Document:

Exhibit 10.2

                   FORM OF NONSTATUTORY STOCK OPTION AGREEMENT
                           FOR NON-EMPLOYEE DIRECTORS

     AGREEMENT made effective as of the _____ day of __________,  20___, between
NATURAL GAS SERVICES GROUP,  INC., a Colorado  corporation (the "Company"),  and
_______________ ("Optionee").

     To carry out the purposes of the NATURAL GAS  SERVICES  GROUP,  INC.,  1998
STOCK  OPTION  PLAN,  as  amended  (the  "Plan"),   by  affording  Optionee  the
opportunity  to  purchase   shares  of  common  stock  of  the  Company  and  in
consideration of the mutual agreements and other matters set forth herein and in
the Plan, the Company and Optionee hereby agree as follows:

     1. Grant of Option.  Subject to and upon the terms and conditions set forth
herein and in the Plan, which Plan is incorporated herein by reference as a part
of this  Agreement,  the Company  hereby  irrevocably  grants to the  Optionee a
nonstatutory stock option ("Option") to purchase all or any part of an aggregate
of  ______  shares  of the  Company's  Common  Stock,  $.01 par  value per share
("Common Stock"), which shares are referred to as the "Stock". This Option shall
not be treated as an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code").

     2.  Exercise  Price.  The  purchase  price  ("Exercise  Price")  for  Stock
purchased  pursuant to this Option is $_____ per share of Stock,  which shall be
paid in full at the time of exercise.  The Exercise  Price shall be paid in cash
at the time of  exercise,  except that the  Company's  Board of Directors or the
Committee of the Board of Directors administering the Plan ("Committee") may, in
its sole  discretion,  permit  payment to be made with Common Stock owned by the
Optionee.  Optionee  shall have no rights with  respect to dividends or have any
other rights as a  shareholder  with respect to the Stock subject to this Option
until  Optionee has given  written  notice of the exercise of the Option and has
paid for such Stock in full.

     3. Exercise Period.  This Option shall be exercisable  __________ and shall
expire at 5:00 P.M.,  Central  Time,  on  __________,  except that if Optionee's
position as a director of the Company is terminated for any reason,  this Option
will  terminate  as of 5:00 P.M.,  Central  Time,  on the  _______ day after the
effective date of such termination ("Expiration Date").

     4. Number of Shares.  This Option shall be exercised  only for _____ shares
of Stock or a  multiple  thereof  or for the full  number of shares of Stock for
which the Option is then exercisable.

<PAGE>

     5.  Nontransferability  of Option.  This Option may not be  transferred  by
Optionee otherwise than by will or the laws of descent and distribution.  During
Optionee's lifetime, this Option will be exercisable only by Optionee.

     6. Manner of Exercise. Subject to the terms and conditions contained herein
and in the Plan,  this Option may be  exercised  in whole or in part at any time
and from time to time after the applicable  first exercise date and prior to the
Expiration  Date by the delivery of written notice to any officer or director of
the  Company  other than  Optionee,  together  with full  payment  for the Stock
purchased. The notice (i) shall state the election to exercise this Option, (ii)
shall  state the  number of shares of Stock in  respect  to which the  Option is
being  exercised,  (iii)  shall  state  Optionee's  address,  (iv)  shall  state
Optionee's social security number,  (v) shall contain such  representations  and
agreements concerning Optionee's investment intent with respect to such Stock as
shall be  satisfactory to the Company,  (vi) if requested by the Company,  shall
state  that  the  Certificate  evidencing  the  Stock  may  be  stamped  with  a
restrictive  legend and the Stock evidenced by such  Certificate will constitute
"restricted  securities" as defined in and subject to Rule 144 promulgated under
the Securities Act of 1933, and (vii) shall be signed by Optionee.  As a further
condition to the exercise of this  Option,  the Company may require  Optionee to
make any  additional  representations  and  warranties  to the Company as may be
required by any applicable law or regulation.

