EXHIBIT 10.1

AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT

This Amended and Restated Change in Control Agreement (the “Agreement”) is made
and entered into on this 31 day of December, 2010 by and between             
(“Employee”) and Medical Action Industries Inc., a Delaware corporation (the
“Company”).

RECITALS

WHEREAS, the Company and the Employee are currently parties to an Agreement
entered into as of              (the “Prior Agreement”);

WHEREAS, the Company continues to believe that it is in the best interest of the
Company and its stockholders to foster Employee’s objectivity in making
decisions with respect to any pending or threatened Change in Control of the
Company and to assure that the Company will have the continued dedication and
availability of Employee, notwithstanding the possibility, threat, or occurrence
of a Change in Control;

WHEREAS, the Company continues to believe that these goals can be accomplished
by alleviating certain of the risks and uncertainties with regard to Employee’s
financial and professional security that would be created by a pending or
threatened Change in Control and that inevitably would distract Employee and
could impair his ability to objectively perform his duties for and on behalf of
the Company;

WHEREAS, the Company continues to believe that it is appropriate and in the best
interest of the Company and its stockholders to continue to provide Employee
with compensation arrangements upon a Change in Control that lessen Employee’s
financial risks and uncertainties and that are competitive with those of other
corporations;

WHEREAS, the Company and the Employee desire to enter into this Agreement to
amend and restate the Prior Agreement so as to bring it into compliance with
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”); and

WHEREAS, the Board of Directors of the Company has authorized the Company to
enter into this Agreement with the Employee to provide the protections set forth
herein for Employee’s financial security following a Change in Control;

NOW, THEREFORE, in consideration of the mutual promises, covenants, and other
obligations contained herein, the Company and the Employee hereby amend and
restate the Prior Agreement to read as follows:

AGREEMENT

1. Term of Agreement. This Agreement shall be effective from the first date
written above until December 31, 2011. The Company may, in its sole discretion
and for any reason, provide written notice of termination (effective as of the
then applicable expiration date) to Employee no later than 60 days before the
expiration date of this Agreement. If written notice is

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not so provided, this Agreement shall be automatically extended for an
additional period of twelve (12) months past the expiration date. This Agreement
shall continue to be automatically extended for an additional twelve (12) months
at the end of such 12-month period and each succeeding 12-month period unless
notice is given in the manner described in this Section. No termination of this
Agreement shall affect Employee’s rights hereunder with respect to a Change in
Control which has occurred prior to such termination.

2. Purpose of Agreement. The purpose of this Agreement is to provide that, in
the event of a Change in Control (as defined below), Employee may become
entitled to receive certain additional benefits, as described herein, in the
event of his termination.

3. Change in Control. As used in this Agreement, the phrase “Change in Control”
shall mean the following and shall be deemed to occur if any of the following
events occur:

(a) Any “person”, as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), is or becomes
the “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act,
directly or indirectly, of securities of the Company representing 20% or more of
the combined voting power of the Company’s then outstanding voting securities;

(b) Individuals who, as of the date hereof, constitute the Board of Directors of
the Company (the “Incumbent Board”), cease for any reason to constitute at least
a majority of the Board of Directors, provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, is approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall, for the purposes of
this Agreement, be considered as though such person were a member of the
Incumbent Board of the Company;

(c) The stockholders of the Company approve a merger or consolidation with any
other corporation, other than

(i) a merger or consolidation pursuant to which the holders of 50% or more of
the total voting power of all shares of the Company’s stock entitled to vote
generally in the election of directors immediately prior to such transaction
have the entitlement to exercise, directly or indirectly, more than 50% of the
total voting power of all shares of stock entitled to vote generally in the
election of directors of the continuing or surviving corporation immediately
after such transaction;

(ii) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person acquires 20% or more of the
combined voting power of the Company’s then outstanding voting securities; or

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(d) The stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or other disposition by the Company of
all or substantially all of the Company’s assets.

Notwithstanding the preceding provisions of this Section, a Change in Control
shall not be deemed to have occurred (i) if the “person” described in the
preceding provisions of this Section is an underwriter or underwriting syndicate
that has acquired the ownership of 20% or more of the combined voting power of
the Company’s then outstanding voting securities solely in connection with a
public offering of the Company’s securities, or (ii) if the “person” described
in the preceding provisions of this Section is an employee stock ownership plan
or other employee benefit plan maintained by the Company (or any of its
affiliated companies) that is qualified under the provisions of the Employee
Retirement Income Security Act of 1974, as amended.

