<PAGE>

                                                                    EXHIBIT 14.1

                            P.R.I.D.E. IN PERFORMANCE

                   HANOVER'S GUIDE TO ETHICAL BUSINESS CONDUCT

                                   [PICTURE]

<PAGE>

                                HANOVER'S VALUES

                                     PEOPLE

                        Our business is driven by people.
              We succeed based on our relationships with employees,
          customers, partners, suppliers, communities and shareholders.
               We maintain a safe workplace for our employees, and
  as a good corporate citizen, we are dedicated to protecting the environment.

                                     RETURN

We strive to maximize return on our resources and assets through careful capital
 management, well-reasoned risk taking, and the establishment of long-term goals
                    for consistent growth and profitability.

                                    INTEGRITY

            Integrity and honorable behavior are an integral part of
      our values. Our success will be realized only through honesty and the
                 highest ethical standards in all aspects of our
                                    business.

                                    DIVERSITY

 We are an international company. Diversity among our workforce and our clients
              creates unique opportunities in forming partnerships
                   and ultimately, contributes to our success.

                             ENTREPRENEURIAL SPIRIT

   We are driven by an entrepreneurial spirit that is strengthened by teamwork
                  and harnessed through a disciplined approach.
  We have a can-do attitude and continually earn our reputation for outstanding
                               customer service.

<PAGE>

                                                         CHAD C. DEATON
                                                         President and
                                                         Chief Executive Officer


[THE HANOVER COMPANY LOGO]

January 1, 2003

To All Hanover Employees:

At Hanover, we use good judgment and conduct our business according to our
values of P.R.I.D.E. - People, Return, Integrity, Diversity, and Entrepreneurial
Spirit.

What is the foundation for good judgment in business? It begins with a personal
commitment to do the right thing. Exercising good judgment means understanding
the ground rules. P.R.I.D.E. in Performance - Hanover's Guide to Ethical
Business Conduct sets forth key company policies in clear terms.

Your management team has renewed its commitment to integrity. It is imperative
that each member of the Hanover organization join in this commitment. Our
cooperative effort will ensure the continued growth and success of each of us as
individuals and collectively as a leader in surface production and compression
products and services. P.R.I.D.E. in Performance contains policies that will
assist you in understanding our responsibilities under the law and under our
code of ethics. This guide also includes information on how to obtain additional
assistance, if needed.

Hanover has built its business on a reputation for exceptional service and as an
industry-leading solutions provider. We will continue that tradition, coupled
with an unqualified commitment to operating with the highest degree of
integrity. The future of our company depends on it. With that in mind, please
review this guide carefully and refer to it whenever a question of standards or
conduct arises.

Thank you for taking pride in Hanover's performance.

<PAGE>

                             COMMITMENT TO INTEGRITY

Hanover people behave honorably and act at all times with unquestioned
integrity. Our success will be realized only through honesty and the highest
ethical standards in all aspects of our business.

                  TO LIVE UP TO THE HIGHEST ETHICAL STANDARDS,
               WE MAKE THE FOLLOWING COMMITMENT TO OUR CUSTOMERS,
                      EMPLOYEES, PARTNERS AND SHAREHOLDERS

Our business is driven by people. While our company may be large and our
business complex, people are at the heart of everything we do. We value the
faith that is placed in us and we will work continuously to earn that trust. We
treat people with respect and dignity and in an honest, straightforward and fair
manner - just as each of us would like to be treated.

We are guided by our conscience and common sense and will not proceed with any
course of action unless we can truthfully answer `yes' to each of the follow
questions:

     -    Are my actions consistent with the letter and spirit of the law?

     -    Have I made sure not to promise more than I can deliver - will I be
          able to keep my word?

     -    Have I provided sufficient, accurate information to allow for a fair
          decision - have I avoided misleading the party with whom I am dealing?

     -    Would my action be consistent with my own standards of ethics?

     -    Would my conduct set a good example - would I like my colleagues to
          follow my lead?

     -    Would I be comfortable discussing and explaining my decision to family
          and friends?

     -    Would I feel proud of myself if my actions were reported on the front
          page of the local newspaper?

                           [THE HANOVER COMPANY LOGO]
<PAGE>


                    HANOVER GUIDE TO ETHICAL BUSINESS CONDUCT

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                    <C>
Introduction.......................................................................................     2
   Your Responsibility.............................................................................     2
   Our Framework for Corporate Responsibility......................................................     3
   Where Can I Obtain Further Guidance?............................................................     3
The Hanover Workplace..............................................................................     5
   Overview........................................................................................     5
   Open Door Policy................................................................................     5
   Health, Safety and Environment..................................................................     5
   Equal Employment Opportunity....................................................................     6
   Policy Against Harassment.......................................................................     6
   Employment of Former and Current Government Officials...........................................     7
   Employment of Eligible Individuals..............................................................     7
   Drug and Alcohol Use............................................................................     7
   No Solicitation/No Distribution Policy..........................................................     8
Your Relationship With Hanover.....................................................................     9
   Overview........................................................................................     9
   Avoiding Conflicts of Interest..................................................................     9
   "Inside Information" and Securities Trading Activities..........................................    10
   Safeguarding Company Property...................................................................    13
   Use of Company Equipment and Systems............................................................    13
   Use, Handling and Protection of Company Information.............................................    15
   Special Rules for Financial Information.........................................................    17
   Business Transactions and Contract Administration...............................................    18
   Political Activities and Contributions..........................................................    18
Hanover's Relationship With Others.................................................................    20
   Overview........................................................................................    20
   Fair Competition................................................................................    20
   Use of Copyrighted and Other Protected Material.................................................    21
   Government Contracts............................................................................    22
   Gifts, Bribery, and Improper Payments...........................................................    22
   Selection of Representatives....................................................................    23
   International Business and Trade................................................................    23
Administration.....................................................................................    25
   Interpretation..................................................................................    25
   Policy Administration...........................................................................    25
   Compliance with the Guide.......................................................................    25
   Distribution....................................................................................    26
Questions and Answers..............................................................................    27
   The Corporate Responsibility Program............................................................    27
   Avoiding Conflicts of Interest..................................................................    27
   Inside Information and Securities Trading Activities............................................    28
   Safeguarding Company Property...................................................................    29
   Fair Competition................................................................................    29
   Political Activities and Contributions..........................................................    29
   Employment Issues...............................................................................    30
Company Contacts...................................................................................    31
</TABLE>

                                                                               1

<PAGE>

                                  INTRODUCTION

Hanover (or the "Company") has grown rapidly and enjoyed great success because
of the entrepreneurial sprit of our people. This spirit has enabled Hanover to
grow from a small start up to an international leader in natural gas compression
services, compression fabrication and processing, and oil and gas production
equipment. Hanover's success is dependent on the concerted efforts of all of its
people, pulling together toward a common goal. This requires a two way
commitment: Hanover's employees should be committed to give 100% effort while
Hanover is committed to provide the tools necessary to achieve success and trust
its employees to act in a manner consistent with the best interests of the
Company and its shareholders, employees and customers.

Hanover believes that by trusting individuals to exercise their own best
judgment, individuals can be more productive and will ultimately achieve greater
success for the Company. Our trust is based on one overriding policy -- that
Hanover people act ethically, safely and in a manner consistent with Hanover's
values.

With individual empowerment comes the need for individuals to assume personal
responsibility for their actions and to act professionally as custodians for the
trust placed in the Company by our customers and shareholders. To assist
individuals in living up to their own high standards and those of the Company,
this introduction reviews the standards of professionalism expected of all
individuals and describes the framework that the Company has put into place to
assist you in putting our value of integrity into action. We believe that given
appropriate training, guidance and opportunity, individuals will make the
correct choices.

The first section of this guide, "The Hanover Workplace," sets out the Company's
policies relating to the fair treatment of all employees in the workplace,
including the Company's open door policy and its policies on equal employment
opportunities. Section Two, "Your Relationship With Hanover," discusses the
policies that help employees avoid conflicts of interest and inappropriate use
of Company resources. Section Three, "Hanover's Relationship With Others"
discusses the policies relating to fair competition and conducting business in a
manner consistent with high standards of business ethics and applicable laws.
Section Four, "Administration," discusses the role of employees in upholding
these policies and the consequences of violations. At the back of the Guide, you
will find a list of key contacts and the answers to frequently asked questions.

YOUR RESPONSIBILITY

Each employee, officer and director should conduct all aspects of the Company's
business consistent with the highest standards of ethics and integrity, and in a
manner that is consistent with applicable law. All employees, officers and
directors should follow these standards in all their business dealings including
those with customers, distributors, the general public, and other employees. Any
employee in a supervisory role is responsible for the conduct of employees
reporting to him or her.

It is the policy of Hanover that its employees shall not participate in or
condone criminal or unethical activity directly or indirectly, in any form. All
employees should promptly report any

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suspected unethical or illegal activity to their supervisors. In addition,
employees who break the law will be subject to discipline, up to and including
termination.

