) to be made after
         his death will be paid in an immediate lump sum to the executor of his
         will or the administrator of his estate. A Participant may revoke in
         writing a prior designation of a Beneficiary at any time before the
         earlier of the Participant's death or his Benefit Starting Date. In
         addition, a Participant may revoke in writing a prior designation of a
         Beneficiary under a Ten-Year Certain Life Annuity at any time before
         the Participant's death. A Beneficiary under a Ten-Year Certain Life
         Annuity or a Ten-Year Certain Fixed Annuity may designate in writing a
         person to receive any benefits due under the Plan after the
         Beneficiary's death (a "Beneficiary's Beneficiary"). The Beneficiary
         may revoke this designation in writing at any time before his death.

                  "BENEFIT STARTING DATE" means the date on which a Participant
         or Beneficiary is scheduled to begin receiving benefits under the Plan.

                  "BOARD OF DIRECTORS" means the Board of Directors of the
         Company.

                  "CHANGE IN CONTROL" means the first to occur of the following
         events:

                           (1) an acquisition (other than directly from the
                  Company) of securities of the Company by any Person,
                  immediately after which such Person, together with all
                  Securities Law Affiliates and Associates of such Person,
                  becomes the Beneficial Owner of securities of the Company
                  representing 25 percent or more of the Voting Power; provided
                  that, in determining whether a Change in Control has occurred,
                  the acquisition of securities of the Company in a Non-Control
                  Acquisition will not constitute an acquisition that would
                  cause a Change in Control; or

                           (2) three or more directors, whose election or
                  nomination for election is not approved by a majority of the
                  members of the Incumbent Board then serving as members of the
                  Board of Directors, are elected within any single 12-month
                  period to serve on the Board of Directors; provided that an
                  individual whose election or nomination for election is
                  approved as a result of either an actual or threatened
                  Election Contest or Proxy Contest, including by reason of any
                  agreement intended to avoid or settle any Election Contest or
                  Proxy Contest, will be deemed not to have been approved by a
                  majority of the Incumbent Board for purposes of this
                  definition; or

                           (3) members of the Incumbent Board cease for any
                  reason to constitute at least a majority of the Board of
                  Directors; or

                           (4) approval by shareholders of the Company of:

                                    (A) a merger, consolidation, or
                           reorganization involving the Company, unless

                                             (i) the shareholders of the
                                    Company, immediately before the merger,
                                    consolidation, or reorganization, own,
                                    directly or indirectly immediately following
                                    such merger, consolidation, or
                                    reorganization, at least 75 percent of the
                                    combined voting power of the outstanding
                                    voting securities of the corporation
                                    resulting from such merger, consolidation,
                                    or reorganization in substantially the same
                                    proportion as their ownership of the voting
                                    securities immediately before such merger,
                                    consolidation, or reorganization;

                                             (ii) individuals who were members
                                    of the Incumbent Board immediately prior to
                                    the execution of the agreement providing for
                                    such merger, consolidation, or
                                    reorganization constitute at least a
                                    majority of the board of the directors of
                                    the Surviving Corporation; and

                                       8
<PAGE>   12

                                             (iii) no Person (other than (1) the
                                    Company or any Subsidiary thereof, (2) any
                                    employee benefit plan (or any trust forming
                                    a part thereof) maintained by the Company,
                                    any Subsidiary thereof, or the Surviving
                                    Corporation, or (3) any person who,
                                    immediately prior to such merger,
                                    consolidation, or reorganization, had
                                    Beneficial Ownership of securities
                                    representing 25 percent or more of the
                                    Voting Power) has Beneficial Ownership of
                                    securities representing 25 percent or more
                                    of the combined voting power of the
                                    Surviving Corporation's then outstanding
                                    voting securities;

                                    (B) a complete liquidation or dissolution of
                           the Company; or

                                    (C) an agreement for the sale or other
                           disposition of all or substantially all of the assets
                           of the Company to any Person (other than a transfer
                           to a Subsidiary of the Company).

                  "CODE" means the Internal Revenue Code of 1986, as amended and
         in effect from time to time.

                  "COMPANY" means JLG Industries, Inc., and any successor to JLG
         Industries, Inc. Employment with the Company includes employment with
         any corporation, partnership, or other organization required to be
         aggregated with the Company under sections 414(b) and (c) of the Code.

                  "COMPENSATION COMMITTEE" means the Compensation Committee of
         the Board of Directors.

                  "DISABILITY RETIREMENT BENEFIT" means the benefit described in
         Section 4.5.

                  "DISABLED" means entitled to receive benefits under a
         long-term disability plan maintained by the Company.

                  "EARLY RETIREMENT BENEFIT" means the benefit described in
         Section 4.3.

                  "EFFECTIVE DATE" means June 1, 1995.

                  "ELECTION CONTEST" means an election contest described in Rule
         14a-11 promulgated under the Securities Exchange Act.

                  "ELIGIBLE EXECUTIVE" means an employee of the Company who is
         an officer of the Company or who holds any other key position
         designated by the Compensation Committee in its sole discretion.

                  "FINAL AVERAGE COMPENSATION" has the meaning assigned to that
         term in Section 3.3.

