Document:

DEFINITIVE AGREEMENT

               This  Definitive  Agreement  ("Definitive  Agreement") is entered
into as of the 3rd day of January,  2006,  by and among TRANS  ENERGY,  INC.,  a
Nevada  corporation,  with its principal place of business at 210 Second Street,
St. Marys, West Virginia 26170 ("Seller");  PRIMA OIL COMPANY,  INC., a Delaware
corporation,  with their principal  place of business at 210 Second Street,  St.
Marys,  West Virginia  26170 (the "Credit  Facilitator");  CLARENCE E. SMITH and
REBECCA  L.  SMITH,   of  P.  O.  Box  432,  St.  Marys,   West  Virginia  26170
("Purchasers");   ARVILLA  OILFIELD  SERVICES,  LLC,  a  West  Virginia  limited
liability company ("AOS");  and ARVILLA PIPELINE  CONSTRUCTION CO., INC., a West
Virginia corporation whose stock is wholly owned by Purchasers ("APC").

                              W I T N E S S E T H:

               WHEREAS,  Purchasers  are the holders of 1,042,821  shares of the
capital common stock of Seller (the "Purchasers' Shares") acquired in connection
with the merger of  Arvilla,  Inc.,  a Nevada  corporation,  with  Trans  Energy
Acquisitions, Inc., a Nevada corporation, on January 31, 2005 (the "Merger");

               WHEREAS, as a result of the Merger, Seller became and remains the
sole stockholder of Arvilla, Inc., which is in turn the sole corporate member of
AOS;

               WHEREAS,  Purchaser  desires  to acquire  100% of the  membership
interests in AOS from Seller; and

               WHEREAS,  Seller desires to reacquire  fifty percent (50%) of the
Purchasers' Shares, or 521,411 shares (the "Reacquired Shares"), from Purchaser.

               NOW,  THEREFORE,  in  consideration  of the  premises  and of the
mutual covenants and agreements  contained herein,  together with other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, the parties hereto agree as follows:

                          Article 1. Purchase and Sale

               1.1 Purchase and Sale of All Membership Interests in AOS. Subject
to the terms and conditions of this  Definitive  Agreement,  on the date hereof,
Seller agrees to cause its wholly owned subsidiary,  Arvilla,  Inc., to sell and
convey to Purchasers,  free and clear of all encumbrances,  and Purchasers agree
to purchase and accept from Seller one hundred percent (100%) of the outstanding
membership interests in AOS.

               1.2  Purchase  and  Sale of  Shares.  Subject  to the  terms  and
conditions of this Definitive Agreement, on the date hereof, Purchasers agree to
sell and convey to Seller, free and clear of all encumbrances, and Seller agrees
to purchase and accept from Purchasers the Reacquired Shares.

                                      -1-
<PAGE>

               1.3 Assignment of the Five Wells.

                    1.3.1 Subject to the terms and conditions of this Definitive
Agreement,  on the date hereof,  Purchasers  agree to sell and convey to Seller,
free and clear of all  encumbrances,  except  for  Permitted  Encumbrances,  and
Seller agrees to purchase and accept from Purchasers all of Purchasers' interest
in and to those certain oil and gas wells located in Tyler County, West Virginia
and known as the Estlack  #1,  Nolan #2,  Nolan #3,  Nolan #4 and Nolan #5 Wells
(collectively,  the  "Five  Wells"),  all as more  particularly  set  forth  and
described in that certain  assignment  attached hereto and made a part hereof as
Exhibit 1.3.1 (the "Five Wells Assignment").

                    1.3.2   Notwithstanding  the  foregoing,   Purchasers  shall
deposit the original  executed Five Wells  Assignment in escrow pending Seller's
payment in full of the AOS Promissory Note and the APC Promissory  Note, as such
terms are defined in paragraph 1.4 below.  Until such time as the AOS Promissory
Note and the APC Promissory Note are satisfied in full,  Purchasers shall retain
for their own account all of the income  derived from the Five Wells,  and shall
bear full and complete  responsibility to make the debt service payments related
to said Five Wells.  Upon Seller's full  satisfaction of the AOS Promissory Note
and the APC  Promissory  Note, (a) the Five Wells  Assignment  shall be released
from  escrow  to  Trans   Energy,   (b)  Trans  Energy   shall  assume   primary
responsibility  for all  outstanding  debt  secured by the Five  Wells,  and (c)
Purchasers shall be released from any responsibility for said outstanding debt.

               1.4 Additional Consideration.  In addition to the exchange of the
membership  interests  in AOS for the  Reacquired  Shares  and  the  Five  Wells
Assignment,   the  parties  will  also  exchange  the  following  as  additional
consideration with respect to exchanges described in paragraphs 1.1, 1.2 and 1.3
hereof (the "Additional Consideration").  The deferred portion of the Additional
Consideration  shall  be  represented  by  the  promissory  notes  described  in
subparagraphs  1.4.1  and 1.4.2  below,  and shall be  secured  by a first  lien
position in certain collateral owned by Credit Facilitator, as more particularly
described and set forth on Schedule 1.4.

                    1.4.1   Seller,   together   with  any  of  its   subsidiary
corporations or affiliated  entities  ("Seller's  Affiliated  Entities"),  shall
execute  a  promissory  note  ("AOS  Promissory  Note")  in  favor of AOS in the
principal amount of Five Hundred  Thousand  Dollars and No Cents  ($500,000.00),
bearing interest from January 1, 2006 at an annual stated rate of interest equal
to  Wall  Street  Journal  plus  one  percent  (1%),  adjusted  monthly  on  the
twenty-eighth  (28th) day of each calendar month; said AOS Promissory Note shall
be payable in equal monthly  installments of Forty Thousand Dollars ($40,000.00)
plus ten percent (10%) of the gross proceeds from any capital raise conducted by
Trans Energy during the term thereof  until such time as the entire  outstanding
principal balance,  together with all interest accrued thereon, is paid in full,
in substantially the same form as attached hereto as Exhibit 1.4.1.

                    1.4.2   Seller,   together   with  any  of  its   subsidiary
corporations or affiliated  entities  ("Seller's  Affiliated  Entities"),  shall
execute a promissory note ("APC Promissory  Note") in favor of APC, in the total
amount of Two Hundred Sixty-Three  Thousand Dollars and No Cents  ($263,000.00),
bearing interest from January 1, 2006 at an annual stated rate of interest equal
to  Wall  Street  Journal  plus  one  percent  (1%),  adjusted  monthly  on  the
twenty-eighth (28th) day

                                      -2-
<PAGE>

of each calendar month;  said APC Promissory Note shall payable as follows:  the
entire  outstanding  principal  balance,  together  with  all  interest  accrued
thereon,  shall be paid in full on or before December 31, 2006, in substantially
the same form as is attached hereto as Exhibit 1.4.2.

                    1.4.3 The AOS Promissory  Note and the APC  Promissory  Note
shall each be cross  collateralized by a first priority Leasehold Deed of Trust,
Fixture  Filing,  Security  Agreement  and Financing  Statement  from the Credit
Facilitator,  for the oil and gas lease of the Lyons property, together with the
oil and gas wells now or hereafter  situate  thereon,  all as more  particularly
described and set forth in that certain  assignment  attached  hereto as Exhibit
1.4.3(B)  (collectively,  the "Lyons  Lease"),  in the form  attached  hereto as
Exhibit 1.4.3(B) and made a part hereof (the "Lyons Leasehold Deed of Trust").