     7. Amendment and  Administration.  The Committee  shall have the authority,
consistent with the Plan, to interpret the Plan and this Option, to adopt, amend
and rescind rules and  regulations for the  administration  of the Plan and this
Option,  and  generally  to  conduct  and  administer  the  Plan and to make all
determinations in connection therewith which may be necessary or advisable,  and
all such actions of the Committee shall be final and conclusive for all purposes
and binding upon Optionee.

     8. Miscellaneous.  This Option shall inure to the benefit of and be binding
upon each successor of the Company.  All obligations imposed upon and all rights
granted to the Optionee and all rights reserved by the Company under this Option
shall be binding  upon and inure to the benefit of Optionee,  Optionee's  heirs,
personal  representatives,  administrators  and  successors.  Unless the context
requires otherwise, words denoting the singular may be construed as denoting the
plural,  and words of the plural may be  construed  as denoting the singular and
words of one  gender  may be  construed  as  denoting  such  other  gender as is
appropriate.

     9.  Withholding  of Tax.  To the extent  that the  exercise  of this Option
results in  compensation  income to the Optionee for federal or state income tax
purposes,  Optionee  shall  deliver to the Company at the time of such  exercise
such  amount of money or shares of Common  Stock as the  Company  may require to
meet its obligations  under applicable tax laws or regulation,  and, if Optionee
fails to do so, the Company is  authorized  to  withhold  from any cash of stock
remuneration  then or  thereafter  payable to  Optionee  any tax  required to be
withheld  as a result  of such  compensation  income.  The  Company  is  further

                                       2
<PAGE>

authorized in its discretion to satisfy such withholding  requirement out of any
cash or Stock distributable to Optionee upon such exercise.

     10. Status of Stock.  Optionee understands and agrees that if the shares of
Stock  acquirable  upon the exercise of this Option have not been registered for
issue under the Securities Act of 1933, as amended (the "Act"), the Company will
not issue such shares unless the holder of the Option  provides the Company with
a written  opinion of legal counsel,  who shall be  satisfactory to the Company,
addressed to the Company and satisfactory in form and substance to the Company's
counsel,  to the effect that the proposed issuance of such shares to such Option
holder may be made without  registration  under the Act. In the event  exemption
from  registration  under the Act is available  upon an exercise of this Option,
Optionee  (or the  person  permitted  to  exercise  this  Option in the event of
Optionee's  death),  if  requested  by the  Company to do so,  will  execute and
deliver to the Company in writing an agreement containing such provisions as the
Company may require to assure compliance with applicable securities laws.

     Optionee  agrees  that the shares of Stock  which  Optionee  may acquire by
exercising  this Option  shall not be sold,  transferred,  assigned,  pledged or
hypothecated  in the  absence of an  effective  registration  statement  for the
shares  under the Act and  applicable  state  securities  laws or an  applicable
exemption from the registration requirements of the Act and any applicable state
securities  laws.  Optionee also agrees that the shares of Stock which  Optionee
may acquire by exercising this Option will not be sold or otherwise  disposed of
in any manner which would  constitute a violation of any  applicable  securities
laws, whether federal or state.

     In addition,  Optionee agrees (i) that the  certificates  representing  the
shares of Stock  purchased  under this Option may bear such legend or legends as
the Committee  deems  appropriate in order to assure  compliance with applicable
securities  laws,  (ii) that the Company may refuse to register  the transfer of
the shares of Stock purchased under this Option on the stock transfer records of
the  Company  if  such  proposed  transfer  would  in  the  opinion  of  counsel
satisfactory to the Company constitute a violation of any applicable  securities
law and (iii) that the Company may give  related  instructions  to its  transfer
agent,  if any,  to stop  registration  of the  transfer  of the shares of Stock
purchased under this Option.

     11. Binding  Effect.  This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Optionee.

     12.  Governing Law. This  Agreement  shall be governed by, and construed in
accordance with, the laws of the State of Colorado.