                  "INCUMBENT BOARD" means individuals who, as of the close of
         business on the Effective Date, are members of the Board of Directors;
         provided that, if the election, or nomination for election by the
         Company's shareholders, of any new director was approved by a vote of
         at least 75 percent of the Incumbent Board, such new director shall,
         for purposes of the Plan, be considered as a member of the Incumbent
         Board; provided further that no individual shall be considered a member
         of the Incumbent Board if such individual initially assumed office as a
         result of either an actual or threatened Election Contest or other
         actual or threatened Proxy Contest, including by reason of any
         agreement intended to avoid or settle any Election Contest or Proxy
         Contest.

                  "LATE RETIREMENT BENEFIT" means the benefit described in
         Section 4.2.

                                       9
<PAGE>   13

                  "LATE RETIREMENT DATE" means the first day of the month
         following the month in which a Participant retires from service with
         the Company, if he retires from service with the Company after his
         Normal Retirement Date.

                  "NON-CONTROL ACQUISITION" means an acquisition by (1) an
         employee benefit plan (or a trust forming a part thereof) maintained by
         (A) the Company or (B) any of its Subsidiaries, (2) the Company or any
         of its Subsidiaries, or (3) any Person in connection with a Non-Control
         Transaction.

                  "NON-CONTROL TRANSACTION" means any transaction described in
         clauses (4)(A)(i) through (iii) of the definition of "Change in
         Control."

                  "NORMAL RETIREMENT BENEFIT" means the benefit described in
         Section 4.1.

                  "NORMAL RETIREMENT DATE" means the first day of the month
         following the month in which a Participant reaches age 62, unless a
         Change in Control occurs, in which case Normal Retirement Date means
         the first day of the month following the month in which the participant
         reaches age 60. In the case of a Participant who dies before reaching
         his Normal Retirement Date, Normal Retirement Date mans the day on
         which the Participant would have reached his Normal Retirement Date had
         he not died.

                  "PARTICIPANT" means a member of a select group of management
         or highly compensated employees of the Company who has become a
         participant in the Plan under Section 2.

                  "PERSON" means any individual, firm, corporation, partnership,
         joint venture, association, trust, or other entity.

                  "PLAN" means the JLG Industries, Inc. Supplemental Executive
         Retirement Plan as set forth in this document.

                  "PRERETIREMENT DEATH BENEFIT" means the benefit described in
         Section 5.1.

                  "PRIOR PLAN" means an individual agreement (customarily
         denominated a "Deferred Compensation Benefit Agreement") between the
         Company and the employee that provides for unfunded deferred
         compensation benefits and certain other benefits specified in the
         agreement.

                  "PROXY CONTEST" means a solicitation of proxies or consents by
         or on behalf of a Person other than the Board of Directors.

                  "RETIREMENT BENEFIT" means a Normal Retirement Benefit, a Late
         Retirement Benefit, an Early Retirement Benefit, a Vested Retirement
         Benefit, or a Disability Retirement Benefit.

                  "SECTION" means a section of this Plan. For example, a
         reference to Section 2 includes a reference to Sections 2.1 through
         2.3, while a reference to Section 2.1 is intended as a reference to
         Section 2.1 only.

                  "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
         1934, as amended and in effect from time to time.

                  "SECURITIES LAW AFFILIATE" means an "affiliate" as defined for
         purposes of Rule 12b-2 of the General Rules and Regulations under the
         Securities Exchange Act.

                  "SINGLE LIFE ANNUITY" means an annuity payable in equal
         monthly installments to a Beneficiary, beginning with the calendar
         month in which the Beneficiary's Benefit Starting Date occurs and
         ending with

                                       10
<PAGE>   14

         the calendar month in which the Beneficiary dies. The Single Life
         Annuity payable to a Beneficiary will be the Actuarial Equivalent of
         the Preretirement Death Benefit that the Beneficiary could have elected
         to receive in the form of a Ten-Year Certain Fixed Annuity beginning on
         the same day.

                  "SOCIAL SECURITY RETIREMENT AGE" means the earliest age at
         which the participant is entitled to begin receiving federal Social
         Security old-age benefits. In the case of a participant who does before
         reaching his Social Security Retirement Date, Social Security
         Retirement Date means the day on which the Participant would have
         reached his Social Security Retirement Date had he not died.

                  "SUBSIDIARY" of any Person means any corporation or other
         entity of which at least 80 percent (or such lesser percentage as the
         Administrative Committee may determine) of the voting power of the
         voting equity securities or voting interest therein is owned, directly
         or indirectly, by such Person.

                  "SURVIVING CORPORATION" means a corporation resulting from a
         merger, consolidation, or reorganization described in paragraph
         (4)(A)(i) of the definition of "Change in Control."

                  "TEN-YEAR CERTAIN FIXED ANNUITY" means an annuity payable in
         120 monthly installments that are equal to the first 120 monthly
         installments that would have been paid to the Participant (had he not
         died) under a Ten-Year Certain Life Annuity that began on the
         Beneficiary's Benefit Starting Date. The 120 monthly installments will
         be paid to the Beneficiary unless the Beneficiary dies before all 120
         monthly installments have been paid, in which case the Actuarial
         Present Value of the remaining installments will be paid to the
         Beneficiary's Beneficiary in an immediate lump sum.

