DEF 14A: Definitive proxy statements

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [ ]


Check the appropriate box:

[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e) (2)
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S)
240.14a-12


HARRIS & HARRIS GROUP, INC.
_________________________________________________________________
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)

Payment of Filing Fee (Check the appropriate box):

[ X ] No fee required

[ ] Fee computed on table below per Exchange Act Rules 14-a-
6(i) (1) and 0-11.
1) Title of each class of securities to which transaction
applies:

___________________________________________________________

2) Aggregate number of securities to which transaction
applies:

___________________________________________________________

3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11:1

___________________________________________________________


4) Proposed maximum aggregate value of transaction:

___________________________________________________________

5) Total fee paid:

___________________________________________________________
/1/ Set forth the amount on which the filing fee is
calculated and state how it was determined.

[ ] Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11 (a) (2) and identify the
filing for which the offsetting fee was paid
previously. Identify the previous filing for which the
offsetting fee was paid previously. Identify the
previous filing by registration statement number, or
the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

___________________________________________________________

2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

___________________________________________________________

4) Date Filed:

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HARRIS & HARRIS GROUP, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held April 24, 2001

TO THE SHAREHOLDERS OF HARRIS & HARRIS GROUP, INC.:

NOTICE IS HEREBY GIVEN that the 2001 annual meeting of the
shareholders of Harris & Harris Group, Inc. (the "Company") will be
held on Tuesday, April 24, at 2:00 P.M., local time, at 780 Third
Avenue (between 48th and 49th), New York, New York 10017. This
meeting has been called by the Board of Directors of the Company,
and this notice is being issued at its direction. It has called
this meeting for the following purposes:

1. To elect eight (8) directors of the Company to hold
office until the next annual meeting of shareholders or
until their respective successors have been duly elected
and qualified.

2. To ratify, confirm and approve the Board of Directors'
selection of Arthur Andersen LLP as the Company's
independent public accountant for its fiscal year ending
December 31, 2001.

3. To transact such other business as may properly come
before the meeting or any adjournment or adjournments
thereof.

Holders of common stock of record, at the close of business
on March 15, 2001 will be entitled to vote at the meeting.

Whether or not you expect to be present in person at the
meeting, please sign and date the accompanying proxy and return it
promptly in the enclosed business reply envelope, which requires
no postage if mailed in the United States.

By Order of the Board of Directors

March 26, 2001 Rachel M. Pernia
New York, New York Secretary


IMPORTANT: PLEASE MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE. THE MEETING DATE IS APRIL 24, 2001.

PROXY STATEMENT

HARRIS & HARRIS GROUP, INC.
Annual Meeting of Shareholders
April 24, 2001

GENERAL INFORMATION

This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Harris &
Harris Group, Inc. (the "Company") to be voted at the 2001 Annual
Meeting of Shareholders (the "Annual Meeting") to be held on April
24, 2001 and at any adjournment thereof.

The Annual Meeting will be held on Tuesday, April 24, 2001
at 2:00 P.M., local time, at 780 Third Avenue, New York, New York
10017. At the Annual Meeting, shareholders of the Company will be
asked to elect eight directors to serve on the Board of Directors
of the Company and to hold office until the next Annual Meeting and
to vote on the other matters stated in the accompanying Notice and
described in more detail in this proxy statement.

The mailing address of the principal executive office of the
Company is One Rockefeller Plaza, Rockefeller Center, New York,
New York 10020 (telephone 212-332-3600). The enclosed proxy card
and this proxy statement and annual report on Form 10K are being
first transmitted on or about March 26, 2001 to shareholders of
the Company.

The Board of Directors has fixed the close of business on
March 15, 2001 as the record date for the determination of
shareholders of the Company entitled to receive notice of, and
to vote at, the Annual Meeting. At the close of business on the
record date, an aggregate of 9,064,231 shares of common stock were
issued and outstanding. Each such share will be entitled to one
vote on each matter to be voted upon at the Annual Meeting. The
presence, in person or by proxy, of the holders of a majority of
such outstanding shares is necessary to constitute a quorum for
the transaction of business at the Annual Meeting.

Solicitation and Revocation; Vote Required

All properly executed proxies received prior to the Annual
Meeting will be voted at the meeting in accordance with the
instructions marked thereon or otherwise as provided therein.
Unless instructions to the contrary are marked, shares represented
by the proxies will be voted "FOR" all the proposals.

Any proxy given pursuant to this solicitation may be revoked
by a shareholder at any time, before it is exercised, by written
notification delivered to the Secretary of the Company, by voting
in person at the Annual Meeting, or by executing another proxy
bearing a later date. If your shares are held for your account
by a broker, bank or other institution or nominee, you may vote
such shares at the Annual Meeting only if you obtain proper written
authority from your institution or nominee that you present at the
Annual Meeting.

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Approval of any of the matters submitted for stockholder
approval requires that a quorum be present. The presence, in person
or by proxy, of at least a majority of the total number of outstanding
shares of common stock entitled to vote is necessary to constitute a
quorum. Abstentions and broker non-votes will be counted as shares
present at the Annual Meeting for purposes of determining the existence
of a quorum. Broker non-votes are proxies received by the Company from
brokers or nominees when the broker or nominee has neither received
instructions from the beneficial owner or other persons entitled to
vote nor has discretionary power to vote on a particular matter.

For the election of directors, each nominee must receive the
affirmative vote of a plurality of the votes cast by the shares of
common stock present and in person or represented by proxy and entitled
to vote. Votes that are withheld, abstentions and broker non-votes
will not be included in determining the number of votes cast, and will
have no effect on the election of directors. Except with respect to
the election of directors, each of the matters being submitted to
stockholder vote pursuant to the Notice of Annual Meeting will be
approved if a quorum is present in person or by proxy and a majority
of the votes cast on a particular matter are cast in favor of that
matter. For such purposes, abstentions and broker non-votes will not
be counted as votes cast or as votes entitled to be cast on the matter
and will have no affect on the result of the vote.

Proxies are being solicited by the Company. Proxies will be
solicited by mail. All expenses of preparing, printing, mailing,
and delivering proxies and all materials used in the solicitation
of proxies will be borne by the Company. They may also be solicited
by officers and regular employees of the Company personally, by
telephone or otherwise, but these persons will not be specifically
compensated for such services. Banks, brokers, nominees, and other
custodians and fiduciaries will be reimbursed for their reasonable
out-of-pocket expenses in forwarding solicitation material to their
principals, the beneficial owners of common stock of the Company. It
is estimated that those costs will be nominal.