                                       3
<PAGE>

     IN WITNESS  WHEREOF,  the  Company  has caused  this  Agreement  to be duly
executed by its officer  thereunto  duly  authorized,  and Optionee has executed
this Agreement, all as of the day and year first above written.

                                                NATURAL GAS SERVICES GROUP, INC.

                                             By:
                                                --------------------------------
                                                Name:
                                                      --------------------------
                                                Title:
                                                      --------------------------

AGREED TO BY OPTIONEE:

---------------------------

                                       4Exhibit 10.3

                    FORM OF INCENTIVE STOCK OPTION AGREEMENT
                                  FOR EMPLOYEES

     AGREEMENT made effective as of the _____ day of __________,  20___, between
NATURAL GAS SERVICES GROUP,  INC., a Colorado  corporation (the "Company"),  and
_______________ ("Optionee").

     To carry out the purposes of the NATURAL GAS  SERVICES  GROUP,  INC.,  1998
STOCK  OPTION  PLAN,  as  amended  (the  "Plan"),   by  affording  Optionee  the
opportunity  to  purchase   shares  of  common  stock  of  the  Company  and  in
consideration of the mutual agreements and other matters set forth herein and in
the Plan, the Company and Optionee hereby agree as follows:

     1. Grant of Option.  Subject to and upon the terms and conditions set forth
herein and in the Plan, which Plan is incorporated herein by reference as a part
of this  Agreement,  the  Company  hereby  irrevocably  grants  to  Optionee  an
incentive stock option ("Option") to purchase all or any part of an aggregate of
_________  shares  of the  Company's  Common  Stock,  $.01 par  value  per share
("Common  Stock"),  which shares are referred to as the "Stock".  This Option is
intended to constitute  an incentive  stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code").

     2.  Exercise  Price.  The  purchase  price  ("Exercise  Price")  for  Stock
purchased  pursuant to this Option is $_____ per share of Stock,  which shall be
paid in full at the time of exercise.  The Exercise  Price shall be paid in cash
at the time of  exercise,  except that the  Company's  Board of Directors or the
Committee of the Board of Directors administering the Plan ("Committee") may, in
its sole  discretion,  permit  payment to be made with Common Stock owned by the
Optionee.  Optionee  shall have no rights with  respect to dividends or have any
other rights as a  shareholder  with respect to the Stock subject to this Option
until  Optionee has given  written  notice of the exercise of the Option and has
paid for such Stock in full.

     3.  Exercise  Period.  Subject to the earlier  expiration of this Option as
herein provided,  this Option may be exercised, by written notice to the Company
at   its   principal   executive   office   addressed   to  the   attention   of
____________________,  at any time and from time to time after the expiration of
[_____  year(s)][_____  month(s)] from the date of grant hereof,  but, except as
otherwise  provided below,  this Option shall not be exercisable for more than a
percentage of the aggregate  number of shares offered by this Option  determined
by the number of full [years] [months] from the date of grant hereof to the date
of such exercise, in accordance with the following schedule:

<PAGE>

                                                 Percentage of
                                                  Shares That
          Number of Full [Years][Months]       May be Purchased
         --------------------------------     ------------------

          Less than      1 year
                         1 year
                         2 years
                         3 years
                         4 years or more

     4. Number of Shares.  This Option shall be exercised  only for _____ shares
of Stock or a  multiple  thereof  or for the full  number of shares of Stock for
which the Option is then exercisable.