                  "TEN-YEAR CERTAIN JOINT & SURVIVOR ANNUITY" means an annuity
         payable in equal monthly installments to the Participant, beginning
         with the calendar month in which his Benefit Starting Date occurs and
         ending with the calendar month in which he dies, and thereafter in
         equal monthly installments of the same or a lesser amount to his
         surviving Beneficiary (if any), beginning with the calendar month in
         which he dies and ending with the calendar month in which the
         Beneficiary dies, provided that if the Participant and his Beneficiary
         both die before the end of the 120-month period that begins on the
         Participant's Benefit Starting Date, the Actuarial Present Value of the
         additional monthly installments that would have been paid to the last
         to survive of the Participant and his Beneficiary (had the last
         survivor not died until the end of the 120-month period) will be paid
         in an immediate lump sum to the executor of the last survivor's will or
         the administrator of the last survivor's estate. At the time he elects
         a Ten-Year Certain Joint & Survivor Annuity, the Participant must
         designate a named natural person as his Beneficiary and must specify
         whether the monthly amount payable to the Beneficiary will be 50 or 100
         percent of the monthly amount payable to him under the Ten-Year Certain
         Joint & Survivor Annuity. After his Benefit Starting Date, the terms of
         his election may not be changed or revoked.

                  "TEN-YEAR CERTAIN LIFE ANNUITY" means an annuity payable in
         monthly installments to the Participant, beginning with the calendar
         month in which his benefit Starting Date occurs and ending with the
         calendar month in which he dies, provided that if he dies before the
         end of the 120-month period that begins on his Benefit Starting Date,
         the monthly installments will be continued to his Beneficiary,
         beginning with the calendar month following the calendar month in which
         the Participant dies and ending with the calendar month in which the
         120-month period ends. Except as required under Section 3.4(e) and (f),
         the monthly installments payable under a Ten-Year Certain Life Annuity
         will be equal in amount.

                  "VESTED RETIREMENT BENEFIT" means the benefit described in
         Section 4.4.

                  "VOTING POWER" means the voting power of all securities of the
         Company then outstanding generally entitled to vote for the election of
         directors of the Company.

                  "YEAR OF SERVICE" has the meaning assigned to that term under
         the JLG Industries, Inc. Employees' retirement Savings Plan.

                                       11
<PAGE>   15

                                            JLG Industries, Inc.

Attest:______________________               By:_________________________________

Title:_______________________               Title:______________________________

                                       12<PAGE>59
TRUST AGREEMENT

Dated as of __________, 2000

between

NOVA PHARMACEUTICAL, INC.

and

FARMERS AND MERCHANTS BANK of LONG BEACH

Establishing the formers

Creditor Protection Trust

Effective as of        , 2000

<PAGE>60

TABLE OF CONTENTS

ARTICLE I

Creation of Trust

Section 1.1.  Establishment of Trust               1
Section 1.2.  Purpose                              1
Section 1.3.  Accounts                             1

ARTICLE II

General Duties of the Parties

Section 2.1.  General Duties of Company            2
Section 2.2.  General Duties of Trustee            2

ARTICLE III

Investment, Administration and
Disbursement of Trust Fund

Section 3.1.  Investment Powers of Trustee         3
Section 3.2.  Valuation of Trust Fund              3
Section 3.3.  Administrative Powers of Trustee     4
Section 3.4.  Dealings with Trustee                5
Section 3.5.  Distributions from Trust Fund        5
Section 3.6  Payments by the Company..             5
Section 3.7.  Insolvency or Bankruptcy             6

ARTICLE IV

Settlement of Accounts,
 Enforcement of Trust and Legal Proceedings

Section 4.1.  Settlement of Accounts of Trustee    6
Section 4.2.  Determination of Interests
              in the Trust Fund, Enforcement of
Trust and Legal Proceedings                        7

ARTICLE V

Taxes, Expenses and Compensation
 of Trustee

Section 5.1.  Taxes                                7
Section 5.2.  Expenses and Compensation            8

ARTICLE VI

For Protection of Trustee

Section 6.1.  Evidence of Action by Company         8
Section 6.2.  Advice of Counsel                     8
Section 6.3.  Fiduciary Responsibility              8
Section 6.4.  No Duty to Advance Funds
   or to Administer the Plans                       9
Section 6.5.  Indemnification                       9

ARTICLE VII

Resignation and Removal of Trustee

Section 7.1.  Resignation of Trustee                9
Section 7.2.  Removal of Trustee                    9
Section 7.3.  Appointment of Successor Trustee      9
Section 7.4.  Transfer of Fund to Successor        10

ARTICLE VIII

Duration and Termination
of Trust and Amendment

<PAGE>61

Section 8.1.  Duration and Termination            10
Section 8.2.  Distribution upon Termination       10
Section 8.3.  Amendment                           10

ARTICLE IX

Indemnification

Section 9.1.  Indemnification                       11

ARTICLE X

Miscellaneous

Section 10.1.  Laws of California to Govern         11
Section 10.2.  Company's Liability
   Not Limited to Trust Assets                      11
Section 10.3. Rights of Beneficiaries               11
Section 10.4. Titles and Headings Not to Control    12
Section 10.5. Interpretation of the Trust Agreement 12

<PAGE>62

THIS AGREEMENT dated as of _________, 2000  by and between Nova
Pharmaceutical, Inc., a Delaware corporation (the "Company"), and
Farmers and Merchants Bank of Long Beach, a corporation having trust
powers under the laws of the state of California  (the "Trustee

