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): June 12, 2007

UNIVERSAL COMPRESSION HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 001-15843
(Commission File Number) 13-3989167
(IRS Employer
Identification No.)

4444 Brittmoore Road
Houston, Texas
(Address of principal executive offices) 77041
(Zip Code)

(713) 335-7000
Registrant’s telephone number, including area code

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:

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

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

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

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

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

     Grants of Restricted Stock

     On June 12, 2007, the compensation committee of the board of directors of Universal Compression Holdings, Inc. (the “Company”) approved the grant of restricted stock under the Company’s Restricted Stock Plan to the executive officers of the Company set forth below in the respective amounts set forth below, subject to the terms and conditions of the Company’s Restricted Stock Plan and the applicable award agreements.

	Number of Shares of
Executive Officer	Restricted Stock Granted
Stephen A. Snider	21,333
D. Bradley Childers	6,000
J. Michael Anderson	6,000
Kirk E. Townsend	4,000

     A copy of the form of award agreement relating to these grants (the “Restricted Stock Award Agreement”) is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The shares of restricted stock granted to executive officers vest in one-third increments on the first, second and third anniversary of the grant. Upon any termination of the executive officer’s “continuous service” (as that term is defined in the Company’s Restricted Stock Plan), the Company will have the right to cancel any unvested shares of restricted stock.

     In addition, the Restricted Stock Award Agreement provides that shares of restricted stock will vest upon a “change in control” (as that term is defined in the Company’s Restricted Stock Plan), other than any change in control resulting from the consummation of the transactions contemplated by that certain Agreement and Plan of Merger, dated as of February 5, 2007 (the “Merger Agreement”), among the Company, Hanover Compressor Company, Iliad Holdings, Inc., Ulysses Sub, Inc. and Hector Sub, Inc.

     Grants of Stock Options

     On June 12, 2007, the compensation committee of the board of directors of the Company also approved the grant of options (the “Options”) to purchase common stock, par value $0.01, of the Company (“Common Stock”) under the Company’s Incentive Stock Option Plan to the executive officers and directors set forth below in the respective amounts set forth below, subject to the terms and conditions of the Company’s Incentive Stock Option Plan and the applicable award agreements.

	Number of Shares of
	Common Stock Underlying
Executive Officer or Director	Options Granted
Stephen A. Snider	38,651
D. Bradley Childers	10,871
J. Michael Anderson	10,871
Kirk E. Townsend	7,247
Janet F. Clark	3,000
Uriel E. Dutton	3,000
J.W.G. “Will” Honeybourne	3,000

     In accordance with the Company’s Incentive Stock Option Plan, the purchase price per share under each option granted is the average of the high and low reported consolidated trading sales prices of the Common Stock on the New York Stock Exchange on June 12, 2007.

     Copies of the forms of award agreement relating to the grant of incentive stock options and non-qualified stock options to the executive officers named above (the “Option Award Agreements”) are attached hereto as Exhibits 10.2 and 10.3, respectively, and are incorporated hereby by reference. The Options will become

exercisable in one-third increments on the first, second and third anniversary of the grant. If any such executive officer’s employment with the Company terminates on account of death, “disability” (as that term is defined in the Company’s Incentive Stock Option Plan) or retirement after age 65 or without “cause” (as that term is defined in the Company’s Incentive Stock Option Plan), the unexercisable portion of any Options owned by that officer will terminate immediately and the exercisable portion of any Options owned by the employee will terminate three months following the date of such death, disability or retirement or, in the case of a termination without cause, 30 days following the date of such termination. If the officer’s employment is terminated for “cause” or the officer voluntarily resigns his position with the Company, any Options owned by the employee, whether or not exercisable, will terminate on the date of such termination of employment.

     In addition, the Option Award Agreements relating to the executive officers provide that Options will become immediately exercisable upon the acquisition by any person of fifty-one percent (51%) or more of the Common Stock of the Company, other than any such acquisition resulting from the consummation of the transactions contemplated by the Merger Agreement.

Item 9.01.Financial Statements and Exhibits.

     (d) Exhibits.

Exhibit
Number	Description
10.1	Form of Restricted Stock Agreement.
10.2	Form of Incentive Stock Option Agreement.
10.3	Form of Non-Qualified Stock Option Agreement for Officers.

SIGNATURE

     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.
Date: June 18, 2007	By:	/s/ J. MICHAEL ANDERSON
		J. Michael Anderson
		Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number	Description
10.1	Form of Restricted Stock Agreement.
10.2	Form of Incentive Stock Option Agreement.
10.3	Form of Non-Qualified Stock Option Agreement for Officers.

