AMENDMENT NO. 1
                                TO
                 DEFERRED COMPENSATION AGREEMENT

     AMENDMENT made as of March 20, 2003, to Deferred Compensa
tion Agreement made as of February 2, 2000 (the "Agreement"), by
and between Harris & Harris Group, Inc., a corporation organized
under the laws of the State of New York (the "Company"), and
Charles E. Harris (the "Executive").

     WHEREAS Charles E. Harris has offered for the benefit of the
Company in connection with its establishment of the Harris &
Harris Group, Inc. Executive Mandatory Retirement Benefit Plan
(the "Plan") to waive certain benefit rights;

     NOW, THEREFORE, the parties hereto agree as follows:
     1.  Section 7 of the Agreement is hereby amended to read in
its entirety as follows:

     "Section 7.    Effect on Other Benefits.
               "Any deferred compensation payable under this
Agreement shall not be deemed salary or other compensation to the
Executive for the purpose of computing benefits to which he may
be entitled under any pension plan or other arrangement of the
Company for the benefit of its employees, except under the Harris
& Harris Group, Inc. Executive Mandatory Retirement Benefit
Plan."

     IN WITNESS WHEREOF, the Company has caused this Amendment
No. 1 to the Agreement to be executed by its duly authorized
officer and the Executive has executed this Amendment No. 1 to
the Agreement as of the date first above written.


                              HARRIS & HARRIS GROUP, INC.

                              By:/s/ Mel P. Melsheimer
                                 ---------------------
                                 Mel P. Melsheimer, President


                              By:/s/ Charles E. Harris
                                 ---------------------
                                 Charles E. Harris