Employees should always cooperate fully in any investigation of misconduct.
Hanover does not tolerate retribution against employees who, in good faith,
report suspected violations of law. Employees who retaliate against others who
report suspected crimes or wrongs are themselves subject to discipline.

OUR FRAMEWORK FOR CORPORATE RESPONSIBILITY

Integrity is not only one of the Company's core values, it is one of the keys to
our success. By operating with integrity, Hanover and its people will be
respected and will find others eager to partner with the Company. Of course,
integrity and respect must be earned with each transaction, each day with each
customer.

Company management and our board of directors are fully committed to
transparency and good corporate governance. We will not tolerate inappropriate
or illegal behavior. We will also endeavor to provide sufficient resources so
that the Company can perform necessary functions consistent with the law and the
highest ethical standards and that resources are available so that individuals
are made aware of the rules and how to follow them. Management will establish
appropriate internal controls and disclosure controls and procedures to protect
the integrity of the Company's financial statements and periodic reports filed
with the SEC, but also to allow for more efficient and effective operations and
management.

WHERE CAN I OBTAIN FURTHER GUIDANCE?

You have several alternatives for obtaining guidance if you have a question
regarding your own obligations or conduct or the conduct of a colleague or
supervisor. You are encouraged to first raise issues with your supervisor. We
believe that raising and resolving issues with your immediate supervisor fosters
straightforward communication and can build productive teamwork. For their part,
supervisors are expected to take seriously and address promptly issues raised by
employees.

We understand that there may be circumstances where it is uncomfortable or
inappropriate to raise issues with your supervisor. In these situations, you are
encouraged to speak with others in management or to contact either the Human
Resources or Legal Department in our corporate offices. For your convenient
reference, a list of contact numbers and addresses is provided at the end of
this Guide.

You are also free to ask questions or report potentially improper conduct
through the Company's toll-free number 1-800-281-5439. Hanover will endeavor,
within the limit of the law, to maintain the confidentiality of the identity of
any individual who reports possible misconduct. You should feel free to report
any potentially improper conduct without fear of reprisal or adverse action.
Anyone who deliberately makes a false accusation with the purpose of harming or
retaliating against another colleague may be subject to discipline.

If you have any complaints or concerns regarding accounting or auditing matters
or other matters regarding the CEO, senior management or the Company's public
disclosures to shareholders, in addition to the alternatives for obtaining
guidance that are outlined above, you may submit a confidential, anonymous
written statement to the Audit Committee of Hanover's Board of

                                                                               3
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Directors by submitting a copy addressed to the Chairman of the Audit Committee
with your complaint or concern, forwarded care of the General Counsel's office.

Hanover is committed to promptly investigate all reported concerns and to take
any appropriate action. Individuals who are found to have violated the law or
Company policies may be subject to discipline that includes a warning,
reprimand, loss of all or part of performance compensation or other privileges,
suspension, or termination.

4
<PAGE>

                              THE HANOVER WORKPLACE

OVERVIEW

Hanover values diversity among its employees, recognizing that diversity
enriches our Company and is essential to creativity in business and personal
growth. Further, Hanover expects that each employee, officer and director will
endeavor to deal fairly with the Company's employees. No one should take unfair
advantage of anyone through manipulation, concealment, abuse of privileged
information, misrepresentation of facts, or any other unfair dealing.

In accordance with applicable law and our values, Hanover has developed the
following employment policies relating to the fair treatment of employees. If
you have questions or concerns regarding any of the policies outlined in this
section, please feel free to contact your supervisor, others in management or
the Human Resources Department.

OPEN DOOR POLICY

Hanover strongly believes in an open door, open communication policy. Employees
are invited to approach their supervisors and, as might be necessary and
appropriate, other Company officials in order to discuss issues of concern to
the individual and the Company. We believe that this policy improves the overall
productivity of the Company, enhances teamwork, and contributes to the
satisfaction that each of us derives from our work. We also believe that this
policy will provide a useful vehicle for surfacing and discussing issues,
allowing any such matters to be resolved quickly and efficiently, and avoid the
harm caused by unattended problems.

Employees should always consider raising issues or concerns with their immediate
supervisors who are typically best positioned to address such matters. However,
if this is inappropriate, either because your concerns pertain to your immediate
supervisor or because your immediate supervisor is not able to address your
workplace issues, then you are free to contact more senior levels of management.
Issues of special concern, or that an employee believes cannot be appropriately
addressed within the employee's department, can be brought to the attention of
the Human Resources Department. In addition, issues that an employee believes
cannot be effectively raised or addressed through the Human Resources Department
can be raised through the Company's toll-free number at 1-800-281-5439.

HEALTH, SAFETY AND ENVIRONMENT

Hanover is committed to protecting the safety and health of our employees and to
environmental stewardship around the world. The Company views its health, safety
and environmental policies as a competitive advantage and strives for continuous
improvement in these areas. Working together, we can ensure that we protect our
environment and efficiently use resources to provide for a better tomorrow for
our children.

It is Hanover's policy to comply with both the letter and the spirit of health,
safety and environmental laws and regulations in both its U.S. and international
operations. To this end, we should endeavor to see that the properties that we
own or manage fully comply with applicable legal standards and that our
practices for waste disposal and the handling of hazardous materials

                                                                               5
<PAGE>

are consistent with legal requirements. In helping Hanover comply with
applicable laws and regulations, you should understand how your job duties
impact the environment, adhere to all environmental laws and related Hanover
policies, and immediately report any violation of environmental laws or any
action that may appear to conceal a violation to the Health, Safety and
Environment Department.

No Hanover employee knowingly will be required to work in an unsafe manner or
place. Likewise, employees also have a responsibility to provide their
co-workers with a safe work environment, to carry out their duties in a safe
fashion, to limit the possibility of accidents, to report any accidents that
occur, and to refrain from bringing any dangerous objects or weapons into the
workplace. Employees should report to the Health, Safety and Environment
Department conditions that they perceive to be unsafe or unhealthy. Hanover will
not tolerate retaliation in any form against complainants, individuals who
report the possible existence of safety or health issues, or witnesses who
assist in the Company's investigation.

EQUAL EMPLOYMENT OPPORTUNITY

The Company is committed to complying with all laws and regulations regarding
equal employment opportunities so that all employees and candidates for
employment are afforded fair and equal treatment. This commitment means that
Hanover will recruit, hire, train, terminate, transfer, pay, and promote
individuals, as well as administer all personnel actions, without regard to
race, color, religion, age, gender, national origin, disability, or veteran
status. Hanover will not tolerate any unlawful discrimination or harassment
based upon race, color, religion, age, gender, national origin, disability, or
veteran status, and any such conduct is strictly prohibited. Consistent with
this policy and applicable law, Hanover will make reasonable accommodations to
the known limitations of qualified applicants or employees, unless to do so
would impose an undue hardship on the operation of our business or cause a
threat to anyone's safety.

Complaint Procedure. If you have experienced discriminatory conduct or observe
another employee experiencing discriminatory conduct, you should, to the extent
that you feel comfortable, tell the person that you perceive that the behavior
is discriminatory. If you cannot resolve the issue, or you feel uncomfortable
doing so, contact the Human Resources Department immediately. Complaints of
discrimination are investigated promptly. Hanover will not tolerate retaliation
in any form against complainants, individuals who report the possible existence
of discrimination against others, or witnesses who assist in the Company's
investigation.

POLICY AGAINST HARASSMENT

Hanover is committed to providing a work environment that is free from
discriminatory intimidation or harassment. Harassment is defined as behavior
that is offensive to others based upon race, color, religion, age, gender,
national origin, disability, or veteran status, and which interferes with an
employee's work performance or creates an intimidating, hostile, or offensive
work environment. It also applies to situations where submission to
inappropriate conduct is made a term or condition of employment or where
submission to or rejection of such conduct is used as a basis for employment
decisions. Examples of discriminatory harassment include unwelcome sexual
advances, uninvited suggestive remarks, sexist, racist or religious slurs, and
ethnic jokes. Hanover will not tolerate any discriminatory harassment, and any
such conduct is strictly prohibited. It is your responsibility to help maintain
a harassment-free environment.

Complaint Procedure. If you have experienced discriminatory harassment or
observe another employee experiencing discriminatory harassment, you should, to
the extent that you feel

6
<PAGE>

comfortable, tell the person to stop. If you cannot resolve the issue, or you
feel uncomfortable attempting to do so, contact the Human Resources Department
immediately. Complaints of harassment are investigated promptly. Hanover will
not tolerate retaliation in any form against complainants, individuals who
report the possible existence of harassment against others, or witnesses who
assist in the Company's investigation.

EMPLOYMENT OF FORMER AND CURRENT GOVERNMENT OFFICIALS

U.S. federal and state laws and regulations and the laws of many foreign
countries govern the recruitment and employment of current and former government
officials or members of their immediate families.

If a former government official wishes to become employed by, or a consultant to
Hanover, care should be exercised to ensure that applicable laws are not
violated. Before an employee takes any action to discuss potential employment
with a current or former government official, that employee should consult with
the Human Resources Department. In addition, if a former government official
becomes a consultant or employee of Hanover, care should be taken to ensure that
the scope of his or her duties is consistent with applicable legal restrictions.