EX-10.1

EXHIBIT 10.1

UNIVERSAL COMPRESSION HOLDINGS, INC. RESTRICTED STOCK PLAN

RESTRICTED STOCK AGREEMENT

Grantee:	(FName  ) (LName  )
Total Shares Subject to Restricted Stock Award:	(RS)
Date of Award:	June 12, 2007
Vesting Commencement Date:	June 12, 2007
Expiration of the Restriction Period:	June 12, 2010

     1. Issuance of Stock. The Company hereby agrees to issue to the grantee named above (the “Grantee”), the shares of Common Stock set forth above as the Total Shares subject to the Restricted Stock Award (the “Shares”), in accordance with this Restricted Stock Agreement (the “Agreement”) and subject to the terms and conditions of the Universal Compression Holdings, Inc. Restricted Stock Plan (the “Plan”), which are incorporated herein by reference. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Plan.

     2. Forfeiture; Company’s Cancellation Right. Upon any termination of the Grantee’s Continuous Service before all of the Shares are released from the Forfeiture Restrictions described in Section 3 of this Agreement, the Company shall have the right (the “Cancellation Right”), exercisable at any time during the ninety (90) day period (the “Cancellation Period”) following the date of termination of the Grantee’s Continuous Service (the “Termination Date”), to cancel, without any additional consideration, all or any portion of the Shares in which the Grantee is not, as of the Termination Date, vested in accordance with the provisions of Section 3 of this Agreement (the “Unvested Shares”). The Cancellation Right shall be exercisable by written notice delivered to the Grantee and any recipient of a Permitted Transfer (as defined in Section 3 of this Agreement) of Unvested Shares prior to the expiration of the Cancellation Period. The notice shall indicate the number of Unvested Shares to be cancelled. The cancellation shall be effective immediately after giving of notice in accordance with the terms of this Agreement without any further action on the part of the Grantee. The certificates representing the shares so cancelled shall be promptly delivered to Company, but failure to deliver such certificates shall not affect the effectiveness of such cancellation. The Cancellation Right shall terminate with respect to any Unvested Shares for which it is not exercised during the Cancellation Period. In addition, the Cancellation Right shall terminate and cease to be exercisable by the Company with respect to any and all Shares which are released from the Forfeiture Restrictions described in Section 3 of this Agreement.

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     3. Forfeiture Restrictions; Vesting.

     (a) The Grantee may not sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of any of the Unvested Shares, or any right or interest therein, before the Expiration of the Restriction Period set forth on the first page of this Agreement or any other lapse of the Forfeiture Restrictions under this Agreement, except only with respect to (i) a gratuitous transfer with the prior written consent of the Company or (ii) a transfer of title effected pursuant to Grantee’s will or the laws of intestate succession following Grantee’s death (in either such case, a “Permitted Transfer”).

     (b) The Shares shall vest and the Forfeiture Restrictions with respect to such Shares shall lapse on each anniversary of the Vesting Commencement Date as set forth on the first page of this Agreement, if at each such anniversary of the Vesting Commencement Date the Grantee’s Continuous Service has not terminated, as follows:

(i)	thirty-three and one-third percent (33 1/3%) of the Shares shall vest on the first anniversary of the Vesting Commencement Date;
(ii)	an additional thirty-three and one-third percent (33 1/3%) of the Shares shall vest on the second anniversary of the Vesting Commencement Date; and
(iii)	the remaining Shares shall vest on the third anniversary of the Vesting Commencement Date.

If an installment of the release of shares from the Forfeiture Restrictions covers a fractional Share, such installment will be rounded to the next higher Share, except the final installment, which will be for the balance of the Shares.

     (c) The Forfeiture Restrictions may lapse, and the Unvested Shares may become vested and released from the Cancellation Right, earlier than the times stated above in accordance with the provisions of Section 4(c) of the Plan.

     4. Federal Restrictions on Transfer. The Grantee understands that, regarding any of the Shares that may become transferable because of the lapse of Forfeiture Restrictions, the Company is under no obligation to register any resale of the Shares and that an exemption may not be available or may not permit the Grantee to resell or transfer any of the Shares in the amounts or at the times proposed by the Grantee. The Grantee hereby acknowledges that the Grantee is prepared to hold the Shares for an indefinite period and that the Grantee is aware of the requirements of Rule 144 and other exemptions from the registration requirements of the Securities Act. Subject to the other provisions of this Agreement, if the Shares have not been registered under the Securities Act, the Grantee shall make no disposition of the Shares (other than a Permitted Transfer) unless and until there is compliance with all of the following requirements:

     (a) The Grantee shall have furnished the Company with a written summary of the terms and conditions of the proposed disposition.

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     (b) The Grantee shall have complied with all requirements of this Agreement applicable to the disposition of the Shares.