                    1.4.4 In the event any payment due under the AOS  Promissory
Note and the APC Promissory Note is not made when due,  Purchasers may, at their
sole  discretion,  declare all of the  remainder  of the  outstanding  principal
balances, together with all interest accrued thereon the AOS Promissory Note and
the APC  Promissory  Note  presently and  immediately  due and  collectible.  In
addition,  Purchasers,  AOS and APC may pursue  any and all legal and  equitable
remedies  available to them,  including  enforcement  of their rights under that
certain Escrow Agreement more particularly  described and set forth in paragraph
1.5 below.  Any failure to exercise this option shall not constitute a waiver of
the right to exercise the same at any time in the future.

                    1.4.5 Seller shall  declare and pay,  subject to  applicable
withholdings  for federal  and state  income  taxes,  FICA and  Medicare  Tax, a
one-time bonus to Clarence E. Smith equal to the annual compensation  determined
by its auditors,  H-J and Associates,  CPAs, as reasonable  compensation for his
services as its Chief Executive Officer.  Notwithstanding the foregoing, the net
amount of such bonus shall be retained by Seller for its own account.

                    1.4.6 Seller shall cause AOS to declare and pay,  subject to
applicable  withholdings  for federal and state income taxes,  FICA and Medicare
Tax, a one-time  bonus to  Rebecca  L.  Smith  equal to the annual  compensation
determined by its auditors, H-J and Associates, CPAs, as reasonable compensation
for her services as its Chief Executive Officer.  Notwithstanding the foregoing,
the net amount of such bonus shall be retained by Seller for its own account.

                    1.4.7 Upon  closing the  transactions  contemplated  by this
Definitive Agreement,  Clarence E. Smith shall resign as Chief Executive Officer
of Trans Energy, Inc. and shall deliver an executed letter of resignation in the
form attached hereto as Exhibit 1.4.6.

               1.5  Escrow  Agreement.  Seller,  the  Credit  Facilitators,  the
Purchasers, AOS APC and William Powell, Esq., of 601 Avery Street,  Parkersburg,
West Virginia 26101,  (the "Escrow Agent") shall enter into an Escrow  Agreement
for the purpose of delivering the AOS Promissory  Note, the APC Promissory Note,
the Lyons Leasehold Deed of Trust, as well as all other agreements, instruments,
certificates,   approvals  and  other  documents   necessary  or  convenient  to
consummate the transactions contemplated herein (the "Transaction Documents") to
the Escrow Agent pending the receipt of a fairness  opinion and the satisfaction
of certain other conditions set forth therein (the "Escrow Agreement").

            Article 2. Representations and Warranties of Purchasers

               2.1  Representations  and  Warranties  of  the  Purchasers.   The
Purchasers represent and warrant to Seller:

                    2.1.1 Title to Shares.  Purchasers  have good,  indefeasible
and marketable title to the Reacquired Shares and own the same free and clear of
any encumbrance.

                    2.1.2 No Broker or Finder's  Fee.  Negotiations  relative to
this Definitive  Agreement and the  transactions  contemplated  hereby have been
carried on by the parties hereto without the  intervention of any person in such
manner as to give rise to any valid claim against any of the parties  hereto for
a brokerage commission, finder's fee or any similar payments.

                    2.1.3   Definitive   Agreement  Will  Not  Cause  Breach  or
Violation. The execution,  delivery and performance of this Definitive Agreement
by  Purchasers  will not violate the  provisions  of, or  constitute a breach or
default  whether upon lapse of time and/or the occurrence of any act or event or
otherwise under (a) any law, statute, rule or regulation to which Purchasers are
subject,  or (b) any commitment,  contract or agreement to which Purchasers,  or
either of them,  are a party,  if, in each  case,  such a  violation,  breach or
default would be reasonably likely to prevent, or materially delay or materially
impair the ability of Purchasers to consummate the transactions  contemplated by
this Definitive Agreement.

                    2.1.4  Closing  Certificate.  At the Closing the  Purchasers
shall deliver a  certificate  executed by both of them to the effect that all of
the  representations  and warranties  made herein are true as of the date of the
Closing.

   Article 3. Representations and Warranties of Seller and Credit Facilitator

               3.1  Representations  and  Warranties  of the  Seller  and Credit
Facilitator. The Seller and the Credit Facilitator each represent and warrant to
Purchasers:

                    3.1.1 Organization, Standing and Qualification of Seller and
Credit  Facilitator.  Seller and  Credit  Facilitator  are each duly  organized,
validly existing, and in good standing under the laws of their respective States
or  Commonwealths  of  incorporation,  they are each qualified to do business in
each and every respective  state or commonwealth in which they do business,  and
they have all necessary  powers to own their own  respective  properties  and to
carry on their own respective  businesses,  and to execute,  deliver and perform
this Definitive Agreement and consummate the transactions contemplated hereby.

                    3.1.2   Definitive   Agreement  Will  Not  Cause  Breach  or
Violation. The execution,  delivery and performance of this Definitive Agreement
by  Seller  and  Credit  Facilitator  will not  violate  the  provisions  of, or
constitute a breach or default  whether upon lapse of time and/or the occurrence
of any act or event or otherwise  under (a) the  corporate  charter or bylaws of
Seller or Credit Facilitator,  (b) any law, statute, rule or regulation to which
Seller or Credit  Facilitator  is subject,  or (c) any  commitment,  contract or
agreement to which Seller or Credit  Facilitator are parties,  if, in each case,
such a violation,

                                      -3-
<PAGE>

breach or default would be reasonably likely to prevent,  or materially delay or
materially impair the ability of Seller or Credit  Facilitator to consummate the
transactions contemplated by this Definitive Agreement.

                    3.1.3  Authority and Consent.  The  execution,  delivery and
performance of this Definitive  Agreement by Seller and Credit Facilitator,  and
all instruments and agreements to be executed by them at Closing, have been duly
and  validly  authorized  by the  boards  of  directors  of  Seller  and  Credit
Facilitator  and by all other necessary  corporate  action on the part of Seller
and Credit Facilitator.  This Definitive Agreement  constitutes the legal, valid
and binding  obligation of Seller and Credit  Facilitator,  enforceable  against
Seller and Credit Facilitator in accordance with its terms except as such

                                      -4-

<PAGE>

enforceability  may  be  limited  by  bankruptcy,  insolvency,   reorganization,
moratorium  and other  similar  laws and  equitable  principles  relating  to or
limiting creditors' rights generally.

                    3.1.4 Third Party Consents. As of the Escrow Closing, Seller
and  Credit  Facilitator  will  have  obtained  all  consents,   authorizations,
licenses,  permits and/or regulatory approvals of any governmental entity or any
other person  necessary for the  consummation of the  transactions  contemplated
hereby,  including  any  necessary  consent,  authorization  or  approval of any
creditors of Seller and Credit Facilitator whose consent is necessary.

                    3.1.5  Secretary's  Certificate.  At the Escrow  Closing the
Seller and the Credit Facilitator shall deliver a certificate  executed by their
respective  corporate  Secretary's to the effect that all of the representations
and warranties made herein are true as of the date of the Closing.