W I T N E S S E T H:
WHEREAS, the Company desires to establish an irrevocable trust, subject
to the claims of its creditors, designed to qualify as a "grantor
trust" for federal income tax purposes, to be known as the Nova
Pharmaceutical, Inc. Creditor Protection Trust (the "Trust"), and the
Trustee is willing to serve as trustee thereof;
NOW, THEREFORE, the Company hereby establishes a trust with the
Trustee, and the Trustee hereby agrees to accept its appointment as
trustee thereof, subject to the following terms and conditions:

Creation of Trust

Section I.1.  Establishment of Trust.  The Company hereby establishes
with the Trustee and the Trustee hereby accepts an irrevocable trust
initially consisting of cash in the amount of one dollar (the "Initial
Contribution").
Section I.2.  Purpose.  The purpose of the Trust is to assist the
Company in meeting its obligations under those certain structured
repayment agreements listed on Appendix A hereto ("Agreements") and to
pay those trade obligations listed on Appendix B hereto.
Notwithstanding the foregoing, the Company may elect to include under
the Trust obligations payable under any other structured payment
agreement, contract, plan, agreement or trade payable (which, together
with the agreements and obligations listed on Appendix A and B shall
hereafter be collectively referred to as the "Obligations").
Section I.3.   Accounts.  The assets of the Trust shall be maintained
in one general account ("General Account") for the benefit of all
creditors who are parties to or beneficiaries under any Agreement  or
are creditors listed currently or in the future on Addendum B
("Creditors").  All of the earnings or proceeds of any assets of the
Trust shall be maintained in the General Account for the purposes of
the Trust and payment of expenses of the Trustee and its fees.  The
Trustee shall maintain records for the General Account.
General Duties of the Parties

Section 2.1.  General Duties of Company.  The Company shall provide the
Trustee with a copy of each Agreement and with copies of all amendments
thereto or addition Agreements for which payments are to be made from
the Trust.   In addition, The Company shall from time to time certify
to the Trustee the names and specimen signatures of the persons
appointed by the Board of Directors of the Company to act on behalf of
the Company in connection with the Trust.  The Company shall, upon
request of the Trustee, furnish the Trustee with such reasonable
information as is necessary or appropriate for the Trustee to carry out
its responsibilities under this Agreement, and the Trustee shall be
entitled to rely on the information received from the Company.  The
Company shall furnish the Trustee with such information as the Trustee
shall reasonably request to carry out the intent and purposes of the
Trust, and the Trustee shall be entitled to rely on the information
received from the Company.
In addition to the Initial Contribution, the Company shall make such
other contributions as shall from time to time be authorized by due
corporate action.  Any such payments made by the Company may be in
cash, Common Stock issued by the Company, ("Nova Stock") or by letter
of credit as the Company may determine.  The Company shall keep
accurate books and records with respect to the obligation owed to each
Creditor and shall provide copies of such books and records to the
Trustee at any time as the Trustee shall request.
Section 2.2.  General Duties of Trustee.  The Trustee shall hold all
payments and property received by it hereunder, together with the
income and gains therefrom and additions thereto (the "Trust Fund").
Unless otherwise directed by the Company, the Trustee shall invest any
cash at its discretion in any marketable short and medium term fixed
income securities, United States Treasury Bills, other short and medium
term government obligations, commercial paper or money market instru-
<PAGE>63
ments ("Short-Term Investments"), or may maintain cash balances
consistent with the liquidity needs of the Trust as determined by the
Trustee.  The Trustee shall manage, invest and reinvest the Trust Fund,
collect the income thereon, and make distributions therefrom, all as
hereinafter provided.  The Trustee shall be responsible only for the
property actually received by it hereunder and not for any amount which
the Company is required to contribute to the Trust Fund hereunder.  The
Trustee shall have no duty or authority to compute any amount to be
contributed to the Trust Fund or to bring any action or proceeding to
enforce the collection of any contribution required to be made to the
Trust Fund.  The rights, duties and obligations of the Trustee
hereunder shall be solely as set forth herein, without regard to the
terms of any of the Agreements or any other document which is not part
of this Agreement.

Investment, Administration and
  Disbursement of Trust Fund

Section 3.1.  Investment Powers of Trustee.  Subject to the
provisions of Sections 2.2, and 8.2 hereof, the Trustee shall have,
with respect to the Trust Fund, the power:

