Compensation Committee Charter

DUSA PHARMACEUTICALS, INC.
COMPENSATION COMMITTEE CHARTER

Adopted: February 27, 2004

The Compensation Committee (the "Committee") of DUSA Pharmaceuticals, Inc. (the
"Company") shall have overall responsibility with respect to reviewing, evaluating and
approving the compensation plans, policies and programs of the Company pertaining to all
compensation for officers and members of the Board of Directors ("Directors") of the Company
and stock option grants made to employees of the Company. The Committee shall be
responsible for determining the Company's compensation strategies.

The Committee shall develop a compensation strategy that creates a direct relationship
between compensation levels and corporate goals and performance and expected returns to
shareholders over the long term. The Committee shall monitor the results of such compensation
strategy to assure that the compensation payable to the Company's officers and Directors
provides overall competitive compensation levels, creates proper incentives to enhance
shareholder values and rewards superior performance.

The membership of the Committee shall consist of at least two (2) Directors, all of whom
shall be independent and shall be appointed annually by the Board of Directors. Independence
for membership purposes shall be established in accordance with the Board of Directors'
determination that such individual has no relationship which would interfere with the exercise of
independent judgment in carrying out the responsibilities of a Committee member. A person
may serve on the Committee only if he or she (i) is a "Non-employee director" for the purposes
of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, (ii) satisfies the
requirements of an "outside director" for purposes of Section 162(m) of the Internal Revenue
Code of 1986, as amended, and (iii) meets the rules and requirements necessary to be an
independent director under the requirements of the Nasdaq Stock Market, Inc.

Each Committee member shall serve at the pleasure of the Board of Directors and for
such term or terms as the Board shall determine. The Board of Directors shall appoint the
Chairperson of the Committee at its first meeting after each annual meeting of the shareholders,
or as the Committee shall determine necessary or appropriate.

Powers

The Committee shall have the full power and authority to:
• Retain and terminate a consulting firm, including the authority to approve the
consulting firm's fees and retention terms, to the extent it deems it necessary or
appropriate to fulfill its responsibilities and duties hereunder. Any such
consultant shall report directly to the Committee.
• Evaluate the compensation of the Company's Chief Executive Officer, Executive
Officers (as defined below) and Directors.
• Obtain advice and assistance from internal or external legal, accounting, human
resource or other advisors, to the extent it deems it necessary or appropriate to
fulfill its responsibilities and duties hereunder, and to have direct access to such
supervisors without the presence of any officer of the Company.
• Form and delegate authority to subcommittees, as permitted.
• Review and approve stock option grants to qualified employees of the Company.
• Exercise such other powers as may be necessary or appropriate to fulfill its
purposes.

Specific Responsibilities and Duties

The Committee shall have the full power and authority to:
• Make decisions with respect to the corporate goals and objectives relevant to
Chief Executive Officer compensation, evaluate the Chief Executive Officer's
performance in light of those goals and objectives, and set the Chief Executive
Officer's compensation level based upon such evaluation. The Chief Executive
Officer may not be present during any discussion and deliberations of the
Committee regarding such compensation. In determining the incentive
components of the Chief Executive Officer's compensation, the Committee will
consider the Company's performance and relative shareholder return, the value of
the similar incentive awards to chief executive officers at comparable companies,
the awards given to the Chief Executive Officer in past years and such other
factors as the Committee members shall deem to be appropriate. The Chief
Executive Officer's salary shall consist of an appropriate mix of salary and
incentive-based opportunities, both in a mix of cash and equity, to provide
stability and promote long-term growth of the Company.
• Make decisions for the Board of Directors with respect to the compensation of all
officers of the Company who are subject to Section 16 of the Exchange of 1934,
as amended (the "Executive Officers"), and all Directors of the Company.
• Review and approve, for each and any Executive Officer or Director, as
applicable:

(i) the annual base salary level,
(ii) the annual incentive opportunity level,
(iii) employment agreements, severance arrangements, and change in control
provisions/agreements, in each case as, when, and if appropriate, and
(iv) any special or supplemental benefits.

• Review and approve a compensation strategy to be applied by the Chief Executive
Officer in determining base salary and incentives for all officers and employees of
the Company other than the Executive Officers and Directors.
• Review and approve stock option grants for officers, Directors and employees of
the Company.
• Produce an annual report on director and executive compensation for inclusion in
the Company's proxy statement, in accordance with applicable rules and
regulations.
• Regularly report the Committee's activities to the Board of Directors.
• Perform such other responsibilities as may be delegated by the Board of
Directors.

Except as noted above, the Committee shall perform each of its responsibilities and duties
at least annually, but more often as the Committee shall determine is necessary or
appropriate.

Procedural Matters

The Committee will meet at least once per year, or more frequently as circumstances
dictate. The agenda of each Committee meeting shall be established by the Chairperson with the
assistance of appropriate members of management. Each Committee member is free to suggest
the inclusion of items on the agenda. Each Committee member is free to raise at any Committee
meeting subjects not on the agenda for that meeting. The agenda, whenever reasonably
practicable, shall be circulated to each Committee member prior to the meeting date. One-half of
the members of the Committee will constitute a quorum for a meeting of the Committee. A
majority of the members present at any meeting at which a quorum is present may act on behalf
of the Committee. The Chairperson will preside, when present, at all meetings of the
Committee. The Committee will keep a record of its meetings and report on them to the Board.
The Committee may meet by telephone or video conference and may take action by written
consent.