Exhibit 10.5

     
HANOVER COMPRESSOR COMPANY

AWARD NOTICE
PERFORMANCE-VESTED RESTRICTED STOCK UNIT (Stock-Settled)
  (HANOVER LOGO) [h38091h3809100.gif]

Hanover Compressor Company (the “Company”), has granted to you, [NAME] (“the
Participant”), restricted stock units under the Hanover Compressor Company 2006
Stock Incentive Plan (the “Plan”). All capitalized terms in this Notice have the
same meaning ascribed to them in the Plan.
The main terms of your Award are as follows:
     1. Award. You have been granted [NUMBER] restricted stock units (the
“Award” or “RSUs”). This Award is stated at maximum payout and the actual Award
earned and paid may be less.
     2. Grant Date. The date of this RSU Award is July 21, 2006 (the “Grant
Date”).
     3. Vesting. The Award will vest on July 21, 2009 (the “Vesting Date”) and
will be paid at 0% to 200% of the Target Award, subject to the achievement of a
pre-determined performance objective (the “Performance Measure”) over a
three-year period (the “Performance Period”). The “Target Award” is the number
of RSUs that would be earned and paid if the Performance Measure is met at the
target level.
     Exhibit A provides (i) the Performance Period over which performance will
be measured, (ii) an explanation of the Performance Measure, and (iii) the
percentage of the Award that will vest based on the achievement of the
Performance Measure at threshold, target and maximum levels. Based upon the
performance achieved at the conclusion of the Performance Period, the portion of
your Award that vests will no longer be subject to the restrictions on transfer
described in Section 6 below, and any portion of your Award that does not vest
will be forfeited.
     As soon as administratively practicable following the Vesting Date, and in
no event later than September 30, 2009, the Company will issue to you one share
of Common Stock for each of your vested RSUs. Contact Wachovia at (866) 311-5694
or (713) 853-2400 with any questions concerning the vesting of your Award.
     4. Termination of Employment. If your employment with the Company or a
subsidiary terminates for any reason (other than as a result of death,
Disability or a Corporate Change) during the Performance Period and up to the
Vesting Date, your Award will be automatically forfeited on the date of such
event unless the Compensation Committee directs otherwise. If your employment
with the Company terminates as a result of your death, Disability or a Corporate
Change, your Award will immediately vest at 100% of the Target Award and all
restrictions applicable to your Award will cease as of that date.
     5. No Stockholder Rights. You will not have any right to vote your RSUs or
receive dividends with respect to your RSUs.
     6. Non-Transferability. You cannot sell, transfer, pledge exchange or
otherwise dispose of your RSUs (except by will or the laws of descent and
distribution).
     7. No Right to Continued Employment. Nothing in this Notice guarantees your
continued employment with the Company or its subsidiaries or interferes in any
way with the right of the Company or its subsidiaries to terminate your
employment at any time.

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     8. No Right to Future Benefits. The Plan is provided by the Company on an
entirely discretionary basis, and the Plan creates no vested rights in you as a
Participant. You understand and agree that this Award is not part of your salary
and that receipt of this Award does not entitle you to any future awards under
the Plan or any other plan or program of the Company. This Award is not part of
your normal or expected compensation for purposes of calculating any severance,
resignation, redundancy, end of service payments, bonuses, long-service awards,
pension, or retirement benefits or similar payments.
     9. Data Privacy. You consent to the collection, use, processing and
transfer of your personal data as described in this paragraph. You understand
that the Company and its subsidiaries hold certain personal information about
you (including your name, address and telephone number, date of birth, social
security number, social insurance number, etc.) for the purpose of administering
the Plan (“Data”). You also understand that the Company and/or its subsidiaries
will transfer this Data amongst themselves as necessary for the purpose of
implementing, administering and managing your participation in the Plan, and
that the Company and/or any of its subsidiaries may also transfer this Data to
any third parties assisting the Company in the implementation, administration
and management of the Plan. You authorize them to receive, possess, use, retain
and transfer the information, in electronic or other form, for these purposes.
You also understand that you may, at any time, review the Data, require any
necessary changes to the Data or withdraw your consent in writing by contacting
the Company. You further understand that withdrawing your consent may affect
your ability to participate in the Plan.
     10. Withholding. Your Award is subject to applicable income tax, social
insurance, or social security withholding obligations. If necessary, the Company
reserves the right to withhold from your regular earnings an amount sufficient
to meet the withholding obligations.
     11. Plan Governs. This Notice is subject to the terms of the Plan, a copy
of which is available on the Company’s website or which will be provided to you
upon written request addressed to Hanover Compressor Company, Compensation and
Benefits Department, 12001 N. Houston Rosslyn, Houston, Texas 77086. In the
event of a discrepancy between this Notice and the Plan, the Plan shall govern.
     12. Participant Acceptance. If you do not accept the Award or the terms of
the Award, you must notify the Company in writing at the address provided above
within thirty (30) days of delivery of this Notice. Otherwise, the Company will
deem the Award and the terms of the Award accepted by you.

            ON BEHALF OF HANOVER COMPRESSOR
COMPANY AND ITS SUBSIDIARIES
    By:   /s/ John E. Jackson         John E. Jackson        President and Chief
Executive Officer   

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HANOVER COMPRESSOR COMPANY

AWARD NOTICE – EXHIBIT A
2006 PERFORMANCE-BASED OBJECTIVES AND CONDITIONS
  (HANOVER LOGO) [h38091h3809100.gif]

     
Performance Period
  July 1, 2006 through June 30, 2009
 
   
Performance Measure
  Average Return on Capital Employed (“ROCE”) over the Performance Period
 
   
 
  ROCE is calculated as follows: (1) earnings before interest and taxes, divided
by (2) short-term debt plus, current maturities of long-term debt plus,
long-term debt plus, minority interest plus, stockholders’ equity less, cash.
 
   
 
  The intent of the Performance Measure is to provide an incentive for managers
to effect significant improvements in the Company’s operational performance.
Upon the occurrence of material non-operational events during the Performance
Period, the Compensation Committee may, in its discretion, adjust the incentive
formula to exclude such event.

                              Threshold   Target   Maximum ROCE Performance
Objectives   6.0%   7.5%   9.5%
Payout (expressed as a percentage of the Award at target performance)
    50 %     100 %     200 %           The actual Award payout will range from
0% to 200% of the Award that would have been earned at target performance.

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