Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Compensation Arrangements

On November 4, 2009, the Compensation Committee of Harris & Harris Group, Inc. awarded bonuses for 2009 in the amount of $50,000 to each of Douglas W. Jamison, Chairman, Chief Executive Officer and Managing Director; Daniel B. Wolfe, President, Chief Operating Officer, Chief Financial Officer and Managing Director; Alexei A. Andreev, Executive Vice President and Managing Director; and Michael A. Janse, Executive Vice President and Managing Director. The bonuses were awarded based on market information provided by the independent compensation consultant that indicated that the base salaries of our Managing Directors are below the average base salaries plus bonus paid to other managing directors of similar sized funds. The compensation committee will be paying a bonus to the Managing Directors to bring them into the 50 percentile range for their peers in base salary plus bonus compensation. Some of the Managing Directors have elected to use a portion of the after tax proceeds of the bonus to either purchase shares or to exercise vested stock options with cash. This decision will increase their ownership in the Company. Neither the Managing Directors, nor any of the named executive officers in our proxy, will receive an increase in base salary for 2010, and our Board of Directors will not receive any increase in their fees in 2010.

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