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Compensation Committee Charter

DUSA PHARMACEUTICALS, INC.

COMPENSATION COMMITTEE CHARTER

Revisions Adopted: November 5, 2010

Purpose

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. 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.

Organization

The membership of the Committee shall consist of at least two (2) Directors, both 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.

Committee 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.

• Review and approve stock option and other equity grants to qualified employees of the Company.

• Obtain advice and assistance from internal or external legal, accounting, human resource or other advisors, or other persons, including Directors, officers or employees of the Company, 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.

• Exercise such other powers as may be necessary or appropriate to fulfill its purposes.

• Review and recommend to the Board of Directors, or approve, new executive compensation programs.

Specific Responsibilities and Duties

To fulfill its responsibilities and duties, the Committee shall:

• 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.

• Discharge the duties of 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, evaluate, and approve, for each and any Chief Executive Officer, 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) annual retainer and meeting fees for the Board of Directors and committees of the Board

(v) any special or supplemental benefits.

• Review and approve a compensation strategy to be applied by the Chief Executive Officer and President in determining base salary and incentives for all officers and employees of the Company other than the Executive Officers and Directors.

• Administer the Company’s equity and deferred compensation plans, approve any new employee benefit plan or a change to any existing plan.

• Review and approve stock option grants, stock awards, stock appreciation rights, or other compensation according to the terms of the Company’s equity plans and policies for officers, Directors and employees of the Company.

• Review the Compensation Discussion & Analysis section of the Company’s proxy statement prepared by management, and any other disclosure, as may be applicable, in accordance with applicable rules and regulations

• Produce an annual report 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.

• Conduct an annual evaluation of this Charter, members of the Committee, and the Committee’s performance in fulfilling its duties and responsibilities under this Charter.

• 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 Chairperson or any member of the Committee or the Board may call a meeting of the Committee. The Committee will meet at least twice 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.