(a)  To invest and reinvest the Trust Fund as a single fund or, to the
extent directed by the Company.  Except as otherwise directed by the
Company in writing, the Trustee shall invest the Trust Fund, without
distinction between principal and income, in Short-Term Investments;
provided, that, the Trustee shall hold (i) any securities of the
Company or other property contributed to the Trust until it determines
in its sole discretion to sell such securities and (ii) any letter of
credit contributed to the Trust until replaced or drawn upon.  The
Trustee shall have the authority in its sole discretion to determine
the quantity and timing of its disposition of the Nova Stock, although
it is anticipated that it will be sold as the Trustee determines
necessary or appropriate to meet the liquidity needs of the Trust over
the term of the Trust and as the market for Nova Stock permits;
(b)  To participate in any plan of reorganization, consolidation,
merger, combination, liquidation or other similar plan or oppose any
such plan or any action thereunder, or any contract, mortgage,
purchase, sale or other action by any person or corporation;
(c)  To deposit any property with any protective, reorganization or
similar committee, to delegate discretionary power to any such
committee and to pay and agree to pay part of the expenses and
compensation of any such committee and any assessments levied with
respect to any property so deposited;
(d)  To exercise all conversion and subscription rights pertaining to
any property;
 (e)   To organize under the laws of any state a corporation for the
purpose of acquiring and holding title to any property which it is
authorized to acquire under this Agreement and to exercise with respect
thereto any or all of the powers set forth in this Agreement;
(f)  To borrow against the cash surrender value of any insurance
contract for the purpose of paying the premiums on such contract; and
(g)  Generally to do all acts, whether or not expressly authorized, not
inconsistent with the terms of this Agreement which the Trustee may
deem necessary or desirable for the investment of the Trust Fund.
Section 3.2.  Valuation of Trust Fund.  As soon as practicable after
the last bank business day of each calendar quarter and as of such
other dates as may be specified by the Company or as determined by the
Trustee, the Trustee shall report to the Company the assets held in the
Trust Fund as of such day and shall determine and include in such
report the fair market value as of such day of each such asset.  In
determining such fair market values, the Trustee shall use such market
quotations and other information as are available to it and as may in
its discretion be appropriate.  The report of any such valuation shall
not constitute a representation by the Trustee that the amounts
reported as fair market values would actually be realized upon the
liquidation of the Trust Fund.  The Trustee shall not be accountable to
the Company or to any other person on the basis of any such valuation,
but its accountability shall be in accordance with the provisions of
Article VI hereof.

<PAGE>64
Section 3.3.  Administrative Powers of Trustee.  The Trustee shall have
the power in its discretion:
(a)  Except as otherwise provided pursuant to the terms of
this Agreement, to exercise all voting rights with respect
to the shares of stock, including Nova Stock, held in the
Trust Fund and to grant proxies, discretionary or
otherwise;
(b)  To cause any shares of stock to be registered and held in the name
of one or more of its nominees, or one or more nominees of any
system for the central handling of securities, without increase or
decrease of liability;
(c)  To collect and receive any and all money and other property due to
the Trust Fund and to give full discharge therefor;
(d)  To settle, compromise, or submit to arbitration any claims, debts
or damages due or owing to or from the Trust; to commence or defend
suits or legal proceedings whenever, in its judgment, any interest
of the Trust requires it; and to represent the Trust in all suits
or legal proceedings in any court of law or equity or before any
other body or tribunal, insofar as such suits or proceedings relate
to any property forming part of the Trust Fund or to the
administration of the Trust Fund; and
(e)  To hold uninvested for not more than four business days, without
liability for interest thereon, any moneys received by it until the
same shall be invested or disbursed;
(f)  To determine how all receipts and disbursements shall be credited,
charged or apportioned as between income and principal, and the
decision of the Trustee shall be final and not subject to question
by any beneficiary of the Trust;
(g)  To hold property of the Trust in its own name or in the name of a
nominee or nominees, without disclosure of the Trust, or in bearer
form so that it will pass by delivery, but no such holding shall
relieve the Trustee of its responsibility for the safe custody and
disposition of the Trust in accordance with the provisions of this
Agreement.  The Trustee's books and records shall at all times show
that such property is part of the Trust and the Trustee shall be
absolutely liable for any loss occasioned by the acts of its
nominee or nominees with respect to securities registered in the
name of the nominee or nominees;
(h)  To employ in the management of the Trust suitable agents, without
liability, subject to subparagraph (g) above, for any loss
occasioned by any such agents selected by the Trustee with the
care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims;
 (i)  To make, execute and deliver, as Trustee, any deeds, conveyances,
leases, mortgages, contracts, waivers or other instruments in
writing that the Trustee may deem necessary or desirable in the
exercise of its powers under this Agreement; and
 (j)  Generally to do all acts, whether or not expressly authorized,
which the Trustee may deem necessary or desirable for the
protection of the Trust Fund.
Section 3.4.  Dealings with Trustee.  Persons dealing with the Trustee
shall be under no obligation to see to the proper application of any
money paid or property delivered to the Trustee or to inquire into the
Trustee's authority as to any transaction.
Section 3.5.  Distributions from Trust Fund.  The Trustee shall make
distributions from the Trust Fund at such time or times and to such
person or persons, including the Trustee as provided under Section
5.2, (i) as the Company shall direct (whether expressly as to any
Creditor or pursuant to a payment schedule delivered to the Trustee by
the Company) or (ii) as is expressly provided elsewhere in this
Agreement.  The Trustee shall be entitled (i) to assume that any
condition with respect to payment of any benefit shall have been
satisfied by the intended recipient thereof or (ii) to rely on the
written statement of an intended recipient that all conditions or
events required to be satisfied or to have occurred prior to
commencement of payment have been satisfied or have occurred. The
Trustee shall also make distributions in accordance with any order of
a court of competent jurisdiction issued in conjunction with a
<PAGE>65
successful challenge by a person having an interest in the Trust Fund
made in accordance with the applicable provisions of any Plan.
Section 3.6.   Payments by the Company.   The Company reserves the
right to pay any Obligation directly to a Creditor rather than have
all or part of an Obligation paid by the Trustee.  The Trustee shall
notify the Company at any time that the Trust Fund is not capable of
meeting any Obligation and the Company shall make a determination in
its sole discretion whether to discharge the Obligation by direct
payment to the Creditor, contribute more assets to the Trust in order
to facilitate the Trust discharging such Obligation, or direct the
Trustee to defer payment until the Trust's liquidity is restored and
payment can be made by the Trustee from the Trust Fund.  In the event
of direct payment by the Company of any Obligation, the Company shall
advise the Trustee in writing of any adjustments to be made in the
balances or timing of any Obligations listed on Appendix A or B.
Section 3.7.  Insolvency or Bankruptcy.  The assets of the Trust shall
be subject to the claims of the Company's creditors only in the event
that the Company is a debtor in proceedings under the U.S. Bankruptcy
Code ("Bankruptcy") or is unable to pay its debts as they become due
("Insolvency").  The chief executive officer or other person serving
as the principal executive officer of the Company (the "Chief
Executive Officer") of the Company and the chief financial officer or
other person serving as the principal financial officer of the Company
(the "Chief Financial Officer") shall be obligated to notify the
Trustee promptly upon the occurrence of the Insolvency or Bankruptcy
of the Company, and, upon receipt of such notice, the Trustee shall
thereupon immediately suspend all payments hereunder for the duration
of such Insolvency or Bankruptcy.  If the Trustee receives written
allegations of the Company's Insolvency, it shall suspend payments
hereunder immediately and shall demand that the Company's Board of
Directors, Chief Executive Officer or the Chief Financial Officer
certify whether the Company is Insolvent.  The Trustee may accept a
certified resolution of the Board of Directors or a certificate of the
Chief Executive Officer or the Chief Financial Officer of the Company
attesting that the Company is not in a state of Insolvency as
determinative of the solvency of the Company and, if such resolution
or certificate is delivered, may recommence making payments hereunder.
Until such a resolution or certificate is delivered, the Trustee shall
continue to suspend payments.  While payments from the Trust Fund are
suspended under this Section 3.6, whether due to notice from the
Company or pending certification of the Company's solvency, the
Trustee shall hold the Trust Fund as set forth in this Agreement,
unless and until otherwise specifically directed by a court having
jurisdiction over the Trust Fund.
ARTICLE IV
Settlement of Accounts,
Enforcement of Trust and Legal Proceedings