                    3.1.6 Title to Collateral.  Credit  Facilitator has good and
marketable title, free of all liens and encumbrances, to the Lyons Lease, except
for such  permitted  encumbrances  as set forth and described on Schedule  3.1.6
hereof.

                  Article 4. Additional Definitive Agreements

               4.1  Resignations.  Upon  the  execution  and  delivery  of  this
Definitive Agreement, Purchasers agree to resign any and all positions they hold
as an  employee,  officer or director of any  subsidiaries  of Seller.  Further,
Purchasers  shall resign as members of the Board of Directors of Seller upon the
receipt of a fairness opinion of the transactions contemplated herein.

               4.2  Purchasers  Access  to  Books  and  Records.  Until  the AOS
Promissory Note and the APC Promissory Note are paid in full and all obligations
of  Seller to  Purchasers  have  been  fully  satisfied,  Seller  shall  provide
Purchasers  access to the all  financial  records of Seller  and its  Affiliated
Entities,  together with any written financial  statements prepared by Seller or
its accountants upon written request of Purchasers.

               4.3  Covenant  Not  to  Represent   Association  of  Seller  with
Purchasers.   Following  the  Closing,  neither  Seller,  Purchasers  nor  their
Affiliated  Entities shall  represent to any person,  firm or  corporation  that
Purchasers are associated in any way with Seller.

               4.4 Survival of Merger Agreement Provisions. The covenants of the
Merger  Agreement  shall  continue to remain in full force and effect  until all
conditions precedent to the Escrow Closing are satisfied.

                                      -5-
<PAGE>

               4.5 Consent of Huntington  National Bank to Sale of AOS.  Closing
of the transactions  contemplated  herein is expressly  conditioned on the prior
written consent of Huntington  National Bank to the sale of AOS to Purchasers in
accordance with the terms and conditions of the loan documents dated on or about
November 19, 2004 between Huntington National Bank, AOS, Clarence E. and Rebecca
L. Smith,  together with the approval of all other lenders,  if any,  having the
right to call a loan on transfer of ownership of AOS.

               4.6 Approval of Boards of Directors.  Closing of the transactions
contemplated  herein is expressly  conditioned  on the approval of the Boards of
Directors of each of the Seller and the Credit Facilitator.

               4.7 Fairness  Opinion.  Closing of the transactions  contemplated
herein is expressly  conditioned on the receipt of a fairness opinion from a law
firm, certified public accounting firm, underwriter or broker-dealer  possessing
qualifications and credentials necessary to offer such an opinion,  addressed to
each of the parties,  stating that the transactions  contemplated herein are, in
toto, fair to Seller and its shareholders (the "Fairness Opinion"). In the event
it is impossible to obtain such a fairness opinion, then the parties shall enter
into an irrevocable  option in favor of Purchasers to carry out the  transaction
contemplated  herein  on the same  terms  and  conditions  as set  forth in this
Definitive  Agreement at such time as a fairness  opinion can be obtained from a
law firm,  broker-dealer or certified public accounting firm, with experience in
transactions similar in substance to those contemplated herein.

               4.8 Use of Best Efforts.  Each of the parties to the transactions
contemplated  by this  Definitive  Agreement  shall use their  best  efforts  to
satisfy  all  conditions  precedent  to and  to  consummate  said  transactions,
including  without  limitation  obtaining  all necessary  regulatory  approvals,
approval of their  respective  Boards of Directors or Members,  and the Fairness
Opinion.

               4.9  Unaudited  Financial  Statements;  Cooperation  With  Public
Filings.  AOS will provide Trans Energy with its  unaudited  balance sheet as of
December 31, 2005 and its  unaudited  interim  income  statement  for the eleven
month period from  February 1, 2005 through  December 31, 2005, as soon as it is
available,  and shall furnish such unaudited  statements  each month  thereafter
until Escrow Closing. Purchasers and AOS agree to cooperate fully in all manners
necessary  to the  timely  filing of the  December  31,  2005  10-KSB of Seller;
provided,  however,  the new Chief Executive Officer of Seller shall provide all
certifications  necessary  pursuant  to the  Sarbanes-Oxley  Act.  At the Escrow
Closing or upon  filing  all  necessary  reports  with the  Securities  Exchange
Commission  relating to the  operations of AOS while  affiliated  with Seller or
required in connection with the transactions  contemplated herein,  whichever is
the later to occur,  Seller and its Affiliated Entities will remove all software
licensed to AOS or APC, including without limitation the I-Commander  accounting
software,  from its computer  systems and shall not  thereafter use same without
obtaining independent licenses.

               4.10 Resignations from AOS. All persons on the payroll of AOS who
are not necessary to the operation of AOS,  including without limitation William
F.  Woodburn,  Janet  Woodburn,  Loren E.  Bagley,  et al.,  will  resign and be
transferred  to the  payroll  and  employee  benefits  of  Seller  or one of its
subsidiaries other than AOS or Arvilla, Inc.

                                      -6-
<PAGE>

               4.11  Purchasers'  Salary.  AOS shall  immediately  enter into an
employment  contract  with  Rebecca L.  Smith to manage AOS at an annual  salary
equal to the greater of Eighty-five  Thousand Dollars ($85,000.00) or the amount
established  by the CPA Firm  auditing  the  financial  statements  of Seller as
reasonable   compensation  for  said  position.  Said  agreement  shall  not  be
terminable by Seller, or any of its subsidiaries,  as long as either Clarence or
Rebecca Smith are personal  guarantors of the promissory  note dated on or about
November 19, 2004 due from AOS to Huntington  National Bank, or any  replacement
thereof,  together with all other debt of AOS personally  guaranteed by Clarence
and Rebecca Smith.

                          Article 5. Events of Default

               5.1 Financial Events of Default. The following shall constitute a
"Financial Event of Default" under the terms of this Definitive Agreement.

                    5.1.1 The failure of Seller to pay the AOS  Promissory  Note
when due.

                    5.1.2 The failure of Seller to pay the APC  Promissory  Note
when due.

               5.2 Non-Financial Events of Default. The failure of the breaching
party to cure a  material  breach  of any  non-financial  covenant,  promise  or
obligation  of a party to this  Definitive  Agreement  within  ten (10)  days of
receipt of written  notice of such  breach  from the  non-breaching  party shall
constitute a  "Non-Financial  Event of Default"  hereunder.  5.3 Relationship to
Escrow Agreement.  An Event of Default by Seller shall entitle the Purchasers to
the right to (a) foreclose on its first  priority  lien on the Lyons Lease,  and
(b) to receive an immediate distribution of all the membership interests in AOS.
Upon Purchasers,  AOS or APC becoming the record title holder of the Lyons Lease
by foreclosure,  trustee's sale or deed in lieu of foreclosure,  Seller shall be
entitled  to  receive  a  distribution  of the  Five  Wells  Assignment  and the
certificates to the Reacquired Shares.

