8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8 – K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report: November 1, 2011

(Date of earliest event reported)

MEDICAL ACTION INDUSTRIES INC.

(Exact name of registrant as specified in its charter)

(Former name or former address, if changed since last report)

Delaware	0-13251	11-2421849
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)
500 Expressway Drive South, Brentwood, New York		11717
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number including area code (631) 231-4600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Effective November 1, 2011, an amendment to the Bylaws of Medical Action Industries Inc. (the “Company”) was approved by the Board of Directors (the “Board”) and put into effect. The principal changes effected were:

• Amendment to Section 2 of Article I allowing the Board to set the date of the Annual Meeting of stockholders.

• Amendment to Section 3 of Article I making the right to call special meetings of the stockholders by the Board subject to the rights of holders of Preferred Stock provided it is in accordance with the Certificate of Incorporation.

• Amendment to Section 5 of Article I allowing the Chairman of the meeting or the holders of shares of stock with a majority of the voting power present in person or represented by proxy the ability to adjourn a meeting without notice, notwithstanding other provisions of the Certificate of Incorporation or these Bylaws.

• Amendment to Section 6 of Article I requiring that directors be elected by a plurality of the votes cast by the holders of shares of stock entitled to vote, subject to the rights of holders of Preferred Stock.

• Addition of Section 8 of Article I stating that the Company may not vote shares of its own stock.

• Addition of Section 9 of Article I stating that an action without a meeting can occur if consent in writing is obtained from a minimum number of votes necessary to authorize or take such action in a meeting.

• Amendment to Section 2 of Article II allowing the Board to determine the number of directors of the Company.

• Insert Sections 1 through 10 within Article VII which assigns the Company responsibilities regarding the indemnification and advancement of expenses of “Covered Persons” (as defined in the Amended and Restated Bylaws).

The Amended and Restated Bylaws also contain certain other clarifying and conforming changes. The preceding is qualified in its entirety by the full text of the Amended and Restated Bylaws of the Company that is included as Exhibit 3.2 to this Current Report on form 8-K and is incorporated herein by reference.

Item 5.05 Amendments to the Company’s Code of Ethics

Effective November 1, 2011, an amendment to the Company’s Code of Ethics was approved by the Board and put into effect. The principal changes effected were:

• Implementation of periodic certifications to be signed by the Company’s directors, officers and other appropriate employees.

• Clarification of the responsibilities under the Code of Ethics of the Chief Financial Officer and Vice President of Human Resources.

• Prohibition of the extension of personal loans to directors, officers or employees.

The amended Code of Ethics also contains certain other clarifying and conforming changes. The preceding is qualified in its entirety by the full text of the amended Code of Ethics of the Company that is included as Exhibit 14.1 to this Current Report on form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

3.2	Amended and Restated Bylaws
14.1	Code of Ethics

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

MEDICAL ACTION INDUSTRIES INC.
By:	/s/    Charles L. Kelly, Jr.
	Charles L. Kelly, Jr., Chief Financial Officer

Dated: November 7, 2011

EX-3.2

EXHIBIT 3.2

AMENDED AND RESTATED

BYLAWS

OF

MEDICAL ACTION INDUSTRIES INC.

(A Delaware Corporation)

ARTICLE I

STOCKHOLDERS

SECTION 1. Place of Meetings. Meetings of stockholders shall be held at such place as shall be designated from time to time by the Board of Directors (the “Board”) or as the business of Medical Action Industries Inc. (the “Corporation”) may require.

SECTION 2. Annual Meetings. Annual meetings of stockholders shall be held on such date and at such time as may be fixed by the Board and stated in the notice of the meeting, for the purpose of electing directors and for the transaction of such other business as may be properly brought before the meeting in accordance with these bylaws.

SECTION 3. Special Meetings. Except as otherwise required by law, special meetings of the stockholders may be called only by the Board, subject to the rights of holders of Preferred Stock, called only in accordance with the Certificate of Incorporation.

SECTION 4. Notice of Meetings. Written notice of each meeting of the stockholders stating place, date, hour and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present and in person and vote at such meeting of the stockholders shall be given by or at the direction of the Board to each stockholder entitled to vote at the meeting at least ten, but not more than sixty, days prior to the meeting and may be given personally, by electronic transmission or by mail. Notice of any special meeting shall state in general terms the purpose or purposes for which the meeting is called and no other business shall be transacted thereat except as stated in such notice. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his, her or its address as it appears on the records of the Corporation. The Corporation may provide stockholders with notice of a meeting by electronic transmission provided such stockholders have consented to receiving electronic notice.

SECTION 5. Quorum; Adjournments of Meetings. Unless otherwise required by law or provided in the Certificate of Incorporation or these bylaws, the holders of shares of stock with a majority of the voting power entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at any meeting of stockholders for the transaction of business, and the act of the holders of a majority of the voting power of such stock so represented at any meeting of stockholders at which a quorum is present shall constitute the act of the meeting of stockholders; but, if there be less than a quorum, the holders of a majority of the votes entitled to be cast by the holders of all classes of the Corporation’s capital stock so present or represented

may adjourn the meeting to another time or place, from time to time, until a quorum shall be present, whereupon the meeting may be held, as adjourned, without further notice, except as required by law, and any business may be transacted thereat which might have been transacted at the meeting as originally called.