     5.  Nontransferability  of Option.  This Option may not be  transferred  by
Optionee  otherwise than by will or the laws of descent and distribution and may
be exercised  only by Optionee  during  Optionee's  lifetime and while  Optionee
remains an employee of the Company, except that:

     a. Termination of Status as an Employee.  If Optionee ceases to serve as an
employee of the Company,  he may, but only within _____ months after the date he
ceases to be an employee of the Company,  exercise his Option to the extent that
he was  entitled to exercise it at the date of such  termination.  To the extent
that he was not entitled to exercise the Option at the date of such termination,
or if he does not  exercise  such Option  (which he was  entitled  to  exercise)
within the time specified herein, this Option shall terminate.

     b. Disability of Optionee.  Notwithstanding  the provisions of Section 5(a)
above,  if Optionee is unable to continue his  employment  with the Company as a
result of total and permanent  disability (as defined in Section 22(e)(3) of the
Code),  he may,  but only within  ______  months  from the date of  termination,
exercise  his Option to the extent he was entitled to exercise it at the date of
such termination.  To the extent that he was not entitled to exercise the Option
at the date of termination, or if he does not exercise such Option (which he was
entitled  to  exercise)  within the time  specified  herein,  the  Option  shall
terminate.

     c. Death of Optionee. In the event of the death of the Optionee:

     (i) During the term of the  Option if the  Optionee  was at the time of his
death an employee and had been in Continuous  Status (as defined in the Plan) as
an employee or consultant since the date of grant of the Option,  the Option may
be exercised,  at any time within ______ months  following the date of death, by
the  Optionee's  estate or by a person who  acquired  the right to exercise  the
Option by  bequest  or  inheritance,  but only to the  extent  that the right to
exercise  would have accrued had the Optionee  continued  living and remained in
Continuous Status as an employee ______ months after the date of death; or

                                       2
<PAGE>

     (ii) Within ______ months after the termination of Continuous  Status as an
employee,  the  Option  may be  exercised,  at any  time  within  ______  months
following  the date of  death,  by the  Optionee's  estate  or by a  person  who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the right to exercise had accrued at the date of termination.

     6. Manner of Exercise. Subject to the terms and conditions contained herein
and in the Plan,  this Option may be  exercised  in whole or in part at any time
and from time to time after the applicable  first exercise date and prior to the
Expiration  Date by the delivery of written notice to any officer or director of
the  Company  other than  Optionee,  together  with full  payment  for the Stock
purchased. The notice (i) shall state the election to exercise this Option, (ii)
shall  state the  number of shares of Stock in  respect  to which the  Option is
being  exercised,  (iii)  shall  state  Optionee's  address,  (iv)  shall  state
Optionee's social security number,  (v) shall contain such  representations  and
agreements concerning Optionee's investment intent with respect to such Stock as
shall be  satisfactory  to the Company,  (vi) if required by the Company,  shall
state  that  the  Certificate  evidencing  the  Stock  may  be  stamped  with  a
restrictive  legend and the Stock evidenced by such  Certificate will constitute
"restricted  securities" as defined in and subject to Rule 144 promulgated under
the Securities Act of 1933, and (vii) shall be signed by Optionee.  As a further
condition to the exercise of this  Option,  the Company may require  Optionee to
make any  additional  representations  and  warranties  to the Company as may be
required by any applicable law or regulation.

     7. Amendment and  Administration.  The Committee  shall have the authority,
consistent with the Plan, to interpret the Plan and this Option, to adopt, amend
and rescind rules and  regulations for the  administration  of the Plan and this
Option,  and  generally  to  conduct  and  administer  the  Plan and to make all
determinations in connection therewith which may be necessary or advisable,  and
all such actions of the Committee shall be final and conclusive for all purposes
and binding upon Optionee.

     8. Miscellaneous.  This Option shall inure to the benefit of and be binding
upon each successor of the Company.  All obligations imposed upon and all rights
granted to the Optionee and all rights reserved by the Company under this Option
shall be binding  upon and inure to the benefit of Optionee,  Optionee's  heirs,
personal  representatives,  administrators  and  successors.  Unless the context
requires otherwise, words denoting the singular may be construed as denoting the
plural,  and words of the plural may be  construed  as denoting the singular and
words of one  gender  may be  construed  as  denoting  such  other  gender as is
appropriate.

