DIRECTOR'S STOCK PURCHASE PLAN

HARRIS & HARRIS GROUP, INC.

DIRECTORS STOCK PURCHASE PLAN 2001


The Board of Directors of Harris & Harris Group, Inc (the
"Company") has adopted this Director Stock Purchase Plan 2001
(the "Plan") to enable individuals who serve as directors of the
Company (the "Directors"), through the retention by the Company
of fees paid to such Directors for services as directors, to
purchase shares of the Company's common stock, $0.01 par value
per share (the "Common Stock"). The purpose of the Plan is to
benefit the Company's growth and success and enabling the Company
to continue to attract highly qualified persons to serve as
Directors. The provisions of the Plan are set forth below.

1. Shares Subject to the Plan.

All shares purchased pursuant to the Plan will be purchased
in the open market on behalf of each Director. A brokerage
account will be established for each Director at Investec Ernst &
Co. (the "Broker") or another brokerage firm to be approved by
the Board at a later date.

2. Administration.

The Plan shall be administered by the Board. The Board's
actions under the Plan shall be limited to taking all actions
authorized by this Plan or as otherwise reasonably necessary to
effect the purposes hereof.

3. Interpretation.

Subject to the express provisions of the Plan, the Board
shall have authority to interpret the Plan, to prescribe, amend
and rescind rules relating to it, and to make all other
determinations necessary or advisable in administering the Plan,
all of which determinations will be final and binding upon all
persons.

4. Eligibility to Participate.

The only persons eligible in the Plan shall be Directors of
the Company. All Directors are required to participate in the
Plan during their respective terms as members of the Board.

5. Fee Retention.

From and after the effective date of the Plan, each Director
shall have an amount equal to fifty percent (50%) of eligible
fees payable to such Director retained by the Company at the time
such eligible fee is due to be paid. For purposes of this Plan,
"eligible fees" includes each Director's monthly retainer and
Board meeting fees, which the Director is entitled to receive
from the Company for his or her service as a Director. Such
retained amounts will be credited to the Director's account under
the Plan. Once a Director's account accumulates a minimum amount
of two thousand five hundred dollars ($2,500) in value, the
Broker will purchase the Common Stock of the Company in an open
market transaction on behalf of the Director. A Director may not
contribute amounts to purchase Common Stock under the Plan other
than through fee retentions.

For the Directors who currently have a credit balance, the
brokerage account will be funded once the credit balance has been
completely offset by fifty percent (50%) of a Director's eligible
fees. For purposes of this Plan, "credit balance" is defined as
any Common Stock purchases made by a Director or on a Director's
behalf (i) in excess of his or her year 2000 Common Stock
purchase obligation, and (ii) prior to the date of Board approval
of this Plan.

Effective upon the date of approval of this Plan by the
Board, any Company stock purchases made directly by any Directors
cannot be applied to the 50 percent stock purchase commitment
unless it is to satisfy their year 2000 Common Stock purchase
obligation.

Subject to compliance with Section 16 of the Securities
Exchange Act of 1934 which may affect a Director's ability to
sell or purchase shares of the Common Stock (See Section 11 of
the Plan below), Directors may sell, transfer or assign their
shares of Common Stock under the Plan at any time and for any
reason after the shares of Common Stock have been purchased for
their account pursuant to the Plan.

6. Purchase Price.

The purchase price of each share of Common Stock will be the
fair market value. For purpose of this Plan, "fair market value"
means, if the Common Stock is listed on an established national
or regional exchange, is admitted to quotation on the New York
Stock Exchange or the National Association of Securities Dealers
Automated Quotation System, or is publicly traded in an
established securities market, the current quoted price on such
exchange at the time the Brokers purchase order is executed on
behalf of the Director, less any applicable brokerage
commissions.

7. No Right to Continued Membership on the Board.

Neither the Plan nor any right to purchase Common Stock
under the Plan confers upon any Director any right to continued
membership on the Board, nor will a Director's participation in
the Plan create any obligation on the part of the Board to
nominate any Director for re-election by the Company's
stockholders.

8. Amendment of Plan.

Unless otherwise required by law, the Board may, at any
time, amend the Plan in any respect.

9. Assignment.

No participating Director may assign his or her rights to
purchase shares of Common Stock under the Plan, whether
voluntarily, by operation of law or otherwise. Any payment of
cash or issuance of shares of Common Stock under the Plan may be
made only to the participating Director (or in the event of the
Director's death, to the Director's estate).

10. Rule 10b5-1.

Transactions under this Plan are intended to comply with all
applicable conditions of Rule 10b5-1 or any successor provision
under the Securities Exchange Act of 1934 (the "Exchange Act").
Rule 10b5-1's provisions define when a purchase or sale
constitutes trading "on the basis of" material nonpublic
information in insider trading cases brought under Section 10(b)
of the Exchange Act and Rule 10b-5 thereunder. If any provision
of the Plan or action by the Board fails to so comply, it shall
be deemed null and void to the extent permitted by law and
advisable by the Board.

11. Section 16 of the Exchange Act.

Purchases and sales made by Directors of Common Stock
acquired through the Plan will not be considered to be exempt
transactions under Rule 16b-3 under the Exchange Act and will be
subject to the reporting, matching and short-swing profit
provisions of Section 16 of the Exchange Act and the Rules
promulgated thereunder.

12. Effective Date; Term and Termination of the Plan.

The Plan shall be effective as of the date of adoption by
the Board, which date is set forth below. The Board may
terminate the Plan at any time for any reason or for no reason,
provided that such termination shall not impair any rights of
participating Directors.

13. Payment of Plan Expenses.

The Company will bear all costs of administering and
carrying out the Plan, excluding any brokerage commissions
payable.



This Plan was duly adopted and approved by the Board of
Directors of the Company by resolution at a meeting held on the
1st of March, 2001.



/s/ Rachel M. Pernia
----------------------------
Rachel M. Pernia
Secretary of
Harris & Harris Group, Inc.