Section 4.1.  Settlement of Accounts of Trustee.  The Trustee shall
keep full accounts of all investments, receipts and disbursements and
other transactions hereunder.  Its financial statements, books and
records with respect to the Trust Fund shall be open to inspection by
the Company or its representatives upon reasonable notice at all
reasonable times during business hours of the Trustee.
The Trustee shall render to the Company monthly statements of its
receipts and disbursements as Trustee hereunder.  Within 30 days after
the close of each year or any termination of the duties of the
Trustee, the Trustee shall prepare, sign and mail in duplicate to the
Company an account of its acts and transactions as Trustee hereunder.
If the Company finds the annual account to be correct, the Company
shall sign the instrument of settlement annexed to one counterpart of
the account and return such counterpart to the Trustee, whereupon the
account shall become an account stated as between the Trustee and the
Company.  If within ninety (90) days after receipt of the account or
any amended account the Company has not signed and returned a
counterpart to the Trustee, nor filed with the Trustee notice of any
objection to any act or transaction of the Trustee, the account or
amended account shall become an account stated as between the Trustee
and the Company.  If any objection has been filed, and if the Company
is satisfied that it should be withdrawn or if the account is adjusted
to its satisfaction, the Company shall in writing filed with the
Trustee signify its approval of the account, and it shall become an
account stated as between the Trustee and the Company.
When an account becomes an account stated, such account shall be
finally settled, and the Trustee shall be completely discharged and
<PAGE>66
released, as if such account had been settled and allowed by a
judgment or decree of a court of competent jurisdiction in an action
or proceeding in which the Trustee, the Company, and all persons
having or claiming to have any interest in the Trust Fund or under the
Plan were parties.
The Trustee or the Company shall have the right to apply at any time
to a court of competent jurisdiction for judicial settlement of any
account of the Trustee not previously settled as hereinabove provided.
In any such action or proceeding it shall be necessary to join as
parties only the Trustee and the Company (although the Trustee may
also join other parties as it deems appropriate), and any judgment or
decree entered therein shall be conclusive.
Section 4.2.  Determination of Interests in the Trust Fund,
Enforcement of Trust and Legal Proceedings.  The interests of each
person in the Trust Fund shall be determined in accordance with the
terms of the Agreement between each such person and the Company.  The
Trustee shall have no duty to question any direction given to the
Trustee by the Board or any committee thereof or by the authorized
representative of the Company, including any direction advising the
Trustee as to the interests of any person under any Agreement or
Obligation.  The Company shall have authority to enforce this
Agreement on behalf of all persons claiming any interest in the Trust
Fund, provided that a written request is received by the Company from
a Creditor to enforce this Agreement and the Company declines to
enforce this Agreement, the Creditor who made such request may enforce
this Agreement individually or as part of a class, in which case the
Company shall be obligated to reimburse such beneficiary for all
expenses incurred in pursuing such action.  Except as otherwise
provided in this Section 4.2, in any action or proceeding affecting
the Trust Fund the only necessary parties shall be the Company and the
Trustee, and no other person shall be entitled to any notice or
process.