4. Effect of a Change in Control. In the event of a Change in Control, Sections
6 through 9 of this Agreement shall become applicable to Employee. These
Sections shall continue to remain applicable until the second anniversary of the
date upon which the Change in Control occurs. At that point, so long as the
employment of Employee has not been terminated on account of a Qualifying
Termination, as defined in Section 5, this Agreement shall terminate and be of
no further force. If Employee’s employment with the Company and its affiliated
companies is terminated on account of a Qualifying Termination on or before such
date, this Agreement shall govern the payment of the Severance Payment (as
defined in Section 6 below) and other benefits provided herein, and remain in
effect until Employee receives all benefits to which he has become entitled
under the terms of this Agreement.

5. Qualifying Termination. If, subsequent to a Change in Control Employee’s
employment with the Company and its affiliated companies is terminated, such
termination shall be considered a Qualifying Termination unless:

(a) Employee voluntarily terminates his employment with the Company and its
affiliated companies. Employee, however, shall not be considered to have
voluntarily terminated his employment with the Company and its affiliated
companies if, following the Change in Control, Employee’s overall compensation
is reduced or adversely modified in any material respect or Employee’s duties
are materially changed, and subsequent to such reduction, modification, or
change, Employee elects to terminate his employment with the Company and its
affiliated companies. For such purposes, Employee’s duties shall be considered
to have been “materially changed” if without Employee’s express written consent,
there is any substantial diminution or adverse modification in Employee’s
overall position, responsibilities or reporting relationship, or if without
employee’s express written consent, Employee’s job location is transferred to a
site more than 50 miles away from his place of employment prior to the Change in
Control.

(b) The termination is on account of Employee’s death or Disability. For such
purposes, “Disability” shall mean a physical or mental incapacity as a result of
which Employee becomes unable to continue the performance of his
responsibilities for the Company and its affiliated companies and which, at
least 26 weeks after its commencement, is determined to be total and permanent
by a physician agreed to by the

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Company and Employee, or in the event of Employee’s inability to designate a
physician, Employee’s legal representative. In the absence of agreement between
the Company and Employee, each party shall nominate a qualified physician and
the two physicians so nominated shall select a third physician who shall make
the determination as to Disability.

(c) Employee is involuntarily terminated for “cause”. For this purpose, “cause”
shall be limited to only three types of events:

(i) the willful refusal of Employee to comply with a lawful, written instruction
of the Board so long as the instruction is consistent with the scope and
responsibilities of Employee’s position prior to the Change in Control;

(ii) dishonesty by Employee which results in a material financial loss to the
Company (or to any of its affiliated companies) or material injury to its public
reputation (or to the public reputation of any of its affiliated companies); or

(iii) Employee’s conviction of any felony involving an act of moral turpitude.

6. Severance Payment. If Employee is terminated as a result of a Qualifying
Termination, the Company shall pay Employee within thirty (30) days after the
Qualifying Termination a cash lump sum equal to 2.99 times Employee’s
“Compensation” (the “Severance Payment”). The date on which the Severance
Payment is made shall be in the sole discretion of the Company, but in no event
will the Severance Payment be made later than the thirtieth (30th) day following
the Qualifying Termination.

(a) For purposes of this Agreement, Employee’s “Compensation” shall equal the
sum of (i) Employee’s highest annual salary rate within the five year period
ending on the date of Employee’s Qualifying Termination, plus (ii) a “Management
Bonus Increment”. The “Management Bonus Increment” shall equal the average of
the two highest of the last five bonuses paid to Employee.

(b) The Severance Payment hereunder is in lieu of any severance payment that
Employee might otherwise be entitled to from the Company under the Company’s
applicable severance pay policies.

7. Equity Compensation Grants. Employee may have received stock option grants,
grants of restricted stock, or other incentive compensation awards under the
Company’s 1989 Non-Qualified Stock Option Plan, 1994 Stock Incentive Plan, or
other equity incentive compensation plans of the Company (collectively the
“Incentive Plans”). In the event of a Qualifying Termination, the Company agrees
that any and all such stock options, restricted stock, and other incentive
compensation awards that are outstanding at the time of such termination and
that have not previously become exercisable, payable or free from restrictions,
as the case may be, shall immediately become exercisable, payable or free from
restrictions (other than restrictions required by applicable law or any national
securities exchange upon which any securities of the Company are then listed),
as the case may be, in their entirety, and that the exercise period of any stock
option or other incentive award granted pursuant to any of the Incentive Plans
shall continue for the length of the exercise period specified in the grant of
the award determined without regard to Employee’s termination of employment.