Notwithstanding the other provisions of the Certificate of Incorporation or these bylaws, the chairman of the meeting or the holders of shares of stock with a majority of the voting power present in person or represented by proxy at any meeting of stockholders, whether or not a quorum is present, shall have the power to adjourn such meeting from time to time, without any notice other than announcement at the meeting of the time and place of the holding of the adjourned meeting; provided, however, if the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at such meeting. At any such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally called.

SECTION 6. Voting. At any meeting of the stockholders every registered owner of shares entitled to vote may vote in person or by proxy and, unless otherwise provided by law or in the Certificate of Incorporation, shall have one vote for each such share which is registered in his, her or its name on the record date for the meeting. Unless otherwise provided in the Certificate of Incorporation or these bylaws, and subject to the rights of holders of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one or more series of Preferred Stock, directors shall be elected by a plurality of the votes cast by the holders of shares of stock entitled to vote in the election of directors at a meeting of stockholders at which a quorum is present. Except as otherwise required by statute, the Certificate of Incorporation, or these bylaws, all matters, other than the election of directors, brought before any meeting of the stockholders shall be decided by a vote of a majority in interest of the stockholders of the Corporation present in person or by proxy at such meeting and voting thereon, a quorum being present. Unless otherwise provided in the Certificate of Incorporation, cumulative voting for the election of directors shall be prohibited.

SECTION 7. Inspectors of Election. The Board, or, if the Board shall not have made the appointment, the chairman presiding at any meeting of stockholders at which a vote is taken by ballots, shall have power to appoint one or more persons to act as inspectors of election at the meeting or any adjournment thereof, but no candidate for the office of director shall be appointed as an inspector at any meeting for the election of directors. Such inspector shall ascertain the number of shares of capital stock of the Corporation outstanding and the voting power of each such share, determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, count all votes and ballots, determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law.

SECTION 8. Treasury Stock. The Corporation shall not vote, directly or indirectly, shares of its own stock owned by it or any other corporation, if a majority of shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation and such shares shall not be counted for quorum purposes.

SECTION 9. Action without Meeting. Unless otherwise provided in the Certificate of Incorporation, any action permitted or required by law, the Certificate of Incorporation or these bylaws to be taken at a meeting of stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than a unanimous written consent shall be given by the Secretary to those stockholders who have not consented in writing.

SECTION 10. Meeting Attendance via Remote Communication Equipment. If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxy holders not physically present at a meeting of stockholders may, by means of remote communication: (a) participate in a meeting of stockholders; and (b) be deemed present in person and vote at a meeting of stockholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxy holder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxy holder votes or takes other action at the meeting by means of remote communication, a record of such votes or other action shall be maintained by the Corporation.

ARTICLE II

BOARD OF DIRECTORS

SECTION 1. General Powers. The affairs, business and property of the Corporation shall be managed and controlled by the Board. Except as provided in the Certificate of Incorporation or these bylaws, the Board may exercise all the powers of the Corporation and do all such lawful acts and things as are not by statute or the Certificate of Incorporation directed or required to be exercised or done by the stockholders.

SECTION 2. Number of Directors. The number of directors of the Corporation shall be determined from time to time by resolution of the Board, unless the Certificate of Incorporation fixes the number of directors, in which case a change in the number of directors shall be made only by amendment of the Certificate of Incorporation. Each director shall hold office for the term for which he or she is elected, and until his or her successor shall have been elected and qualified or until his or her earlier death, resignation or removal.

SECTION 3. First Meeting. The first meeting of each newly elected Board, of which no notice shall be necessary, shall be held immediately following the annual meeting of stockholders or any adjournment thereof at the place the annual meeting of stockholders was held at which such directors were elected, or at such other place as a majority of the members of the newly elected Board who are then present shall determine, for the election or appointment of Officers for the ensuing year and the transaction of such other business as may be brought before such meeting.

SECTION 4. Regular Meetings. Regular meetings of the Board, other than the first meeting, may be held without notice at such times and places as the Board may from time to time determine.

SECTION 5. Special Meetings. Special meetings of the Board may be called by order of the Chairman of the Board, the chief executive officer, the chief financial officer, the President, the Secretary or any two directors. Notice of the time and place of each special meeting shall be given by or at the direction of the person or persons calling the meeting by mailing the same at least two days before the meeting or by telephoning, telegraphing or delivering personally the same at least twenty-four (24) hours before the meeting to each director. Except as otherwise specified in the notice thereof, or as required by statute, the Certificate of Incorporation, or these bylaws, any and all business may be transacted at any special meeting.

SECTION 6. Attendance by Communications Equipment. Unless otherwise restricted by the Certificate of Incorporation, members of the Board or of any committee designated by the Board may participate in a meeting of the Board or any such committee by means of conference telephone or similar communications equipment whereby all persons participating in the meeting can hear each other. Participation in any meeting by such means shall constitute presence in person at such meeting. Any meeting at which one or more members of the Board or of any committee designated by the Board shall participate by means of conference telephone or similar communications equipment shall be deemed to have been held at the place designated for such meeting, provided that at least one member is at such place while participating in the meeting.

SECTION 7. Action without Meeting. Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board, or any committee designated by the Board, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such consent shall have the same force and effect as a unanimous vote at a meeting.

