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HANOVER COMPRESSOR COMPANY
RETENTION BONUS PLAN
 ESTABLISHMENT AND PURPOSE
  DEFINITIONS
  (a)
    
    Administrator means the person or persons appointed by the
Compensation Committee of the Board of Directors of the Company to administer
the Plan.(b)
    
    Affiliate means any corporation, partnership, limited
liability company or partnership, association, trust or other organization
which, directly or indirectly, controls, is controlled by, or is under common
control with, the Company. For purposes of the preceding sentence, control
(including, with correlative meanings, the terms controlled by and under
common control with), as used with respect to any entity or organization,
shall mean the possession, directly or indirectly, of the power (i) to vote
more than 50% of the securities having ordinary voting power for the election
of directors of the controlled entity or organization, or (ii) to direct or
cause the direction of management and policies of the controlled entity or
organization, whether through the ownership of voting securities or by contract
or otherwise.(c)
    
    Company means Hanover Compressor Company, a Delaware
corporation.(d)
    
    Cause means (i) the commission by a Participant of an act of
fraud, embezzlement or willful breach of a fiduciary duty to the Company or an
Affiliate (including the unauthorized disclosure of confidential or proprietary
material information of the Company or an Affiliate), (ii) a conviction of a
Participant (or a plea of nolo contendere in lieu thereof) for a felony or a
crime involving fraud, dishonesty or moral turpitude, (iii) willful failure of
a Participant to follow the written directions of the chief executive officer
of the Company, Company management, or the Board of Directors, in the case of
executive officers of the Company, when such directions are consistent with the
Participants customary duties and




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responsibilities and where such refusal has continued for more than 10 days
following written notice; (iv) willful misconduct as an employee of the
Company or an Affiliate which includes the Participants failure to adhere
to P.R.I.D.E., the Companys Guide to Ethical Business Conduct; (v) willful
failure of a Participant to render services to the Company or an Affiliate
in accordance with his employment arrangement, which failure amounts to a
material neglect of his duties to the Company or an Affiliate or (vi)
substantial dependence, as determined by the Administrator, on any drug,
immediate precursor or other substance listed on Schedule IV of the Federal
Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended, as
determined in the sole discretion of the Administrator. With respect to any
Participant residing outside of the United States, the Administrator may
revise the definition of Cause as appropriate to conform to the laws of
the applicable non-U.S. jurisdiction.(e)
    
    Disability means any physical or mental condition for which
the Participant would be eligible to receive long-term disability benefits
under the Companys long-term disability plan. With respect to any Participant
residing outside of the United States, the Administrator may revise the
definition of Disability as appropriate to conform to the laws of the
applicable non-U.S. jurisdiction.(f)
    
    Internal Revenue Code means the Internal Revenue Code of
1986, as amended.(g)
    
    Key Date means the date through which a Participant must
remain in continuous employment with the Company in order to be entitled to a
Retention Bonus under the Plan as determined under Section 5.2 and set forth on
the Participants Retention Bonus Award Letter.(h)
    
    Participant means an employee of the Company selected by the
Administrator who has been provided a Retention Bonus Award Letter that
specifies the details of the employees participation in the Plan.(i)
    
    Retention Bonus means the amount described in Section 5.1 and
specifically set forth on the Participants Retention Bonus Award Letter.(j)
    
    Retention Bonus Award Letter means the letter provided by the
Administrator to each Participant that sets forth the Retention Bonus and Key
Date applicable to the Retention Bonus, as described in Section 5.1.(k)
    
    Successor shall mean any person, firm, corporation, or
business entity which at any time, whether by merger, purchase, or otherwise,
acquires all or substantially all of the assets, stock or business of the
Company.
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ADMINISTRATION
 Administration of the Plan
 Authority of the Administrator
 Decision of Administrator Final
 Interested Administrator
 PARTICIPATION
  RETENTION BONUS OPPORTUNITY
 Establishment of Retention Bonus Amount
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Establishment of Key Date
 Payment of Retention Bonus
 Withholding for Taxes
 TERMINATION OF EMPLOYMENT
 Termination Due to Death, Disability, or Termination Without Cause
 Termination For Other Reasons
 Employment with Successors
 Compliance with Section 409A
 BENEFICIARY
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RIGHTS OF PARTICIPANTS
 No Employment or Benefit Guaranty
 No Assignment of Rights
 No Funding
 MISCELLANEOUS PROVISIONS
 Amendment and Termination
 Headings
 Evidence
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Gender and Number
 Applicable Law
 Severability
 Effective Date
 Successors
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