EMPLOYMENT OF ELIGIBLE INDIVIDUALS

It is the policy of Hanover to hire and employ only those individuals who are
lawfully authorized for unsponsored employment in the countries in which Hanover
operates and to follow all immigration laws and regulations. In its U.S.
operations, Hanover generally does not assist or sponsor individuals in
obtaining or extending employment authorizations. In connection with federal
immigration laws, we should collect certain information and review certain
documentation concerning the employment and authorization of new employees. This
information and documentation will be used only for compliance with applicable
federal immigration laws and will not be used for employment-related decisions
other than verifying eligibility. If your eligibility to work in the United
States changes or terminates after you begin work at the Company, please
promptly inform the Human Resources Department.

DRUG AND ALCOHOL USE

Substance abuse and the excessive consumption of alcohol reduce the ability of
an employee to function appropriately and impede the ability of Hanover to
provide a safe work environment for all employees. Therefore, Hanover complies
with applicable laws and regulations and strives to maintain a work environment
that is free from substance abuse and the influence of alcohol.

Hanover prohibits its employees from possessing, selling, purchasing,
manufacturing, distributing, or using illegal drugs in the workplace. In
addition, Hanover prohibits its employees from consuming alcohol at work (except
for the moderate use of alcohol at Company sponsored events or functions) and
from working under the influence of drugs (including prescription drugs) or
alcohol.

Employees with questions or concerns about substance dependency or abuse are
encouraged to use the resources of the Employee Assistance Program where
available. They may also wish to discuss these matters with their supervisor or
the Human Resources Director to receive assistance or referrals to appropriate
resources in the community.

Employees with drug or alcohol problems that have not resulted in, and are not
the immediate

                                                                               7
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subject of, disciplinary action may request approval to take paid (if available)
or unpaid time off to participate in a rehabilitation or treatment program
through Hanover's health insurance benefit coverage. Leave may be granted if the
employee agrees to abstain from use of the problem substance; abides by all of
Hanover's policies, rules, and prohibitions relating to conduct in the
workplace; and if granting the leave will not cause Hanover any undue hardship.

Employees with questions on Hanover's policy or issues related to drug or
alcohol use in the workplace should raise their concerns with their supervisor
or the Human Resources Director without fear of reprisal.

To help ensure a safe and healthful working environment, Hanover's drug and
alcohol policies provide for drug and alcohol testing consistent with Department
of Transportation regulations for certain covered jobs and also provide for
pre-employment drug testing, random drug-testing, drug or alcohol testing upon
reasonable suspicion, drug and alcohol testing following work-related accidents
or injuries, and drug and alcohol testing in other situations consistent with
applicable law. Employees may be randomly asked to provide urine or hair samples
to determine the unauthorized or illegal use of drugs, and may be asked to
supply a breath, blood, urine or hair sample if the company suspects the
employee is using drugs or alcohol or under the influence of drugs or alcohol.
Refusal to submit to such drug or alcohol testing, or avoiding or sabotaging the
testing, may result in disciplinary action, up to and including termination of
employment.

Please be aware that you do not have any personal right of privacy as to any of
Hanover's facilities, offices, property or vehicles. Hanover's facilities and
equipment are subject to search at any time, in furtherance of the drug and
alcohol policies.

Copies of the drug and alcohol policies will be available to all employees.
Questions concerning the policies or their administration should be directed to
your immediate supervisor or the Human Resources Department.

NO SOLICITATION/NO DISTRIBUTION POLICY

In the interest of maintaining a positive working atmosphere, Hanover limits
employee solicitation and the distribution of literature to pre-approved
activities, such as United Way campaigns and blood drives. No employee may
solicit another employee for any purpose that is not pre-approved during the
work time of either employee. The distribution of handbills or other literature
in work areas that is not pre-approved is forbidden. Persons who are not
employed by Hanover are prohibited from soliciting any employee or distributing
literature on Company premises or at employee work locations at any time.

8
<PAGE>

                         YOUR RELATIONSHIP WITH HANOVER

OVERVIEW

Each of us has been entrusted with an important role in helping Hanover become a
great company. The standards set out in this section require that we honor that
trust by conducting our business activities in the best interest of Hanover and
by avoiding personal activities that conflict with the interests of the Company.

AVOIDING CONFLICTS OF INTEREST

The Company's policy regarding conflicts of interest is applicable to all
employees. In recognition of the special duties of management, officers and
directors of Hanover are required to review and sign the directors and officers
questionnaire at least annually and return it to the Legal Department. All
employees of Hanover will be required to list all potential conflicts or state
that no conflicts exist at the time of employment. If any arise after signing
that document, the Legal Department and the Human Resources Department should be
informed.

We should all avoid putting our interests in conflict with those of the Company.
A conflict of interest arises when an employee's personal interests or
activities impair, or appear to impair, the employee's ability to act in the
best interest of Hanover. In reviewing the guidelines included below, remember
that no set of rules can address every situation that may be faced by employees.
Rather, use your best judgment to act in accordance with the Company's Guide of
ethics, avoid situations in which your loyalty may become divided, and act
appropriately when a potential conflict presents itself. If you are uncertain
about your conduct in a particular situation, consult your supervisor, others in
management or the Human Resources or Legal Departments.

Gifts and Gratuities. Neither you nor any member of your immediate family are
permitted to accept, directly or through another person or entity, any money,
gifts (such as meals, entertainment, personal computers, or other items of
value), business opportunities, or preferential treatment if it will influence,
or reasonably appear to influence, your ability to be objective in making a
business decision. You may only accept business-related meals, entertainment,
gifts, or favors when acceptance could not reasonably be viewed as placing you
under any obligation to the giver or otherwise compromise the independence of
your judgment. If an employee receives a gift that does not fall in the nominal
category, he or she must report it to his or her supervisor and return the gift.
If return of the gift is not practical, it should be given to the Company for
charitable use or such other disposition as the Company feels appropriate. You
also should not give or offer excessive gifts or entertainment to others whose
business the Company may be seeking. If you have any doubt as to the propriety
of giving or receiving any gift, you should consult your supervisor.

Outside Business Activities and Business Opportunities. In your activities as an
employee of Hanover, business opportunities may come to your attention. You are
obliged to present any such opportunities to the Company and may not undertake
the activities yourself or make them available to a family member or friend
without first presenting the opportunity to the Company. In addition, no
employee is permitted to pursue a business opportunity that would adversely
impact the employee's ability to perform his or her job responsibilities for
Hanover.

                                                                               9
<PAGE>

Business Activities with Partners and Competitors. You may not work for, or have
a significant relationship with, an enterprise that does business or competes
with Hanover without approval from the President and CEO. A relationship with
another company is significant if it could impair, or reasonably appear to
impair, your ability to act solely in the best interest of Hanover. Examples of
significant relationships with an outside company include: serving as an
officer, director, or consultant, or in any other, position of responsibility;
or owning an interest in the other enterprise.

Business Activities of Company Management. In addition to the restrictions
discussed above, officers of Hanover and its subsidiaries are prohibited from
accepting any position as a director, trustee, or consultant of any business
entity without first obtaining the permission of the President and CEO. The
Company does not prohibit officers from accepting any position as a director,
trustee, or consultant of a not-for-profit entity.

Employment of Relatives. Family members who work together present special issues
and challenges. To minimize difficulties that might otherwise occur, Hanover
does not permit an employee to have influence over the employment, salary, job
responsibilities, or termination of a relative. In addition, an employee is not
permitted to be in a position to direct, review, or process the work of a
relative; have access to the personnel records of a relative; or otherwise have
influence over the employment, termination, or compensation of a relative. For
the purposes of this policy, a relative is defined as a spouse, parents,
children, siblings, mothers and fathers-in-law, sons and daughters-in-law,
brothers and sisters-in-law, and anyone (other than employees) who shares such
person's home.

No individual implicated by this policy will be employed unless the Human
Resources Department has reviewed the matter with the referring employee and the
appropriate Supervisor approves the action. Also, the employment of an
individual who is related to an officer of Hanover must be approved by the
President and CEO.

Loans from the Company. Effective as of the date this Guide is introduced, no
employee, officer or director may receive any new loan, guarantee or other
extension of credit in the form of a personal loan from Hanover.

"INSIDE INFORMATION" AND SECURITIES TRADING ACTIVITIES

During the course of your employment with Hanover, you may become aware of
important information about Hanover or other companies that has not been
provided to the public. Generally speaking, it is illegal and against Company
policy to buy or sell securities, such as stocks or stock options, when you are
in possession of material, non-public information. This type of illegal conduct
is referred to as "insider trading." You should know that passing on or
"tipping" material, non-public information to someone who may buy or sell
securities may also constitute a violation by both the person who provides the
information and the person who receives it. Violations can subject individuals
to imprisonment for up to 10 years or longer, substantial fines of up to $1
million, and disciplinary action, including termination of an employee
committing a violation. Illegal insider trading by a Hanover employee may also
subject the Company to liability and punishment. These prohibitions apply to
securities of any company (not just the securities of Hanover Compressor
Company) with respect to which a person has acquired material, non-public
information.

