CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF MICROMEM TECHNOLOGIES INC.

• Purpose

The Compensation Committee (the "Committee") is appointed by the Board of Directors of Micromem Technologies Inc. (the "Company") to assist the Board in fulfilling its oversight responsibilities relating to the compensation of the Company’s executive officers and directors; to provide general oversight of the Company’s compensation plans and benefits programs; and to perform the additional specific duties and responsibilities set out herein.  The primary duties and responsibilities of the Committee are to:

• establish the compensation and benefits for the President and Chief Executive Officer and other executive officers of the Company;
• evaluate the performance of the President and Chief Executive Officer and other senior executive officers of the Company;
• review and recommend executive compensation, equity and retirement plans and any amendments to the same.

II.        Composition of the Committee
The Committee shall consist of at least two (2) independent directors.  Members of the Committee shall be appointed by the Board annually, subject to removal at any time by the Board. The Board shall designate one (1) committee member as Chair of the Committee.
The Board's policy is that each Committee member shall meet the independence requirements for an independent director for an audit committee as described in Multilateral Instrument 52-110 – Audit Committees.  Committee members shall have, to the extent feasible, background and experience in compensation, retirement plans or employment matters.
Annually, the Board shall determine if Committee members continue to be independent and meet applicable requirements.
III.      Operations of the Committee
The Committee shall meet at least four (4) times annually, or more frequently as circumstances dictate and as the Committee shall deem necessary.  The Committee Chair shall prepare, approve and distribute to each member of the Committee an agenda in advance of each meeting. If the Chair is not present, the members of the Committee may designate a Chair by a majority vote of those present. Meetings shall be of sufficient duration and scheduled at such times as the Committee deems appropriate to discharge properly its responsibilities. A majority of the members of the Committee will be present to constitute a quorum for the transaction of the Committee’s business.  The Committee may ask members of management or others to attend meetings or portions thereof and provide pertinent information as necessary. The Committee shall meet in executive session annually to review the performance of the President and Chief Executive Officer and shall present a full report to the Board annually. The Committee also may meet in executive session from time to time to discuss any other matters that it believes should be discussed without management or any employee present. The Committee shall maintain minutes of its meetings.
All decisions of the Committee shall require the affirmative vote of a majority of the directors then serving on the Committee.
Compensation for service on the Committee shall be established by the full Board based on the recommendations of the Committee.
The Committee has the authority to access any consultant of the Company, including actuaries, compensation consultants or attorneys, in order to fulfill its responsibilities. The Committee in consultation with management is authorized to retain, at the Company's expense, such compensation, legal or other consultants or experts as it may deem necessary in the performance of its duties.
IV.      Responsibilities and Duties

• Compensation
• Review and recommend corporate goals and objectives relevant to the compensation of the Company's President and Chief Executive Officer and other executive officers; periodically evaluate the performance of the President and Chief Executive Officer and other executive officers in light of such goals and objectives; and determine and recommend the compensation for the President and Chief Executive Officer and other executive officers based upon these evaluations.
• Periodically review the Company's general executive compensation policies and strategies and make recommendations to the Board with respect thereto, including without limitation with respect to incentive compensation plans and equity compensation plans.
• Examine base, short-term and long-term compensation for executives of similar sized technology companies at a similar stage of development as the Company and benchmark such compensation to the Company's executive compensation structure.
• Review and recommend (i) annual compensation strategy for Company officers and employees (ii) merit budget for officers and employees and (iii) short-term and long-term incentive plans and goals for executive officers.
  
• Identify, in consultation with the management of the Company, performance targets for eligibility for bonuses of executive officers and recommend bonus awards, including any equity-based bonus awards, to executive officers.
• Provide oversight for the administration of each of the Company's equity compensation plans.
• Recommend grants of awards under equity compensation plans to key employees of the Company.
  
• Review and recommend compensation for Board members and committee members.
  
• Review and recommend perquisites provided to executive officers.
  
• Review executive compensation disclosure before the Company publicly discloses this information.


B.        Retirement Plans

• Review and make recommendations regarding the Company's retirement plan strategy and recommend to the Board modifications, amendments and/or termination of qualified retirement plans.
  
• Review and make recommendations regarding the terms of the Company's supplemental retirement plans or agreements.
  
• Review and make recommendations regarding participation of executives in supplemental retirement plans or agreements.

C.  Severance and Change in Control

• Review and make recommendations regarding the form of any agreement which provides severance to the executive officers of the Company in connection with a termination of employment following a change in control of the Company.




• Review and make recommendations regarding any severance plan which provides severance to employees of the Company in connection with a termination of employment following a change in control of the Company.

D.  Employment and Other Agreements

• Review and recommend any employment, retention, consulting or other compensatory agreement between the Company and any director or executive officer of the Company.

E.  Equity Ownership Guidelines

• Review and recommend stock ownership guidelines for executive officers and directors.

F.  Management Succession

• Annually review succession planning for the President and Chief Executive Officer and key members of executive management.

G.  Annual Report

• Annually prepare a report of the Committee for inclusion in the Company's annual proxy statement in accordance with the requirements of the Ontario Securities Commission, the TSX Venture Exchange, Canadian Securities Administrators’ statements and other relevant authorities.

H.  Evaluation and Review of Charter

• Review and assess annually the performance of the Committee, and report the results to the Board.
• Review and assess annually the adequacy of this Charter and, if appropriate, recommend changes to the Charter to the Board.

I.          Other Responsibilities

• Report to the Board of Directors on a quarterly basis on the significant results of the Committee's activities.
• Perform any other activities consistent with this Charter, the Company's bylaws and applicable laws and regulations as the Committee or the Board deems necessary or appropriate.



Date:  Effective                        2008 – Approved by the Compensation Committee