ELECTION OF DIRECTORS
(Proposal No. 1)

The eight nominees listed below, all of whom currently serve as
directors, have been nominated to serve as directors of the Company
until the next Annual Meeting or until their respective successors
are duly elected and qualified. Although it is not anticipated that
any of the nominees will be unable or unwilling to serve, in the
unexpected event that any such nominees should become unable or decline
to serve, it is intended that votes will be cast for substitute nominees
designated by the present Board of Directors of the Company.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE "FOR" ALL THE NOMINEES.

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NOMINEES

Certain information, as of March 7, 2001, with respect to each
of the eight nominees for election at the Annual Meeting is set forth
below, including their names, ages and a brief description of their
recent business experience, including present occupations and
employment, certain directorships held by each and the year in which
each became a director of the Company. All nominees are currently
directors of the Company.

Directors

Dr. C. Wayne Bardin, age 66, was elected to the Company's Board
of Directors in December 1994. He is currently President of Thyreos
Corp., a privately held, start-up pharmaceutical company. From 1978
through 1996, Dr. Bardin was Vice President of The Population Council.
His recent professional appointments have included: Professor of
Medicine, Chief of the Division of Endocrinology, The Milton S. Hershey
Medical Center of Pennsylvania State University; and Senior
Investigator, Endocrinology Branch, National Cancer Institute. Dr.
Bardin also serves as a consultant to several pharmaceutical companies.
He has directed basic and clinical research leading to over 500
publications and patents. He has negotiated 15 licensing and
manufacturing agreements. He has directed clinical R&D under 18
investigational new drug applications filed with the U.S. FDA. Dr.
Bardin has been appointed to the editorial boards of 15 journals. He
has also served on national and international committees and boards for
National Institute of Health, World Health Organization, The Ford
Foundation, and numerous scientific societies. Dr. Bardin received a
B.A. from Rice University; an M.S. and M.D. from Baylor University and a
Doctor Honoris Causa from the University of Caen, the University of
Paris, and the University of Helsinki.

Dr. Phillip A. Bauman, age 45, was elected to the Company's Board
of Directors in February 1998. Dr. Bauman is an orthopedic surgeon
who is in practice in New York City and has held an academic appointment
at Columbia University since 1988. He is a principal and Vice President
of Orthopedic Associates of New York since 1994. He holds bachelor's
and master's degrees in biology from Harvard University and a medical
degree from Columbia University. Dr. Bauman was elected a fellow of
the American Academy of Orthopedic Surgeons in 1991, is affiliated with
the New York Academy of Medicine and is on the advisory board of a
medical research foundation.

G. Morgan Browne, age 66, was elected to the Company's Board of
Directors in June 1992. Since January 1, 2001, Mr. Browne has been
the Chief Financial Officer and from 1985-2000 was the Administrative
Director of the Cold Spring Harbor Laboratory, a private not-for-profit
institution that conducts research and education programs in the fields
of molecular biology and genetics. In prior years, he was active in
the management of numerous scientifically based companies as an officer,
as an individual consultant and as an associate of Laurent Oppenheim
Associates, Industrial Management Consultants. He is a director of
OSI Pharmaceuticals, Inc. (a publicly held company principally engaged
in drug discovery based on gene transcription), a founding director
of the New York Biotechnology Association, and a founding director of
the Long Island Research Institute. He is a graduate of Yale University
and attended New York University Graduate School of Business.

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Harry E. Ekblom, age 73, was elected to the Company's Board of
Directors in 1984. Mr. Ekblom is a retired investor. He is former
Chairman and CEO of European American Bank and former Vice Chairman
of A.T. Hudson & Co. Inc. Mr. Ekblom is a director of The Commercial
Bank of New York. He is a graduate of Columbia College and the New
York University School of Law, a member of the New York Bar, and
holds honorary degrees from Hofstra University and Pace University.

Dugald A. Fletcher, age 71, was elected to the Company's Board of
Directors in June 1996. Mr. Fletcher has been President of Fletcher &
Company, Inc., a management consulting firm, for the past five years.
He was also Chairman of Binnings Building Products Company, Inc. until
the end of 1997, and is an Advisor to the Gabelli Growth Fund and a
Director of the Gabelli Convertible Securities Fund. His previous
business appointments include: advisor to Gabelli/Rosenthal LP, a
leveraged buyout fund; Chairman of Keller Industries (building and
consumer products); Director and investor in Mid-Atlantic Coca-Cola
Bottling Company; Senior Vice President of Booz-Allen & Hamilton and
President of Booz-Allen Acquisition Services; Executive Vice President
and a Director of Paine Webber, Inc.; and President of Baker, Weeks
and Co., Inc., a New York Stock Exchange member firm. He is a graduate
of Harvard College and of Harvard Business School.

*Charles E. Harris, age 58, has been a director of the Company and
Chairman of its Board of Directors since April 1984 and Chief Compliance
Officer from February 1997 to February 2001. He has served as Chief
Executive Officer of the Company since July 1984. He has served as a
director, trustee, control person, chairman and/or chief executive
officer of various publicly and privately held corporations and not-for-
profit institutions. Prior to 1984, he was Chairman of Wood, Struthers
and Winthrop Management Corp., the investment advisory subsidiary of
Donaldson, Lufkin & Jenrette. He was a member of the Advisory Panel
for the Congressional Office of Technology Assessment. He is a member
of the New York Society of Security Analysts. Among his eleemosynary
activities, he is currently a Trustee of, and a member of the
President's Council of, the Cold Spring Harbor Laboratory; a Trustee
of the Nidus Center, a life sciences business incubator in St. Louis,
Missouri; and a life-sustaining fellow and a member of the President's
Council of the Massachusetts Institute of Technology. He is a graduate
of Princeton University (A.B., 1964) and Columbia University Graduate
School of Business (M.B.A., 1967).

Glenn E. Mayer, age 75, has been a director of the Company
since 1981. In December 1991, Mr. Mayer joined, as a Senior Vice
President, the Investment Banking division of Reich & Company.
Reich & Co. is now a division of Fahnestock & Company, Inc., a member
firm of the New York Stock Exchange. For 15 years prior to that, he
was employed by Jesup & Lamont Securities Co. and its successor firms,
in the Corporate Finance department. Mr. Mayer is a graduate of
Indiana University.