     9.  Withholding  of Tax.  To the extent  that the  exercise  of this Option
results in  compensation  income to the Optionee for federal or state income tax
purposes,  Optionee  shall  deliver to the Company at the time of such  exercise
such  amount of money or shares of Common  Stock as the  Company  may require to
meet its obligations  under applicable tax laws or regulation,  and, if Optionee
fails to do so, the Company is  authorized  to  withhold  from any cash of stock
remuneration  then or  thereafter  payable to  Optionee  any tax  required to be

                                       3
<PAGE>

withheld  as a result  of such  compensation  income.  The  Company  is  further
authorized in its discretion to satisfy such withholding  requirement out of any
cash or Stock distributable to Optionee upon such exercise.

     10. Status of Stock.  Optionee understands and agrees that if the shares of
Stock  acquirable  upon the exercise of this Option have not been registered for
issue under the Securities Act of 1933, as amended (the "Act"), the Company will
not issue such shares unless the holder of the Option  provides the Company with
a written  opinion of legal counsel,  who shall be  satisfactory to the Company,
addressed to the Company and satisfactory in form and substance to the Company's
counsel,  to the effect that the proposed issuance of such shares to such Option
holder may be made without  registration  under the Act. In the event  exemption
from  registration  under the Act is available  upon an exercise of this Option,
Optionee  (or the  person  permitted  to  exercise  this  Option in the event of
Optionee's  death),  if  requested  by the  Company to do so,  will  execute and
deliver to the Company in writing an agreement containing such provisions as the
Company may require to assure compliance with applicable securities laws.

     Optionee  agrees  that the shares of Stock  which  Optionee  may acquire by
exercising  this Option  shall not be sold,  transferred,  assigned,  pledged or
hypothecated  in the  absence of an  effective  registration  statement  for the
shares  under the Act and  applicable  state  securities  laws or an  applicable
exemption from the registration requirements of the Act and any applicable state
securities  laws.  Optionee also agrees that the shares of Stock which  Optionee
may acquire by exercising this Option will not be sold or otherwise  disposed of
in any manner which would  constitute a violation of any  applicable  securities
laws, whether federal or state.

     In addition,  Optionee agrees (i) that the  certificates  representing  the
shares of Stock  purchased  under this Option may bear such legend or legends as
the Committee  deems  appropriate in order to assure  compliance with applicable
securities  laws,  (ii) that the Company may refuse to register  the transfer of
the shares of Stock purchased under this Option on the stock transfer records of
the  Company  if  such  proposed  transfer  would  in  the  opinion  of  counsel
satisfactory to the Company constitute a violation of any applicable  securities
law and (iii) that the Company may give  related  instructions  to its  transfer
agent,  if any,  to stop  registration  of the  transfer  of the shares of Stock
purchased under this Option.

     11. Employment Relationship. For purposes of this Agreement, Optionee shall
be considered to be in the employment of the Company as long as Optionee remains
an  employee  of either the  Company,  a parent or  subsidiary  corporation  (as
defined in Section 425 of the Code) of the Company, or a corporation or a parent
or subsidiary of such corporation assuming or substituting a new option for this
Option. Any question as to whether and when there has been a termination of such
employment,  and the  cause  of such  termination,  shall be  determined  by the
Committee and its determination shall be final.

                                       4
<PAGE>

     12. Binding  Effect.  This Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under
Optionee.

     13.  Governing Law. This  Agreement  shall be governed by, and construed in
accordance with, the laws of the State of Colorado.

     IN WITNESS  WHEREOF,  the  Company  has caused  this  Agreement  to be duly
executed by its officer  thereunto  duly  authorized,  and Optionee has executed
this Agreement, all as of the day and year first above written.

                                                NATURAL GAS SERVICES GROUP, INC.

                                             By:
                                                --------------------------------
                                                Name:
                                                      --------------------------
                                                Title:
                                                      --------------------------

AGREED TO BY OPTIONEE:

---------------------------

                                       5

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