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

• General

The Board of Directors of the Corporation (the “Board”) has established a Governance Committee (the “Committee”) for purpose of providing the Board with recommendations relating to corporate governance in general, including, without limitation: (a) all matters relating to the stewardship role of the Board in respect of the management of the Corporation, (b) Board size and composition, including the candidate selection process and the orientation of new members, (c) the relationship and interaction of the Board and management, and (d) the consideration and implementation of such procedures as many be necessary of allow the Board to function independently of management.  The Committee will also oversee compliance with policies associated with the efficient system of corporate governance, having regard to best practices and published guidelines of the Toronto Stock Exchange, the Ontario Securities Commission, the OTCBB and such other regulatory bodies as may from time to time be applicable.  The Committee will endeavor to stay abreast of legal and regulatory developments in the field of corporate governance with a view to being able to provide timely advice to the Board about such developments, including recommendations for the revision of existing committee mandates of the addition of new committees, to ensure the Board remains proactive in discharging its legal duties.

• Members

 

The Board will in each year appoint a minimum of three (3) directors as members of the Committee.  The Committee will have an appropriate representation of independent directors as required and defined by law and all regulatory orders and exemption orders issued in respect of the Corporation by applicable securities regulatory authorities.
The Chief Executive Officer (“CEO”) of the Corporation and, to the extent the Chairman of the Board is not otherwise a member of the Committee, the Chairman, and all other directors who are not members of the Committee may attend all meetings of the Committee in an ex officio capacity and will not vote.  The CEO shall not attend in-camera sessions.

• Duties

The Committee will have the following duties:

• The Committee will review and make recommendations to the Board respecting:

 

• corporate governance in general and regarding the Board’s stewardship role in the management of the Corporation, including defining the roles and responsibilities of directors and recommending appropriate policies and procedures for directors to carry out their duties with due diligence and in compliance with all legal and regulatory requirements;
• the size and composition of the Board (including with reference to applicable rules, regulations or guidelines promulgated by regulatory authorities related to corporate governance; whether any compensation committee interlocks exist; general responsibilities and functions of the Board and its members, including position descriptions for the CEO and the Chairman; the organization and responsibilities of Board committees; and the procedures for effective Board meetings to ensure that the Board functions independently of management and without conflicts of interest;

 

• the long term plan for the composition of the Board of directors that takes into consideration the current strengths, skills and experience on the Board and the strategic direction of the Corporation.  This plan will include: (i) a written outline describing the desired qualifications, demographics, skills and experience for potential directors, (ii) the appropriate rotation of directors on Board committees, (iii) an interview process for potential candidates for Board membership, and (iv) a list of future candidates for Board membership;
• when required, a candidate for appointment of the office of Chairman of the Board;

 

• annually, in consultation with the Chairman of the Board and the CEO, the Board nominees for election as members of the Board, and for those individuals it has identified as qualified to become new members of the Board, to conduct background checks in respect of such individuals;
• as required, candidates to fill any Board or Committee vacancies;

 

at appropriate intervals, the scope, duties and responsibilities of each committee of the Board, and where advisable, any amendments to the charters of such committees, as well as the establishment or disbanding of Board committees and change to their composition, including the Chair there of;

• considering appropriate levels and scope of coverage of director and officers liability insurance coverage; and

 

• the framework for delegating authority from the Board to management.
• The Committee will review, approve and report to the Board on:

 

• the orientation process for new directors and plans for the ongoing development of existing Board members;
• the establishment of appropriate processes for the regular evaluation of the effectiveness of the Board, its committee and its members;

 

• annually, in conjunction with the Chairman of the Board, the performance evaluation of individual directors, the Board as a whole, and committees of the Board;
• together with the Chairman of the Board (where appropriate), concerns of individual directors about matters that are not readily or easily discussed at full Board meetings, to ensure the Board can operate independently of management; and

 

• the corporate governance disclosure section in the Corporation’s annual report, and any other corporate governance matters as required by public disclosure requirements.
• The Committee will oversee compliance with the Corporation’s Employee Code of Conduct by officers of the Corporation; authorize any waiver granted in connection with this policy; and confirm with management the appropriate disclosure of any such waiver.

 

• The Committee will oversee compliance by members of the Board with the Corporation’s Board Code of Conduct (the “Board Code”); monitor compliance by Directors; authorize any waiver granted in connection with this policy; and oversee the appropriate disclosure of any such waiver.
• The Committee will oversee compliance with any rules, regulations or guidelines promulgated by regulatory authorities relating to corporate governance.

 

• Chair

The Board will in each year appoint the Chair of the Committee from among the members of the Committee.  In the Chair’s absence, or if the position is vacant, the Committee may select another member as Chair.  The Chair will have the right to exercise all powers of the Committee between meetings, but will attempt to involve all other members as appropriate prior to the exercise of any powers and will, in any event, advise all other members of any decisions made of power exercised.

• Meetings

 

The Committee will meet at the request of its Chair, but in any event it will meet at least two times per year to consider matters referred to it by the Board.  Notices calling meetings will be sent to all Committee members, to the CEO of the Corporation, the Chairman of the Board and all other directors.

 

• Quorum

A majority of members of the Committee, present in person, by teleconferencing, or by videoconferencing will constitute a quorum.

• Removal and Vacancy

 

A member may resign from the Committee, and may also be removed and replaced at any time by the Board, and will automatically cease to be a member as soon as the member ceases to be a director.  The Board will fill vacancies on the Committee by appointment from among the directors of the Board in accordance with Section 2 of this Charter.  Subject to quorum requirements, if a vacancy exists on the Committee, the remaining members will exercise all its powers.

• Experts and Advisors

 

The Committee may retain or appoint, at the Corporation’s expense, and with the approval of the Board, an outside advisor or expert, as it deems necessary to carry out its duties.  The Committee will receive and consider all such requests for the retention of outside advisors and experts from an individual director, the Board, and all of its committees (except for the Audit Committee, which will notify the Committee of its actions in this regard).

• Secretary and Minutes

 

The secretary of the Corporation or such other person as may be appointed by the Chair of the Committee will act as secretary of the Committee.  The minutes of the Committee will be in writing and duly entered into the books of the Corporation, and will be circulated to all members of the Board.

• Complaints Procedure

 

The Committee will establish a procedure for the receipt, retention and follow-up of complaints of all members of the Board.

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Date Effective:     _____________, 2008

 

Approved by the Governance Committee