* Charles E. Harris is an "interested person" of the Company, as
defined in the Investment Company Act of 1940, as a beneficial owner
of more than five percent of the Company's stock, as a control person
and as an officer of the Company.

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James E. Roberts, age 55, was elected to the Company's Board of
Directors in June 1995. Since October 1999, Mr. Roberts has been
Chairman and Chief Executive Officer of The Insurance Corporation of
New York, Dakota Specialty Insurance Company, and ReCor Insurance
Company Inc., all of which are members of Trenwick Group, Ltd. In
addition, since March 2000, Mr. Roberts has been Chairman of and Chief
Executive Officer of Chartwell Insurance Company, also a member of
Trenwick Group, Ltd. From October 1999 to March 2000, he served as
Vice Chairman of Chartwell Reinsurance Company. Prior to assuming
his present positions, Mr. Roberts was Vice Chairman of Trenwick
America Reinsurance Corporation from May 1995 to March 2000. Mr.
Roberts is a graduate of Cornell University.


Meetings of the Board of Directors and Committees

In 2000, there were six meetings of the Board of Directors of the
Company, and the Board acted 17 times by unanimous written consent.
No incumbent director attended fewer than 75 percent of the aggregate
of Board of Directors' and applicable committee meetings held in 2000
(during the periods that they so served).

The Company's Board of Directors has five committees comprised of
the following members:

Committees


Executive Audit Compensation

Charles E. Harris* Harry E. Ekblom* James E. Roberts*
Dr. C. Wayne Bardin Dr. Phillip A. Bauman Harry E. Ekblom
Glenn E. Mayer Glenn E. Mayer Dugald Fletcher
James E. Roberts


Nominating Investment and Valuation

G. Morgan Browne* Dugald A. Fletcher*
Harry E. Ekblom G. Morgan Browne
Dr. Phillip A. Bauman James E. Roberts
Dr. C. Wayne Bardin

* Chairman of the Committee

The Executive Committee meets from time to time between regular
meetings of the Board of Directors and exercises the authority of the
Board to the extent provided by law. The Executive Committee did not
meet as a separate committee and acted once by unanimous written
consent in 2000.

The Audit Committee annually recommends to the Board of Directors
the appointment of the Company's independent public accountant,
discusses and reviews the scope and fees of the prospective annual
audit, reviews the results thereof with the independent public
accountant, reviews and approves non-audit services of the independent
public accountant, reviews compliance with existing major accounting and
financial policies relative to the adequacy of the Company's internal
accounting controls, reviews compliance with federal and state laws
relating to accounting practices and reviews and approves transactions,
if any, with affiliated parties.

The members of the Audit Committee are Harry E. Ekblom, Dr.
Phillip A. Bauman and Glenn E. Mayer, and such committee members are

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considered independent under the rules promulgated by the Nasdaq Stock
Market. The Audit Committee met once and acted once by unanimous
written consent in 2000.

The Audit Committee operates pursuant to a charter approved by
the Company's Board of Directors. The Audit Committee Charter sets
out the responsibilities, authority and duties of the Audit Committee.
A copy of the Audit Committee Charter is attached to this Proxy
Statements as Appendix A.

The Compensation Committee has the full power and authority of
the Board with respect to all matters pertaining to the remuneration
of the Company's officers and employees. The Compensation Committee
did not meet as a separate committee in 2000.

The Nominating Committee acts as an advisory committee to the
Board by making recommendations to the Board of potential new directors,
committee members and officers of the Company to fill vacancies or
otherwise be appointed to corporate offices. The Board shall ratify,
approve or otherwise confirm the Nominating Committee's selections and
appointments to render them effective. The Nominating Committee did
not meet as a separate committee in 2000. On February 13, 2001, the
Board of Directors acted as the Nominating Committee. See "Submission
of Shareholder Proposals."

The Investment and Valuation Committee has the full power and
authority of the Board in reviewing and approving the valuation of
the Company's assets for reporting purposes pursuant to the Company's
Asset Valuation Policy Guidelines that were established and approved
by the Board of Directors. The Investment and Valuation Committee
met four times in 2000.

Audit Committee Report

The Audit Committee of the Board of Directors is responsible for
monitoring the integrity of the Company's consolidated financial
statements, its system of internal controls and the independence and
performance of its independent auditors. The Audit Committee also
recommends to the Board of Directors, subject to shareholder
ratification, the selection of the Company's independent accountant.

Management is responsible for the financial reporting process,
including the system of internal control, and for the preparation of
consolidated financial statements in accordance with accounting
principles generally accepted in the United States. The Company's
independent accountant is responsible for auditing those financial
statements. The Audit Committee's responsibility is to monitor and
review these processes. However, it is not professionally engaged in
the practice of accounting or auditing and is not expert in the field
of accounting or auditing, including with respect to auditor
independence. The Audit Committee relies without independent
verification on the information provided to it and on the
representations made by management and the independent accountant.

In this context, the Audit Committee had one meeting during fiscal
2000. The meeting was designed, among other things, to facilitate and

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encourage communications among the Audit Committee, management and the
Company's independent accountant, Arthur Andersen LLP. The Audit
Committee discussed with the Company's independent accountant the
overall scope and plans for the audit. The Audit Committee met with
the independent accountant, with and without management present, to
discuss the results of their examination and the evaluation of the
Company's internal controls.

The Audit Committee has reviewed and discussed the audited
consolidated financial statements for the fiscal year ended December
31, 2000 with management and Arthur Andersen LLP.

The Audit Committee also discussed with the independent accountant
matters required to be discussed with audit committees under generally
accepted auditing standards, including, among other things, matters
related to the conduct of the audit of the Company's consolidated
financial statements and the matters required to be discussed by the
Statement on Auditing Standards No. 61, as amended (Communications
with Audit Committees).

The Company's independent accountant also provided to the Audit
Committee the written disclosures and the letter required by
Independence Standards Board Standards No. 1 (Independence Discussions
with Audit Committees), and it discussed with the independent accountant
its independence from the Company. When considering Arthur Andersen
LLP's independence, the Audit Committee considered whether their
provision of services to the Company beyond those rendered in connection
with the audit and review of the Company's consolidated financial
statements was compatible with maintaining their independence. The
Audit Committee reviewed, among other things, the amounts of fees paid
to Arthur Andersen LLP for audit and non-audit services.