SECTION 8. Quorum; Vote. A majority of the directors then in office shall constitute a quorum for the transaction of business, but less than quorum may adjourn any meeting to another time or place from time to time until a quorum shall be present, whereupon the meeting may be held, as adjourned, without further notice. Except as otherwise required by statute, the Certificate of Incorporation, or these bylaws, all matters coming before any meeting of the Board shall be decided by the vote of a majority of the directors present at the meeting, a quorum being present.

SECTION 9. Compensation. Unless otherwise restricted by the Certificate of Incorporation, the Board (or a committee thereof) shall have the authority to fix the compensation of directors. The directors may be reimbursed for their expenses, if any, for attendance at each meeting of the Board and may be paid either a fixed sum for attendance at each meeting of the Board or other compensation as director. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of committees of the Board may be allowed like compensation and reimbursement of expenses for service on Board committees.

ARTICLE III

COMMITTEES

SECTION 1. Designation; Powers; Meetings; Substitution of Members. The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent allowed by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation. The Board shall have the power to prescribe the manner in which the proceedings of any such committee shall be conducted. In the absence of any such prescription, such committee shall have the power to prescribe the manner in which its proceedings shall be conducted. Unless the Board or such committee shall otherwise provide, regular and special meetings and other actions of any such committee shall be governed by the provisions of this Article III applicable to meetings and actions of the Board. Each committee shall keep regular minutes and report to the Board when required.

ARTICLE IV

OFFICERS

SECTION 1. Number and Designation. The Board shall elect as executive officers a chief executive officer, a Secretary and, if the Board so elects, a Chairman of the Board, one or more Vice Presidents, a Treasurer, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers as the Board may deem necessary. Except for the Chairman of the Board, if any, no officer need be a director. Any number of offices may be held by one, or more than one, person, but in any case where the bylaws or resolutions of the Board provide for the signature of the incumbents of two or more officers of the Corporation upon the certificates of stock, notes, checks or other instruments or documents issued by the Corporation, no one person shall sign in more than one capacity. The executive officers shall be elected annually by the Board at its first meeting following the annual election of directors, but in the event of the

failure of the Board so to elect any executive officer, such executive officer may be elected at any subsequent meeting of the Board. Each executive officer shall hold office until his successor shall have been duly elected and qualified, except in the event of the earlier termination of his or her term of office through death, resignation, removal or otherwise. Any vacancy in an executive office may be filled for the unexpired portion of the term of such office by the Board at any regular or special meeting.

SECTION 2. Chief Executive Officer. Unless the Board designates the Chairman of the Board or any other officer as chief executive officer, the President shall be the chief executive officer of the Corporation and, subject to the Board, shall have general direction, supervision and management of the business and affairs of the corporation. The Chairman of the Board shall have such other powers and perform such other duties as the Board may from time to time prescribe and may execute contracts and other instruments in the name of the Corporation.

SECTION 3. Chairman of the Board. If elected, the Chairman of the Board shall preside at all meetings of the stockholders and of the Board; shall have such other powers and duties as designated in these bylaws and as from time to time may be assigned to him or her by the Board.

SECTION 4. President. The President shall be the principal operations officer of the Corporation, and, subject to the Board, the Chairman of the Board shall direct the operations of the Corporation. The President (i) shall have such other powers and perform such other duties as the Board may from time to time prescribe; (ii) shall perform the duties of the Chairman of the Board in the absence of and/or in the event of the inability of the Chairman of the Board to act; (iii) may execute contracts and other instruments in the name of the Corporation and appoint and discharge agents and employees; and (iv) shall perform all other duties incident to the office of President, except as herein otherwise provided.

SECTION 5. Vice Presidents. Whenever there is more than one Vice President, the Board shall decide upon the order of their seniority and may designate one or more to be executive Vice Presidents. In the absence or inability to act of the President, or if the office of President be vacant, the Vice Presidents, in order of seniority, subject to the right of the Board from time to time to extend or confine such powers and duties, may exercise all the powers of the President. Each Vice President shall have such other powers and shall perform such other duties as may be assigned to him by the Board.

SECTION 6. Treasurer. The Treasurer, subject to the right of the Board from time to time to extend or confine his or her powers and duties or assign them to others, shall have general supervision over the care and custody of the funds and securities of the Corporation and shall deposit in the name of the Corporation in such bank or banks, trust company or trust companies, and in such safe deposit company or companies or invested in securities of such money market fund or funds, as the Board or the executive committee may designate, shall have supervision over the accounts of all receipts and disbursements of the Corporation, shall, whenever required by the Board, render or cause to be rendered financial statements of the Corporation, shall have the powers and perform the duties usually incident to the office of Treasurer, and shall have such other powers and perform such other duties as may be assigned to him or her by the Board.

SECTION 7. Secretary. The Secretary, subject to the right of the Board from time to time to extend or confine his powers and duties or to assign them to others, shall act as Secretary of all meetings of the stockholders and of the Board at which he or she is present, shall have supervision over the giving and serving of notices of the Corporation, shall be the custodian of the corporate records and of the corporate seal of the Corporation, shall be empowered to affix the corporate seal to documents, the execution of which, on behalf of the Corporation, under its seal, is duly authorized, and when so affixed may attest the same, shall exercise the powers and perform the duties usually incident to the office of Secretary, and shall exercise such other powers and perform such other duties as may be assigned to him or her by the Board. The Secretary shall, if the law so provides, be sworn to the faithful discharge of his or her duties.

