Unassociated Document


    
      AMENDED
        AND RESTATED

      SUPPLEMENTAL
        EXECUTIVE RETIREMENT PLAN

       

      This
        is
        an AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP") made
        as
        of the 2nd day of August, 2007, 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"). The SERP was originally effective
        February 2, 2000 and was at that time called "Deferred Compensation Agreement",
        and is hereby amended and restated effective January 1, 2005, but actually
        on
        the date first shown above, for compliance with Internal Revenue Code (the
        "Code") Section 409A.

      


      WHEREAS,
        the Company and the Executive are parties to an employment
        agreement;

      


      WHEREAS,
        the employment agreement obligates the Company to maintain a supplemental
        executive retirement plan for the benefit of the Executive, and the Company
        and
        the Executive wish to enter into this Amended and Restated SERP to bring
        it into
        compliance with Code Section 409A. 

      


      NOW,
        THEREFORE, in consideration of the premises and covenants hereinafter contained,
        the parties hereto agree as follows:

      


      Section
        1.            
Deferred Compensation Account; Contributions to Trust.

      


      (1)    The
        Company shall credit to a book reserve (the "Deferred Compensation Account
        commencing as of October 19, 1999 and for each month thereafter, an amount
        equal
        to 1/12th
        of the
        Executive's Base Salary (as defined in the employment agreement in effect
        from
        time to time between the Company and the Executive (the "Employment Agreement"))
        for such month; provided that the Executive is employed with the Company
        on the
        last business day of such month. The Deferred Compensation Account shall
        be
        debited with amounts representing all losses and distributions from the Trust
        (as hereinafter defined) and shall be credited with all earnings of and deposits
        to the Trust or amounts otherwise contributed to the Trust.

      


      (2)    Any
        amounts represented by credits made to the Deferred Compensation Account
        in
        accordance with the first sentence of paragraph (a) above shall be contributed
        by the Company on the last business day of each month to the trust (the "Trust")
        established under the Trust Agreement substantially in the form of Exhibit
        A
        annexed hereto (the "Trust Agreement"). Amounts contributed to the Trust
        shall
        be invested and reinvested in accordance with the provisions of the Trust
        Agreement in such investments as are requested by the Executive and agreed
        to by
        the Company, which agreement shall not be unreasonably withheld. To the extent
        that the Company is required to withhold hospital insurance tax or other
        taxes
        in respect of credits to the Deferred Compensation Account representing earnings
        of the Trust prior to distribution of such earnings to the Executive pursuant
        to
        Section 2 below, as provided in Amendment No. 3 to this SERP made in December,
        2005 (i) for taxes owed in 2005, such taxes shall be paid from the Trust,
        and
        (ii) for taxes owed in 2006 and later years, such taxes shall be paid from
        amounts otherwise payable by the Company to Executive that are not paid under
        this Agreement. 

       

      
        
          
          

        

        
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      (3)    The
        Executive agrees on behalf of himself and his designated beneficiary to assume
        all risk in connection with any debits or credits made to him under the Trust
        by
        reason of losses or earnings on investments made in accordance with the
        provisions of the Trust Agreement.

      


      Section
        2.             Benefit
        Payments.

      


      (1)    In
        accordance with Amendment No. 3 made in 2005, the Executive was paid the
        sum of
        $125,000 of the Deferred Compensation Account in December, 2005 and the
        remainder of the Deferred Compensation Account was scheduled to be paid on
        December 31, 2008 regardless of whether the Executive has then separated
        from
        service. In accordance with Amendment No. 4, the Executive was permitted
        to make
        a new payment timing election in 2006 in accordance with Code Section 409A
        transition rules, and the Executive elected payment on January 6, 2009. The
        Executive may make a new payment timing election on or before December 31,
        2007,
        provided that such election cannot be for payment to be made in 2007. If
        Executive does not make a new payment timing election by December 31, 2007,
        the
        balance of the Deferred Compensation Account will be paid to Executive on
        January 6, 2009. Notwithstanding the Executive's payment timing election,
        if the
        Executive dies before his entire Deferred Compensation Account has been paid
        to
        him, the remainder of the Deferred Compensation Account shall be paid on
        the
        90th
        day
        after his date of death, and further provided that if the Executive separates
        from service with the Company the meaning of Code Section 409A within six
        months
        prior to the date after 2007 when payments are to be paid or begin to be
        paid,
        no payment shall not be made until six months and one day after separation
        from
        service, and then all payments that would have been made in that six month
        period shall be made. 

      


      (2)    The
        beneficiary referred to in paragraph (a) above may be designated or changed
        by
        the Executive (without the consent of any prior beneficiary) on a form provided
        by the Company and delivered to the Company before the Executive's death.
        If no
        such beneficiary shall have been designated, or if no designated beneficiary
        shall survive the Executive, the lump sum payment payable under paragraph
        (a)
        above shall be payable to the Executive's estate.