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8. Additional Benefits. In the event of a Qualifying Termination, Employee shall
be entitled to continue to participate in the following employee benefit
programs which had been made available to Employee before the Qualifying
Termination: group medical insurance, group dental insurance, group term life
insurance and disability insurance. These programs shall be continued at no cost
to Employee, except to the extent that tax rules require the inclusion of the
value of such benefits in Employee’s income. The programs shall be continued in
the same way and at the same level as immediately prior to the Qualifying
Termination. These programs shall continue until the third anniversary of the
Qualifying Termination.

9. Excise Taxes. If the Compensation Committee of the Board of Directors of the
Company determines, in its sole discretion, that Section 280G of the Code
applies to any compensation payable to the Employee, then the provisions of this
Section 9 shall apply. If any payments or benefits to which the Employee is
entitled from the Company, any affiliate, any successor to the Company or an
affiliate, or any trusts established by any of the foregoing by reason of, or in
connection with, any transaction that occurs after the date of this Agreement
(collectively, the “Payments,” which shall include, without limitation, the
vesting of any equity awards or other non-cash benefit or property) are, alone
or in the aggregate, more likely than not, if paid or delivered to the Employee,
to be subject to the tax imposed by Section 4999 of the Code or any successor
provisions to that section, then the Payments (beginning with any Payment to be
paid in cash hereunder), shall be either (a) reduced (but not below zero) so
that the present value of such total Payments received by the Employee will be
one dollar ($1.00) less than three times the Employee’s “base amount” (as
defined in Section 280G(b)(3) of the Code) and so that no portion of such
Payments received by the Employee shall be subject to the excise tax imposed by
Section 4999 of the Code, or (b) paid in full, whichever of (a) or (b) produces
the better net after tax position to the Employee (taking into account any
applicable excise tax under Section 4999 of the Code and any other applicable
taxes). The determination as to whether any Payments are more likely than not to
be subject to taxes under Section 4999 of the Code and as to whether reduction
or payment in full of the amount of the Payments provided hereunder results in
the better net after tax position to the Employee shall be made by the Board of
Directors of the Company and the Employee in good faith.

10. Compliance with Section 409A. It is intended that any amounts payable under
this Agreement and the Company’s and the Employee’s exercise of authority or
discretion hereunder shall comply with and avoid the imputation of any tax,
penalty, or interest under Section 409A of the Code and the guidance promulgated
thereunder (collectively, the “Nonqualified Deferred Compensation Rules”). This
Agreement shall be construed and interpreted consistent with that intent.

(a) In no event shall a Qualifying Termination occur unless such termination
would be classified as a “separation from service” within the meaning of the
Nonqualified Deferred Compensation Rules.

(b) If the Employee is a “specified employee” within the meaning of Treasury
Regulation Section 1.409A-1(i) as of the date of the Employee’s Qualifying

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Termination, the Employee shall not be entitled to any payment or benefit
pursuant to this Agreement until the earlier of (i) the date which is six
(6) months after his or her Qualifying Termination, or (ii) the date of the
Employee’s death. The provisions of this paragraph shall only apply if, and to
the extent, required to avoid the imputation of any tax, penalty, or interest
pursuant to the Nonqualified Deferred Compensation Rules. Any amounts otherwise
payable to the Employee upon or in the six (6) month period following the
Employee’s Qualifying Termination that are not so paid by reason of this
Section 10(b) shall be paid (without interest) as soon as practicable (and in
all events within twenty (20) days) after the date that is six (6) months after
the Employee’s Qualifying Termination (or, if earlier, on the first business day
following the 30th day after the date of Employee’s death).

(c) To the extent that any reimbursements pursuant to Section 8 are taxable to
the Employee, any reimbursement payment due to the Employee pursuant to such
provision shall be paid to the Employee on or before the last day of the
Employee’s taxable year following the taxable year in which the related expense
was incurred. The Employee agrees to provide prompt notice to the Company of any
such expenses (and any other documentation that the Company may reasonably
require to substantiate such expenses) in order to facilitate the Company’s
timely reimbursement of the same. The reimbursements and benefits pursuant to
Section 8 are not subject to liquidation or exchange for another benefit and the
amount of such reimbursements and benefits that the Employee receives in one
taxable year shall not affect the amount of such reimbursements or benefits that
the Employee receives in any other taxable year.