SECTION 8. Other Officers. The Assistant Secretaries, the Assistant Treasurers and all other officers shall hold office during the pleasure of the Board and shall exercise such powers and perform such duties as may be assigned to each by the Board.

SECTION 9. Term of Office; Removal and Vacancy. Each officer shall hold his or her office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer or agent shall be subject to removal with or without cause at any time by the Board. Vacancies in any office, whether occurring by death, resignation, removal or otherwise, may be filled by the Board.

SECTION 10. Power to Vote Stock. Unless otherwise ordered by the Board, the Chairman of the Board and the President shall have full power and authority on behalf of the Corporation to attend and to vote at any meeting of stockholders of any corporation in which the Corporation may hold stock, and may exercise on behalf of the Corporation any and all of the rights and powers incident to the ownership of such stock at any such meeting and shall have the power and authority to execute and deliver proxies, waivers and consents on behalf of the Corporation in connection with the exercise by the Corporation of the rights and powers incident to the ownership of such stock. The Board, from time to time, may confer like powers upon any other person or persons.

ARTICLE V

CAPITAL STOCK

SECTION 1. Certificates for Stock. Certificates for stock of the Corporation shall be in such form as the Board may from time to time prescribe and shall be signed by the Chairman of the Board, the President or a Vice President and by the Treasurer or an Assistant Treasurer or the Secretary and the Assistant Secretary.

SECTION 2. Transfer of Stock. Shares of capital stock of the Corporation shall be transferable on the books of the Corporation only by the holder of record thereof, in person or by duly authorized attorney, upon surrender and cancellation of the certificates for a like number of shares, with an assignment or power of transfer endorsed thereon or delivered therewith, duly executed, and with such proof of the authenticity of the signature and of authority to transfer, and of payment of transfer taxes, as the Corporation or its agents may require.

SECTION 3. Ownership of Stock. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the owner thereof in fact and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law.

SECTION 4. Regulations Regarding Certificates. The Board shall have the power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration or the replacement of certificates for shares of capital stock of the Corporation.

SECTION 5. Lost or Destroyed Certificates. The Board may determine the conditions upon which a new certificate of stock may be issued in place of a certificate which is alleged to have been lost, stolen or destroyed; and may, in their discretion, require the owner of such certificate or his or her legal representative to give bond, with sufficient surety, to indemnify the Corporation and each transfer agent and registrar against any and all losses or claims which may arise by reason of the issue of a new certificate in the place of the one so lost, stolen or destroyed.

ARTICLE VI

AMENDMENT

The Board shall have the power to make, alter or repeal the bylaws of the Corporation subject to the power of the stockholders to alter or repeal the bylaws made or altered by the Board of Directors.

ARTICLE VII

INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

SECTION 1. Right to Indemnification. The Corporation shall indemnify, and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person (“Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or an officer of the Corporation or, while a director or an officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, the Corporation shall be required to indemnify a Covered Person in connection with a proceeding (or part thereof) commenced by such Covered Person only if the commencement of such proceeding (or part thereof) by the Covered Person was authorized by the Board.

SECTION 2. Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 7.1, a Covered Person also shall have the right to be paid by the Corporation the expenses (including, without limitation, attorneys’ fees) incurred in defending, testifying, or otherwise participating in any such proceeding in advance of its final disposition (hereinafter an “advancement of expenses”); provided, however, that, if the Delaware General Corporation Law (the “DGCL”) requires, an advancement of expenses incurred by a Covered Person in his or her capacity as a director or officer of the Corporation shall be made only upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such Covered Person, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such Covered Person is not entitled to be indemnified for such expenses under this Article VII or otherwise.

SECTION 3. Claims. If (a) a claim under Section 7.1 (following the final disposition of such proceeding) is not paid in full by the Corporation within sixty (60) days after a written claim therefor has been received by the Corporation, or (b) a claim under Section 7.2 is not paid in full by the Corporation within thirty (30) days after a written claim therefor has been received by the Corporation, the Covered Person may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Covered Person shall also be entitled to be paid the expense of prosecuting or defending such suit to the fullest extent permitted by law. It shall be a defense to any such suit (other than a suit brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the Covered Person has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the Covered Person for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the Covered Person is proper in the circumstances because the Covered Person has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including a determination by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the Covered Person has not met such applicable standard of conduct, shall create a presumption that the Covered Person has not met the applicable standard of conduct or, in the case of such a suit brought by the Covered Person, shall be a defense to such suit. In any suit brought by the Covered Person to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the Covered Person is not entitled to be indemnified, or to such advancement of expenses, under this Article VII or otherwise shall be on the Corporation.

SECTION 4. Non-Exclusivity of Rights. The rights provided to Covered Persons pursuant to this Article VII are not exclusive of any other rights that any Covered Person may have or hereafter acquire under applicable law, the Certificate of Incorporation, these bylaws, an agreement, a vote of stockholders or disinterested directors, or otherwise.

SECTION 5. Insurance. The Corporation may maintain insurance, at its expense, to protect itself and/or any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

SECTION 6. Indemnification of Other Persons. This Article VII shall not limit the right of the Corporation to the extent and in the manner authorized or permitted by law to indemnify and to advance expenses to persons other than Covered Persons. Without limiting the foregoing, the Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation and to any other person who is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise or nonprofit entity, including service with respect to an employee benefit plan, to the fullest extent of the provisions of this Article VII with respect to the indemnification and advancement of expenses of Covered Persons under this Article VII.