Taxes, Expenses and Compensation
           of Trustee

Section 5.1.  Taxes.  Any taxes on the Trust Fund or the income
thereof or which the Trustee is required to pay shall be paid by the
Company.
Section 5.2.  Expenses and Compensation.  The Trustee shall be paid
such compensation for its services as Trustee as shall be agreed on
between the Company and Trustee (the "Fees") from the Trust, and pay
the Trustee's expenses of management and administration of the Trust,
including, but not limited to, compensation of counsel, record-keeping
expenses, investment management fees, computer time charges, data
retrieval and input costs, and charges for time expended by personnel
of the Trustee in fulfilling the Trustee's duties. The payment of such
compensation and expenses shall have priority over payments to be made
under this Agreement to beneficiaries of the Trust. If the Trust is
unable to pay such fees and expenses, the Company, upon receipt of
notice from the Trustee, shall promptly pay any such compensation and
expenses directly to the Trustee.

ARTICLE VI
For Protection of Trustee

Section 6.1.  Evidence of Action by Company.  Pursuant to Section 2.1
the Company shall certify to the Trustee the name or names of any
persons or persons authorized to act for the Company.  Until the
Company notifies the Trustee that any such person is no longer
authorized to act for it, the Trustee may continue to rely on the
authority of such person.
The Trustee may rely upon any certificate, notice or direction
purporting to have been signed on behalf of the Company which the
Trustee believes to have been signed by any person or persons
authorized to act for the Company.
Communications to the Trustee shall be sent to the Trustee's principal
office or to such other address as the Trustee may specify.  No
communication shall be binding upon the Trust Fund or the Trustee
until it is received by the Trustee.
<PAGE>67
Communications to the Company shall be sent to the Company's principal
office or to such other address as the Company may specify.
Section 6.2.  Advice of Counsel.  The Trustee may consult with any
legal counsel, including counsel to the Company, with respect to the
construction of this Agreement, its duties hereunder, or any act which
it proposes to take or omit, and shall not be liable for any action
taken or omitted in good faith pursuant to such advice.
Section 6.3.  Fiduciary Responsibility.  The Trustee shall carry out
its duties hereunder solely in the best interests of the Creditors and
their beneficiaries, and shall use the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matters would use in
the conduct of an enterprise of like character and with like aims.
The Trustee shall not be liable for any act or failure to act under
this Agreement, if any such action were taken or omitted, as the case
may be, in good faith or in accordance with the express provisions of
this Agreement.
The Trustee's duties and obligations shall be limited to those
expressly imposed upon it by this Agreement.
The Company at any time may employ as agent (to perform any act, keep
any records or accounts, or make any computations required of the
Company by this Agreement or the Plan) the corporation serving as
Trustee hereunder.  Nothing done by said corporation as such agent
shall affect its responsibility or liability as Trustee hereunder.
Section 6.4.  No Duty to Advance Funds or to Administer the
Agreements.  The Trustee shall have no obligation to advance its own
funds for the purposes of fulfilling its responsibilities under this
Agreement, and its obligation to incur expenses shall at all times be
limited to amounts in the Trust available to be applied toward such
expenses.  The Trustee shall not be responsible in any respect for
administering the Agreements.
Section 6.5.  Indemnification.  The Company agrees to indemnify the
Trustee for, and hold it harmless against, and defend it against any
and all liabilities, losses, costs or expenses (including reasonable
attorneys' fees) of whatsoever kind and nature which may be imposed
on, incurred by or asserted against it at any time by reason of (i)
accepting any property contributed to the Trust in the Company's
discretion or retaining such property as an investment for the Trust
Fund at the Company's direction, or (ii) carrying out in good faith
the responsibilities delegated to it under this Agreement, or by
reason of any act or failure to act under this Agreement, if any such
action were taken or omitted, as the case may be, in good faith or in
accordance with the express provisions of this Agreement; provided
that, with respect to subclause (ii), the Trustee shall not be
indemnified against any liability or expense for any action or
inaction taken or omitted by the Trustee which, under the
circumstances, the Trustee knows or has reason to know constitutes a
violation of the law or a breach of its fiduciary duties.

ARTICLE VII
Resignation and Removal of Trustee

Section 7.1.  Resignation of Trustee.  The Trustee may resign upon 90
days' written notice to the Company.
Section 7.2.  Removal of Trustee.  The Company, by action of its Board
of Directors, may remove the Trustee upon 90 days' valid written
notice to the Trustee, or upon shorter notice if acceptable to the
Trustee.
In the event the Trustee resigns or is removed, the Trustee shall have
a right to have its accounts settled as provided in Section 4.1
hereof.
Section 7.3.  Appointment of Successor Trustee.  The appointment of a
successor to the Trustee shall take effect upon delivery to the
Trustee of (a) a duly executed instrument in writing appointing such
successor, and (b)an acceptance in writing, executed by such
successor, both acknowledged in the same form as this Agreement.

<PAGE>68
All of the provisions set forth herein with respect to the Trustee
shall relate to each successor with the same force and effect as if
such successor had been originally named as a Trustee hereunder.
If a successor is not appointed within 60 days after the Trustee gives
notice of its resignation pursuant to Section 7.1, the Trustee may
apply to any court of competent jurisdiction for appointment of a
successor.
Section 7.4.  Transfer of Fund to Successor.  Upon the resignation or
removal of the Trustee and appointment of a successor and after the
final account of the Trustee has been settled as provided in Article
IV, the Trustee shall transfer and deliver the Trust Fund to such
successor.