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The Company's policies regarding insider trading are intended to protect both
employees and the Company from the potentially severe liability arising out of
personal securities transactions. All employees are subject to the general
policy relating to insider trading discussed below. In addition, employees who
are among the "control group" of Hanover are subject to a trading "blackout
period" (discussed below), while the most senior officers are also subject to
certain additional reporting requirements (discussed below).

When in doubt about whether this policy applies to a given transaction,
employees, officers and directors are to exercise caution and are to consult the
office of the General Counsel before trading in or recommending securities to
which that information relates. The Legal Department will determine if a
particular transaction is consistent with Company policy. This determination
should not be considered legal advice, and you should consider consulting your
own legal counsel concerning any legal issues that might affect your specific
transaction.

What Is "Inside Information"? For the purposes of this Guide, "inside
information" is information that is both "material" and "non-public."

Information is "material" if the average investor is likely to consider it
important in deciding whether to buy, sell, or hold the securities. Examples of
information that might be considered material include: mergers, acquisitions,
antitrust charges, threats of litigation, financial results, earnings estimates,
revisions to previously released earnings estimates, labor disputes, pending
large commercial or governmental contracts, key personnel changes, initiation of
a proxy fight, major new products or services, significant oil or gas
discoveries not publicly disclosed and significant shifts in operating or
financial circumstances (such as major write-offs).

Information is "non-public" if it has not been effectively disclosed to security
holders and the public. You should assume that information is non-public until
the third business day after it has been published through a Company press
release on one of the major wire services, in a story in a national news medium,
or through other means making the information generally available to the public.
Examples of "non-public" information may include: undisclosed facts that are the
subject of rumors, even if the rumors are widely circulated; and information
that has been entrusted to the Company on a confidential basis until a public
announcement of the information has been made and enough time has elapsed for
the market to respond to a public announcement of the information (i.e., three
days).

General Prohibition Against Insider Trading. In general, Company policy
prohibits employees from trading in Hanover securities or the securities of
other publicly traded companies while in possession of inside information about
those securities. This prohibition applies to stock, debts, warrants, stock
options, or any other securities. The fact that you possess inside information
is enough to bar you from trading; it is no excuse that your reasons for trading
were not based on that information.

You also are prohibited from tipping inside information to others who may buy or
sell securities. In this regard, it is important to recognize the risk of
inadvertently tipping inside information to someone outside Hanover, such as
when fielding an inquiry from a person outside the Company. If you have any
doubt whether a person is authorized to receive certain information about
Hanover, do not disclose it until you have consulted with the office of the
General Counsel.

                                                                              11
<PAGE>

In summary, all of us are strictly prohibited from using inside information for
our own benefit and from advising a friend or relative regarding whether to
purchase, sell, or hold securities while in possession of inside information.
These rules apply regardless of whether the trading is being done for the
benefit of the employee, Hanover itself, or someone else.

Specific Restrictions on Securities Transactions. In addition to the general
prohibition against insider trading, there are also specific restrictions and
reporting requirements that apply to certain employees' securities transactions.
These are described below.

-    MARKET OPTIONS. No employee may trade in market options (such as puts or
     calls), warrants, or other derivative instruments of Hanover securities.
     Options granted to you by the Company are not considered market options.

-    SHORT SALES. The Company's securities must not be sold short. That is, you
     may not sell Company securities that you do not own (for example, by
     borrowing the stock from a broker) in anticipation of later purchasing
     securities to cover the short sale.

-    TRADING ON MARGIN. The Company's securities may not be traded on margin.

-    SPECIAL TRADING RULES FOR CONTROL GROUP. The "control group" comprises
     persons who are designated by the General Counsel to be covered by the
     special blackout period trading rules. Generally, the "control group" is
     limited to executive officers, directors and employees whose
     responsibilities bring them into contact with key financial information.
     Subject to the prohibition on insider trading, members of the control group
     of Hanover may only engage in market transactions involving Hanover
     securities (including stock and stock options) from the third day following
     the Company's public release of its earnings for that quarter through the
     24th calendar day following the release of earnings. In other words,
     members of the control group may only trade Hanover securities for a 21 day
     window. Members of the control group, as well as all other employees, are
     always subject to the general prohibition against insider trading, and are
     requested to contact the office of the General Counsel prior to engaging in
     any market transactions involving Hanover securities.

     In addition, no director or executive officer of the Company may, directly
     or indirectly, purchase, sell, or otherwise acquire or transfer any
     security of the Company during any pension fund blackout period for that
     security if the director or executive officer acquired this security in
     connection with his or her service or employment as a director of executive
     office.

     For the purposes of this ban, "pension fund blackout period" means any
     period of more than three consecutive business days during which the
     ability of 50% or more of the participants or beneficiaries of an
     individual account plan maintained by the Company to purchase, sell or
     otherwise transfer or acquire an interest in the security held in the
     individual account plan is temporarily suspended by the Company or by the
     plan's fiduciary.

     The insider trading rules do not prohibit the purchase or sale of mutual
     funds (where the individual investor has no discretion over the individual
     investments in the mutual fund or the timing of such investments) and do
     not prohibit the pre-arranged periodic purchases through employee stock
     purchase plans (including 401(k) plans). That means that insider trading
     rules would not prohibit directing all or a portion of your periodic
     contributions in a 401(k) plan toward the purchase of Hanover stock. Please
     note, however, that selling stock

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<PAGE>

     from within your retirement account or purchasing stock for such account in
     a 401(k) plan must comply with insider trading rules.

-    REPORTING REQUIREMENTS FOR SENIOR EXECUTIVES. Executive officers and
     directors are also subject to "short-swing" profit rules and certain
     disclosure requirements, such as Form 3, 4, and 5 filings under Section 16
     of the Securities Exchange Act of 1934. Those officers and directors who
     are subject to these requirements are requested to follow the procedures
     established by the Legal Department to assist in meeting these
     requirements.

If you have any doubt as to the scope or applicability of these trading rules
and policies to you or to a particular transaction, contact the Office of the
General Counsel.

A willful failure to abide by this trading policy and its implementing
procedures will result in immediate termination of employment for cause and may
result in prosecution as provided by law. A non-willful violation of the policy
may result in Hanover taking corrective measures, up to and including
termination of employment.

SAFEGUARDING COMPANY PROPERTY

The ability of Hanover to meet its broad commitments to customers, suppliers,
employees, shareholders, and others depends on our ability to efficiently
utilize Company property and resources. This includes Company funds, services,
technology and the time and talent of our employees. Accordingly, employees are
not permitted to use Company resources for personal gain or otherwise in a
manner that is not in the best interest of the Company.

Employees who use Hanover resources for illegal or improper purposes are subject
to discipline, including termination, and could be subject to legal prosecution.
Likewise, acts of dishonesty against Hanover involving embezzlement, theft, and
destruction or misappropriation of property, including money, office equipment,
or any other items of value, also are prohibited and could result in discipline
or legal prosecution.

USE OF COMPANY EQUIPMENT AND SYSTEMS

Employees are advised that all business equipment, such as copiers, facsimile
machines, computers, and the telephone system, are the Company's property and,
with limited exception, should be used only for business-related reasons.
Incidental and occasional personal use of the Company's computers, copiers,
facsimile machines, telephone systems, voice mail, electronic mail (E-mail), and
Internet service is permitted, provided such use does not interfere with the
performance of an employee's responsibilities and is limited to lawful purposes
and then only when such use is consistent with the policies in this Guide.

Employees are reminded that under no circumstances should Company systems and
equipment be used to transmit, receive, or access any material that might be
perceived as offensive or harassing to others. Employees are reminded that
Hanover's policies regarding equal employment opportunity and against sexual
harassment, including the procedures for filing complaints, apply fully to the
use of the computer, telephone, voice mail, E-mail, and Internet services.

Please be aware that you do not have any personal right of privacy as to any
communications, data, or information created, received, or transmitted using
Hanover's systems or equipment.

                                                                              13
<PAGE>

Use of Hanover's communication systems, computer systems and other equipment is
monitored, and individuals who disregard these policies will be subject to
disciplinary action, up to and including termination. Information, even
information deleted by the user, remains on the system and is available to be
recalled by the system administrator or anyone who has administrative manager
access.

Any employee wishing to utilize new software on any Hanover equipment should
receive approval from both their Department Manager and the Manager of
Information Systems. Employees learning of any misuse of software or related
documentation within the Company shall notify the Manager of Information Systems
or the Human Resources Department.

E-mail Policy. Hanover provides many of its employees with the use of E-mail,
E-mail offers employees a cost- and time-effective alternative to some
paper-based communication. We use E-mail at Hanover for a variety of business
purposes, such as bulletin distribution, project status updates, meeting
coordination, and small file transfers. With this access, however, come certain
rules and responsibilities.