     (c) The Grantee shall have provided the Company with written assurances, in form and substance satisfactory to the Company, that (i) the proposed disposition does not require registration of the Shares under the Securities Act or (ii) all appropriate action necessary for compliance with the registration requirements of the Securities Act or any exemption from registration available under the Securities Act (including Rule 144) has been taken.

     5. Stockholder Rights. Until such time as the Company exercise its Cancellation Right, the Grantee shall have all the rights of a stockholder with respect to the Unvested Shares, including without limitation, the right to vote the Unvested Shares and the right to receive any cash dividends declared thereon, subject however, to the restrictions contained in this Agreement and the provisions of Section 4(b) of the Plan relating to the dissolution or liquidation of the Company.

     6. Capital Adjustments and Corporate Events. If, from time to time during the term of the Restriction Period, there is (i) any capital adjustment affecting the outstanding Common Stock as a class without the Company’s receipt of consideration, the Unvested Shares shall be adjusted in accordance with the provisions of Section 4(a) of the Plan or (ii) a Change in Control, the Unvested Shares shall be subject to the provisions of Section 4(c) of the Plan. Any and all new, substituted or additional securities to which the Grantee may be entitled by reason of the Grantee’s ownership of the Unvested Shares hereunder because of a capital adjustment shall be immediately subject to the Company’s Cancellation Right and included thereafter as “Unvested Shares” for purposes of this Agreement. The foregoing to the contrary notwithstanding, the consummation of the merger of the Company and Hanover Compressor Company, pursuant to the Agreement and Plan of Merger among Hanover Compressor Company, the Company, Iliad Holdings, Inc., Hector Sub, Inc. and Ulysses Sub, Inc., dated as of February 5, 2007, as amended, shall not constitute, qualify as or otherwise result in a Change in Control event with respect to the Shares granted under this Agreement.

     7. Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or the Plan, or (ii) to treat as owner of such Shares, or accord the right to vote or pay or deliver dividends or other distributions to, any purchaser or other transferee to whom or which such Shares shall have been so transferred.

     8. Legends.

     (a) If the Shares have not been registered under the Securities Act, the stock certificates for all of the Shares shall be endorsed with the following restrictive legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER SUCH ACT, (B) A ‘NO ACTION’ LETTER OF THE SECURITIES AND EXCHANGE COMMISSION WITH RESPECT TO SUCH SALE OR OFFER OR (C) SATISFACTORY ASSURANCES TO THE ISSUER THAT REGISTRATION UNDER SUCH ACT IS NOT REQUIRED WITH RESPECT TO SUCH SALE OR OFFER.

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     (b) In addition to the legend referenced to above, the certificate or certificates evidencing the Unvested Shares, if any, issued hereunder shall be endorsed with the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN CANCELLATION RIGHTS GRANTED TO THE ISSUER AND ACCORDINGLY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT IN CONFORMITY WITH THE TERMS OF THAT CERTAIN RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES. A COPY OF SUCH AGREEMENT IS MAINTAINED AT THE ISSUER’S PRINCIPAL CORPORATE OFFICES.

     9. Tax Consequences. The Grantee has reviewed with the Grantee’s own tax advisors the federal, state, and local tax consequences of this investment and the transactions contemplated by this Agreement. The Grantee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. The Grantee understands that the Grantee (and not the Company) shall be responsible for the Grantee’s own tax liability that may arise as a result of the transactions contemplated by this Agreement. The Grantee understands that Section 83 of the Code taxes as ordinary income the difference between the purchase price, if any, for the Shares and the Fair Market Value of the Shares as of the date any restrictions on the Shares lapse. In this context, “restriction” includes the Forfeiture Restrictions and the right of the Company to repurchase the Unvested Shares pursuant to the Forfeiture Repurchase Option. The Grantee understands that the Grantee may elect to be taxed at the time the Shares are awarded rather than when and as the restrictions lapse by filing an election under Section 83(b) of the Code with the Internal Revenue Service within 30 days from the Date of Award. THE GRANTEE ACKNOWLEDGES THAT IT IS THE GRANTEE’S SOLE RESPONSIBILITY (AND NOT THE COMPANY’S) TO FILE TIMELY THE ELECTION UNDER SECTION 83(B), EVEN IF THE GRANTEE REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE GRANTEE’S BEHALF.

     10. Withholding of Taxes. At the time and to the extent vested Shares become compensation income to the Grantee for federal or state income tax purposes, the Grantee either shall deliver to the Company such amount of money as required to meet the Company’s minimum obligation under applicable tax laws or regulations, or, in lieu of cash, the Grantee, in his sole discretion, may elect to surrender, or direct the Company to withhold from the vested Shares, shares of Common Stock (valued at their Fair Market Value on the date of surrender or withholding of such shares) in such number as necessary to satisfy either (i) the Company’s minimum tax withholding obligations or (ii) the Grantee’s tax obligation as anticipated by the Grantee, by reason of such compensation income, whichever the Grantee elects.