                 Article 6. Indemnification and Mutual Release

               6.1  Survival.  All  representations,  warranties,  covenants and
obligations in this Definitive Agreement, the certificates delivered pursuant to
Sections  2.1.4  and  3.1.5  and any other  certificate  or  document  delivered
pursuant to this Agreement shall survive the Closing and the consummation of the
transactions   contemplated  herein,  subject  to  Section  6.4.  The  right  to
indemnification,  reimbursement or other remedy based upon such representations,
warranties, covenants and obligations shall not be affected by any investigation
conducted  with respect to, or any knowledge  acquired by a party (or capable of
being acquired) at any time,  whether before or after the execution and delivery
of this  Definitive  Agreement or the  Closing,  with respect to the accuracy or
inaccuracy of or compliance with any such representation,  warranty, covenant or
obligation.  The  waiver  of  any  condition  based  upon  the  accuracy  of any
representation  or warranty,  or on the  performance  of or compliance  with any
covenant  or  obligation,   will  not  affect  the  right  to   indemnification,
reimbursement  or other  remedy  based  upon such  representations,  warranties,
covenants and obligations.

                                      -7-
<PAGE>

               6.2  Indemnification  and  Reimbursement  by  Seller  and  Credit
Facilitator.  Seller and the Credit  Facilitator,  jointly and  severally,  will
indemnify and hold harmless Purchasers,  and their  representatives,  agents and
related persons (collectively,  the "Purchasers Indemnified Persons"),  and will
reimburse the Purchasers  Indemnified  Persons for any loss,  liability,  claim,
damage,  expense  (including costs of  investigation  and defense and reasonable
attorneys' fees and expenses) or diminution of value, whether or not involving a
Third-Party Claim (collectively, "Damages"), arising from or in connection with:

                    6.2.1 any Breach of any  representation  or warranty made by
Seller  or  Credit  Facilitator  in  (i)  this  Definitive  Agreement  (ii)  the
certificates  delivered  pursuant to Section 3.1.5 (for this purpose,  each such
certificate will be deemed to have stated that Seller's and Credit Facilitator's
representations  and warranties in this Agreement  fulfill the  requirements  of
Section 3.1 as of the Closing  Date as if made on the  Closing  Date,  (iii) any
transfer  instrument  or  (iv)  any  other  certificate,  document,  writing  or
instrument delivered by Seller or Credit Facilitator pursuant to this Agreement;

                    6.2.2 any Breach of any covenant or  obligation of Seller or
Credit  Facilitator  in this  Agreement or in any other  certificate,  document,
writing or instrument delivered by Seller or Credit Facilitator pursuant to this
Agreement;

                    6.2.3  any  Damages  resulting  from or  arising  out of the
relationship  of Purchasers  to Seller,  or its  subsidiaries,  except for those
damages solely attributable to the negligent or intentional acts or omissions of
the Purchasers;

                    6.2.4 any  brokerage  or  finder's  fees or  commissions  or
similar payments based upon any agreement or  understanding  made, or alleged to
have been made, by any Person with Seller or Credit  Facilitator (or any person,
firm or  corporation  acting  on their  behalf)  in  connection  with any of the
transactions contemplated herein;

                    6.2.5 any product or component  thereof  manufactured  by or
shipped,  or any services provided by, Seller, in whole or in part, prior to the
Closing; and

                    6.2.6 any  noncompliance  with  fraudulent  transfer  law in
respect of the transactions contemplated herein.

               6.3 Indemnification  and Reimbursement by Purchasers.  Purchasers
will  indemnify and hold harmless  Seller,  and will reimburse  Seller,  for any
damages arising from or in connection with:

                    6.3.1 any Breach of any  representation  or warranty made by
Purchasers  in  this  Agreement  or in any  certificate,  document,  writing  or
instrument delivered by Purchasers pursuant to this Agreement;

                    6.3.2 any Breach of any covenant or obligation of Purchasers
in this Agreement or in any other certificate,  document,  writing or instrument
delivered by Purchasers pursuant to this Agreement;

                                      -8-
<PAGE>

                    6.3.3  any  claim by any  person,  firm or  corporation  for
brokerage or finder's fees or  commissions  or similar  payments  based upon any
agreement or  understanding  alleged to have been made by such  person,  firm or
corporation  with  Purchasers  (or any  person,  firm or  corporation  acting on
Purchasers'  behalf) in  connection  with any of the  transactions  contemplated
herein; and

                    6.3.4 any  noncompliance  with  fraudulent  transfer  law in
respect of the transactions contemplated herein.

             6.3A Indemnification and Reimbursement by AOS and APC.

                    6.3A.1 AOS will indemnify and hold harmless Seller, and will
reimburse  Seller,  for any damages arising from or in connection  with: (a) any
product  or  component  thereof  manufactured  by or  shipped,  or any  services
provided  by,  AOS,  in  whole or in part,  prior  to the  Closing;  and (b) any
noncompliance  with  fraudulent  transfer  law in  respect  of the  transactions
contemplated herein.

                    6.3A.2 APC will indemnify and hold harmless Seller, and will
reimburse  Seller,  for any damages arising from or in connection  with: (a) any
product  or  component  thereof  manufactured  by or  shipped,  or any  services
provided  by,  APC,  in  whole or in part,  prior  to the  Closing;  and (b) any
noncompliance  with  fraudulent  transfer  law in  respect  of the  transactions
contemplated herein.

               6.4 Time Limitations.

                    6.4.1 If the Closing occurs,  Seller and Credit  Facilitator
will have  liability  (for  indemnification  or  otherwise)  with respect to any
Breach  of (i) a  covenant  or  obligation  to be  performed  or  complied  with
subsequent to the Closing (other than those in Sections 4.3 and 4.4, as to which
a claim may be made at any time) or (ii) a  representation  or  warranty  (other
than those in Section 3.1.6, as to which a claim may be made at any time),  only
if  on  or  before  December  31,  2007,  Purchasers  notify  Seller  or  Credit
Facilitator  of a claim  specifying the factual basis of the claim in reasonable
detail to the extent then known by Purchasers.

                    6.4.2 If the Closing occurs,  Purchasers will have liability
(for  indemnification or otherwise) with respect to any Breach of (i) a covenant
or obligation to be performed or complied with prior to the Closing Date or (ii)
a representation  or warranty (other than that set forth in Section 2.1.4, as to
which a claim may be made at any time),  only if on or before December 31, 2007,
Seller or Credit Facilitator notify Purchasers of a claim specifying the factual
basis of the claim in  reasonable  detail to the extent  then known by Seller or
Credit Facilitator.

               6.5 [INTENTIONALLY OMITTED]

               6.6 Third Party Claims. For purposes of this Section 6.6 the term
"Third  Party Claim" shall mean any claim  against any  Indemnified  Person by a
Third Party, whether or not involving a proceeding

                                      -9-
<PAGE>

                    6.6.1   Promptly   after  receipt  by  a  person,   firm  or
corporation  entitled to indemnity  under  Section 6.2, 6.3, 6.3A (to the extent
provided in the Section 6.3.3) or 6.4 (an "Indemnified Person") of notice of the
assertion of a Third-Party Claim against it, such Indemnified  Person shall give
notice to the person,  firm or  corporation  obligated to  indemnify  under such
Section (an "Indemnifying  Person") of the assertion of such Third-Party  Claim,
provided that the failure to notify the Indemnifying Person will not relieve the
Indemnifying Person of any liability that it may have to any Indemnified Person,
except to the extent that the Indemnifying  Person demonstrates that the defense
of such Third-Party  Claim is prejudiced by the Indemnified  Person's failure to
give such notice.