-    MESSAGE CONTENT. Employees should use good judgment regarding the content
     of their E-mail messages. Employees should be as careful about E-mail
     content and confidentiality as they would when drafting a paper memorandum.
     Also, keep in mind that your intended audience is not your only potential
     audience. E-mail message privacy is intrinsically uncertain because
     messages can be forwarded, printed, cut, pasted, or blind copied to other
     recipients. In addition, due to the nature of the medium, E-mail messages
     might be taken out of context or misinterpreted.

-    DISTRIBUTION. Sending E-mail to a small group of persons simultaneously
     can, under appropriate circumstances, enhance employees' productivity.
     Sending E-mail to large numbers of individuals can, however, be
     unnecessarily distracting and reduce efficiency. Hanover prohibits the use
     of its E-mail system for sending mass messages to its employee population
     without special authorization from Human Resources and from using its
     E-mail system to circulate chain letters or similar communications.

-    RETENTION. In order to maximize computer space, E-mail messages should be
     promptly deleted from individual computers after they are reviewed. Unless
     required by special circumstances, business necessity or by the policy on
     document retention found elsewhere in this Guide, messages contained in
     E-mail in-boxes or backup media should be maintained for a maximum of 30
     days. Employees should remember that E-mail messages may be stored on
     backup or long-term databases indefinitely, even when they have been
     deleted from individual computers. Employees should remember that E-mail
     messages are Company property and are subject to monitoring, access, and
     disclosure.

-    ACCESS. E-mail passwords or accounts should not be shared. You are
     permitted to provide your E-mail address to vendors and other third
     parties, but you should ensure that those persons are made aware of Hanover
     policies, particularly its restrictions as to content, and agree to abide
     by the Company's policies.

Voice Mail Policy. Employees are reminded that their professional behavior
extends to the use of voice mail systems. Voice mail content should always be
professional, and voice mail should never be used for harassing or improper
purposes. Much like E-mails, voice mail messages are

14
<PAGE>

stored and may become a permanent record. As a result, employees should use good
judgment regarding the content of voice mail messages.

Internet Policy. Hanover provides Internet access to authorized individuals so
that employees may perform their job functions more effectively and efficiently.
The Internet is often the most appropriate method of communicating and gathering
business-related information. Use of the Internet is subject to the Company's
general policies regarding the use of its systems, including the prohibition
against accessing or transmitting inappropriate or offensive materials.
Employees should take particular care in engaging in discussions in "chat rooms"
or other Internet forums and should under no circumstances disclose confidential
or proprietary information in any such discussions. Employees are reminded that
their Internet usage is subject to monitoring by the Company.

USE, HANDLING AND PROTECTION OF COMPANY INFORMATION

Ownership of Ideas and Information. All ideas and all expressions of ideas
created or developed by Hanover employees that relate to the business, products,
or services of Hanover belong to the Company. This includes ideas developed at
the office and elsewhere (including at home) and includes the right to publish
such ideas or obtain a copyright for them.

Customer Information. You are expected to be sensitive to the fact that customer
information is given in confidence and for a limited purpose. As a result, you
may not disclose to others any confidential information in Hanover's possession
or use any such information for your own or someone else's benefit. In addition,
both during and subsequent to your employment with the Company, you are expected
to take reasonable precautions to prevent the unauthorized disclosure of
confidential information regarding Hanover's customers. Any request to provide
confidential information to any external source should be referred to the Legal
Department.

Trade Secrets and Other Confidential Information. It is crucial that each
Hanover employee protect the Company's trade secrets and other confidential
Company information. This includes information that is not known to the public
or to competitors and that gives Hanover a competitive advantage. Hanover
employees may have access to sensitive information originating from a client
using a Hanover product. It is the responsibility of our employees to safeguard
this information, treating such information as sensitive and confidential.
Employees should respect confidential information which they may have had access
to as employees of another company, unless such information is made available
with the consent of the other company or has otherwise become publicly
available.

Each of us who possesses or has access to confidential information or trade
secrets has an important responsibility to keep that information confidential
and to prevent it from being improperly disclosed to others inside or outside of
Hanover who are not entitled to receive it. This obligation applies both during
and subsequent to your employment with Hanover. An employee must return any
documents or records belonging to Hanover after termination of his or her
employment.

Federal law makes it a crime to appropriate a trade secret for the economic
benefit of anyone other than the owner. It is Hanover's policy both to observe
this law in relation to the trade secrets of other persons and to expect
compliance with this law by those with access to its own trade secrets.

                                                                              15
<PAGE>

Distribution of Information. Any and all inquiries, attempts to gain specific
information or interview requests from outside sources, including
representatives from the news media, banks, rating agencies and equity analysts,
should immediately be referred to the office of the President and CEO for
response. Any general request for information on Hanover is to be referred to
Hanover Investor Relations. Employees, other than authorized spokespersons, are
not to respond to information inquiries relating to Hanover from outside sources
under any circumstances unless specifically authorized to do so by a
spokesperson and the office of the President and CEO. No employee or officer may
initiate any communication with the news media, banks, rating agencies, equity
analysts or any other outside source concerning Hanover without authorization of
the office of the President and CEO. All press releases, or other official
declarations on behalf of Hanover should be approved in advance by the President
and CEO.

Information deemed to be of a confidential nature or meeting the criteria for
nonpublic and material set out in the Guide provision covering insider trading
may not be discussed by any employee, officer or director with anyone outside
the organization without permission of the Legal Department.

Use of Patents, Trademarks and Copyrights. Hanover uses trademarks and
copyrights - words, names, symbols, or devices - to identify and distinguish the
Company's products. The Company uses patents to protect its technology.
Hanover's name is one of our most valuable corporate assets. You are not
permitted to use the Company's name, logo, or letterhead to conduct personal or
non-Company business. In addition, you are not permitted to use any of the
Company's trademarked or copyrighted materials and its patents other than in
connection with your work for Hanover and with the approval of management.
Similarly, we should all be vigilant in ensuring that other parties do not
infringe on Hanover's name or its patented, copyrighted and trademarked
materials.

Legal Privileges. Like other assets of the Company, the attorney-client
privilege and other legal privileges from disclosure belong to the Company. As
such, these privileges can only be waived by the Company and should be guarded
with vigilance by employees. To ensure that Hanover's legal privileges are
appropriately preserved, employees are prohibited from disclosing any
confidential information, including the advice of attorneys for the Company,
without first obtaining approval from the Legal Department. No attorneys may be
retained, either as Hanover employees or as outside counsel, without notice and
approval by the Legal Department.

Retention of Documents. Hanover cooperates fully with all government
investigations and the judicial process. Accordingly, there are instances in
which Company documents should be retained. Examples of these types of
situations include filed or anticipated litigation, federal or state
investigations, and internal and external audits. In these circumstances, you
should retain all documents (including computerized information) in your custody
or control relating to the matter under review. Please note that the destruction
or falsification of a document in order to impede a governmental investigation,
audit, or examination may lead to civil or criminal sanctions. The Company may
promulgate more specific document retention policies or instructions from time
to time, and each employee is required to comply with such additional policies
or instructions. If you are not sure that a document should be destroyed or
discarded, consult the Legal Department.

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<PAGE>

SPECIAL RULES FOR FINANCIAL INFORMATION

Financial Information. The responsibility to ensure the accuracy of the books
and records of Hanover does not rest exclusively with our accounting and
auditing personnel. Rather, each employee should help to ensure that our
Company's financial information complies with the law, applicable accounting and
record keeping standards, and Company policy. Employees are expected to
accurately record and report financial information and to fully cooperate in any
audits of Company records.

All employees who are involved in preparing or reviewing financial documentation
are responsible for ensuring that transactions are recorded accurately and in
appropriate detail. All receipts and disbursements should be fully and
accurately described in the Company's books and records and should be supported
by appropriate descriptive documentation. In addition, individuals are
prohibited from requesting or making reimbursement, or otherwise making payment
on invoices, without proper documentation that is consistent with Company
policies.

If you have reason to believe that any of Hanover's books and records are not
being maintained in an accurate or complete manner, you are expected to report
this immediately to your supervisor, to the Internal Audit Department, or to the
Finance Department. You are expected to report if you are ever pressured to
prepare inappropriately or destroy financial documents or if you become aware
that any misleading, incomplete, or false statement was made to an accountant,
auditor, attorney, or government official in connection with any audit,
examination, or filing with a government agency. If you have any complaints or
concerns regarding accounting or auditing matters [or other matters regarding
the CEO, senior management or the Company's public disclosures to shareholders],
in addition to the alternatives for obtaining guidance that are outlined above,
you may submit a confidential, anonymous written statement to the Audit
Committee of Hanover's Board of Directors by submitting a copy addressed to the
Chairman of the Audit Committee with your complaint or concern forwarded care of
the General Counsel's office.

No accountants may be retained, either as Hanover employees or as outside
auditors, without notice and approval by the Finance Department, who in turn may
require the approval of the Company's audit committee.

No filing may be made to any agency, including the Securities and Exchange
Commission, without that filing being cleared by the Finance and Legal
Departments in accordance with Company policies.

