HARRIS & HARRIS GROUP, INC
EXECUTIVE MANDATORY RETIREMENT BENEFIT PLAN


SECTION I

PURPOSE

1.1 Purpose. The purpose of the Harris & Harris
Group, Inc. Executive Mandatory Retirement Benefit Plan
(the "Plan") is to provide those employees of Harris &
Harris Group, Inc. who are required to retire pursuant to
the Harris & Harris Group, Inc. Executive Mandatory
Retirement Program with a nonforfeitable retirement
benefit which will satisfy the requirements for exempting
those employees from any prohibitions against mandatory
retirement which might otherwise apply under any age
discrimination laws applicable to such terminations of
employment.


SECTION II

DEFINITIONS

2.1 Definitions. The following definitions
shall apply for purposes of the Plan, unless a different
meaning is plainly indicated by the context:

(a) Age Discrimination Acts shall mean,
collectively, the federal Age Discrimination in Employ
ment Act, 29 U.S.C. Section 621 et seq., the New York State
Human Rights Law, N.Y. Exec. Law Section 290 et seq., the New
York City Human Rights Law, Section 8-107 and any other
applicable law pertaining to age discrimination, as well as
any regulations promulgated under any such law.

(b) Board shall mean the Board of Directors
of the Company, as constituted from time to time.

(c) Code shall mean the Internal Revenue
Code of 1986, as amended from time to time.

(d) Committee shall mean a committee to
administer the Program which shall be comprised of all
members of the Company's Board of Directors serving from
time to time who would be treated as "non-interested
directors" for purposes of determining eligibility for
service on the Board's Audit Committee.

(e) Company shall mean Harris & Harris
Group, Inc., and any successor to all or a major portion
of its assets or business, which successor assumes the
obligations of the Company under this Plan by operation
of law or otherwise.

(f) Effective Mandatory Retirement Date
shall be the date on which an employee's employment is
actually terminated in a mandatory retirement pursuant to
the Program (whether such date is the Initial Mandatory
Retirement Date or a later date).

(g) ERISA shall mean the Employee Retirement
Income Security Act of 1974, as amended from time to
time.

(h) Initial Mandatory Retirement Date, for
an employee of the Company who has been designated as
subject to the Program, shall be December 31 of the year
in which the employee attains the age of 65 years (or
December 31 of such later year as the two-year "bona fide
executive or high policymaking position" employment
requirement of the Program is first met by the employee);
provided, however, that the employee's mandatory retirement
can be postponed in accordance with the Program.

(i) Mandatory Retirement Benefit Amount
shall mean the lump sum equivalent of a nonforfeitable
retirement benefit (within the meaning of, and calculated
in accordance with, the Age Discrimination Acts) which
will satisfy the requirements for exempting the Participant
from any prohibitions against compulsory retirement
under the Age Discrimination Acts immediately prior to
the Participant's Effective Mandatory Retirement Date.
As of the adoption of this Plan, the Mandatory Retirement
Benefit Amount is the lump sum equivalent of an immediate
nonforfeitable straight life annuity (with no ancillary
benefits) of $44,000.

(j) Offsetting Benefit Amount shall mean the
aggregate lump sum equivalent of those benefits to which
a Participant is entitled outside of the Plan which are
treated as immediate nonforfeitable retirement benefits
pursuant to the Age Discrimination Acts. The Offsetting
Benefit Amount shall be calculated by adjusting the
relevant benefits to lump sum equivalents in accordance
with the Age Discrimination Acts.

(k) Participant shall mean any employee of
the Company who is being required to retire pursuant to
the Harris & Harris Group, Inc. Executive Mandatory
Retirement Program and participation shall begin immediately
prior to the employee's Effective Mandatory Retirement Date.

(l) Plan shall mean the Harris & Harris
Group, Inc. Executive Mandatory Retirement Benefit Plan,
as set forth in this plan instrument, as it may be
amended from time to time.

(m) Plan Benefit shall mean the benefit
payable to a Participant hereunder and calculated
pursuant to Section 3.1 hereof.

(n) Program shall mean the Harris & Harris
Group, Inc. Executive Retirement Program, as it may be
amended from time to time.


SECTION III

BENEFITS

3.1 Plan Benefit. Each Participant shall be
entitled under this Plan to receive a Plan Benefit equal
to (or actuarially equivalent to) the result obtained by
reducing the Mandatory Retirement Benefit Amount by the
Participant's Offsetting Benefit Amount (if any), but
only if such result is a positive amount.