     11. Entire Agreement; Governing Law. The Plan and this Agreement constitute the entire agreement of the Company and the Grantee (collectively, the “Parties”) with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the

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Parties with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing signed by the Parties. Nothing in the Plan and this Agreement (except as expressly provided therein or herein) is intended to confer any rights or remedies on any person other than the Parties. The Plan and this Agreement are to be construed in accordance with and governed by the internal laws of the State of Texas, without giving effect to any choice-of-law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Texas to the rights and duties of the Parties. Should any provision of the Plan or this Agreement relating to the Shares be determined by a court of law to be illegal or unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain effective and shall remain enforceable.

     12. Interpretive Matters. Whenever required by the context, pronouns and any variation thereof shall be deemed to refer to the masculine, feminine, or neuter, and the singular shall include the plural, and vice versa. The term “include” or “including” does not denote or imply any limitation. The term “business day” means any Monday through Friday other than such a day on which banks are authorized to be closed in the State of Texas. The captions and headings used in this Agreement are inserted for convenience and shall not be deemed a part of the Restricted Stock Award or this Agreement for construction or interpretation.

     13. Dispute Resolution. The provisions of this Section 13 shall be the exclusive means of resolving disputes of the Parties (including any other persons claiming any rights or having any obligations through the Company or the Grantee) arising out of or relating to the Plan and this Agreement. The Parties shall attempt in good faith to resolve any disputes arising out of or relating to the Plan and this Agreement by negotiation between individuals who have authority to settle the controversy. Negotiations shall be commenced by either Party by a written statement of the Party’s position and the name and title of the individual who will represent the Party. Within thirty (30) days of the written notification, the Parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to resolve the dispute. If the dispute has not been resolved by negotiation, the Parties agree that any suit, action, or proceeding arising out of or relating to the Plan or this Agreement shall be brought in the United States District Court for the Southern District of Texas (or should such court lack jurisdiction to hear such action, suit or proceeding, in a Texas state court in Harris County, Texas) and that the Parties shall submit to the jurisdiction of such court. The Parties irrevocably waive, to the fullest extent permitted by law, any objection a Party may have to the laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 13 shall for any reason be held invalid or unenforceable, it is the specific intent of the Parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable.

     14. Notice. Any notice or other communication required or permitted hereunder shall be given in writing and shall be deemed given, effective, and received upon prepaid delivery in person or by courier or upon the earlier of delivery or the third business day after deposit in the United States mail if sent by certified mail, with postage and fees prepaid, addressed to the other Party at its address as shown beneath its signature in this Agreement, or to such other address as

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such Party may designate in writing from time to time by notice to the other Party in accordance with this Section 14.

UNIVERSAL COMPRESSION HOLDINGS, INC.
By:
	Stephen A. Snider
Title:	President & Chief Executive Officer
Address:	4444 Brittmoore Road
	Houston, Texas 77041
	U.S.A.

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE FORFEITURE RESTRICTIONS AND THE COMPANY’S CANCELLATION RIGHT WITH RESPECT TO THE SHARES SUBJECT TO THE RESTRICTED STOCK AWARD SHALL LAPSE, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED OR BEING GRANTED THE RESTRICTED STOCK AWARD). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT OF THE GRANTEE’S EMPLOYER TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY OR AN AFFILIATE TO THE COMPANY THAT PROVIDES OTHERWISE, THE GRANTEE’S STATUS IS AT-WILL. The Grantee acknowledges receipt of a copy of the Plan, represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Restricted Stock Award subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Agreement, and fully understands all provisions of this Agreement and the Plan. The Grantee hereby agrees that all disputes arising out of or relating to this Agreement and the Plan shall be resolved in accordance with Section 13 of this Agreement. The Grantee further agrees to notify the Company upon any change in the address for notice indicated in this Agreement.

DATED:	SIGNED:
		Grantee: (FName  )  (LName  )
	Address:

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EX-10.2

Exhibit 10.2

INCENTIVE STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT, effective as of June 12, 2007 (the “Grant Date”), by and between UNIVERSAL COMPRESSION HOLDINGS, INC., a Delaware corporation (“Holdings”), and «FName_» «LName_» (the “Employee”), who is an Employee of Universal Compression, Inc. (“Universal”), a wholly-owned subsidiary of Holdings. All capitalized terms not otherwise defined in this Agreement shall have the respective meaning of such terms as defined in the Universal Compression Holdings, Inc. Incentive Stock Option Plan, as amended (the “Plan”).