                    6.6.2  If  an   Indemnified   Person  gives  notice  to  the
Indemnifying  Person pursuant to Section 6.6.1 of the assertion of a Third-Party
Claim, the  Indemnifying  Person shall be entitled to participate in the defense
of such  Third-Party  Claim and,  to the extent  that it wishes  (unless (i) the
Indemnifying  Person is also a Person against whom the Third-Party Claim is made
and the Indemnified  Person  determines in good faith that joint  representation
would  be  inappropriate  or (ii)  the  Indemnifying  Person  fails  to  provide
reasonable  assurance to the  Indemnified  Person of its  financial  capacity to
defend such Third-Party Claim and provide  indemnification  with respect to such
Third-Party Claim), to assume the defense of such Third-Party Claim with counsel
satisfactory  to the  Indemnified  Person.  After  notice from the  Indemnifying
Person to the  Indemnified  Person of its election to assume the defense of such
Third-Party  Claim, the Indemnifying  Person shall not, so long as it diligently
conducts such defense,  be liable to the Indemnified Person under this Article 6
for any fees of other counsel or any other  expenses with respect to the defense
of such Third-Party Claim, in each case subsequently incurred by the Indemnified
Person in  connection  with the defense of such  Third-Party  Claim,  other than
reasonable  costs of  investigation.  If the  Indemnifying  Person  assumes  the
defense of a Third-Party Claim, (i) such assumption will conclusively  establish
for purposes of this  Agreement that the claims made in that  Third-Party  Claim
are within the scope of and subject to  indemnification,  and (ii) no compromise
or settlement  of such  Third-Party  Claims may be effected by the  Indemnifying
Person without the Indemnified  Person's  Consent unless (A) there is no finding
or admission of any  violation of a legal  requirement  or any  violation of the
rights of any  person,  firm or  corporation;  (B) the sole  relief  provided is
monetary damages that are paid in full by the Indemnifying  Person;  and (C) the
Indemnified  Person shall have no liability  with respect to any  compromise  or
settlement of such Third-Party Claims effected without its consent. If notice is
given to an Indemnifying  Person of the assertion of any  Third-Party  Claim and
the  Indemnifying  Person does not,  within ten (10) days after the  Indemnified
Person's notice is given, give notice to the Indemnified  Person of its election
to assume the defense of such Third-Party Claim, the Indemnifying Person will be
bound by any  determination  made in such Third-Party Claim or any compromise or
settlement effected by the Indemnified Person.

                    6.6.3 [INTENTIONALLY LEFT BLANK]

                    6.6.4  Notwithstanding  the  foregoing,  if  an  Indemnified
Person  determines in good faith that there is a reasonable  probability  that a
Third-Party  Claim may  adversely  affect it or its  related  persons,  firms or
corporations  other than as a result of  monetary  damages for which it would be
entitled to indemnification under this Agreement, the Indemnified Person may, by
notice to the Indemnifying Person, assume the exclusive right to defend,

                                      -10-
<PAGE>

compromise or settle such Third-Party  Claim,  but the Indemnifying  Person will
not be bound by any  determination of any Third-Party  Claim so defended for the
purposes of this Agreement or any compromise or settlement  effected without its
consent (which may not be unreasonably withheld).

                    6.6.5 Notwithstanding the provisions of any jurisdiction and
venue provision herein, Seller and each Credit Facilitator hereby consent to the
nonexclusive  jurisdiction  of any court in which a  proceeding  in respect of a
Third-Party  Claim is brought  against  any  Purchasers  Indemnified  Person for
purposes of any claim that a Purchasers  Indemnified  Person may have under this
Definitive  Agreement  with respect to such  Proceeding  or the matters  alleged
therein and agree that  process may be served on Seller and Credit  Facilitators
with respect to such a claim anywhere in the world.

                    6.6.6  With  respect  to any  Third-Party  Claim  subject to
indemnification  under this Article 6: (i) both the  Indemnified  Person and the
Indemnifying  Person,  as the case may be, shall keep the other person,  firm or
corporation  fully  informed  of the  status of such  Third-Party  Claim and any
related  legal  proceedings  at all stages  thereof  where such person,  firm or
corporation is not  represented  by its own counsel,  and (ii) the parties agree
(each at its own  expense) to render to each other such  assistance  as they may
reasonably  require of each other and to cooperate in good faith with each other
in order to ensure the proper and adequate defense of any Third-Party Claim.

               6.7 Other Claims. A claim for  indemnification for any matter not
involving a  Third-Party  Claim may be asserted by notice to the party from whom
indemnification is sought and shall be paid promptly after such notice.

               6.8 Mutual Releases. At the Escrow Closing, Seller, together with
all of its  subsidiaries,  and  Purchasers  will  deliver to each  other  mutual
releases of all claims, however arising, up to the time of the Escrow Closing in
the form attached hereto as Exhibit 6.8.

                          Article 7. Other Provisions

               7.1 Survival of  Representations,  Warranties and Covenants.  All
representations  and  warranties  made by the parties  hereto shall  survive the
transfer of shares of stock and the payment of consideration therefore.

               7.2  Entirety.  This  Definitive  Agreement  embodies  the entire
agreement  among the parties with respect to the subject matter hereof,  and all
prior agreements  between the parties with respect thereto are hereby superceded
in their entirety.

               7.3 Notices and Waivers.  Any notice or waiver to be given to any
party hereto shall be in writing and shall be delivered by certified mail to the
addresses set forth above.

               7.4 Captions. The captions contained in this Definitive Agreement
are  solely  for  convenient  reference  and shall  not be deemed to affect  the
meaning or interpretation of any article, section or paragraph hereof.

                                      -11-
<PAGE>

               7.5 Successors and Assigns.  This  Definitive  Agreement shall be
binding  upon  and  shall  inure to the  benefit  of and be  enforceable  by the
successors and assigns of the parties hereto.

               7.6 Severability. If any term, provision, covenant or restriction
of this Definitive Agreement is held by a court of competent  jurisdiction to be
invalid,  void,  or  unenforceable,  the  remainder  of the  terms,  provisions,
covenants and restrictions shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.

               7.7 Applicable Law. This  Definitive  Agreement shall be governed
by and  construed  and enforced in accordance  with the  applicable  laws of the
State of West Virginia.

               7.8 Closing.  The  transactions  contemplated  by this Definitive
Agreement will close in escrow on Tuesday, January 3, 2006 at the offices of AOS
at a mutually  agreeable time  (hereinabove  referred to as the "Closing").  The
final closing shall be held in accordance with the terms of the Escrow Agreement
(hereinabove referred to as the "Escrow Closing").

               IN WITNESS  WHEREOF,  the parties have executed  this  Definitive
Agreement:

                                              PURCHASERS:

                                              /s/ Clarence E. Smioth
                                              ----------------------------------
                                              (Clarence E. Smith)

                                              /s/ Rebecca L. Smith
                                              ----------------------------------
                                              (Rebecca L. Smith)

                                              SELLER:

                                              Trans Energy, Inc.

Attest:  ___________________________          By: _____________________________
         Its:     Secretary                           Its:     Vice President

                                              CREDIT FACILITATOR:

                                              Prima Oil Company, Inc.

Attest:  ___________________________          By: _____________________________
         Its:     Secretary                           Its:     President

                                      -12-
<PAGE>

                                         APC:

                                         Arvilla Pipeline Construction Co., Inc.