Proper Documentation and Accounting of Transactions. The goal in drafting and
documenting contracts and other Company transactions should be to ensure that
they are written and substantiated with sufficient clarity and definitiveness
that Company personnel, outside auditors and others reviewing the contract can
understand the goods and services being provided and, if specified, their price.
For this reason, each payment by Hanover for goods or services shall be
supported by documentation reflecting the purpose and nature of such payment.
All payments and billings for equipment, parts or services shall be made in such
a manner that public disclosure of the full details thereof would not impugn or
jeopardize Hanover's integrity or reputation.

                                                                              17
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BUSINESS TRANSACTIONS AND CONTRACT ADMINISTRATION

Business transactions, including those completed through the execution of
contracts with others, should be entered into in a manner that serves the best
interests of the Company and our shareholders. This means that all business
transactions should be accomplished on terms that are arrived at through
arms-length negotiations on terms which are commercially reasonable. No
transaction should be entered into - and no contract should be executed - as a
means or in a manner that is inconsistent with legitimate business interests of
the Company or which lacks economic substance. Similarly, documentation
(including contracts, purchase orders or invoices) may not be created to support
a transaction which is inconsistent with the business terms of the transaction.

Contract administration is the management, supervision, and monitoring of the
execution of the terms and conditions of a contract. Contracts refer to all
written agreements or understandings (and amendments thereto) that are to be
executed in the name of and binding upon Hanover or its subsidiaries or
affiliates.

Hanover has centralized the overall coordination as well as the responsibility
associated with the administration of contracts. Contract administration is
coordinated within the Legal Department and managed by the Director of Contract
Administration. An integrated set of detailed policies and procedures direct the
overall contract administration process flow from contract initiation,
negotiation, modification, maintenance, review, and/or ultimate disposition. The
Legal Department also provides advice regarding legal sufficiency, confirms
approval authority, and assists management in identifying and evaluating
potential risks.

Appropriate approvals for contracts should be obtained in accordance with
Company policy. In order to collect appropriate approval signatures, contract
documents are circulated for review among certain individuals associated with
specific disciplines and/or departments (e.g. Finance, Legal, and Tax). After
the terms and conditions of an agreement have been negotiated and finalized, the
contract should be signed by an appropriate Hanover officer or properly
authorized representative. All executed contracts should be reported, cataloged,
and filed for safekeeping consistent with Company policy.

POLITICAL ACTIVITIES AND CONTRIBUTIONS

Hanover encourages all employees to vote and to participate actively in the
political process. Individuals are free to contribute their personal time and
resources to political campaigns and candidates. Individual contributions should
be made in the name of the donor and cannot be made in the name of another
person or entity. For example, employees are prohibited from making
contributions to political parties or candidates in the name of Hanover.

Prohibited Corporate Activities. Federal and state law and the laws of some
foreign countries impose significant restrictions on the ability of corporations
to contribute to state and federal candidates or political parties. Accordingly,
employees are prohibited from devoting Company work time, facilities, or
property (including the Company's trademark) to a political campaign or party.
In addition, consistent with the law, the Company will not directly or
indirectly reimburse employees for contributions made to a candidate, or party.
Employees are strictly prohibited from including any such contributions,
including the cost of attendance at political fundraisers, on expense reports or
other requests for reimbursement.

18
<PAGE>

Do Not Represent Hanover in Political Matters. Detailed and complex federal and
state laws and the laws of some foreign countries regulate political and
lobbying activities. Unless specifically authorized to do so, employees cannot
independently deal with government officials or political candidates on behalf
of or in the name of Hanover. Employees also are not permitted to represent, and
should avoid the appearance of representing, personal political activity as
activity on behalf of Hanover.

Pressure to Support Hanover Political Activities Is Prohibited. Employees should
not be compelled or pressured into working on behalf of any political campaign
or party, casting a vote one way or the other. Any financial reprisal, job
discrimination, or other undue influence used or threatened in such a situation
is against Hanover policy and should be reported immediately to the Human
Resources Department or the Legal Department.

                                                                              19
<PAGE>

                       HANOVER'S RELATIONSHIP WITH OTHERS

OVERVIEW

At Hanover, we have a disciplined, entrepreneurial spirit and the will to
prevail in the competitive marketplace. It is critical, however, that we not
compromise our value of integrity for the sake of enhanced profit or operating
performance. Rather, we should treat others as we would like to be treated.

FAIR COMPETITION

Hanover expects that each employee, officer and director will endeavor to deal
fairly with the Company's customers, suppliers, and competitors. None should
take unfair advantage of anyone through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts, or any other unfair
dealing.

Federal antitrust laws and other federal and state laws and the laws of foreign
countries regulate certain aspects of the manner in which businesses and their
employees can interact with each other. To comply with these laws and as a
matter of Company policy, all employees of Hanover should strive to engage in
fair competition. Fair competition means that Hanover employees should not use
tactics that unfairly hurt competitors, are anti-competitive, or otherwise
involve the provision of misleading or inaccurate information. Conduct that
should be avoided includes the following:

Disparaging Remarks. In conducting Hanover's business, employees should focus on
the strengths of Hanover and its products and services, and should refrain from
making disparaging remarks about competitors that could be considered
"competitor bashing." While "disparaging remarks" do not include relevant,
factually accurate information, they do include statements made to dissuade a
consumer from doing business with a competitor if the information is inaccurate
or misleading.

Truthful Promotion. Our advertising should always be truthful. If we make
specific claims about our products or the performance of our products, we should
have evidence to substantiate these claims. We should not label or market our
products in any way that might cause confusion between our products and those of
any of our competitors. Similarly, we should be alert to any situation where a
competitor may be attempting to mislead potential customers as to the origin of
products and inform appropriate management or the Legal Department of any such
case.

If we supply any estimates - such as cost estimates - they should be fair and
reasonable. To the maximum extent possible, they should be backed by objective
facts and experience. To the extent that the estimate cannot be objectively
verified, it should be based upon the good faith judgments of those making the
estimate. If it is necessary to forecast future delivery dates, such forecasts
should be made in the same way as an estimate - backed up by objective evidence
to the maximum extent possible and based upon good faith judgment where
required.

Anti-Competitive, Unfair, or Deceptive Trade Practices. Hanover should compete
in the market on the basis of its independent business judgment and should avoid
even the appearance of collusion with a competitor. For example, employees
cannot reach agreements with competitors

20
<PAGE>

to fix prices, fix the terms or conditions of product sales, divide markets,
enter into group boycotts, or engage in deceptive practices.

Employees and officers who attend a trade association meeting or who belong to a
trade association should familiarize themselves with antitrust principles and
legal pitfalls involved in trade association programs and conduct ourselves
accordingly. Company representatives should be vigilant that they do not
participate in improper discussions with competitors on these occasions, even if
outside the context of meetings themselves.

Tying and Bundling. Tying or bundling arrangements exist where a seller
conditions the sale of one product or service on the buyer purchasing some other
separate and unrelated product or service, or only makes products or services
available as a package. Such practices are not in-and-of-themselves illegal, but
under certain conditions they can raise antitrust issues. As a general matter,
tying and bundling is only prohibited where the seller has a monopoly position
or faces only very weak competition in one product or service, and as a result
of the practice can coerce customers into paying a price for one or more
additional products or services at above-market level prices. If you have
concerns that the Company is entering into an arrangement that might raise the
issue of tying or bundling or if a customer complains to you that this is the
case, please promptly notify the Legal Department.

Reciprocity. Our products are sold on the basis of good quality and service for
a fair price. We should be buying the products of others based on those same
considerations. While parties may agree voluntarily to buy and sell to one
another, where one of the parties possesses monopoly power or market power
problems similar to the tying arrangements discussed above may arise.
Reciprocity means agreeing to buy the products or services of a supplier on the
condition that the supplier also agree to buy products and services from us. As
a general rule, we should thus not attempt to sell our products to companies on
the basis of purchases we may make from those other companies, nor should we
allow other companies to attempt to make us buy their products simply because
they sell products to us.

This list of fair competition practices is not exhaustive, and the application
of the law to any specific situation is apt to be quite fact-specific. For this
reason questions regarding actions that may raise antitrust and fair competition
concerns should be presented to management and the Legal Department at the
earliest possible opportunity.

USE OF COPYRIGHTED AND OTHER PROTECTED MATERIAL

Federal law grants the owners of intellectual property, such as copyrighted
materials, with the exclusive right to use and authorize the use of their
protected materials. To this end, federal law forbids unauthorized persons from
copying or otherwise duplicating protected materials. For example, this
protection is extended to preparing advertising or promotional materials, using
the name or printed materials of another company, or operating an unlicensed
software program on a personal computer.

There are also legal restrictions to obtaining and using trade secrets and
confidential or proprietary business information belonging to other
organizations. It is generally permissible to obtain information about other
organizations, including Hanover's competitors, through legal and ethical means,
such as publicly available documents, public presentations, articles, and other
published sources. It is not acceptable, however, to obtain proprietary or
confidential

                                                                              21
<PAGE>

information, including information about a competitor, through illegal means,
such as fraud, bribery, or misappropriation, or by inducing someone to breach a
contract.