     WHEREAS, Holdings has agreed to grant to the Employee an option to purchase Holdings Common Stock, $.01 par value per share, (the “Common Stock”) pursuant to the terms and conditions of this Agreement in consideration for services to Universal.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows:

     1. GRANT OF OPTION. Holdings grants to the Employee an option (the “Option”) to purchase «ISO» shares of Common Stock at an Exercise Price per share equal to $___. The Option shall expire on the tenth anniversary of the Grant Date, unless sooner terminated under the provisions hereof. This Option is granted under the Plan, a copy of which is a part of the Prospectus dated March 10, 2005 and attached hereto as Exhibit “A” and is incorporated herein by reference, and is intended to constitute an Incentive Stock Option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”); provided, however, that to the extent the Option exceeds the limit under Section 422(d) of the Code, the excess of the Option shall be treated as a nonqualified stock option subject to Section 83 of the Code.

     2. OPTION TERMS AND CONDITIONS.

     (a) Exercise of Option. The Option shall become exercisable in accordance with the following schedule:

Anniversary of Grant Date	Aggregate Amount Exercisable
June 12, 2008	33 1/3%
June 12, 2009	66 2/3%
June 12, 2010	100%

provided, however, the Option shall become immediately exercisable upon (i) the acquisition by any Person of fifty-one percent (51%) or more of the Common Stock of Holdings, other than such acquisition resulting from the consummation of the merger of the Company and Hanover Compressor Company, pursuant to the Agreement and Plan of Merger among Hanover Compressor Company, the Company, Iliad Holdings, Inc., Hector Sub, Inc. and Ulysses Sub, Inc., dated as of February 5, 2007, as amended, or (ii) a sale of all or substantially all of the assets of Holdings.

     (b) Termination of Employment.

          (i) Termination due to Death, Disability or Retirement. In the event the Employee’s employment with Universal terminates on account of death, Disability (as defined in the Plan) or retirement after age 65, the Option shall terminate as of the date of Employee’s termination of employment, except for the portion of the Option which is exercisable as of the date of termination of employment, which shall terminate three months following the date of Employee’s death, Disability or retirement after age 65.

          (ii) Termination of Employment Without Cause. In the event Universal terminates Employee’s employment without Cause (as defined in the Plan), the Option shall terminate as of the date of Employee’s termination of employment, except for the portion of the Option which is exercisable as of the date of termination of employment, which shall terminate 30 days following the date of such termination of employment.

          (iii) Termination of Employment for Cause or Voluntary Resignation. In the event the Employee’s employment with Universal shall terminate for Cause (as defined in the Plan), or the Employee voluntarily resigns his or her employment with Universal, the Option, whether or not exercisable as of the date of termination of employment, shall terminate in its entirety on the date of termination.

     3. NON-TRANSFERABILITY. No Option granted hereby and no right arising thereunder shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of the Employee, the Option shall be exercisable only by the Employee. If the Option is exercisable at the date of the Employee’s death and is transferred by will or by the laws of descent and distribution, the Option shall be exercisable in accordance with the terms of such Option by the executor or administrator, as the case may be, of the Employee’s estate for a period of three (3) months after the date of the Employee’s death and shall then terminate.

     4. MODE OF EXERCISE. The Option shall be exercised by giving to Holdings written notice stating (a) the number of shares with respect to which the Option is being exercised, (b) the aggregate Exercise Price for such shares, and (c) the method of payment. At the option of the Employee, such aggregate Exercise Price may be paid: (i) in cash; (ii) with the consent of the Board, which consent may be given or withheld in its sole discretion, by delivery of a promissory note to Holdings payable over a three (3) year period and bearing interest at the prime rate; (iii) with the consent of the Administrator of the Plan, which consent may be given or withheld in its sole discretion, by delivery of shares of Common Stock owned by the Employee having a Fair Market Value (as determined by Section 5 below) equal in amount to the aggregate Exercise Price of the Option being exercised; (iv) by any combination of (i), (ii) and (iii); or (v) with the consent of the Administrator of the Plan, which consent may be given or withheld in its sole discretion, by cancellation of a portion of the Option as determined by the Administrator of the Plan.

     5. FAIR MARKET VALUE OF COMMON STOCK. The “Fair Market Value” of the Common Stock on any day shall be determined by the Board as follows: (i) if the Common Stock is listed on a national securities exchange or quoted through the NASDAQ National Market System, the Fair Market Value on any day shall be the average of the high and low reported Consolidated Trading sales prices, or if no such sale is made on such day, the average of

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the closing bid and asked prices reported on the Consolidated Trading listing for such day; (ii) if the Common Stock is quoted on the NASDAQ inter-dealer quotation system, the Fair Market Value on any day shall be the average of the representative bid and asked prices at the close of business for such day; (iii) if the Common Stock is not listed on a national stock exchange or quoted on NASDAQ, the Fair Market Value on any day shall be the average of the high bid and low asked prices reported by the National Quotation Bureau, Inc. for such day; or (iv) if none of clauses (i) — (iii) are applicable, the Fair Market Value as may be determined by the Board or the Administrator of the Plan, there being no obligation to make such determination.