ARTICLE VIII
Duration and Termination
 of Trust and Amendment

Section 8.1.  Duration and Termination.  The Trust shall terminate
upon the earliest of (a)full payment of all Obligations, (b)the
expiration of three years from the date this Trust is established, or
(c) a change in applicable law occurs which requires it to be amended
in a way that would substantially frustrate its purpose.
Section 8.2.  Distribution upon Termination.  Upon termination of this
Trust, the Trustee shall liquidate the Trust Fund and, after its final
account has been settled as provided in Article IV, shall distribute
the net balance thereof to the person or persons having an interest
therein.  The Trustee shall make such distribution as the Company
shall direct (whether expressly as to any Creditor or pursuant to an
Agreement or payment schedule delivered to the Trustee by the
Company).  Distributions pursuant to this Section 8.2 shall be made in
cash.  Any assets of the Trust remaining after all such payments have
been made shall continue to be held in the Trust pending the Company's
providing a supplemental Addendum A or B naming additional Creditors.
When all liabilities of the Trust to all Creditors and all the
Trustee's Fees and expenses have been fully satisfied and all funds
distributed, the Trustee shall be relieved from all further liability.
The powers of the Trustee hereunder shall continue so long as any
assets of the Trust Fund remain in its hands.
Section 8.3.  Amendment.  By a duly executed, written instrument
delivered to the Trustee and acknowledged in the same form as this
Agreement, the Company shall have the right at any time and from time
to time to amend this Agreement in whole or in part, except that (i)
the duties and responsibilities of the Trustee shall not be increased
without the Trustee's written consent, and (ii) no amendment hereto
shall be made which provides for the return of the Trust Funds to the
Company or provides for the Company to have control over the
disposition of the Nova Stock held in the Trust.  Any such amendment
shall become effective upon (i)delivery to the Trustee of the written
instrument of amendment, together with a certified copy of the resolu-
tion of the Board or the committee thereof authorizing such amendment,
and (ii)endorsement by the Trustee on such instrument upon receipt
thereof, together with any required consent thereto.

ARTICLE IX
Indemnification

Section 9.1.  Indemnification.  The Company agrees, to the extent
permitted by law, to indemnify and hold the Trustee harmless from and
against any liability that it may incur in the administration of the
Trust, unless arising from the Trustee's own gross negligence or
willful breach of its obligations under this Agreement.  The Trustee
shall not be required to give any bond or any other security for the
faithful performance of its duties under this Agreement, except as
required by law.
<PAGE>69
ARTICLE X
Miscellaneous

Section 10.1.  Laws of California to Govern This Agreement and the
Trust hereby created shall be construed and regulated by the laws of
the State of California, except as otherwise provided by federal law.
Section 10.2.  Company's Liability Not Limited to Trust Assets.
Nothing provided in this Agreement shall relieve the Company of its
liabilities to pay its Creditors any amounts due under any Agreement
or other Obligation except to the extent such liabilities are met by
application of Trust assets.
Section 10.3. Rights of Beneficiaries.  Neither the Creditors nor any
other beneficiary hereunder shall have any right, title or interest in
the Trust Fund other than as a general, unsecured creditor of the
Company.  Neither the Creditors nor any other beneficiary shall be
able to alienate, assign, or otherwise encumber any interest such
person has under any Agreement and no such interest shall be subject
to lien, levy, attachment or other encumbrance.  Nothing in this
Agreement shall alter, limit or otherwise restrict the Company's
obligations under any Agreement or Obligation except to the extent
that distributions hereunder satisfy such underlying obligations.
Section 10.4. Titles and Headings Not to Control.  The titles to
Articles and headings of Sections in this Agreement are placed herein
for convenience of reference only and in case of any conflict the text
of this Agreement, rather than such titles or headings, shall control.
Section 10.5.  Interpretation of the Trust Agreement.  This Trust is
intended to be (a) classified as a grantor trust as defined in section
671 et seq. of the Code.  Accordingly, all provisions of this Agreement
shall be interpreted in a manner that satisfies the requirements that
must be met in order that the Trust be so classified.
IN WITNESS WHEREOF, Nova Pharmaceutical, Inc. and Farmers and Merchants
Bank of Long Beach have caused this Agreement to be executed by their
duly authorized officers and their respective seals to be hereunto
affixed as of the day and year first above written.

NOVA PHARMACEUTICAL, INC.

By__________________________________
Title:   Vice President and Chief Financial Officer
Attest:
________________________

FARMERS AND MERCHANTS BANK of
LONG BEACH

  By_________________________________
Title:

Attest:
________________________

STATE OF CALIFORNIA        )
                            ss.:
COUNTY OF ________________ )

On this ___st day of _________, 2000, before me came [Robert Eggering],
to me known, who, being by me duly sworn, did depose and say that [he

<PAGE>70
resides at ______________________________, California ______] ; and
that [he is Chief Financial Officer] of Nova Pharmaceutical, Inc., the
corporation described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order
of the board of directors of said corporation, and that[he signed his
name thereto by like order.

____________________________
   Notary Public
STATE OF CALIFORNIA   )
                        ss.:
COUNTY OF LOS ANGELES  )

On this _____ day of July, 1997, before me came, to me known, who,
being by me duly sworn, did depose and say that he resides at; and that
he is             of Farmers and Merchants Bank, of Long Beach, the
corporation described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order
of the board of directors of said corporation, and that he signed his
name thereto by like order.

____________________________
   Notary Public

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