Based on their review and these meetings, discussions and reports,
and subject to the limitations on the Audit Committee's role and
responsibilities referred to above and in the Audit Committee Charter,
the Audit Committee recommended to the Board of Directors that the
Company's audited consolidated financial statements for the fiscal
year ended December 31, 2000 be included in the Company's Annual Report
on Form 10-K. The Audit Committee has also recommended the selection of
the Company's independent accountant, and based on its recommendation,
the board has selected Arthur Andersen LLP as the Company's independent
accountant for the fiscal year ended December 31, 2001, subject to the
shareholder ratification.

Harry E. Ekblom
Dr. Phillip A. Bauman
Glenn E. Mayer

Security ownership of Directors and Executive Officers and other
principal holders of the Company's voting securities

The following table sets forth certain information with respect
to beneficial ownership (as that term is defined in the rules and
regulations of the Securities and Exchange Commission) of the
Company's common stock as of March 7, 2001 by (1) each person who
is known by the Company to be the beneficial owner of more than

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five percent of the outstanding common stock, (2) each director of
the Company, (3) each current executive officer listed in the Summary
Compensation Table and (4) all directors and executive officers of the
Company as a group. Except as otherwise indicated, to the Company's
knowledge, all shares are beneficially owned and investment and voting
power is held as stated by the persons named as owners. At this time,
the Company is unaware of any shareholder owning five percent or more
of the outstanding shares of common stock other than the ones noted
below.



Number of Shares
Name and Address of of Common Stock Percent of
Beneficial Owner Owned Class

Charles E. and Susan T. Harris
One Rockefeller Plaza, Suite 1430 791,919 (1) 8.74%
New York, NY 10020

Equity Assets Management, Inc.
2155 Resort Drive, Suite 108 526,083 (2) 5.80%
Steamboat Springs, CO 80487

Dr. C. Wayne Bardin 12,861 (3) *

Dr. Phillip A. Bauman 15,236 (4) *

G. Morgan Browne 25,629 *

Harry E. Ekblom 11,325 *

Dugald A. Fletcher 5,908 *

Glenn E. Mayer 83,000 (5) *

Mel P. Melsheimer 10,000 *

James E. Roberts 9,235 *

Rachel M. Pernia -- *

All Directors and Executive
Officers as a group 965,113 10.65%
(10 persons)

* Less than one percent of issued and outstanding stock.

(1) Includes 783,419 shares for which Mrs. Harris has sole power to
vote and dispose of; 8,500 shares for which Mr. Harris has sole
power to vote and dispose of.

(2) Represents shares owned by Equity Assets Management, Inc., pursuant
to Schedule 13G filed on February 14, 2001. Equity Assets
Management, Inc. is a registered investment advisor that holds these
shares for investment purposes only on behalf of various clients.

(3) Includes 2,840 shares owned by Bardin LLC for the Bardin LLC
Profit-Sharing Keogh.

(4) Includes 5,637 shares owned by Ms. Milbry C. Polk, Dr. Bauman's
wife.

(5) Includes 2,000 shares owned by Mrs. Mayer.

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Executive Officers

Set forth below is certain information with respect to the
executive officers of the Company:

Charles E. Harris, Chairman and Chief Executive Officer. For
additional information about Mr. Harris, please see the Directors'
biographical information section.

Mel P. Melsheimer, age 61, has served as President, Chief
Operating Officer and Chief Financial Officer since February 1997
and he has been Chief Compliance Officer since February 2001.
Previously, Harris & Harris Group utilized Mr. Melsheimer as a nearly
full-time consultant or officer of an investee company since March
1994. Mr. Melsheimer has had extensive entrepreneurial experience
as well as senior operational and financial management responsibilities
with publicly and privately owned companies. From November 1992 to
February 1994, he served as Executive Vice President, Chief Operating
Officer and Secretary of Dairy Holdings, Inc. From June 1991 to
August 1992, he served as President and Chief Executive Officer of
Land-O-Sun Dairies as well as Executive Vice President of Finevest
Foods, Inc. From March 1989 to May 1991, he served as Vice President,
Chief Financial Officer and Treasurer of Finevest Foods, Inc. From
January 1984 to February 1989, he served as Chairman, Chief Executive
Officer and Founder of PHX Pacific, Inc. and President and Chief
Executive Officer of MPM Capital Corp. From January 1981 to
December 1983, he served as Executive Vice President and Chief
Operating Officer of AZL Resources. From November 1975 to December
1980, he served as Executive Vice President and Chief Financial Officer
of AZL Resources. From January 1968 to November 1975, he served in a
financial capacity before becoming Vice President and Chief Financial
Officer of Pepsi-Cola Company, PepsiCo, Inc. in 1972. He was graduated
from the University of Southern California (M.B.A.) and Occidental
College (B.A., Economics).

Rachel M. Pernia, age 42, has served since January 1992 as a Vice
President and Controller of the Company, as Treasurer since November
1994 and Secretary since September 1996. She was graduated from
Rutgers University (B.A., 1981; M.B.A., 2000) and is a certified public
accountant.

Executive Compensation

Summary Compensation Table

The following table sets forth a summary for each of the last
three years of the cash and non-cash compensation awarded to, earned
by, or paid to the Chief Executive Officer of the Company and the other
executive officers of the Company, whose individual remuneration
exceeded $60,000 for the year ended December 31, 2000.

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Long Term
Compensation
Annual Compensation Awards
------------------------- ------------
Other All
Name and Annual Securities Other
Principal Compen- Underlying Compen-
Postion Year Salary Bonus sation Options sation
- ---------- ---- ------- --------- ------- ---------- -------
($) ($)(1) ($)(2) (3) ($)(4)

Charles E. 2000 208,315 1,603,137 43,267 - - 224,805
Harris 1999 202,980 785,031 40,674 - - 63,422
Chairman, 1998 200,000 - - 37,758 - - 15,990
CEO (5)

Mel P. 2000 235,727 492,101 - - - - 10,500
Melsheimer 1999 229,690 240,974 - - - - 10,000
President, 1998 223,000 - - - - - - 10,000
COO, CFO
& Chief
Compliance
Officer

Rachel M. 2000 92,494 177,170 - - - - 10,500
Pernia 1999 90,092 86,758 - - - - 10,000
Controller, 1998 86,720 - - - - - - 10,000
Treasurer &
Secretary


(1) For 1999, these amounts represent the actual amounts earned
for the year ended December 31, 1999 and paid out in 2000.
For 2000, these amounts represent the approximate amounts
earned for the year ended December 31, 2000; 90 percent was
paid in February 2001 and the remaining 10 percent will be
paid upon the completion and filing of the Company's
federal tax return. The Harris & Harris Group Employee
Profit-Sharing Plan is described in Employee Benefits.