     6. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option granted hereunder and the obligation of Holdings to sell and deliver shares under such Option shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required. Holdings, in its discretion, may postpone the issuance or delivery of shares upon any exercise of the Option until completion of any stock exchange listing, or other qualification of such shares under any state or federal law, rule or regulation as Holdings may consider appropriate, and may require the Employee, his or her beneficiary or his or her legal representative to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the shares in compliance with applicable laws, rules and regulations.

     Upon demand by the Board, the Employee (or any person acting under Section 3 above) shall deliver to the Board at the time of exercise of the Option a written representation that the shares to be acquired upon the exercise of the Option are being acquired for his or her own account and not with a view to, or for resale in connection with, any distribution in violation of federal or state securities laws. Upon such demand, delivery of such representation prior to the delivery of any shares issued upon exercise of the Option shall be a condition precedent to the right of the Employee or such other person to purchase any shares.

     7. NO RIGHTS AS STOCKHOLDER PRIOR TO EXERCISE OF OPTION. The Participant shall not have any rights as a stockholder with respect to any shares subject to the Option prior to the date on which the Employee is recorded as the holder of such shares on the records of Holdings.

     8. NO RIGHTS WITH RESPECT TO CONTINUANCE OF EMPLOYMENT. Neither the grant of the Option nor any action taken with respect thereto shall be construed as giving the Employee the right to be retained in the employ of Universal or any subsidiary or affiliate, nor shall it interfere in any way with the right of Universal or any such subsidiary or affiliate to terminate any Employee’s employment at any time for any reason, or for no reason at all.

     9. TAXES. Holdings may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of all Federal, state, local and other taxes required by law to be withheld with respect to the Option including, but not limited to: (i) reducing the number of shares of Common Stock otherwise deliverable, based upon their Fair Market Value on the date of exercise, to permit deduction of the amount of any such withholding taxes from the amount otherwise payable under this Agreement; (ii) deducting the amount of any such withholding taxes from any other amount then or thereafter payable to the Employee; or (iii) requiring the Employee, his or her beneficiary or his or her legal representative to pay to Holdings the amount required to be

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withheld or to execute such documents as Holdings deems necessary or desirable to enable it to satisfy its withholding obligations as a condition of releasing the Common Stock.

     10. GOVERNING LAW. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware applicable to contract made and to be performed entirely within such state.

     11. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

     12. NOTICES. Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, telecopied with confirmed receipt, sent by certified, registered, or express mail, postage prepaid, or sent by a national next-day delivery service to the parties at the following addresses or at such other addresses as shall be specified by the parties by like notice, and shall be deemed given when so delivered personally or telecopied, or if mailed, 2 days after the date of mailing, or, if by national next-day delivery service, on the day after delivery to such service as follows:

(i)	if to Holdings, at:
	Universal Compression Holdings, Inc. 4444 Brittmoore Road Houston, Texas 77041-8004 Attention: J. Michael Anderson,                  Senior Vice President and Chief Financial Officer Telecopier Number: 713-466-6720
	with a copy to:
	Universal Compression, Inc. 4444 Brittmoore Road Houston, Texas 77041-8004 Attention: Donald Wayne,                  Vice President and General Counsel Telecopier Number: 713-466-6720
(ii)	if to Employee, to him or her at:
	Universal Compression, Inc. 4444 Brittmoore Road Houston, Texas 77041-8004

     13. HEADINGS. The headings in this Agreement are for convenience of reference only and shall not in any manner define or limit the scope or intent of any provisions of this Agreement.

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     14. SEVERABILITY. If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction or any foreign federal, state, county or local government or any other governmental, regulatory or administrative agency or authority to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have executed this Agreement effective as of the Grant Date above mentioned.

Signature

Printed Name

Social Security Number

UNIVERSAL COMPRESSION HOLDINGS, INC.

Stephen A. Snider

President and Chief Executive Officer

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EX-10.3

Exhibit 10.3

NON-QUALIFIED STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT, effective as of June 12, 2007 (the “Grant Date”), by and between UNIVERSAL COMPRESSION HOLDINGS, INC., a Delaware corporation (“Holdings”), and «FirstName» «LastName» (the “Employee”), who is an Employee of Universal Compression, Inc. (“Universal”), a wholly-owned subsidiary of Holdings. All capitalized terms not otherwise defined in this Agreement shall have the respective meaning of such terms as defined in the Universal Compression Holdings, Inc. Incentive Stock Option Plan, as amended (the “Plan”).