The Plan Benefit shall be payable to the
Participant, as determined in the sole discretion of the
Committee, either (i) in the form of a lump sum within
sixty days after the Participant's termination of
employment or (ii) in the form of a straight life annuity
(with no ancillary benefits) with payments commencing
within sixty days after the Participant's termination of
employment. Any adjustment to the form of payment shall
be made in accordance with the Age Discrimination Acts.
If the Plan Benefit is paid in a lump sum, the amount
shall be adjusted to the extent necessary (if any) to
comply with the Age Discrimination Acts.

3.2 Vesting. Each Participant shall become
completely vested in his or her Plan Benefit immediately
prior to his or her Effective Mandatory Retirement Date
and the Plan Benefit shall be nonforfeitable.



SECTION IV

ADMINISTRATION

4.1 Administration. The Plan shall be administered
by the Committee.

4.2 Duties. The Committee shall perform the
duties required, and shall have the powers necessary, to
administer the Plan and carry out the provisions thereof.

4.3 Powers. The powers of the Committee shall
be as follows:

(a) To determine any question arising
in connection with the Plan (and its decision
or action in respect thereof shall be final,
conclusive and binding upon the Company and
the Participants and any other individual
interested herein);

(b) To engage the services of counsel
or attorney (who may be counsel or attorney
for the Company) and an actuary, if it deems
necessary, and such other agents or assistants
as it deems advisable for the proper
administration of the Plan; and

(c) To receive from the Company and
from Participants such information as shall
be necessary for the proper administration of
the Plan.

4.4 Claims Procedure. Subject to the provisions
of this Plan, the Committee shall make all determinations
as to the right of any individual to a benefit. Any
denial by the Committee of the claim for benefits under
the Plan by a Participant or any other individual
interested herein shall be stated in writing by the
Committee and delivered or mailed to the Participant or
such individual. Such notice shall set forth the
specific reasons for the denial, written to the best of
the Committee's ability in a manner that may be
understood without legal or actuarial counsel. In addition,
the Committee shall afford to any Participant whose
claim for benefits has been denied a reasonable
opportunity for a review of the decision denying the
claim.


SECTION V

NONALIENATION OF BENEFITS

Neither the Participant nor any other individual
shall have any right to assign or otherwise to alienate
the right to receive payments under the Plan, in whole or
in part.


SECTION VI

AMENDMENT AND TERMINATION

The Company reserves the right at any time by
action of the Board to terminate the Plan or to amend its
provisions in any way. Notwithstanding the foregoing, no
termination or amendment of the Plan may reduce the
benefits payable under the Plan to the Participant if the
Participant's termination of employment with the Company
has occurred prior to such termination of the Plan or
amendment of its provisions.


SECTION VII

MISCELLANEOUS

7.1 No Right to Employment. This Plan shall not
be construed as providing any Participant with the right
to be retained in the Company's employ or to receive any
benefit not specifically provided hereunder.

7.2 No Effect on Other Compensation and Benefits.
Nothing contained herein shall exclude or in any
manner modify or otherwise affect any existing or future
rights of any Participant to participate in and receive
the benefits of any compensation, bonus, pension, life
insurance, medical and hospitalization insurance or other
employee benefit plan or program to which he or she
otherwise might be or become entitled as an officer or
employee of the Company.

7.3 Governing Law. This Plan shall be construed
in accordance with and governed by the laws of the State
of New York, without regard to its conflicts of law
principles.

7.4 Status. This Plan is not intended to satify
the requirements for qualification under Section
401(a) of the Code. It is intended to be a nonqualified
plan that is not subject to ERISA. The Plan shall be
construed and administered so as to effectuate this
intent.

7.5 Plan Expenses; Plan Unfunded. All expenses
of establishing and administering the Plan shall be paid
by the Company. No individual interested herein shall
have any interest in any specific assets of the Company
by reason of the individual's interest under the Plan,
and such individuals shall have only the status of
unsecured creditors of the Company with respect to any
benefits that become payable under this Plan. The
Company is not required to purchase any annuity from any
third party to provide a Plan Benefit.

7.6 Successors. The Company shall require any
successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company
to expressly assume the Company's obligations hereunder
in the same manner and to the same extent that the Com
pany would be required to perform if no such succession
had taken place.

7.7 Withholding Requirements. Payment of
benefits under this Plan shall be subject to applicable
withholding requirements.