SECTION 7. Amendments. Any repeal or amendment of this Article VII by the Board or the stockholders of the Corporation or by changes in applicable law, or the adoption of any other provision of these bylaws inconsistent with this Article VII, will, to the extent permitted by applicable law, be prospective only (except to the extent such amendment or change in applicable law permits the Corporation to provide broader indemnification rights to Covered Persons on a retroactive basis than permitted prior thereto), and will not in any way diminish or adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

SECTION 8. Certain Definitions. For purposes of this Article VII, (a) references to “other enterprise” shall include any employee benefit plan; (b) references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; (c) references to “serving at the request of the Corporation” shall include any service that imposes duties on, or involves services by, a person with respect to any employee benefit plan, its participants, or beneficiaries; and (d) a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interest of the Corporation” for purposes of Section 145 of the DGCL.

SECTION 9. Contract Rights. The rights provided to Covered Persons pursuant to this Article VII shall be contract rights and such rights shall continue as to a Covered Person who has ceased to be a director, officer, agent or employee and shall inure to the benefit of the Covered Person’s heirs, executors and administrators.

SECTION 10. Severability. If any provision or provisions of this Article VII shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality

and enforceability of the remaining provisions of this Article VII shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Article VII (including, without limitation, each such portion of this Article VII containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

ARTICLE VIII

MISCELLANEOUS

SECTION 1. Corporate Seal. The seal of the Corporation shall be circular in form and shall contain the name of the Corporation and the year and State of Incorporation.

SECTION 2. Fiscal Year. The Board shall have power to fix, and from time to time to change, the fiscal year of the Corporation.

SECTION 3. Notice and Waiver of Notice. Whenever any notice is required to be given by law, the Certificate of Incorporation or under the provisions of these bylaws, said notice shall be deemed to be sufficient if given by electronic transmission or by deposit of the same in a post office box in a sealed prepaid wrapper addressed to the person entitled thereto at his or her post office address, as it appears on the records of the Corporation, and such notice shall be deemed to have been given on the day of such transmission or mailing, as the case may be.

Whenever notice is required to be given by law, the Certificate of Incorporation or under any of the provisions of these bylaws, a written waiver thereof, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the grounds that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation or these bylaws.

SECTION 4. Resignations. Any director, member of a committee or officer may resign at any time. Such resignation shall be made in writing or by electronic transmission and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the chief executive officer or Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation.

SECTION 5. Facsimile Signatures. In addition to the provisions for the use of facsimile signatures elsewhere specifically authorized in these bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board.

SECTION 6. Reliance upon Books, Reports and Records. Each director and each member of any committee designated by the Board shall, in the performance of his or her duties, be fully protected in relying in good faith upon the books of account or reports made to the Corporation by any of its officers, or by an independent certified public accountant, or by an appraiser selected with reasonable care by the Board or by any such committee, or in relying in good faith upon other records of the Corporation.

SECTION 7. Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of, or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time.

EX-14.1

EXHIBIT 14.1

Medical Action Industries Inc.

Code of Ethics

The way we do business worldwide

Contents

1. Fundamental Principles

A. Condition of Employment/Directorship

B. Compliance Certificate

C. Interpretation Questions

D. Violation of Policy

2. Responsibilities to Medical Action

A. Opportunity is for Everyone

B. Employee Relations

C. Non-Discrimination Policy

D. Freedom of Association

E. Disciplinary Practices

F. Confidential Information

G. Public Communications

H. Use of Company Equipment, Electronic Systems and Communications

I. Association with Unaffiliated Enterprises

J. Conflicts of Interest

K. It’s a Matter of Record

3. Responsibilities to Others

A. Payments of Amounts Due

B. Foreign Payments

C. Quality in All We Do

D. Protection and Proper use of Company Assets

E. Using Company and Third-Party Copyrighted Material

F. Environmental Health and Safety

4. Responsibilities to the Public

A. Dealing with Government Contracts and Other Government Requirements

B. Questionable or Improper Payments

C. Political Contributions and Activities

D. Business Practices

E. Trade Practices

5. Compliance and Consequences

A. Being Vigilant

B. Company Compliance

C. Consequences

The Board of Directors (the “Board”) of Medical Action Industries Inc. (the “Company”) has adopted this Code of Conduct (this “Code”), which provides basic principles and guidelines to assist directors, officers and other employees in complying with the legal and ethical requirements governing the Company’s business conduct. This Code covers a wide range of business practices and procedures but does not cover every issue that may arise.

The Company reserves the right to add to, modify and rescind this Code or any portion of it at any time. This Code governs in the event of any conflict or inconsistency between this Code and any other materials distributed by the Company. If a law conflicts with a policy in this Code, you must comply with the law.

You should read this Code carefully and direct questions regarding accounting and financial matters to the Company’s Chief Financial Officer (“CFO”) and all other questions to the Company’s Vice President of Human Resources, and promptly sign and return the certification attached as Annex A, acknowledging receipt of this Code to:

Medical Action Industries Inc.

500 Expressway Drive South

Brentwood, NY 11717

Attention: Laurie Darnaby

The Company’s Vice President of Human Resources is responsible for ensuring that all of the Company’s directors, officers and other employees promptly sign and return the attached certification acknowledging receipt of this Code.