      


      (3)    This
        SERP
        shall be administered by the Compensation Committee of the Board of Directors
        of
        the Company (the "Committee"). The Committee shall perform the duties required,
        and shall have the powers necessary, to administer the Plan and carry out
        the
        provisions thereof. Specifically, the Committee shall have the power:


       

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

       

      (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 SERP.
        

       

      
        
          
          

        

        
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      Subject
        to the provisions of this SERP, 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 SERP shall be stated in writing by the Committee
        and delivered or mailed to the claimant. 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 the claimant a reasonable opportunity
        for a
        review of the decision denying the claim.

      


      Section
        3.             Vesting.

      


      The
        Executive's interest in the Deferred Compensation Account shall be 100% vested
        and non-forfeitable.

      


      Section
        4.             Unfunded
        Arrangement.

      


      It
        is the
        intention of the parties hereto that the arrangement described in this SERP
        be
        unfunded for tax purposes and for purposes of Title 1 of the Employee Retirement
        Income Security Act of 1974, as amended. Nothing contained in this SERP or
        the
        Trust Agreement and no action taken pursuant to the provisions of this SERP
        or
        the Trust Agreement shall create or be construed to create a fiduciary
        relationship between the Company and the Executive, his designated beneficiary
        or any other person. Any funds that may be invested under the provisions
        of the
        Trust Agreement shall continue for all purposes to be a part of the general
        funds of the Company and no person other than the Company shall by virtue
        of the
        provisions of this SERP have any interest in such funds. To the extent that
        any
        person acquires a right to receive payments from the Company under this SERP,
        such right shall be no greater than the right of any unsecured general creditor
        of the Company. This SERP constitutes a mere promise by the Company to make
        a
        benefit payment in the future.

      


      Section
        5.             Nonalienation
        of Benefits.

      


      The
        right
        of the Executive or any other person to the payment of deferred compensation
        or
        other benefits under this SERP shall not be subject in any manner to
        anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
        attachment or garnishment by creditors of the Executive or the Executive's
        beneficiary or estate.

      


      Section
        6.             No
        Right to Employment.

      


      Nothing
        contained herein shall be construed as conferring upon the Executive the
        right
        to continue in the employ of the Company as an executive or in any other
        capacity.

      


      Section
        7.             Effect
        on Other Benefits

      


      Any
        deferred compensation payable under this SERP 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.


      


      
        
          
          

        

        
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      Section
        8.             Binding
        Agreement.

      


      This
        SERP
        shall be binding upon and inure to the benefit of the Company, its successors
        and assigns and the Executive and his heirs, executors, administrators and
        legal
        representatives.

      


      Section
        9.             Governing
        Law

      


      This
        SERP
        shall be construed in accordance with and governed by the laws of the State
        of
        New York without regard to its conflict of laws principles, to the extent
        not
        preempted by federal law.

       

      Section
        10.     
     Validity.

       

      The
        invalidity or unenforceability of any provision or provisions of this SERP
        shall
        not affect the validity or enforceability of any other provision of this
        SERP,
        which shall remain in full force and effect.

      


      Section
        11.         
 Counterparts.

      


      This
        SERP
        may be executed in one or more counterparts, each of which shall be deemed
        to be
        an original but all of which together will constitute one and the same
        instrument.

       

      Section
        12.       
   Arbitration.

      


      Any
        dispute or controversy arising under or in connection with this SERP shall
        be
        settled exclusively by arbitration in the City of New York in accordance
        with
        the rules of the American Arbitration Association then in effect. Judgment
        may
        be entered on the arbitrator's award in any court having jurisdiction. The
        expense of such arbitration shall be shared equally by the Company and by
        the
        Executive; provided that the arbitrator shall be entitled to include as part
        of
        the award to the prevailing party the reasonable legal fees and expenses
        incurred by such party in an amount not to exceed $25,000 in connection with
        enforcing its rights hereunder.

      


      Section
        13.        
  Amendment.

      


      This
        SERP
        may be amended in whole or in part by a written instrument executed by both
        parties hereto.


      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the Company has caused this Amended and Restated SERP to
        be
        executed by its duly authorized officers and the Executive has executed this
        Amended and Restated SERP as of the date first above written, but actually
        on
        the date(s) 
        stated
        below.

      


      
        	 	 	 
	 	 	HARRIS
                & HARRIS GROUP, INC.
	 	 
	 	 
	 	  	/s/ Douglas
                W. Jamison
	 	
                
Douglas
                W. Jamison, President
	 	 
	 	Date:
                August 2, 2007
	 	 
	 	 


      

      
        	
              	 	THE
                EXECUTIVE
	 	
              
	 	 
	
              	
              	/s/
                Charles E. Harris
	 	
                
Charles
                E. Harris
	 	 
	 	Date:
                August 2, 2007


         

        
          
            
            

          

          
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