     WHEREAS, Holdings has agreed to grant to the Employee an option to purchase Holdings Common Stock, $.01 par value per share (the “Common Stock”), pursuant to the terms and conditions of this Agreement in consideration for services to Universal.

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows:

     1. GRANT OF OPTION. Holdings grants to the Employee an option (the “Option”) to purchase «NQSO» shares of Common Stock at an Exercise Price per share equal to $___. The Option shall expire on the tenth anniversary of the Grant Date, unless sooner terminated under the provisions hereof. This Option is granted under the Plan, a copy of which is a part of the Prospectus dated March 10, 2005 and attached hereto as Exhibit “A” and is incorporated herein by reference, and is not intended to constitute an Incentive Stock Option under Section 422 of the Internal Revenue Code of 1986, as amended, but shall be a Non-qualified Stock Option.

     2. OPTION TERMS AND CONDITIONS.

     (a) Exercise of Option. The Option shall become exercisable in accordance with the following schedule:

Anniversary of Grant Date	Aggregate Amount Exercisable
June 12, 2008	33 1/3%
June 12, 2009	66 2/3%
June 12, 2010	100%

provided, however, the Option shall become immediately exercisable upon (i) the acquisition by any Person of fifty-one percent (51%) or more of the Common Stock of Holdings, other than, such acquisition resulting from the consummation of the merger of the Company and Hanover Compressor Company, pursuant to the Agreement and Plan of Merger among Hanover Compressor Company, the Company, Iliad Holdings, Inc., Hector Sub, Inc. and Ulysses Sub, Inc., dated as of February 5, 2007, as amended, or (ii) a sale of all or substantially all of the assets of Holdings.

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     (b) Termination of Employment.

          (i) Termination due to Death, Disability or Retirement. In the event the Employee’s employment with Universal terminates on account of death, Disability (as defined in the Plan) or retirement after age 65, the Option shall terminate as of the date of Employee’s termination of employment, except for the portion of the Option which is exercisable as of the date of termination of employment, which shall terminate three months following the date of Employee’s death, Disability or retirement after age 65.

          (ii) Termination of Employment Without Cause. In the event Universal terminates Employee’s employment without Cause (as defined in the Plan), the Option shall terminate as of the date of Employee’s termination of employment, except for the portion of the Option which is exercisable as of the date of termination of employment, which shall terminate 30 days following the date of such termination of employment.

          (iii) Termination of Employment for Cause or Voluntary Resignation. In the event the Employee’s employment with Universal shall terminate for Cause (as defined in the Plan), or the Employee voluntarily resigns his or her employment with Universal, the Option, whether or not exercisable as of the date of termination of employment, shall terminate in its entirety on the date of termination.

     3. NON-TRANSFERABILITY. No Option granted hereby and no right arising thereunder shall be transferable other than by will or by the laws of descent and distribution. During the lifetime of the Employee, the Option shall be exercisable only by the Employee. If the Option is exercisable at the date of the Employee’s death and is transferred by will or by the laws of descent and distribution, the Option shall be exercisable in accordance with the terms of such Option by the executor or administrator, as the case may be, of the Employee’s estate for a period of three (3) months after the date of the Employee’s death and shall then terminate.

     4. MODE OF EXERCISE. The Option shall be exercised by giving to Holdings written notice stating (a) the number of shares with respect to which the Option is being exercised, (b) the aggregate Exercise Price for such shares, and (c) the method of payment. At the option of the Employee, such aggregate Exercise Price may be paid: (i) in cash; (ii) with the consent of the Board, which consent may be given or withheld in its sole discretion, by delivery of a promissory note to Holdings payable over a three (3) year period and bearing interest at the prime rate; (iii) with the consent of the Administrator of the Plan, which consent may be given or withheld in its sole discretion, by delivery of shares of Common Stock owned by the Employee having a Fair Market Value (as determined by Section 5 below) equal in amount to the aggregate Exercise Price of the Option being exercised; (iv) by any combination of (i), (ii) and (iii); or (v) with the consent of the Administrator of the Plan, which consent may be given or withheld in its sole discretion, by cancellation of a portion of the Option as determined by the Administrator of the Plan.

     5. FAIR MARKET VALUE OF COMMON STOCK. The “Fair Market Value” of the Common Stock on any day shall be determined by the Board as follows: (i) if the Common Stock is listed on a national securities exchange or quoted through the NASDAQ National Market System, the Fair Market Value on any day shall be the average of the high and low reported Consolidated Trading sales prices, or if no such sale is made on such day, the average of the closing bid and asked prices reported on the Consolidated Trading listing for such day; (ii) if

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the Common Stock is quoted on the NASDAQ inter-dealer quotation system, the Fair Market Value on any day shall be the average of the representative bid and asked prices at the close of business for such day; (iii) if the Common Stock is not listed on a national stock exchange or quoted on NASDAQ, the Fair Market Value on any day shall be the average of the high bid and low asked prices reported by the National Quotation Bureau, Inc. for such day; or (iv) if none of clauses (i) — (iii) are applicable, the Fair Market Value as may be determined by the Board or the Administrator of the Plan, there being no obligation to make such determination.