GOVERNMENT CONTRACTS

The laws and regulations governing contracting with the government can impose
requirements not traditionally associated with purely commercial business
transactions and can subject individual and corporate violators to civil and
criminal penalties. Accordingly, you should contact the Legal Department prior
to entering into a government contract to ensure that you are familiar and in
compliance with any applicable rules. Where the Company decides to entertain
such a contract, it is Hanover's policy to do so in an honest and fair manner
and to satisfy both the Company's legal obligations and its commitment to
maintain the highest standards of integrity.

GIFTS, BRIBERY, AND IMPROPER PAYMENTS

Domestic Public Officials. Under U.S. federal and many state and local laws and
the laws of foreign countries, it is unlawful for the Company or any of its
employees to give a public official a gift or anything of value to influence the
public official to take official action or in appreciation for any official act
that the public official may take. For these purposes, public officials include
federal, state, and local government representatives and officials, whether
elected or not, and their staffs and relatives.

The following rules apply to the conduct of all employees of Hanover when
dealing with any public official:

-    No gift of cash should ever be given, directly or indirectly, to or for the
     benefit of a public official.

-    No gifts, services, special treatment, or entertainment shall be given,
     either directly or indirectly, to any public official to influence or
     induce the public official to take or refrain from taking an official act.

-    No gifts, services, special treatment, or entertainment shall be given,
     directly or indirectly, to any public official in appreciation for official
     acts the public official has taken, or may take in the future, on behalf of
     the Company.

-    Public officials who, directly or indirectly, demand or request gifts,
     services, special treatment, or entertainment should be courteously
     refused. All such demands or requests by a public official should be
     immediately reported to management and the Legal Department.

Foreign Public Officials. Under federal law and the law of some foreign
countries, United States companies and their employees are generally prohibited
from directly or indirectly offering or making payments to foreign officials,
political parties, political party officials, officials of any international
organization or candidates for foreign political office in order to win or
retain business or influence any act of such officials. Payments made to third
parties under circumstances suggesting that the payment would be passed along to
a prohibited source also are illegal. Hanover forbids making any direct or
indirect prohibited payments and requires that all payments to foreign
officials, candidates, or parties receive the prior approval of management and
the Legal Department.

In addition, federal law requires that Hanover maintain books, records, and
accounts - including records of payments to foreign officials - that accurately
and fairly reflect the transactions and

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dispositions of the Company's assets. Each employee is responsible for ensuring
that Hanover's books and records are maintained consistent with the law.

In some foreign countries, "expediting" or "grease" payments are customarily
demanded by or offered to clerical and other low-level foreign government
personnel to take routine action to which the Company is entitled under
applicable law. Although such payments may not be illegal under local law,
Hanover nevertheless strongly discourages them and permits them only when
legally permissible, of nominal value and as a measure of last resort to avoid
damaging delays and refusals by foreign government officials to do routine
duties of the sort ordinarily performed by that official. No such payment should
be made without consultation with management and, as appropriate, with the Legal
Department. Such payments will be properly recorded in the Company's books and
records.

Commercial Bribery. Commercial bribery is a payment to illicitly influence an
employee's conduct with respect to that employee's business. Hanover policy
requires that all commercial transactions be conducted at arms-length in a
manner that is beyond even the appearance of impropriety. As such, employees at
Hanover are prohibited from taking or offering bribes or kickbacks to any party
to a private transaction. In addition, entertainment of customers (or other
third parties with whom the Company deals) should be conducted within the bounds
of applicable laws and good taste, and never under circumstances that might
suggest a compromise of the impartiality of such persons or that would raise
questions about Hanover's integrity or motives. Similarly, Hanover's property,
services, and personnel should never be used to benefit a customer or business
relationship in a fashion that is not directly pertinent to the parties'
business dealings.

SELECTION OF REPRESENTATIVES

Company representatives (sometimes called "agents" in our industry), whether
retained for domestic or overseas business, shall only be retained under an
appropriately written and executed agreement. This agreement should specify that
compliance with relevant aspects of this Guide and, in particular, its
provisions on gifts, bribery, and improper payments, is a condition of the
agreement. The amount of and basis for compensation of the representative shall
be consistent with accepted practice in the industry, the anticipated duration
of the representative's retainer and the specific responsibilities assigned to
the representative. Payments or agreements with any representative shall not be
made in violation of applicable U.S. law or the law of the affected foreign
country, and under no circumstances shall a payment be made if there is reason
to believe that any portion of the payment will be offered, directly or
indirectly, to foreign officials, political parties, political party officials,
officials of any international organization or candidates for foreign political
office.

INTERNATIONAL BUSINESS AND TRADE

Hanover is committed to full compliance with the laws of each country in or with
which we conduct business. The fact that a foreign government does not typically
enforce certain laws does not alter your obligation to comply with those laws.
Because foreign laws may differ from those in the United States, you should
consult an attorney in the Company's Legal Department before either entering
into a business transaction in a country with which Hanover has no business
experience, undertaking a significant new business venture in a country in which
Hanover currently does business or wherever you have any questions as to the
legal implications of any overseas business transaction.

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It is important to remember that conduct that is prohibited directly should not
be attempted indirectly through an intermediary or other third party. What
follows is meant to give you a sense of the nature and scope of the laws
affecting imports and exports and to better ensure that you are sensitive to the
relevant issues, but is not meant as a substitute for working with the Legal
Department.

Exports and Imports. All exports of commodities and technical data from the
United States are controlled by U.S. federal laws and regulations, as are
foreign transactions involving the sale of commodities made abroad using
technical data or components with U.S. origins. Further, the United States
imposes embargoes on certain countries. Hanover complies with all applicable
federal export control laws and regulations. While not all employees are
involved in Hanover's export of products or data or in the import of products or
services from other nations, employees should be aware of the existence of laws
affecting these types of transactions and should be scrupulous in obtaining
proper management and legal advice to ensure compliance with the letter and the
spirit of relevant laws. This policy applies to transactions conducted by the
Company from the U.S. as well as those by or through the Company's overseas
affiliates.

Foreign Boycotts. Generally, United States law prohibits Hanover from complying
with or supporting a foreign country's boycott of another country that is
friendly to the United States. In addition, Hanover is required to report
promptly to the United States government any request to support such a boycott.
A foreign country, or an entity associated with the country, could make the
request in a bid invitation, purchase contract, letters of credit, a common
letter or memo, or orally in connection with a transaction. If you receive or
learn of a boycott or related information request, please report it promptly to
management or the Legal Department for appropriate action.

Human Rights and The Company's International Operations. Hanover believes that
international commerce ultimately strengthens societies and supports human
rights. To guard against circumstances that might otherwise contribute to human
rights abuses, Hanover is committed to supporting and respecting the protection
of internationally proclaimed human rights within its sphere of influence and,
in particular, to ensuring that its security arrangements are consistent with
international human rights standards. Employees retaining or coordinating with
public or private security forces are expected to follow Hanover's policies on
dealings with security forces and to contact the company's Legal Department
immediately with any questions concerning implementation of these human rights
standards.

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                                 ADMINISTRATION

INTERPRETATION

Management and the various disciplines in our corporate offices (i.e. the
Finance, Human Resources, Health, Safety, and Environment, and Legal
Departments) are responsible for interpreting and applying the policies set out
in this Guide to specific situations in which questions may arise. Any questions
relating to how these policies should be interpreted or applied should be
addressed to the appropriate discipline, as specified in this Guide.

POLICY ADMINISTRATION

Policy administration is associated with all aspects of documenting, organizing,
maintaining, and communicating the policies, practices, procedures, and
approvals of the organization to employees. The scope of documented policy and
procedure is intended to include all of the information that an employee should
know or have ready access to regarding how to operate successfully at Hanover.
Any questions regarding the creation, modification, or disposition of the
organization's policies, practices, procedures, or approvals should be referred
to the Director of Policy Administration.

COMPLIANCE WITH THE GUIDE

In general, the use of good judgment and common sense, based on high ethical
principles, will guide employees with respect to lines of acceptable conduct. If
a situation arises where it is difficult to determine the proper course of
action, the matter should be discussed openly with your immediate supervisor,
others in management, or the Human Resources or Legal Departments for advice and
consultation.

Compliance with this Guide of business ethics and conduct is the responsibility
of every Hanover employee. All employees have a moral, and, in some cases, legal
obligation to call to the Company's attention any situation in which the
policies in this Guide are not observed. An employee with knowledge of or
reasonable belief of any violation should promptly report such violation to
management or the Human Resources or Legal Departments. All such information
will be received with the understanding that the Company will not allow
retaliation for reports made in good faith.

The Company shall take appropriate disciplinary action, including dismissal, if
appropriate, with respect to those employees involved in any violation of this
Guide. In other cases, the Company may have a legal and moral obligation to call
violations of the Guide to the attention of appropriate law enforcement
authorities as, in some cases, violations of the Guide are also violations of
the law.

Periodically, all of Hanover's officers will be required to state, in writing,
that they have no knowledge of any material violation of this Guide other than
those violations, if any, which have previously been reported to the President
and CEO. The President and CEO of Hanover shall be charged with the
responsibility of obtaining and reviewing these statements.