Attest:  ___________________________     By: _____________________________
         Its:     Secretary                  Its:     President

                                         AOS:

                                         By:  Arvilla, Inc.,
                                              its sole corporate member

Attest:  ___________________________     By: _____________________________
         Its:     Secretary                  Its:     President

                                      -13-
<PAGE><PAGE>
                                                                    Exhibit 10.1

                       AMERICAN INTERNATIONAL GROUP, INC.
                           SPECIAL RSU AWARD AGREEMENT

     This SPECIAL RSU AWARD AGREEMENT (this "Award Agreement") sets forth the
terms and conditions of an award (this "Award") of restricted stock units
("RSUs") granted to STEVEN J. BENSINGER under the AMERICAN INTERNATIONAL GROUP,
INC. AMENDED AND RESTATED 2002 STOCK INCENTIVE PLAN (the "Plan").

     1. The Plan. This Award is made pursuant to the Plan, the terms of which
are incorporated in this Award Agreement. Capitalized terms used in this Award
Agreement that are not defined in this Award Agreement, or in the attached
Glossary of Terms, have the meanings as used or defined in the Plan.

     2. Award. The number of RSUs subject to this Award is 23,780. Each RSU
constitutes an unfunded and unsecured promise of AIG to deliver (or cause to be
delivered) to you, subject to the terms of this Award Agreement, one share of
Common Stock (the "Share" or the "Shares" as the context requires) (or cash
equal to the Fair Market Value thereof) on the Delivery Date as provided herein.
Until such delivery, you have only the rights of a general unsecured creditor
and no rights as a shareholder, of AIG. THIS AWARD IS SUBJECT TO ALL TERMS,
CONDITIONS AND PROVISIONS OF THE PLAN AND THIS AWARD AGREEMENT, INCLUDING,
WITHOUT LIMITATION, THE ARBITRATION AND CHOICE OF FORUM PROVISIONS SET FORTH IN
PARAGRAPH 15.

     3. Vesting and Delivery.

     (a) Vesting. Except as provided in this Paragraph 3 and in Paragraphs 4 and
6, you shall become vested in the RSUs on January 12, 2010 (the "Vesting Date").
Unless the Committee determines otherwise, and except as provided in Paragraph
6, if your Employment terminates for any reason prior to the Vesting Date, your
rights in respect of all of your RSUs shall terminate, and no Shares (or cash)
shall be delivered in respect of such RSUs.

     (b) Delivery. Except as provided in this Paragraph 3 and in Paragraphs 4,
6, 8 and 9, and unless your RSUs have previously terminated, the Shares
underlying the RSUs shall be delivered on the Vesting Date (the "Delivery
Date"). The Company may, at its option, deliver cash in lieu of all or any
portion of the Shares otherwise deliverable on the Delivery Date. Such cash
payment shall equal the product of the number of Shares to be delivered on the
Delivery Date and the Fair Market Value of one Share of Common Stock on the
Delivery Date. You shall be deemed the beneficial owner of the Shares at the
close of business on the Delivery Date and shall be entitled to any dividend or
distribution that has not already been made with respect to such Shares if the
record date for such dividend or distribution is after the close of business on
the Delivery Date.

     (c) Death. Notwithstanding any other provision of this Award Agreement, if
you die prior to the Delivery Date, and provided your rights in respect of your
RSUs have not previously terminated, the Shares (or cash in lieu of all or any
part thereof) corresponding to your outstanding RSUs shall be delivered to the
representative of

<PAGE>

your estate as soon as practicable after the date of death and after such
documentation as may be requested by the Committee is provided to the Committee.

     (d) Elective Deferral. Notwithstanding Section 3(b), you may irrevocably
elect to defer Delivery Date until the date that is the 6 months after
termination of your Employment. If you wish to make this irrevocable election,
you must notify AIG in writing within 15 days of the Date of Grant. On your
valid election, the references to the term "Delivery Date" for purposes of this
Award Agreement shall be deemed to be to the date that is the 6 months after
termination of your Employment.

     4. Termination of RSUs and Non-Delivery of Shares.

     (a) Unless the Committee determines otherwise, and except as provided in
Paragraphs 3(c) and 6, your rights in respect of your outstanding RSUs shall
immediately terminate, and no Shares (or cash) shall be delivered in respect of
such unvested RSUs, if at any time prior to the Vesting Date your Employment
with the Company terminates for any reason, or you are otherwise no longer
actively Employed by the Company. For avoidance of doubt, a non-renewal of your
Employment Agreement with AIG, dated as of June 27, 2005, as well as your
involuntary or good reason termination with severance under the terms of your
Employment Agreement before the Vesting Date shall not cause accelerated vesting
of the RSUs unless the Committee determines otherwise.

     (b) Unless the Committee determines otherwise, and except as provided in
Paragraph 6, your rights in respect of all of your RSUs (whether or not vested)
shall immediately terminate, and no Shares (or cash) shall be delivered in
respect of such RSUs, if at any time prior to the Delivery Date:

          (i) you attempt to have any dispute under this Award Agreement or the
     Plan resolved in any manner that is not provided for by Paragraph 15;

          (ii) any event that constitutes Cause has occurred;

          (iii) you have violated any of the covenants set forth in Annex A to
     this Award Agreement;

          (iv) AIG is required to prepare an accounting restatement due to
     material noncompliance of AIG, as result of your misconduct (as determined
     by the Committee), with any financial reporting requirement under the
     securities laws; or

          (v) you fail to certify to AIG, in accordance with procedures
     established by the Committee, with respect to the Delivery Date that you
     have complied, or the Committee determines that you have failed as of the
     Delivery Date to comply, with all of the terms and conditions of this Award
     Agreement. By accepting the delivery of Shares (or cash) under this Award
     Agreement, you shall be deemed to have represented and certified at such
     time that you have complied with all the terms and conditions of this Award
     Agreement.

                                       -2-

<PAGE>

     (c) Unless the Committee determines otherwise, if the Delivery Date in
respect of any of your outstanding RSUs occurs, and Shares (or cash) with
respect to such outstanding RSUs would be deliverable under the terms and
conditions of this Award Agreement, except that you have not complied with the
conditions or your obligations under Paragraph 4(b)(v), all of your rights with
respect to your outstanding RSUs shall terminate no later than the Delivery Date
for such Shares.

     5. Repayment. If, within three years following the delivery of Shares (or
cash), the Committee determines that all terms and conditions of this Award
Agreement in respect of such delivery were not satisfied, the Company shall be
entitled to receive, and you shall be obligated to pay the Company immediately
upon demand therefor, the Fair Market Value of the Shares (determined as of the
Delivery Date) and the amount of cash (to the extent that cash was delivered in
lieu of Shares) delivered with respect to the Delivery Date, without reduction
for any Shares (or cash) applied to satisfy withholding tax or other obligations
in respect of such Shares (or cash). For the avoidance of doubt, nothing in this
Paragraph 5 is intended to limit, and this Award Agreement and any Shares (or
cash delivered in lieu of Shares) are subject to, any rights of the Company
under Section 304 of the Sarbanes-Oxley Act of 2002.

     6. Disability. Notwithstanding any other provision of this Award Agreement,
if your Employment with the Company is terminated by reason of Disability, and
provided your rights in respect of your RSUs have not previously terminated, the
Shares (or cash in lieu of all or any part thereof) corresponding to your
outstanding RSUs shall be delivered to you as soon as practicable after the date
of Disability and after such documentation as may be requested by the Committee
is provided to the Committee.