     6. OPTION SUBJECT TO SECURITIES AND OTHER REGULATIONS. The Option granted hereunder and the obligation of Holdings to sell and deliver shares under such Option shall be subject to all applicable federal and state laws, rules and regulations and to such approvals by any government or regulatory agency as may be required. Holdings, in its discretion, may postpone the issuance or delivery of shares upon any exercise of the Option until completion of any stock exchange listing, or other qualification of such shares under any state or federal law, rule or regulation as Holdings may consider appropriate, and may require the Employee, his or her beneficiary or his or her legal representative to make such representations and furnish such information as it may consider appropriate in connection with the issuance or delivery of the shares in compliance with applicable laws, rules and regulations.

     Upon demand by the Board, the Employee (or any person acting under Section 3 above) shall deliver to the Board at the time of exercise of the Option a written representation that the shares to be acquired upon the exercise of the Option are being acquired for his or her own account and not with a view to, or for resale in connection with, any distribution in violation of federal or state securities laws. Upon such demand, delivery of such representation prior to the delivery of any shares issued upon exercise of the Option shall be a condition precedent to the right of the Employee or such other person to purchase any shares.

     7. NO RIGHTS AS STOCKHOLDER PRIOR TO EXERCISE OF OPTION. The Participant shall not have any rights as a stockholder with respect to any shares subject to the Option prior to the date on which the Employee is recorded as the holder of such shares on the records of Holdings.

     8. NO RIGHTS WITH RESPECT TO CONTINUANCE OF EMPLOYMENT. Neither the grant of the Option nor any action taken with respect thereto shall be construed as giving the Employee the right to be retained in the employ of Universal or any subsidiary or affiliate, nor shall it interfere in any way with the right of Universal or any such subsidiary or affiliate to terminate any Employee’s employment at any time for any reason, or for no reason at all.

     9. TAXES. Holdings may make such provisions and take such steps as it may deem necessary or appropriate for the withholding of all Federal, state, local and other taxes required by law to be withheld with respect to the Option including, but not limited to: (i) reducing the number of shares of Common Stock otherwise deliverable, based upon their Fair Market Value on the date of exercise, to permit deduction of the amount of any such withholding taxes from the amount otherwise payable under this Agreement; (ii) deducting the amount of any such withholding taxes from any other amount then or thereafter payable to the Employee; or (iii) requiring the Employee, his or her beneficiary or his or her legal representative to pay to Holdings the amount required to be withheld or to execute such documents as Holdings deems necessary or desirable to enable it to satisfy its withholding obligations as a condition of releasing the Common Stock.

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     10. GOVERNING LAW. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware applicable to contract made and to be performed entirely within such state.

     11. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

     12. NOTICES. Any notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, telecopied with confirmed receipt, sent by certified, registered, or express mail, postage prepaid, or sent by a national next-day delivery service to the parties at the following addresses or at such other addresses as shall be specified by the parties by like notice, and shall be deemed given when so delivered personally or telecopied, or if mailed, 2 days after the date of mailing, or, if by national next-day delivery service, on the day after delivery to such service as follows:

(i)	if to Holdings, at:
	Universal Compression Holdings, Inc. 4444 Brittmoore Road Houston, Texas 77041-8004 Attention: J. Michael Anderson,                  Senior Vice President and Chief Financial Officer Telecopier Number: 713-466-6720
	with a copy to:
	Universal Compression, Inc. 4444 Brittmoore Road Houston, Texas 77041-8004 Attention: Donald Wayne,                  Vice President and General Counsel Telecopier Number: 713-466-6720
(ii)	if to Employee, to him or her at:
	Universal Compression, Inc. 4444 Brittmoore Road Houston, Texas 77041-8004

     13. HEADINGS. The headings in this Agreement are for convenience of reference only and shall not in any manner define or limit the scope or intent of any provisions of this Agreement.

     14. SEVERABILITY. If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction or any foreign federal, state, county or local government or any other governmental, regulatory or administrative agency or authority to be invalid, void, unenforceable or against public policy for any reason, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

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     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have executed this Agreement effective as of the Grant Date above mentioned.

Signature

Printed Name

Social Security Number

UNIVERSAL COMPRESSION HOLDINGS, INC.

Stephen A. Snider

President and Chief Executive Officer

«DivPres»

«Title»

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