(2) Other than Mr. Harris, amounts of "Other Annual
Compensation" earned by the named executive officers for
the periods presented did not meet the threshold reporting
requirements.

(3) The Company's 1988 Stock Option Plan and all outstanding
stock options were canceled as of December 31, 1997. As a
substitution for the 1988 Stock Option Plan, the Company
adopted the 1998 Harris & Harris Group, Inc. Employee
Profit-Sharing Plan.

(4) Except for Mr. Harris's "All Other Compensation," the
amounts reported represent the Company's contributions on
behalf of the named executive to the Harris & Harris Group,
Inc. 401(k) Plan described below. Mr. Harris's 2000 "All
Other Compensation" consists of: $10,500 401(k) Plan
employer contribution; $208,315 for his 2000 SERP
contribution; and $5,990 in life insurance premiums for the
benefit of his beneficiaries.

Except for Mr. Harris, amounts reported represent the
Company's contributions on behalf of the named executive to
the Harris & Harris Group, Inc. 401(k) Plan described below.

(5) Mr. Harris has an employment agreement which is discussed
below under "Employment Agreement."


Employee Benefits

The Company's 1988 Stock Option Plan and all outstanding stock
options were canceled as of December 31, 1997. As a substitution for
the 1988 Stock Option Plan, the Company adopted an employee profit-
sharing plan.

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Employee Profit-Sharing Plan

As of January 1, 1998, the Company began implementing the Harris
& Harris Group, Inc. Employee Profit-Sharing Plan (the "1998 Plan")
that provided for profit sharing equal to 20 percent of the net realized
income of the Company, less the nonqualifying gain, if any. The 1998
Plan was terminated by the Company as of December 31, 1999, subject to
the payment of any amounts owed on the 1999 realized gains under the
1998 Plan. In March 2000, the Company paid out, under the 1998 Plan,
90 percent of the profit sharing on the 1999 realized gains of
approximately $1,024,696; the remaining 10 percent or approximately
$113,855 was paid out in September 2000, upon the completion and filing
of the Company's 1999 federal tax return. See "Summary Compensation
Table."

As of January 1, 2000, the Company implemented the Harris &
Harris Group, Inc. Employee Profit-Sharing Plan (the "Plan") that
provides for profit sharing equal to 20 percent of the net realized
income of the Company as reflected on the Consolidated Statements of
Operations of the Company for such year, less the nonqualifying gain,
if any.

Under the Plan, net realized income of the Company includes
investment income, realized gains and losses, and operating expenses
(including taxes paid or payable by the Company), but is calculated
without regard to dividends paid or distributions made to shareholders,
payments under the Plan, unrealized gains and losses, and loss carry-
overs from other years ("Qualifying Income"). The portion of net after-
tax realized gains attributable to assets values as of September 30,
1997 is considered nonqualifying gain, which reduces Qualifying Income.

As soon as practicable following the year-end audit, the
Compensation Committee ("Committee") will determine whether, and if so
how much, Qualifying Income exists for a plan year, and 90 percent of
the Qualifying Income will be paid out to Plan participants pursuant
to the distribution percentages set forth in the Plan. The remaining
10 percent will be paid out after the Company has filed its federal
tax return for that year in which Qualifying Income exists. Currently,
the distribution amounts for each officer and employee are as follows:
Charles E. Harris, 13.790 percent; Mel P. Melsheimer, 4.233 percent;
Rachel M. Pernia, 1.524 percent; and Jacqueline M. Matthews, 0.453
percent. If a participant leaves the Company for other than cause,
the amount earned will be accrued and may subsequently be paid to such
participant.

Notwithstanding any provisions of the Plan, in no event may the
aggregate amount of all awards payable for any Plan year during which
the Company remains a "business development company" within the meaning
of 1940 Act be greater than 20 percent of the Company's "net income
after taxes" within the meaning of Section 57(n)(1)(B) of the 1940 Act.
In the event the awards exceed such amount, the awards will be reduced
pro rata.

The Plan may be modified, amended or terminated by the Committee
(subject to the approval of the Company's Board of Directors) at any
time with the stipulation that no such modification, amendment or
termination may adversely affect any participant that has not consented
to such modification, amendment or termination. Nothing in this Plan
shall preclude the Committee from, for any Plan Year subsequent to the
current Plan Year, naming additional Participants in the Plan or changing

11

the Award Percentage of any Full Participant or New Participant (subject
to the overall percentage limitations contained herein).

During 2000, the Company reversed a previously accrued profit-
sharing expense of $4,812,675, reducing the cumulative accrual under
the Plan to $3,483,241 at December 31, 2000. Approximately $1,158,170
represents a profit-sharing accrual on unrealized gains and will not be
paid out until the gains are realized. In February 2001, the Company
paid out 90 percent of the profit sharing in the amount of $2,092,564
on the 2000 realized gains; the remaining 10 percent or approximately
$232,507 will be paid out on completion and filing of the Company's 2000
federal tax return. The amounts either paid out or to be paid under the
Plan for the 2000 year are shown in the "Summary Compensation Table."

On April 26, 2000 the shareholders of the Company approved the
performance goals under the Plan in accordance with Section 162(m) of
the Internal Revenue Code of 1986 ("Code"). The Code generally provides
that a public company such as the Company may not deduct compensation
paid to its chief executive officer or to any of its four most highly
compensated officers to the extent that the compensation paid to any
such officer/employee exceeds $1 million in any tax year, unless the
payment is made upon the attainment of objective performance goals that
are approved by the Company's shareholders.

401(k) Plan

As of January 1, 1989, the Company adopted an employee benefits
program covering substantially all employees of the Company under a
401(k) Plan and Trust Agreement. As of January 1, 1999, the Company
adopted the Harris & Harris Pension Plan and Trust, a money purchase
plan that would allow the Company to stay compliant with the 401(k)
top-heavy regulations and deduction limitation regulations.
Contributions to the plan are at the discretion of the Company.
During 2000, contributions to both plans charged to operations totaled
approximately $50,000.

Medical Benefits

On June 30, 1994, the Company adopted a plan to provide medical
and health insurance for retirees, their spouses and dependents who,
at the time of their retirement, have 10 years of service with the
Company and have attained 50 years of age or have attained 45 years
of age and have 15 years of service with the Company. On February 10,
1997, the Company amended this plan to include employees who "have
seven full years of service and have attained 58 years of age." The
coverage is secondary to any government provided or subsequent employer
provided health insurance plans. Based upon actuarial estimates, the
Company provided an original reserve of $176,520 that was charged to
operations for the period ending June 30, 1994. As of December 31,
2000 the Company had a reserve of $354,840 for the plan.