1. Fundamental Principles

The Company’s fundamental policy is to conduct its business with honesty and integrity in accordance with the highest legal and ethical standards. The Company and its directors, officers and employees must comply with all applicable legal requirements of the United States and each other country in which the Company conducts business.

Underlying the way the Company does business is one principle: use good judgment. To give a context for using good judgment, set forth below are some of the basic legal and ethical parameters under which the Company operates. The Company is publicly held, and as such, has a responsibility to its stockholders to pay constant attention to all legal and ethical boundaries and to comply with all applicable laws. The Company has the same obligation to the communities in which it does business and to the customers with whom it does business.

This Code provides guidance for specific situations that may arise. However, each director, officer and employee has the responsibility to exercise good judgment so as to act in a manner that will reflect favorably upon the Company and the individual.

The Company’s directors, officers and employees must comply with the spirit as well as the letter of this Code. Directors, officers and employees must not attempt to achieve indirectly, through the use of agents or other intermediaries, what is prohibited directly by this Code.

Although no two situations are alike, the Company aims for consistency when encountering any ethical issues. No one will be excused for misconduct directed or requested by someone else. Part of your job and ethical responsibility is to help enforce these ethics guidelines. You should be alert to possible violations and report violations of a financial nature to the CFO, and all other violations to the Vice President of Human Resources. You must cooperate in any internal or external investigations of possible violations. Reprisals, threats, retribution or retaliation against any person who has in good faith reported a violation or a suspected violation of law, these ethics guidelines or other Company policies, or against any person who is assisting in any investigation or process with respect to such a violation, is prohibited.

The way the Company does business centers on six general standards:

• The Company expects its employees, including those outside the United States, and third parties with whom the Company does business, to maintain the highest standards of business conduct.

• The Company expects its employees to be totally honest and ethical in all Company business dealings.

• The Company expects its employees to avoid situations where a conflict of interest might occur or appear to occur.

• The Company expects its employees to respect the confidentiality of Company information and the information of third parties, including customers and vendors.

• The Company conducts its business in accordance with all applicable laws and rules, and in such a way as to attain the highest standards of corporate citizenship, and expects the same of those with whom it does business.

• The Company conducts its business so that the communities in which it operates are benefited by its presence.

The Company may take action against any employee, independent contractor, consultant, or other party whose actions violate Company standards, policies or guidelines. Such disciplinary action may include termination of employment or other working relationship, and may subject the person or party to civil and criminal sanctions.

A. Condition of Employment/Directorship

Each employee must become familiar with and agree to comply with this Code as a condition of such employee’s employment. All officers and other employees, regardless of level, must be provided with a copy of this Code at the time their employment commences with the Company; provided, however, that individuals already employed by the Company at the time of the adoption of this Code must be provided with a copy of this Code shortly after its adoption. All managers are responsible both for ensuring that all employees under their supervision, regardless of level, are familiar with this Code and for promoting compliance with this Code.

Each director must become familiar with and agree to comply with this Code. All directors must be provided with a copy of this Code at the time of their appointment or election to serve on the Board.

B. Compliance Certificate

The following persons must execute compliance certificates substantially in the form of Annex A to this Code:

• Directors, officers and other employees of the Company in managerial or supervisory positions;

• Employees who, in the ordinary conduct of their duties, have regular or significant contact with government(s) or any department, agency, instrumentality or employee thereof;

• Facility managers or other employees who are in charge of a significant sales office or other significant facility;

• Employees whose regular responsibilities include the selection of contractors for the provision of significant goods or services to the Company;

• Employees whose regular responsibilities include the review, approval or payment of invoices for significant goods and services supplied to the Company; and

• Any other employees requested by a vice president of the Company or any other officer to give a Periodic Compliance Certificate.

As provided above, each officer and other employee must become familiar with and agree to comply with this Code as a condition of such person’s employment. Therefore, each new officer and other employee must execute the Periodic Compliance Certificate upon employment. In addition, each newly elected director must execute the Periodic Compliance Certificate upon election or appointment to serve on the Board as set forth above.

The Company’s Vice President of Human Resources is responsible for ensuring that all directors, officers and other appropriate employees of the Company execute and return the Periodic Compliance Certificate to the Vice President of Human Resources or another officer designated by the Vice President of Human Resources.

C. Interpretation Questions

Directors, officers or other employees who have questions on how to proceed or interpret this Code should consult their supervisor, the Vice President of Human Resources or any other person(s) designated by the Board to supervise the application of this Code. In addition, please see Annex B for a listing of compliance procedures.

D. Violation of Policy

Compliance with this Code is essential. Violations may result in disciplinary action, including dismissal of any officer or other employee where warranted.

2. Responsibilities to Medical Action

A. Opportunity is for Everyone

The Company encourages a creative, culturally diverse, and supportive work environment and will not tolerate discrimination, harassment, slurs, jokes or threats based on a person’s race, color, sex, sexual orientation, gender identity characteristics or expression, religion, national origin, age, marital status, disability, or veteran status. This applies to employees, applicants for employment, or others who may be present in the workplace at any Company location.

Any Company employee who believes he or she has been discriminated against or harassed, or has witnessed such action, is strongly encouraged to report the incident to the Vice President of Human Resources or to any manager.