     7. Non-transferability. Except as otherwise may be provided by the
Committee, the limitations set forth in Section 3.4 of the Plan shall apply. Any
assignment in violation of the provisions of this Paragraph 7 shall be null and
void.

     8. Withholding, Consents and Legends.

     (a) The delivery of Shares is conditioned on your satisfaction of any
applicable withholding taxes (in accordance with Section 3.2 of the Plan).

     (b) Your rights in respect of your RSUs are conditioned on the receipt to
the full satisfaction of the Committee of any required consents (as defined in
Section 3.3 of the Plan) that the Committee may determine to be necessary or
advisable (including, without limitation, your consenting to deductions from
your wages, or another arrangement satisfactory to the Committee, to reimburse
the Company for advances made on your behalf to satisfy withholding and other
tax obligations in connection with this Award).

     (c) AIG may affix to Certificates representing Shares issued pursuant to
this Award Agreement any legend that the Committee determines to be necessary or
advisable (including to reflect any restrictions to which you may be subject
under a separate agreement with AIG). AIG may advise the transfer agent to place
a stop transfer order against any legended Shares.

                                       -3-

<PAGE>

     9. Right of Offset. The Company shall have the right to offset against the
obligation to deliver Shares (or cash) under this Award Agreement any
outstanding amounts (including, without limitation, travel and entertainment or
advance account balances, loans, or amounts repayable to the Company pursuant to
tax equalization, housing, automobile or other employee programs) you then owe
to the Company and any amounts the Committee otherwise deems appropriate.

     10. No Rights to Continued Employment. Nothing in this Award Agreement or
the Plan shall be construed as giving you any right to continued Employment by
the Company or affect any right that the Company may have to terminate or alter
the terms and conditions of your Employment.

     11. Successors and Assigns of AIG. The terms and conditions of this Award
Agreement shall be binding upon, and shall inure to the benefit of, AIG and its
successor entities (as defined in Section 3.6 of the Plan.)

     12. Committee Discretion. The Committee shall have full discretion with
respect to any actions to be taken or determinations to be made in connection
with this Award Agreement, and its determinations shall be final, binding and
conclusive.

     13. Amendment. The Committee reserves the right at any time to amend the
terms and conditions set forth in this Award Agreement, and the Board may amend
the Plan in any respect; provided, that, notwithstanding the foregoing and
Sections 1.3.1(i), 1.3.1(ii) and 3.1 of the Plan, no such amendment shall
materially adversely affect your rights and obligations under this Award
Agreement without your consent. Any amendment of this Award Agreement shall be
in writing signed by an authorized member of the Committee or a person or
persons designated by the Committee.

     14. Adjustment. In the event of a recapitalization, stock split, stock
dividend, combination or exchange of shares, merger, consolidation, rights
offering, separation, reorganization or liquidation, or any other change in the
corporate structure or the Shares, subsequent to the date of the Date of Grant,
the Committee or the Board shall make such equitable adjustments, designed to
protect dilution or enlargement of rights, as it may deem appropriate, in the
number and kind of Shares covered by the RSUs subject to this Award Agreement.

     15. Arbitration; Choice of Forum.

     (a) Any dispute, controversy or claim between the Company and you, arising
out of or relating to or concerning the Plan or this Award Agreement, shall be
finally settled by arbitration in New York City before, and in accordance with
the rules then obtaining of, the New York Stock Exchange, Inc. (the "NYSE") or,
if the NYSE declines to arbitrate the matter (or if the matter otherwise is not
arbitrable by it), the American Arbitration Association (the "AAA") in
accordance with the commercial arbitration rules of the AAA. Prior to
arbitration, all claims maintained by you must first be submitted to the
Committee in accordance with claims procedures determined by the Committee. This
Paragraph is subject to the provisions of Paragraphs 15(b) and (c) below.

                                       -4-

<PAGE>

     (b) THE COMPANY AND YOU HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN THE CITY OF NEW YORK OVER
ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO OR CONCERNING THE
PLAN OR THIS AWARD AGREEMENT THAT IS NOT OTHERWISE ARBITRATED OR RESOLVED
ACCORDING TO PARAGRAPH 14(a) OF THIS AWARD AGREEMENT. This includes any suit,
action or proceeding to compel arbitration or to enforce an arbitration award.
The Company and you acknowledge that the forum designated by this Paragraph
15(b) has a reasonable relation to the Plan, this Award Agreement, and to your
relationship with the Company. Notwithstanding the foregoing, nothing herein
shall preclude the Company from bringing any action or proceeding in any other
court for the purpose of enforcing the provisions of this Paragraph 15.

     (c) The agreement by you and the Company as to forum is independent of the
law that may be applied in the action, and you and the Company agree to such
forum even if the forum may under applicable law choose to apply non-forum law.
You and the Company hereby waive, to the fullest extent permitted by applicable
law, any objection which you or the Company now or hereafter may have to
personal jurisdiction or to the laying of venue of any such suit, action or
proceeding in any court referred to in Paragraph 15(b). You and the Company
undertake not to commence any action, suit or proceeding arising out of or
relating to or concerning this Award Agreement in any forum other than a forum
described in this Paragraph 15. You and (subject to the last sentence of
Paragraph 15(a)) the Company agree that, to the fullest extent permitted by
applicable law, a final and non-appealable judgment in any such suit, action or
proceeding in any such court shall be conclusive and binding upon you and the
Company.

     (d) You irrevocably appoint the Secretary of AIG as your agent for service
of process in connection with any action, suit or proceeding arising out of or
relating to or concerning this Award Agreement which is not arbitrated pursuant
to the provisions of Paragraph 15(a), who shall promptly advise you of any such
service of process.

     (e) You hereby agree to keep confidential the existence of, and any
information concerning, a dispute described in this Paragraph 15, except that
you may disclose information concerning such dispute to the arbitrator or court
that is considering such dispute or to your legal counsel (provided that such
counsel agrees not to disclose any such information other than as necessary to
the prosecution or defense of the dispute).

     (f) You recognize and agree that prior to the grant of this Award you have
no right to any benefits hereunder. Accordingly, in consideration of the receipt
of this Award, you expressly waive any right to contest the amount of this
Award, terms of this Award Agreement, any determination, action or omission
hereunder or under the Plan by the Committee, AIG or the Board, or any amendment
to the Plan or this Award Agreement (other than an amendment to which your
consent is expressly required by Paragraph 13) and you expressly waive any claim
related in any way to the Award including any claim based on any promissory
estoppel or other theory in connection with this Award and your Employment with
the Company.

                                       -5-

<PAGE>

     16. Governing Law. THIS AWARD SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

     17. Headings. The headings in this Award Agreement are for the purpose of
convenience only and are not intended to define or limit the construction of the
provisions hereof.

     18. Acceptance of Terms. This Award Agreement will become null and void,
your rights in respect of all of your RSUs shall terminate, and no Shares (or
cash) shall be delivered in respect of such RSUs unless you accept and agree to
the terms of this Award Agreement in accordance with the letter agreement to
which this Award Agreement is attached within 3 days of the Date of Grant.

     IN WITNESS WHEREOF, AMERICAN INTERNATIONAL GROUP, INC. has caused this
Award Agreement to be duly executed and delivered as of the Date of Grant.

                                        AMERICAN INTERNATIONAL GROUP, INC.