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DISTRIBUTION

Every employee, officer and director of the Company shall be provided access to
or shall be given a copy of the Guide. Every new employee will be provided
access to or will be given a copy of the Guide and asked to acknowledge receipt
of it either at or within one week of hiring. Where appropriate,
representatives, consultants, contractors or advisors engaged by Hanover to
render services shall be furnished a copy of this Guide which shall govern such
engagement.

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                              QUESTIONS AND ANSWERS

Hanover has created this question and answer section to increase your awareness
of how this Guide should be applied. It is not intended to answer every question
you may have about Hanover's policies or applicable laws and regulations, but
merely to help demonstrate how to apply the Guide in everyday situations.

THE CORPORATE RESPONSIBILITY PROGRAM

Q: What should I do if I have a question about workplace conduct or see
something that I think might be wrong?

A: There are several things you can do if you have questions about workplace
conduct. First, we encourage you to try to ask, or resolve matters with, your
supervisor whenever possible and appropriate. If for any reason you do not feel
comfortable talking to your supervisor, or if your supervisor does not answer
the question or address the problem to your satisfaction, then there are other
options. You can contact others in management or the Human Resources or Legal
Departments. Finally, you can call the Hanover toll-free number at
1-800-281-5439.

Q: If I report conduct that I believe is a violation of the law or Company
policy, will I get in trouble if my suspicions turn out to be wrong?

A: As a Hanover employee, you have a responsibility to report suspected
problems; in fact, employees may be subject to discipline if they witness
improper conduct but do not report it to the Company. Hanover's policies
prohibit any retaliatory actions against employees who report problems. The only
time someone will be disciplined for reporting misconduct is if that person
reports something he or she knows to be false or misleading in order to harm or
harass someone else.

Q: What should I do if my supervisor asks me to do something that I think
violates Hanover policy or is illegal?

A: Consistent with our value of "straightforward communication," it is best if
you first discuss your concerns with your supervisor. If you continue to have
concerns after speaking with your supervisor, contact others in management or
the Human Resources or Legal Departments. Of course, you should not take any
action that you believe violates Company policy or the law.

AVOIDING CONFLICTS OF INTEREST

Q: One of the companies with which we do a lot of business has offered me
tickets to a baseball game. Can I go?

A: Generally, yes. You can accept an occasional gift of relatively nominal value
given in the course of normal business relations that neither has the effect of
influencing your conduct nor

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appears to influence your conduct. If the tickets are for a game out of town and
include transportation and meals, you should not accept the gift. Similarly, if
you are offered season tickets or tickets to numerous games, you should decline
the gift.

Q: I have been asked to have a brochure printed. My husband owns a small but
highly reputable printing business. May I hire him to do the printing for
Hanover if the prices are comparable to other companies?

A: No. While it seems unfair, the potential for conflict is too high to permit
employees to enter into business relationships with their relatives. Such a
situation would put the employee in an impossible situation if the job were not
properly completed and gives the improper outward appearance of favoritism.

INSIDE INFORMATION AND SECURITIES TRADING ACTIVITIES

Q: How can I tell if information is "material" for purposes of the Company's
policy on insider trading?

A: Unfortunately, there is no clear standard to determine whether information is
material. Some categories of information - such as information regarding
earnings or a corporate acquisition - are important enough that you should
generally consider them to be material. If you have any questions regarding
whether you are in possession of material, non-public information, you should
abstain from trading or contact the Legal Department prior to trading.

Q: Am I precluded from trading Hanover securities if I overhear other employees
discussing material, non-public information about the Company in a conversation
of which I am not a part?

A: Yes, Company policy prohibits employees from trading while in possession of
inside information, regardless of the source of that information. In addition,
you must refrain from passing the information on to others.

Q: I had planned to sell some of my Hanover stock on May 15 to buy a car. On May
10, I received non-public information about the Company's expected financial
performance for the quarter. Am I forbidden from selling the stock as planned?

A: Yes. Company policy prohibits you from trading if you possess inside
information about Hanover at the time of the proposed trade, even if the
information did not play a role in your investment decision. If you are planning
to trade in Hanover securities, and you have questions as to whether or not
trading is permissible, you should consult the Legal Department.

Q: Does it violate Company policy if I tell one of my relatives to buy stock in
Hanover so long as I do not give them material, non-public information?

A: Yes. If you are in possession of inside information you are not permitted to
take any action, or advise anyone to take any action, based on that information
- even if you do not share the information with them.

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SAFEGUARDING COMPANY PROPERTY

Q: My son is applying for his first job. Can I use my office computer to type
his resume?

A: Yes, provided that you type the resume on your personal time (at lunch or
after working hours) and that doing so does not otherwise interfere with your
work. You should also remember that because the Company owns the computer
system, you do not have a right of privacy with respect to the resume or any
other personal documents that you create or store on your office computer.

Q: I am selling my car. Can I send the employees in my Division an E-mail with
information about the make, model, and price of the car?

A: This type of E-mail should be avoided. Personal use of the E-mail system
should be extremely limited and, in all cases, requires employees to use good
judgment regarding whether your actions will disrupt legitimate Company
business. Personal announcements like the one proposed are likely to disrupt a
large number of employees with information unrelated to Company business.

Q: I am involved in an organization that is having a fundraiser. The
organization needs addresses of people it can ask for donations. May I give the
organization a list of addresses that Hanover uses for its publications if I
don't reveal any sensitive customer financial information?

A: No. We are all responsible for protecting the confidentiality of information
Hanover receives from its customers, and those customers are entitled to expect
us to respect their privacy. This rule applies not only to financial
information, but also to anything else a client discloses during the course of
doing business with Hanover. That information should be disclosed only to those
authorized to receive it for a legitimate business purpose.

FAIR COMPETITION

Q: I am at a meeting and see a friend who is also a Hanover competitor. She
begins to discuss her company's pricing policy and asks me about Hanover's
pricing. What should I do?

A: Stop the discussion immediately. A conversation with a competitor about
pricing could be illegal. If a competitor raises this issue, even in friendly
conversation, you should object, stop the conversation immediately, and tell the
person that under no circumstances will you discuss these matters.

POLITICAL ACTIVITIES AND CONTRIBUTIONS

Q: In my personal time, I sometimes volunteer for political campaigns. May I use
a copy machine at Hanover to copy a fundraising leaflet?

A: No. Federal and certain state laws and Hanover policy prohibit the use of
corporate resources

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in connection with political activity; therefore, you may not use Hanover time
or resources to support political campaigns.

EMPLOYMENT ISSUES

Q: Another employee is bothering me and making remarks I find offensive. I am
not sure if this behavior would constitute "harassment" or not. What should I
do?

A: To the extent that you feel comfortable doing so, tell the employee to stop
making the remarks. If you are not comfortable speaking directly to the
employee, you should discuss the matter with your supervisor. If, for any
reason, you feel uncomfortable discussing the problem with your supervisor or
you want to make a complaint regarding the conduct, you should contact the Human
Resources Department.

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                                COMPANY CONTACTS

-    DOMESTIC SALES, 12001 N. Houston Rosslyn Rd., Houston, TX 77086, USA,
     Phone: 281-405-5127, Fax: 281-447-8790

-    FINANCE, 12001 N. Houston Rosslyn Rd., Houston, TX 77086, USA, Phone:
     281-405-6219, Fax: 281-447-1933

-    HEALTH, SAFETY, AND ENVIRONMENT, 12001 N. Houston Rosslyn Rd., Houston, TX
     77086, Phone: 281-447-8787, Fax: 281-405-6203

-    HUMAN RESOURCES, 12001 N. Houston Rosslyn Rd., Houston, TX 77086, USA,
     Phone: 281-405-5146, Fax: 281-445-1850

-    INTERNAL AUDIT, 12001 N. Houston Rosslyn Rd., Houston, TX 77086, USA,
     Phone: 713-982-5457, Fax: 713-982-4004

-    INTERNATIONAL OPERATIONS, 12001 N. Houston Rosslyn Rd., Houston, TX 77086,
     USA, Phone: 281-405-6357, Fax: 281-447-3619

-    LEGAL, 12001 N. Houston Rosslyn Rd., Houston, TX 77086, Phone:
     281-405-5175, Fax: 281-405-6203

-    MANUFACTURING AND FABRICATION, 12001 N. Houston Rosslyn Rd., Houston, TX
     77086, USA, Phone: 281-405-6301, Fax: 281-820-5918

-    U.S. OPERATIONS, 12001 N. Houston Rosslyn Rd., Houston, TX 77086, USA,
     Phone: 281-405-5102, Fax: 281-447-8790

The policies set out in this Guide apply to all Hanover employees and, where so
indicated, to its directors. In select circumstances, employees may be required
to follow certain more stringent policies adopted to govern activities in which
individual employees may be involved. Nothing in this Guide should be read as a
guarantee of employment, a commitment to provide employment or a promise to
continue any terms or conditions of existing employment. (Publication Date:
January 1, 2003)

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