Employment Agreement

On October 19, 1999, Charles E. Harris signed an Employment
Agreement with the Company (the "Employment Agreement"), which
superseded an employment agreement that was about to expire on

12

December 31, 1999. The Employment Agreement expires on December 31,
2004 ("Term"); provided, on January 1, 2000 and on each day thereafter,
the Term extends automatically by one day unless at any time the
Company or Mr. Harris, by written notice, decides not to extend the
Term, in which case the Term will expire five years from the date of
the written notice.

During the period of employment, Mr. Harris shall serve as the
Chairman and Chief Executive Officer of the Company; be responsible
for the general management of the affairs of the Company and all its
subsidiaries, reporting directly to the Board of Directors of the
Company; serve as a member of the Board for the period of which he is
and shall from time to time be elected or reelected; and serve, if
elected, as President of the Company and as an officer and director
of any subsidiary or affiliate of the Company.

Mr. Harris is to receive compensation under his Employment
Agreement in the form of base salary of $208,315 for 2000, with
automatic yearly adjustments to reflect inflation. In addition, the
Board may increase such salary, and consequently decrease it, but not
below the level provided for by the automatic adjustments described
above. Mr. Harris is also entitled to participate in the Company's
Profit-Sharing Plan as well as in all compensation or employee benefit
plans or programs, and to receive all benefits, perquisites, and
emoluments for which salaried employees are eligible. Under the
Employment Agreement, the Company is to furnish Mr. Harris with certain
perquisites which include a company car, membership in certain clubs
and up to a $5,000 annual reimbursement for personal, financial or
tax advice.

The Employment Agreement provides Mr. Harris with life insurance
for the benefit of his designated beneficiaries in the amount of
$2,000,000; provides reimbursement for uninsured medical expenses,
not to exceed $10,000 per annum, adjusted for inflation, over the
period of the contract; provides Mr. Harris and spouse with long-term
care insurance; and disability insurance in the amount of 100 percent
of his base salary. These benefits are for the term of the contract.

The Employment Agreement provides severance pay in the event of
termination without cause or by constructive discharge as discussed
below and also provides for certain death benefits payable to the
surviving spouse equal to the executive's base salary for a period of
two years.

In addition, Mr. Harris is entitled to receive severance pay
pursuant to the severance compensation agreement that he entered into
with the Company, effective August 15, 1990. The severance compensation
agreement provides that if, following a change in control of the
Company, as defined in the agreement, such individual's employment is
terminated by the Company without cause or by the executive within one
year of such change in control, the individual shall be entitled to
receive compensation in a lump sum payment equal to 2.99 times the
individual's average annualized compensation and payment of other
welfare benefits. If Mr. Harris's termination is without cause or
is a constructive discharge, the amount payable under the Employment
Agreement will be reduced by the amounts paid pursuant to the severance
compensation agreement.

13
SERP

The Employment Agreement provides for the Company to adopt a
supplemental executive retirement plan (the "SERP") for the benefit of
Mr. Harris. Under the SERP, the Company will cause an amount equal to
one-twelfth of the Mr. Harris's current base salary to be credited each
month (a "Monthly Credit") to a special account maintained for this
purpose on the books of the Company for the benefit of Mr. Harris (the
"SERP Account"). The amounts credited to the SERP Account will be
deemed invested or reinvested in such mutual funds or U.S. Government
securities as determined by Mr. Harris. The SERP Account will be
credited and debited to reflect the deemed investment returns, losses
and expenses attributed to such deemed investments and reinvestments.
Mr. Harris's benefit under the SERP will equal the balance in the SERP
Account and such benefit will always be 100 percent vested (i.e., not
forfeitable). Mr. Harris will determine the form and timing of the
distribution of the balance in the SERP Account; provided, however,
in the event of the termination, the balance in the SERP Account will
be distributed to Mr. Harris or his beneficiary, as the case may be,
in a lump-sum payment within 30 days of such termination. The Company
established a rabbi trust for the purpose of accumulating funds to
satisfy the obligations incurred by the Company under the SERP. During
2000, the Company accrued $208,315 in accordance with this provision of
the SERP increasing the cumulative accrual to $265,183 as of December
31, 2000. Mr. Harris's rights to benefits pursuant to this SERP will
be no greater than those of a general creditor of the Company.

Compensation of Directors

Pension Or
Retirement
Benefits Estimated
Accrued As Annual Total
Part of Benefits Compensation
Name of Aggregate Company's Upon Paid to
Director Compensation Expenses Retirement Directors

Dr. C.
Wayne Bardin $11,000 - - - - $11,000

Dr. Phillip
A. Bauman $13,000 - - - - $13,000


G. Morgan
Browne $16,273 (1) - - - - $16,273

Harry E.
Ekblom $14,886 (2) - - - - $14,886

Dugald A.
Fletcher $16,000 - - - - $16,000

Glenn E.
Mayer $13,000 - - - - $13,000

James E.
Roberts $16,310 (3) - - - - $16,310

(1) Includes $273 paid to Mr. Browne to reimburse him for
travel expenses to attend Board meetings.

(2) Includes $1,886 paid to Mr. Ekblom to reimburse him for
travel expenses to attend Board meetings.

(3) Includes $310 paid to Mr. Roberts to reimburse him for
travel expenses to attend Board meetings.

Effective June 18, 1998, directors who were not officers of the
Company received $1,000 for each meeting of the Board of Directors and
$1,000 for each committee meeting they attended in addition to a monthly
retainer of $500. Prior to June 18, 1998, the directors were paid $500
for Committee meetings and no monthly retainer. The Company also
reimburses its directors for travel, lodging and related expenses they

14

incur in attending Board and committee meetings. The total compensation
and reimbursement for expenses paid to all directors in 2000 was $100,469.

In 1998, the Board of Directors approved that effective January 1,
1998, 50 percent of all Director fees be used to purchase Company common
stock from the Company. However, effective on March 1, 1999, the
Directors began purchasing the Company's common stock in the open
market, rather than from the Company. During 1999 and 2000, the D
irectors bought a total of 23,489 and 15,818 shares in the open market,
respectively.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more
than 10 percent of the Company's common stock to file reports (including
a year-end report) of ownership and changes in ownership with the
Securities and Exchange Commission (the "SEC") and to furnish the
Company with copies of all reports filed.