11. Rights and Obligations Prior to a Change in Control. Prior to a Change in
Control, the rights and obligations of employee with respect to his employment
by the Company shall be determined in accordance with the policies and
procedures adopted from time to time by the Company and the provisions of any
written employment contract in effect between the Company and Employee from time
to time. This Agreement deals only with certain rights and obligations of
Employee subsequent to a Change in Control, and the existence of this Agreement
shall not be treated as raising any inference with respect to what rights and
obligations exist prior to a Change in Control. Unless otherwise expressly set
forth in a separate employment agreement between Employee and the Company, the
employment of Employee is at-will, and Employee or the Company may terminate
Employee’s employment with the Company at any time and for any reason, with or
without cause, whereupon this Agreement shall terminate and be of no further
force.

12. Non-Exclusivity of Rights. Subject to Section 6(b) hereof, nothing in this
Agreement shall prevent or limit Employee’s continuing or future participation
in any benefit, bonus, incentive or other plan or program provided by the
Company or any of its affiliated companies and for which Employee may qualify,
nor shall anything herein limit or otherwise affect (except as provided in
Section 7 above) such rights as Employee may have under any stock option or
other agreements with the Company or any of its affiliated companies. Except as
otherwise provided in Section 6(b) hereof, amounts which are vested benefits or
which Employee is otherwise entitled to receive under any plan or program of the
Company or any of its affiliated companies at or subsequent to the date of any
Qualified Termination shall be payable in accordance with such plan or program.

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13. Full Settlement. The Company’s obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counter-claim, recoupment, defense or other claim,
right or action which the Company may have against Employee or others. In no
event shall Employee be obligated to seek other employment or to take any other
action by way of mitigation of the amounts payable to Employee under any of the
provisions of this Agreement. The Company agrees to pay, to the full extent
permitted by law, all legal fees and expenses which Employee may reasonably
incur as a result of any contest (regardless of the outcome thereof) by the
Company or others of the validity or enforceability of; or liability under, any
provisions of this Agreement or any guarantee of performance thereof, plus in
each case interest at the rate provided in Section 1274(b)(2)(B) of the Code (or
any successor thereto). Reimbursement of legal fees and expenses shall be made
monthly upon the written submission of a request for reimbursement together with
evidence that such fees and expenses are due and payable or were paid by
Employee.

 

  14. Successors.

(a) This Agreement is personal to Employee, and without the prior written
consent of the Company, shall not be assignable by Employee other than by will
or the laws of descent and distribution. This Agreement shall insure to the
benefit of and be enforceable by Employee’s legal representatives,

(b) The rights and obligations of the Company under this Agreement shall inure
to the benefit of and shall be binding upon the successors and assigns of the
Company.

15. Governing Law. This Agreement is made and entered into in the State of New
York, and the laws of New York shall govern its validity and interpretation in
the performance by the parties hereto of their respective duties and obligations
hereunder.

16. Entire Agreement. This Agreement constitutes the entire agreement between
the parties respecting the benefits due Employee in the event of a Change in
Control followed by a Qualifying Termination, and there are no representations,
warranties or commitments, other than those set forth herein, which relate to
such benefits. This Agreement may be amended or modified only by an instrument
in writing executed by all of the parties hereto.

 

  17. Dispute Resolution.

(a) Any controversy or dispute between the parties involving the construction,
interpretation, application or performance of the terms, covenants, or
conditions of this Agreement or in any way arising under this Agreement (a
“Covered Dispute”) shall, on demand by either of the parties by written notice
served on the other party in the manner prescribed in Section 18 hereof, be
referenced pursuant to the procedures described in the New York Civil Practice
Law and Rules (“CPLR”) Section 7501, et seq., as they may be amended from time
to time (the “Reference Procedures”), to a retired Judge from the Supreme Court
for the County of Suffolk for a decision.