B. Employee Relations

All directors, officers and other employees, regardless of position, shall do their best to work together to meet the following objectives:

• Respect each employee, worker and representative of customers, suppliers and contractors as an individual, showing courtesy and consideration and fostering personal dignity;

• Provide equal opportunities to all employees, workers, customers, suppliers and contractors of the Company without regard to race, color, gender, religion, age, national origin, citizenship status, military service or reserve or veteran status, sexual orientation or disability;

• Provide a workplace free of harassment of any kind, including on the basis of race, color, gender, religion, age, national origin, citizenship status, military service or reserve or veteran status, sexual orientation or disability;

• Provide and maintain a safe, healthy and orderly workplace; and

• Assure uniformly fair compensation and benefit practices that will attract, reward and retain quality employees.

In addition to the objectives set forth above, members of the management team are expected to:

• Use good judgment and exercise appropriate use of their influence and authority in their interactions with employees, customers, suppliers, contractors and partners of the Company; and

• Keep other employees generally informed of the Company’s policies, plans and progress through regular communications.

C. Non-Discrimination Policy

The Company values the diversity of its employees and is committed to providing an equal opportunity in all aspects of employment to all employees without regard to race, color, gender, religion, age, national origin, citizenship status, military service or reserve or veteran status, sexual orientation or disability. Directors, officers and other employees should use reasonable efforts to seek business partners for the Company that do not discriminate in hiring or in their employment practices, and who make decisions about hiring, salary, benefits, training opportunities, work assignments, advancement, discipline, termination and retirement solely on the basis of a person’s ability to perform the tasks required by their position.

D. Freedom of Association

The Company recognizes and respects the right of employees to exercise their lawful rights of free association, including joining or electing not to join any association. The Company also expects its business partners to adhere to these principles.

E. Disciplinary Practices

The Company will not condone any type of harassment, abuse or punishment, whether corporal, mental or physical, of an employee by a director, officer or other employee or any partner, customer or supplier of the Company.

F. Confidential Information

The Company’s success and growth depends on its ability to preserve the confidentiality of its confidential, proprietary and trade secret information, as well as that of others in its possession. Each Company employee has the duty to respect and protect the confidentiality of all such information. Employees (including temporary workers, consultants and independent contractors) are expected to read and comply with the Company’s information protection practices, including information classification and procedures for handling confidential information. Employees must also comply with the Company’s policies with respect to personal information of customers, in addition to complying with all applicable laws governing the Company’s use of such personal information, worldwide.

No Company employee, employee of a temporary agency, or independent contractor shall disclose any Company confidential, proprietary, or trade secret information to an outside party unless an authorized Company representative has previously signed an appropriate agreement or license. Similarly, no Company employee, employee of a temporary agency, or independent contractor shall use or disclose to any other party any confidential, proprietary, and trade secret information in the Company’s possession belonging to a third party unless authorized by the third party to do so, and until the party receiving the information has signed an appropriate confidentiality agreement with the Company.

Any unsolicited third-party confidential information sent to the Company must be refused or, if inadvertently received by a Company employee, sent to the Vice President of Human Resources for appropriate disposition. Employees must be careful not to use or disclose, at the Company, information of former employers or other third parties.

G. Public Communications

The Company has specific policies regarding who can communicate information to the press and the financial analyst community. All inquiries or calls from the press and financial analysts should be referred to the CFO. The Company has designated its chief executive officer (“CEO”) and CFO as official Company spokespeople for financial matters.

H. Use of Company Equipment, Electronic Systems and Communications

Company equipment, networks and electronic systems (such as Internet access, voicemail and e-mail) are provided to help employees perform their duties while supporting the Company’s business needs, and are for Company business use. Company equipment, networks and electronic systems should be used only for Company business-related purposes. Use of Company-owned equipment for non-Company commercial use is prohibited.

Company equipment, networks, mail and electronic systems are provided for use in conducting Company business, so there should be no expectation of privacy in files, voicemail, e-mail or Internet use. Management may at any time review and monitor any Company equipment, networks, mail or electronic systems, whether used for business or personal purposes, unless and to the extent that such review and monitoring is otherwise prohibited or limited by applicable law.

I. Association with Unaffiliated Enterprises

The Company’s employees associated with enterprises not controlled by the Company (including vendors, suppliers, contractors, lawyers and accountants) must be guided in their conduct by this Code’s provisions. Such persons must attempt to influence those enterprises to conduct their activities in conformity with all applicable laws and this Code and must report violations of this Code to the CFO or Vice President of Human Resources, as applicable.

J. Conflicts of Interest

A conflict of interest occurs when an individual’s private interest interferes in any way with the interests of the Company as a whole. This situation can arise when a director, officer or other employee takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest also arise when a director, officer or other employee, or a member of such person’s family or household, receives improper personal benefits as a result of the director, officer or other employee’s position with the Company. A conflict of interest is deemed to exist whenever, as a result of the nature or responsibilities of his or her relationship with the Company, a director, officer or other employee is in a position to further any personal financial interest or the financial interest of any member of such person’s family.

Conflicts of interest can compromise an employee’s business ethics. At the Company, a conflict of interest is any activity that is inconsistent with or opposed to the Company’s best interests, or that gives the appearance of divided loyalty on the part of the Company employee. Common areas where conflicts of interest may occur are described below. Although these focus on employees, activities of employees’ family members, household members and other third parties in significant relationships with employees should also be examined for any circumstances which may give rise to a conflict of interest, impropriety, or ethical or legal risks, whether real or perceived, for the Company or the Company employee (examples of significant relationships include domestic partners, dating relationships, and business partnerships outside of the Company).

