EXECUTIVE MANDATORY RETIREMENT BENEFIT PLAN

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 Employment 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 con-

nection 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 satisfy 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 Company 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.