Based solely on a review of the forms furnished to the Company,
or written representations from certain reporting persons, the Company
believes that all persons who were subject to Section 16(a) in 2000
complied with the filing requirements.


PROPOSAL TO RATIFY, CONFIRM AND APPROVE THE BOARD OF DIRECTORS'
SELECTION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANT FOR ITS FISCAL YEAR ENDING DECEMBER 31, 2001
(Proposal No. 2)

Arthur Andersen LLP has been selected as the independent accountant
to audit the accounts of the Company for and during the fiscal year
ending December 31, 2001 by a majority of the Company's Board of
Directors, including a majority of the Directors who are not interested
persons of the Company, by vote cast. This selection is subject to
ratification or rejection by the stockholders of the Company. Arthur
Andersen LLP has advised the Company that neither the firm nor any
present member or associate of it has any material financial interest,
direct or indirect, in the Company or its subsidiaries.

Audit Fees

The aggregate fees for professional services rendered by Arthur
Andersen LLP in connection with their annual audit of the Company's
consolidated financial statements and reviews of the consolidated
financial statements included in the Company's quarterly reports on
Form 10-Q for the fiscal year ended December 31, 2000 was approximately
$63,000.

Other Fees

The aggregate fees for all other services rendered by Arthur
Andersen LLP, including the review of the Company's tax returns, for
the fiscal year ended December 31, 2000 was approximately $13,500.

15

Compatibility

The Audit Committee has reviewed the above services and considers
them compatible with maintaining the auditor's independence.

Unless marked to the contrary, the shares represented by the
enclosed proxy card will be voted for ratification of the appointment
of Arthur Andersen LLP as the independent public accountant of the Company.

A representative of Arthur Andersen LLP is not expected to be
present at the meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL TO
RATIFY, CONFIRM AND APPROVE THE BOARD OF DIRECTORS' SELECTION OF
ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANT FOR
ITS FISCAL YEAR ENDING DECEMBER 31, 2001.


OTHER BUSINESS

The Board of Directors does not intend to bring any other matters
before the Annual Meeting and, at the date of mailing of this proxy
statement, has not been informed of any matter that others may bring
before the Annual Meeting. However, if any other matters properly
come before the Annual Meeting, it is the intention of the persons
named in the accompanying proxy to vote such proxy in accordance with
their judgment on such matters.

SUBMISSION OF SHAREHOLDER PROPOSALS

Any shareholder proposals intended to be presented for inclusion
in the Company's proxy statement and form of proxy for the next annual
meeting of shareholders to be held in 2002 must be received in writing
by the Secretary of the Company at Harris & Harris Group, Inc., One
Rockefeller Plaza, Rockefeller Center, New York, New York 10020 no
later than November 26, 2002, in order for such proposals to be
considered for inclusion in the proxy statement and proxy relating to
the 2002 annual meeting of shareholders. Submission of a proposal
does not guarantee inclusion in the proxy statement, as the requirements
of certain federal laws and regulations must be met by such proposals.

Under the Company's Bylaws, nominations for director may be made
only by the Board or the Nominating Committee, or by a stockholder
entitled to vote who has delivered written notice to the Secretary of
the Company (containing certain information specified in the Bylaws)
not less than 90 days nor more than 120 days prior to the anniversary
of the date of the immediately preceding annual meeting of shareholders.
The Bylaws also provide that no business may be brought before an annual
meeting of the stockholders except as specified in the notice of the
meeting or as otherwise properly brought before the meeting by or at
the direction of the Board or by a stockholder entitled to vote who
has delivered written notice to the Secretary of the Company (containing
certain information specified in the Bylaws) not less than 90 days nor

16

more than 120 days prior to the anniversary of the date of the
immediately preceding annual meeting of shareholders.

Rule 14a-4 of the Securities and Exchange Commission's proxy
rules allows the Company to use discretionary voting authority to vote
on matters coming before an annual meeting of stockholders, if the
Company does not have notice of the matter at least 45 days before the
anniversary of the date on which the Company first mailed its proxy
materials for the prior year's annual meeting of stockholders or the
date specified by the advance notice provision in the Company's Bylaws.
The Company's Bylaws contain such an advance notice provision as
described above. For the Company's Annual Meeting of Stockholders
expected to be held on April 24, 2002, stockholders must submit such
written notice to the Secretary of the Company on or before January 25,
2002.

A copy of the full text of the Bylaw provisions discussed above may
be obtained by writing to the Secretary of the Company.
------------------------
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K (EXCLUDING EXHIBITS)
FOR THE YEAR ENDED DECEMBER 31, 2000, WHICH IS REQUIRED TO BE FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, WILL BE MADE AVAILABLE TO
STOCKHOLDERS TO WHOM THIS PROXY STATEMENT IS MAILED, WITHOUT CHARGE,
UPON WRITTEN REQUEST TO THE OFFICE OF THE TREASURER OF HARRIS & HARRIS
GROUP, INC., ONE ROCKEFELLER PLAZA, SUITE 1430, NEW YORK, NY 10020.

By Order of the Board of Directors
New York, New York Rachel M. Pernia
March 26, 2001 Secretary

17

EXHIBIT A


CHARTER
of the AUDIT COMMITTEE
of the BOARD of DIRECTORS
of
Harris & Harris Group, Inc.

The Board of Directors (the "Board") of Harris & Harris Group,
Inc. (the "Corporation") has determined that the Audit Committee of the
Board shall assist the Board in fulfilling certain of the Board's
oversight responsibilities. The Board hereby adopts this charter to
establish the governing principles of the Audit Committee.

I. Role of the Audit Committee

The role of the Audit Committee is to act on behalf of the Board in
fulfilling the following responsibilities of the Board:

A. To oversee all material aspects of the Corporation's reporting,
internal control and audit functions, except those that are
specifically related to the responsibilities of another committee
of the Board;

B. To monitor the independence and performance of the Corporation's
independent accountants; and

C. To provide a means for open communication among the Corporation's
independent accountants, financial and senior management and the
Board.

While the Audit Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Audit Committee to plan
or conduct audits or to determine that the Corporation's financial
statements are complete and accurate or are in accordance with generally
accepted accounting principles. The responsibility to plan and conduct
audits is that of the Corporation's independent accountants. The
Corporation's management has the responsibility to determine that the
Corporation's financial statements are complete and accurate and in
accordance with generally accepted accounting principles. Nor is it the
duty of the Audit Committee to assure the Corporation's compliance with
laws and regulations. The primary responsibility for these matters also
rests with the Corporation's management.