(b) The Reference Procedures shall be commenced by either party by the filing in
the Supreme Court of the State of New York for the County of Suffolk of an

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application for a special proceeding pursuant to CPLR Section 7502 (a “Special
Proceeding”). Said Special Proceeding shall designate as a referee a Judge from
the list of retired Suffolk County Supreme Court Judges who have made themselves
available for trial or settlement of civil litigation. If the parties hereto are
unable to agree on the designation of a particular retired Suffolk County
Supreme Court Judge or the designated Judge is unavailable or unable to serve in
such capacity, request shall be made in said Special Proceeding that the
Presiding or Assistant Presiding Judge of the Suffolk County Supreme Court
appoint as a referee a retired Suffolk County Supreme Court Judge from the
aforementioned list.

(c) Except as hereafter agreed by the parties, the referee shall apply the law
of New York in deciding the issues submitted hereunder. Unless formal pleadings
are waived by agreement among the parties and the referee, the moving party
shall file and serve its complaint within fifteen (15) days from the date a
referee is designated as provided herein, and the other party shall have fifteen
(15) days thereafter in which to plead to said complaint. Each of the parties
reserves it respective rights to allege and assert in such pleadings all claims,
causes of action, contentions, and defenses which it may have arising out of or
relating to the general subject matter of the Covered Dispute that is being
determined pursuant to the Reference Procedures. Reasonable notice of any
motions before the referee shall be given, and all matters shall be set at the
convenience of the referee. Discovery shall be conducted as the parties agree or
as allowed by the referee. Unless waived by each of the parties, a reporter
shall be present at all proceedings before the referee.

(d) It is the parties’ intention by this Section 17 that all issues of fact and
law and all matters of a legal and equitable nature related to any Covered
Dispute will be submitted for determination by a referee designated as provided
herein. Accordingly, the parties hereby stipulate that a referee designated as
provided herein shall have all powers of a Judge of the Supreme Court including,
without limitation, the power to grant equitable and interlocutory and permanent
injunctive relief.

(e) Each of the parties specifically (i) consents to the exercise of
jurisdiction over his person by a referee designated as provided herein with
respect to any and all Covered Disputes; and (ii) consents to the personal
jurisdiction of the New York courts with respect to any appeal or review of the
decision of any such referee.

(f) Each of the parties acknowledges that the decision by a referee designated
as provided herein shall be a basis for a judgment as provided in CPLR
Section 7514.

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18. Notices. Any notice or communication required or permitted to be given to
the parties hereto shall be delivered personally or be sent by United States
registered or certified mail, postage prepaid and return receipt requested, and
addressed or delivered as follows, or as such other addresses the party
addressed may have substituted by notice pursuant to this Section:

 

     (a)       If to the Company:       Medical Action Industries Inc.       500
Expressway Drive South       Brentwood, NY 11717       Attn: Vice President of
Human Resources      (b)       If to Employee:       –––––––––––––––      
–––––––––––––––       –––––––––––––––

19. Captions. The captions of this Agreement are inserted for convenience and do
not constitute a part hereof.

20. Severability. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein and there shall be deemed substituted for such invalid, illegal
or unenforceable provision such other provision as will most nearly accomplish
the intent of the parties to the Agreement, or any one or more of the provisions
hereof, shall be held to be invalid, illegal, or unenforceable within any
governmental jurisdiction or subdivision thereof, this Agreement or any such
provision thereof shall not as a consequence thereof be deemed to be invalid,
illegal, or unenforceable in any other governmental jurisdiction or subdivision
thereof.

21. Payments to Beneficiary. If the Employee dies before receiving all amounts
to which he is entitled under this Agreement, such amounts shall be paid in a
lump sum to the beneficiary designated in writing by Employee, or if none is so
designated, to Employee’s estate.

22. Non-alienation of Benefits. Benefits payable under this Agreement shall not
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any
kind, either voluntary or involuntary, before actually being received by
Employee, and any such attempt to dispose of any right to benefits payable under
this Agreement shall be void.

23. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which shall together
constitute one in the same Agreement.

24. No Waiver. Employee’s failure to insist upon strict compliance with any
provision of this Agreement shall not be deemed a waiver of such provision or
any other provision of this Agreement. A waiver of any provision of this
Agreement shall not be deemed a waiver of any other provision, and any waiver of
any default in any such provision shall not be deemed a waiver of any later
default thereof or of any other provision.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first written above in
            , New York.

 

Dated: December 31, 2010     MEDICAL ACTION INDUSTRIES INC.     By:  

 

Dated: December 31, 2010      

 

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