Exhibit 10
                                                                      ----------

                                 AMENDMENT NO. 4
                                       TO
                         DEFERRED COMPENSATION AGREEMENT

         This  is an  Amendment  made  as of  August  1,  2006  to the  Deferred
Compensation  Agreement  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").

                                     Recital
                                     -------


         Effective  January 1, 2005,  new  Internal  Revenue  Code (the  "Code")
Section  409A  prohibits  discretion  regarding  the time  and  form of  benefit
payments  under  the  Agreement.  In  accordance  with and as  permitted  by the
Proposed  Regulations  issued  under  Section  409A and Q&A 19(c) of IRS  Notice
2005-1, the Company wishes to allow Executive to make new elections on or before
December  31,  2006  regarding  the  timing  of  remaining  payments  under  the
Agreement,  provided  that any such election made in 2006 cannot cause a payment
to be made in 2006 or change  the  timing of a payment  scheduled  to be made in
2006.

                                    Amendment
                                    ---------

         Section 2.(1) of the Agreement is hereby amended to read as follows:

         The  Executive's  Deferred   Compensation  Account  shall  be  paid  in
         accordance  with a payment  timing  election  made by  Executive  on or
         before  December 31, 2006,  which payment timing election shall require
         payment after December 31, 2006. In the event Executive does not make a
         payment timing election on or before  December 31, 2006,  payment shall
         be made in accordance with the provisions of the Agreement  immediately
         prior to the adoption of this  Amendment No. 4. In the event  Executive
         dies before  payment is made,  his entire  balance shall be paid to his
         Beneficiary on the 90th day after his date of death.

         IN WITNESS  WHEREOF,  the Company has caused this Amendment No. 4 to be
executed by its duly  authorized  officer as of the date first above written but
actually on the date stated below.

                                  HARRIS & HARRIS GROUP, INC.

                                  By: /s/ Douglas W. Jamison
                                      -------------------------------

                                  Title: President
                                         ----------------------------

                                  Date: August 3, 2006
                                        -----------------------------


                                  /s/ Charles E. Harris
                                  -----------------------------------
                                  Charles E. Harris