II. Composition of the Audit Committee

A. The Board shall designate the members of the Audit Committee at
the Board's annual organizational meeting and the members shall
serve until the next such meeting or until their successors are
designated by the Board.

18

B. The Audit Committee shall consist of at least three members by
June 14, 2001 but no more than six members who are free of any
relationship that, in the opinion of the Board, would interfere
with their exercise of independent judgment as committee members.
Committee members shall have a basic understanding of finance and
accounting and shall be able to understand financial statements.
One member of the Committee shall have accounting or related
financial management experience. In addition, the members of the
Audit Committee shall meet the requirements of the rules of the
Nasdaq Stock Market.

III. Meeting of the Audit Committee

The Audit Committee shall meet at least annually or more frequently
as circumstances may require. The Audit Committee shall be
responsible for meeting with the independent accountants at their
request to discuss the interim financial statements. The Committee
shall meet privately with the independent accountants at least
annually in a separate executive session.

IV. Responsibilities of the Audit Committee

The Audit Committee shall assist the Board in overseeing the
Corporation's financial and operating reporting practices, internal
controls and compliance with laws and regulations.

The Audit Committee shall have the responsibility with respect to:

A. The Corporation's Risks and Control Environment:

* To discuss with the Corporation's management and independent
accountants the integrity of the Corporation's financial
reporting processes and controls, particularly the controls in
areas representing significant financial and business risks;
and

* To investigate and follow up on any matters brought to its
attention within the scope of its duties.

B. The Corporation's Independent Accountants:

* To have a relationship with the independent accountants because
of the ultimate responsibility of the independent accountants
to the Board and the Audit Committee, as representatives of the
shareholders;

* To evaluate annually the effectiveness and objectivity of the
Corporation's independent accountants and recommend to the
Board the engagement or replacement of the independent
accountants;

19

* To ensure that the Audit Committee receives annually from the
Corporation's independent accountants the information about all
of the relationships between the independent accountants and
the Corporation that the independent accountants are required
to provide to the Audit Committee, to actively engage in a
dialogue with the independent accountants about any
relationships between the independent accountants and the
Corporation or any services that the independent accountants
provide or propose to provide that may impact upon the
objectivity and independence of the independent accountants
and to take, or recommend that the Board take, any appropriate
action to oversee the independence of the independent
accountants; and

* To approve the fees and other compensation paid to the
independent accountants.

C. The Corporation's Financial Reporting Process:

* To oversee the Corporation's selection of and major changes to
its accounting policies;

* To meet with the Corporation's independent accountants and
financial management both to discuss the proposed scope of the
audit and to discuss the conclusions of the audit, including
any items that the independent accountants are required by
generally accepted auditing standards to discuss with the Audit
Committee, such as, any significant changes to the Company's
accounting policies, the integrity of the Corporation's
financial reporting process and any proposed changes or
improvements in financial, accounting or auditing practices;

* To discuss with the Corporation's financial management and
independent accountants the Corporation's annual results and,
when appropriate, the interim results before they are made
public;

20

* To review and discuss with the Corporation's financial
management and independent accountants the Corporation's
audited financial statements including qualitative judgements,
appropriateness of accounting principles (old and new),
financial disclosure practices, and the degree of
aggressiveness or conservatism of accounting principles and
underlying estimates and, when appropriate, the Corporation's
interim financial statements, before they are made public;

* To recommend to the Board of Directors that the audited
financial statements be included in the Company's Annual Report
on Form 10-K; and

* To issue for public disclosure by the Corporation the report
required by the rules of the Securities and Exchange
Commission.

D. Other Matters

* To review and reassess the adequacy of this charter on an
annual basis;

* To review reports and any financial information submitted by
the Corporation to a government body or the public;

* To report to the Board the matters discussed at each meeting
of the Audit Committee;

* To keep an open line of communication with the financial and
senior management and the independent accountants and the
Board; and

* To retain, at the Corporation's expense, special legal,
accounting or other consultants or experts it deems necessary
in the performance of its duties.

21


HARRIS & HARRIS GROUP, INC.
ONE ROCKEFELLER PLAZA
NEW YORK, NY 10020


THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.

The undersigned hereby appoints CHARLES E. HARRIS and RACHEL M.
PERNIA and each of them, with full power of substitution, proxies to
vote at the annual meeting of shareholders to be held on April 24,
2001, or an adjournment thereof, to represent and to vote all the
shares of common stock of Harris & Harris Group, Inc. that the
undersigned is entitled to vote with all powers the undersigned would
have if personally present, on the following matters as designated on
the reverse side and in their discretion with respect to such other
business as may properly come before the meeting or any adjournment
thereof.

The Board of Directors recommends a vote "FOR" all the nominees
listed in item 1 and "FOR" item 2.

When properly executed, this proxy will be voted as specified
and in accordance with the accompanying proxy statement. If no
instruction is indicated, this proxy will be voted "FOR" items 1
and 2.


(Continued and to be dated and signed on the reverse side.)

HARRIS & HARRIS GROUP, INC.
P.O. BOX 11469
NEW YORK, NY 10203-0469


1. ELECTION OF DIRECTORS

FOR all nominees [ ] WITHHOLD AUTHORITY [ ] *EXCEPTIONS [ ]
Listed below. to vote for all
nominees listed below.

Nominees:

Dr. C. Wayne Bardin, Dr. Phillip A. Bauman, G. Morgan Browne,
Harry E. Ekblom, Dugald A. Fletcher, Charles E. Harris,
Glenn E. Mayer, James E. Roberts

(INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark the "Exceptions" box and write that nominee's name in
the space provided below.)

*Exceptions: ________________________________________________________

2. To ratify, confirm and approve the Board of Director's selection
of Arthur Andersen LLP as the Company's independent public accountant
for its fiscal year ending December 31, 2001.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. At their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting or any
adjournment or adjournments thereof.


Change of Address and
or Comments Mark Here [ ]

Please sign exactly as name appears to the left. When shares are
held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporation name by
President or other authorized officer. If a partnership, please sign
in partnership name by authorized person.

Dated______________________, 2001

________________________________
(Signature)

________________________________
(Signature, if held jointly)

Votes must be indicated [x] in Black or Blue ink.

Sign, Date and Return the Proxy Card Promptly Using the Enclosed
Envelope.