                                        By:     /s/ Martin J. Sullivan
                                            ------------------------------------
                                        Name:  Martin J. Sullivan
                                              ----------------------------------
                                        Title: President and Chief Executive
                                               ---------------------------------
                                               Officer
                                               ---------------------------------

Date of Grant: January 6, 2006
               (subject to Section 18)

                                       -6-

<PAGE>

                                GLOSSARY OF TERMS

     Solely for purposes of this award of RSUs, the following terms shall have
the meanings set forth below. Capitalized terms not defined in this Glossary of
Terms shall have the meanings as used or defined in the applicable Award
Agreement or the Plan.

     "Cause" means your willful and continued failure to perform substantially
your duties with the Company (other than any such failure resulting from your
incapacity due to physical or mental illness) for a period of 10 days after a
written demand for substantial performance is delivered to you by the Board,
which specifically identifies the manner in which the Board believes that you
have not substantially performed your duties, (ii) your willful malfeasance or
willful misconduct that results in substantial damage to the Company, (iii) your
willful and material violation of a material provision of the Company's Code of
Conduct or the Director, Executive Officer and Senior Financial Officer Code of
Business Conduct and Ethics, as such codes of conduct may be in effect from time
to time, or other policies regarding behavior of employees or (iv) conviction
of, or entry of a plea of guilty or no contest by you with respect to, a felony
or any lesser crime of which fraud or dishonesty is a material element. For
purposes of this definition, no act or failure to act on your part shall be
considered "willful" unless it is done, or omitted to be done, by you in bad
faith or without reasonable belief that your action or omission was in the best
interests of the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions of
the Board or the Chief Executive Officer of the Company or based upon the advice
of counsel for the Company shall be conclusively presumed to be done, or omitted
to be done, by you in good faith and in the best interests of the Company. The
Committee shall have the authority in its sole discretion to waive the
consequences under the Plan or any Award Agreement of the existence or
occurrence of any of the events, acts or omissions constituting "Cause."

     "Competitive Business" means any person or entity (including any joint
venture, partnership, firm, corporation or limited liability company) that
engages in or proposes to engage in the following activities in any geographical
area in which the Company does business: (i) the property and casualty insurance
business, including commercial insurance, business insurance, personal insurance
and specialty insurance; (ii) the life and accident and health insurance
business; (iii) the underwriting, reinsurance, marketing or sale of (but not
brokerage of) (A) any form of insurance of any kind that the Company as of such
date does, or proposes to, underwrite, reinsure, market or sell (any such form
of insurance, a "Company Insurance Product"), or (B) any other form of insurance
that is marketed or sold in competition with any Company Insurance Product; (iv)
retirement services and mutual funds services; or (v) any other business that as
of such date is a direct and material competitor of one of the Company's
principal businesses.

     "Disability" means "permanent disability" as defined in the American
International Group, Inc. Group Long - Term Insurance Policy as in effect on the
Date of Grant.

                                       -7-

<PAGE>

                                                                         ANNEX A

                              RESTRICTIVE COVENANTS

     Pursuant to Section 4(b) of the Award Agreement, you agree that your rights
in respect of all of your RSUs (whether or not vested) shall immediately
terminate, and no Shares (or cash) shall be delivered in respect of such RSUs,
if at any time prior to the Delivery Date:

          (A) You directly or indirectly, (i) engage in any Competitive Business
     for your own account, (ii) enter the employ of, or render any services to,
     any person engaged in any Competitive Business, (iii) acquire a financial
     interest in, or otherwise become actively involved with, any person engaged
     in any Competitive Business, directly or indirectly, as an individual,
     partner, shareholder, officer, director, principal, agent, trustee or
     consultant, or (iv) interfere with business relationships (whether formed
     before or after March 14, 2005) between the Company and customers or
     suppliers of, or consultants to, the Company; provided that you may (a)
     directly or indirectly, own, solely as an investment, securities of any
     person engaged in the business of the Company which are publicly traded on
     a national or regional stock exchange or on the over-the-counter market if
     you (x) are not a controlling person of, or a member of a group which
     controls, such person and (y) do not, directly or indirectly, own one
     percent (1%) or more of any class of securities of such person, and (b)
     following termination of your employment, be employed by or provide
     services to, any private equity firm or hedge fund, so long as you have no
     participation whatsoever in any fund invested in any business described in
     clauses (i)- (iii) of the definition of Competitive Business;

          (B) (i) You, directly or indirectly, without the Company's written
     consent, solicit or encourage to cease to work with the Company any person
     who holds a position that is designated as a "senior partner" or "partner"
     for purposes of eligibility to participate in any deferred compensation
     profit participation program of the Company (or any similar designation in
     any successor or substitute plan or program (each, a "DCPPP Senior Partner"
     or "Partner"), any employee holding the title of Vice President or higher
     of the Company or any business unit of the Company, or any employee
     designated by the Company as a "core employee" or a similar designation (a
     "Key Employee") or any consultant whose primary business activity consists
     of providing services to the Company ("Key Consultant") or who was a Key
     Employee of or Key Consultant then under contract with the Company within
     the six (6) month period preceding such activity or (ii) you, without the
     Company's written consent, directly or indirectly hire any person who is or
     who was, within the six (6) month period preceding such activity, a DCPPP
     Senior Partner or Partner;

          (C) You issue, circulate, publish or utter any false or disparaging
     statements, remarks or rumors about the Company or the officers, directors
     or managers of the Company other than to the extent reasonably necessary in
     order to (i) assert a bona fide claim against the Company arising out of
     your Employment, or (ii) respond in a truthful and appropriate manner to
     any legal

                                       -8-

<PAGE>

     process or give truthful and appropriate testimony in a legal or regulatory
     proceeding; or

          (D) You, without the prior written consent of the Company, use,
     divulge, disclose or make accessible to any other person, firm,
     partnership, corporation or other entity, any "Confidential Information"
     (as defined below) except while employed by the Company, in furtherance of
     the business of and for the benefit of the Company, or any "Personal
     Information" (as defined below); provided that you may disclose such
     information when required to do so by a court of competent jurisdiction, by
     any governmental agency having supervisory authority over the business of
     the Company and/or its affiliates, as the case may be, or by any
     administrative body or legislative body (including a committee thereof)
     with jurisdiction to order you to divulge, disclose or make accessible such
     information; provided, further, that in the event that you are ordered by a
     court or other government agency to disclose any Confidential Information
     or Personal Information, you shall (i) promptly notify the Company of such
     order, (ii) at the written request of the Company, diligently contest such
     order at the sole expense of the Company as expenses occur, and (iii) at
     the written request of the Company, seek to obtain, at the sole expense of
     the Company, such confidential treatment as may be available under
     applicable laws for any information disclosed under such order. For
     purposes of this Section (D), (i) "Confidential Information" shall mean non
     public information concerning the financial data, strategic business plans,
     product development (or other proprietary product data), customer lists,
     marketing plans and other non public, proprietary and confidential
     information relating to the business of the Company or its affiliates or
     customers, that, in any case, is not otherwise available to the public
     (other than by your breach of the terms hereof) and (ii) "Personal
     Information" shall mean any information concerning the personal, social or
     business activities of the officers or directors of the Company.

For purposes of this Sections (A) and (B) of this Annex, the Company shall be
construed to include the Company and its controlled affiliates.

                                      -9-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00095-of-00352.parquet"}]]