8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 23, 2005

UNIVERSAL COMPRESSION HOLDINGS, INC.
UNIVERSAL COMPRESSION, INC.

(Exact name of registrants as specified in their charters)

Delaware Texas	001-15843 333-48279	13-3989167 74-1282680
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
4444 Brittmoore Road Houston, Texas		77041
(Address of principal executive offices)		(Zip Code)

Registrants’ telephone number, including area code: (713) 335-7000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01  Entry Into a Material Definitive Agreement.

A.Base Salaries for 2005

On May 23, 2005, the Compensation Committee of the Board of Directors of Universal Compression Holdings, Inc. (the “Company”) approved the annual base salaries of the Company’s executive officers after a review of performance and competitivemarket data.  The following table sets forth the annual base salary levels of the executive officers to be effective as of July 4, 2005:

NAME	BASE SALARY
Stephen A. Snider	$	500,000
Ernie L. Danner	$	320,000
J. Michael Anderson	$	295,000
D. Bradley Childers	$	275,000
Kirk E. Townsend	$	300,000
Richard Leong	$	230,000

B.Officers’ Incentive Plan

On April 30, 2004, the Compensation Committee approved the Officer’s Incentive Plan for the Company’s fiscal year 2005 (the “2005 Bonus Plan”).  The 2005 Bonus Plan provides each executive officer with the potential to earn a cash bonus expressed as a percentage of salary.  A summary of the 2005 Bonus Plan is attached hereto as Exhibit 10.1.

Item 9.01 Financial Statements and Exhibits

(c)Exhibits

Exhibit No.	Description
10.1	Summary of Officers’ Incentive Plan for Fiscal Year 2005

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.

	UNIVERSAL COMPRESSION HOLDINGS, INC. UNIVERSAL COMPRESSION, INC.
	(Registrants)
Date: May 27, 2005
	By:	/s/ D. BRADLEY CHILDERS
		D. Bradley Childers
		Senior Vice President, Business Development, General Counsel and Secretary

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EXHIBIT INDEX

Exhibit No.	Exhibit
10.1	Summary of Officers’ Incentive Plan for Fiscal Year 2005

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EX-10.1

Exhibit 10.1

Summary of Officers’ Incentive Plan for Fiscal Year 2005

Purpose

The purpose of this plan is to provide executive officers with a financial incentive to encourage them to perform in a manner that is aligned with the Company’s objectives and performance goals, and to contribute to the Company’s ability to hire and retain quality executives.

Eligibility and Participation

Eligible employees in this plan include all corporate officers.  Participants include the following positions:

President and Chief Executive Officer

Executive Vice President and President of L.A. Division

Senior Vice President and Chief Financial Officer

Senior Vice President and General Counsel

Senior Vice President and President of N.A. Division

Vice President and President of A.P. Division

New officers hired during the fiscal year are eligible to participate during the fiscal year, but on a prorated basis.  To receive a bonus award, the participant must be actively employed with the Company on the last day of the performance period unless otherwise approved by the Compensation Committee.  Participation in the plan does not confer a right on the participant to participate in any subsequent year or the right to continue in the Company’s employment.

Bonus Target Percentages

The target percentage used to calculate the bonus is expressed as a percentage of base salary.  The target percentage varies from 50% to 100%  based on the officer’s position.  The target award represents the level of bonus payment the participant may earn if the plan performance is achieved at target and acceptable organizational standards are met.  Participants may receive bonus awards above or below the target based on performance levels that exceed or fall below expectations.

Bonus Calculation

The bonus payment is based on three measures: Financial Performance, Operational Performance and Individual Performance.  Financial Performance is based upon earnings per share of the Company and earnings before taxes for the applicable division of the Company.  Operational Performance is based upon the incident rate of recordable injuries and lost time accidents.  Individual Performance is determined based upon the participant’s individual contribution to the Company’s performance.

Under this Plan, each officer’s bonus amount is first calculated based on an objective analysis of our Financial Performance and Operational Performance, with approximately 90% of this amount based on the Financial Performance and 10% based on the Operational Performance.  An Individual Performance multiplier, which can range from 0 to 1.25 times, is then applied to the bonus to account for each executive officer’s individual performance.  The bonuses are calculated after the end of the fiscal year for the Compensation Committee’s review and approval.  Under the plan, determination of actual performance awards is the responsibility of the Compensation Committee, which reserves the right, in its sole discretion, to increase or decrease awards to participants.