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ECOLOGY COATINGS, INC.
COMPENSATION COMMITTEE CHARTER
 This Compensation Committee Charter was adopted by the Board of Directors of Ecology
Coatings, Inc. on October 18, 2007.
 I. Statement of Purpose
  II. Membership
   III. Committee Authority and Responsibilities
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A.
    
    The Committee shall, at least annually, review the compensation
philosophy of the Company.B.
    
    The Committee shall, at least annually, review and approve corporate
goals and objectives relating to the compensation of the chief executive officer,
evaluate the performance of the chief executive officer in light of those goals and
objectives and determine and approve the compensation of the chief executive
officer based on such evaluation. The Committee shall have sole authority to
determine the chief executive officers compensation.C.
    
    The Committee shall, at least annually, review and approve all
compensation for all executive officers, other officers (as such term is defined in
Rule 16a-1, promulgated under the 1934 Act), vice presidents and all other
employees of the Company or its subsidiaries with a base salary greater than or
equal to $150,000. The Committee shall also review and approve all officers
employment agreements and severance arrangements.D.
    
    The Committee shall, at least annually, review and recommend to the
board all compensation for any director (i.e., member of the Board) of the Company.E.
    
    The Committee shall periodically engage in a general review of base
compensation levels for all other employees of the Company.F.
    
    The Committee shall periodically review and approve all annual bonus,
long-term incentive compensation, stock option, employee pension and welfare
benefit plans (including 401(k), employee stock purchase plan and others), and with
respect to each plan shall have responsibility for:
 1.
    
    general administration;2.
    
    setting performance targets under all annual bonus and
long-term incentive compensation plans as appropriate and committing to
writing any and all performance targets for all executive officers who may
be covered employees under Section 162(m) of the Code within the first 90
days of the performance period to which such target relates or, if shorter,
within the period provided by Section 162(m) of the Code in order for such
target to be pre-established within the meaning of Section 162(m);3.
    
    certifying that any and all performance targets used
for any performance-based equity compensation plans have been met before
payment of any executive bonus or compensation or exercise of any executive award granted
under any such plan(s);
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4.
    
    approving all amendments to, and terminations of, all
compensation plans and any awards under such plans;5.
    
    granting any awards, under any performance-based annual
bonus, long-term incentive compensation and equity compensation plans to
executive officers or current employees with the potential to become the
chief executive officer or an executive officer, including stock options
and other equity rights (e.g., restricted stock, stock purchase rights);6.
    
    making recommendations to the Board with respect to
awards for the Companys directors under the Companys equity incentive
plan(s); and7.
    
    repurchasing securities from terminated employees,
other than ordinary course repurchases of shares issued upon the early
exercise of stock options in connection with the termination of an
employees employment.
 G.
    
    The Committee shall establish and periodically review policies
concerning perquisite benefits.H.
    
    The Committee shall periodically review the need for a Company policy
regarding compensation paid to the Companys executive officers in excess of limits
deductible under Section 162(m) of the Code.I.
    
    The Committee shall determine the Companys policy with respect to
change of control or parachute payments.J.
    
    The Committee shall review and approve executive officer and director
indemnification and insurance matters.K.
    
    The Committee shall review and approve any employee loans in an amount
equal to or greater than $10,000.L.
    
    The Committee shall prepare and approve the Compensation Committee
report to be included as part of the Companys annual proxy statement (the Proxy
Statement Report).
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M.
    
    The Committee shall evaluate its own performance on an annual basis,
including its compliance with this Charter, and report to the Board with respect to
such evaluation, including any recommendations for changes in procedures or
policies governing the Committee. The Committee shall conduct such evaluation and
review in such manner as it deems appropriate.N.
    
    The Committee shall review and reassess this Charter at least annually
and submit any recommended changes to the Board for its consideration.
 IV. Delegation
   V. Committee Reports
  A.
    
    An annual performance evaluation of the Committee, which evaluation
measures the performance of the Committee against the requirements of this Charter
and sets forth the goals and objectives of the Committee for the upcoming year. The
performance evaluation should also contain any recommendations for changes to this
Charter arising out of the Committees annual review.B.
    
    The Committee shall maintain minutes. A summary of the actions taken at
each Committee meeting, which shall be presented to the Board at the next Board
meeting following such Committee meeting.C.
    
    Any other reports which the Board may from time to time specify.
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VI. Retention of Consultants and Advisors
  VII. Duties and Responsibilities of the Board
  A.
    
    elect members to the Committee and conduct oversight of the activities
of the Committee;B.
    
    ensure that adequate resources are available to the Committee for
proper discharge of its duties and responsibilities;C.
    
    provide timely written disclosure to the applicable governing or
administrative forums of any determination that the Board has made regarding the
independence of the members of the Committee; the financial literacy of the
members of the Committee; the accounting or related financial management expertise
of the financial expert of the Committee; and the annual review and reassessment of
the adequacy of this Charter as well as an annual self-evaluation.D.
    
    ensure this Charter is posted on the Companys Web site.
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