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                                                                    EXHIBIT 10.2

                              [Hanover Letterhead]

                                  March 6, 2002

Mr. Stephen P. York
919 River Oaks Ln
Charlotte, NC 28226

Dear Steve:

This letter summarizes Hanover Compressor Company's offer of employment to you
to serve as the Company's Controller based in Hanover's corporate office in
Houston, Texas. I am confident that your inclusion in Hanover's executive
management team will prove to be mutually rewarding and offer you the career
opportunity that you seek.

The compensation for this position is as follows.

Base Salary:               $6,153.85 per pay period (26 pay periods per year).

Profit Sharing
Opportunity:               25-50% of annual base salary to be paid annually
                           based upon Company performance and personal
                           performance compared with agreed upon objectives and
                           subjective measures. Not withstanding the provisions
                           described above, your minimum profit sharing payment
                           for performance during 2002 will be $40,000.

Stock Option
Program:                   Upon your employment start date, the Company will
                           grant to you non-qualified stock options to purchase
                           10,000 shares of Company common stock at a price per
                           share equal to the NYSE closing market price that
                           day.

Relocation
Allowance:                 The Company will assume financial responsibility for
                           the relocation costs listed below with the objective
                           of covering all such

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Mr. Stephen P. York
March 6, 2002

                           documented costs subject to a cap described below. As
                           part of this program, the Company will coordinate the
                           movement of your household goods and personal
                           belongings on a direct bill basis under its agreement
                           with one of its national moving companies. The
                           Company will also reimburse you for reasonable and
                           customary closing costs and make a one-time payment
                           to you of $8,000 to cover incidental expenses related
                           to your move. Additionally, under this program the
                           Company agrees to (i) assume financial responsibility
                           for third party brokerage commissions related to the
                           sale of your current residence of up to 6 percent of
                           the sale price of your home or (ii) pay you a "sales
                           incentive" of up to 3 percent of the value of your
                           home in the event that you sell your home yourself
                           without a third party broker. The Company will also
                           assume financial responsibility for loan application,
                           origination and title insurance costs and
                           miscellaneous warranty, appraisal and related fees
                           related to your purchase of a new residence in
                           Houston. Additionally, to help facilitate your
                           family's relocation to Houston, the Company will
                           reimburse you for reasonable out-of-pocket travel and
                           related living expenses for a period of up to 16
                           months following your start date. The Company will
                           provide an income tax gross up to you on taxes that
                           may be owed resulting from taxable relocation-related
                           expenses. The Company will not reimburse your for
                           property, school and personal taxes, related to the
                           sale of your existing primary residence.

                           Total Company reimbursement for the above-referenced
                           relocation and related costs, excluding transitional,
                           temporary living and related travel expense or any
                           "tax gross-up" (see below) incurred within eighteen
                           months of your employment start date shall be capped
                           at $60,000. Whenever possible, these costs will be
                           billed directly to the Company. To the extent that
                           payment of these costs result in taxable relocation
                           expense to you, the Company agrees to provide an
                           income tax gross up to you for such personal taxes
                           paid by you. Note that the Company may reclaim this
                           relocation payment if you terminate your employment
                           with the Company without "Good Reason" within 12
                           months of your employment start date.

Auto Allowance:            Either $500 per month or company furnished vehicle
                           (TBD).

Vacation:                  Three weeks per year.

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Mr. Stephen P. York
March 6, 2002

Employment
Agreement:                 An agreement obligating the Company to make a
                           severance payment to you equal to one and one-half
                           times your annualized salary and bonus compensation
                           in the event that you involuntarily terminate your
                           employment with the Company within the first twelve
                           months following a "Change of Control" of the
                           Company. This agreement will not obligate the Company
                           to make a severance payment to you in the event that
                           you voluntarily terminate your employment with the
                           Company without "Good Reason" or involuntarily
                           terminate your employment with the Company due to
                           your death, disability, or termination for "Cause".
                           The agreement will be paired with a non-competition
                           agreement, which shall preclude you from employment
                           in Hanover's principal lines of business for a period
                           one year after you terminate your employment with the
                           Company employment and shall terminate the
                           above-referenced severance payment to you in the
                           event that you violate this non-compete agreement.

                           For purposes of this letter, voluntary termination of
                           employment for "Good Reason" shall be defined as any
                           situation in which your termination of employment
                           with the Company (i) promptly follows a material
                           reduction of your duties and responsibilities or a
                           permanent change in your duties and responsibilities
                           which are materially inconsistent with the type of
                           duties and responsibilities then in effect, (ii)
                           promptly follows a material reduction in your annual
                           base salary (without regard to bonus compensation, if
                           any), (iii) promptly follows a material reduction in
                           your employee benefits (without regard to bonus
                           compensation, if any) if such reduction results in
                           you receiving benefits which are, in the aggregate,
                           materially less than the benefits received by other
                           comparable employees of the Company generally or (iv)
                           the Board otherwise determines that a voluntary
                           termination by you is for "Good Reason" under the
                           circumstances then prevailing.

Additionally, as a full time employee, you will also be eligible to participant
in the various benefit programs offered by the Company. Pursuant to Company and
ERISA guidelines, your eligibility for participating in the Company's 401(k)
plan will occur on the 1st of the month following six months of service with the
Company.

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Mr. Stephen P. York
March 6, 2002

Steve, this offer is contingent upon providing Hanover with the required
documentation to complete the INS I-9 Form and the successful completion of a
drug screen. These activities along with a full discussion of benefits and the
related forms, can be accomplished by calling me or Errol Robinson, Director of
Human Resources in the Hanover's corporate office at 281/447-8787.

Again, we are extremely confident that if your decision is to accept this offer,
it will prove to be mutually rewarding. Your inclusion in Hanover's senior
executive management group represents a very significant addition to the Company
step and an excellent opportunity for both you and the Company.

Your acceptance of this offer can be confirmed by signing the acceptance below
and returning a copy to my attention.

Sincerely,

/S/ JOHN E. JACKSON

John E. Jackson

cc: Erroll Robinson

Accepted:   /S/ STEPHEN P. YORK             Date:   March 11, 2002
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              Stephen P. York

Start Date:   April 1, 2002
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