No director, officer or other employee, regardless of level, is permitted to engage in any business or conduct or enter into any agreement or arrangement that would give rise to actual or potential conflicts of interest. Directors, officers and other employees should not permit themselves to be placed in a position that might give rise to the appearance that a conflict of interest has arisen.

While it is not possible to describe all circumstances where a conflict of interest involving a director, officer or employee exists or may exist, the following situations may involve actual or potential conflicts of interest:

• An officer or employee’s interest in, or position with, any supplier, customer or competitor of the Company (except for an investment in publicly-traded securities as described below);

• The acceptance of gifts or favors of more than nominal value by a director, officer or employee (or a member of such person’s immediate family) from an actual or prospective customer, supplier or competitor of the Company or any governmental official or other employee. This does not preclude the acceptance by a director, officer or employee of reasonable business entertainment (such as a lunch or dinner or events involving normal sales promotion, advertising or publicity);

• The disclosure or use of confidential information gained by reason of employment with the Company (or, in the case of a director, election or appointment to the Board) for profit or advantage by a director, officer or other employee or anyone else; and

• Competition with the Company in the acquisition or disposition of rights or property.

The following situations should not be considered conflicts of interest:

• Ownership of publicly traded securities of a supplier, customer or competitor of the Company that do not confer upon the holder any ability to influence or direct the policies or management of the supplier, customer or competitor;

• A transaction with one of the Company’s banks, where the transaction is customary and conducted on standard commercially available terms (such as a home mortgage or bank loan); and

• A transaction or relationship disclosed in accordance with this Code and determined by outside legal counsel not to be a prohibited conflict of interest.

These examples are given only to guide directors, officers and other employees in making judgments about conflicts of interest. If any director, officer or employee finds himself or herself in a situation where a conflict of interest exists or may exist, he or she should immediately report the matter as provided below.

Payments to or from third parties. All Company employees must pay for and receive only that which is proper. The Company will make no payments or promises to influence another’s acts or decisions, and the Company will give no gifts beyond those extended in normal business dealings. At a minimum, the Company will observe all government restrictions on gifts and entertainment.

Interests in other businesses. Company employees must avoid any direct or indirect financial or other relationship that could cause divided loyalty. This type of relationship could include, for example, membership on the board of directors of an outside commercial or nonprofit enterprise. Company employees must receive written permission from the CFO before beginning any employment, business, consulting, financial, or other relationship with another company if the proposed activity is in the Company’s present or reasonably anticipated future business; uses any Company or third-party confidential, proprietary, or trade secret information; or relates to the services performed by the employee on behalf of the Company. This does not mean, however, that family members are precluded from being employed by one of the Company’s customers, competitors, or suppliers.

Corporate opportunities. Company employees must not exploit for their own personal gain opportunities that are discovered through the use of Company property, information, or position unless the opportunity is disclosed fully in writing to the Board and the Board declines to pursue the opportunity and gives written consent. Without such written consent, directors, officers and other employees are prohibited from taking for themselves an opportunity that is (1) a potential transaction or matter that may be an investment or business opportunity or prospective economic or competitive advantage in which the Company could reasonably have an interest or expectancy or (2) discovered through the use of corporate property, information or position. In addition, directors, officers and other employees are prohibited from using corporate property, information or position for personal gain and competing with the Company directly or indirectly

Projects or inventions. Before beginning work on any project or invention, outside the course and scope of an employee’s work for the Company, that will involve any Company time, equipment, or materials, or that relates to the Company’s present or reasonably anticipated future business, Company employees must receive the written permission of the CFO.

Investments. Passive investments of not more than one percent of the total outstanding shares of companies listed on a national or international securities exchange, or quoted daily by The NASDAQ Stock Market LLC (“NASDAQ”) or any other board, are permitted without the Company’s approval, provided the investment is not so large that it creates the appearance of a conflict of interest, and provided it does not involve the improper use of confidential or proprietary information.

Market intelligence. Though market intelligence is important, only authorized Company employees should obtain it, and only in straightforward ways. The Company and its employees must never accept or use information otherwise presented. Company employees may not contact competitors for market intelligence.

Family. Company employees should avoid conducting Company business with members of their families (and others with whom they have significant relationships) in another company or business, unless they have prior written permission from the Vice President of Human Resources. Company employees must avoid a direct reporting relationship within the Company with any member of their family or others with whom they have a significant relationship. Company employees must also avoid any direct or indirect financial, business, consulting, or other relationships that could cause divided loyalty, unless the employee has first obtained written permission from the Vice President of Human Resources.

Tips, gifts, and entertainment. Company employees must not give or receive valuable gifts, including gifts of equipment or money, discounts, or favored personal treatment, to or from any person associated with the Company’s vendors or customers. Such gifts (including advertising novelties, favors, and entertainment) are allowed only when the following conditions are met:

• They are consistent with the Company’s business practices;

• They are of limited value (US $100 or less);

• They do not violate any applicable law;

• Public disclosure would not embarrass the Company; and

• They are not given to any government personnel (see the “Dealing with Government Contracts” section below).

This is not intended to preclude the Company from (i) receiving evaluating appropriate complimentary products and services; (ii) making a gift of equipment to a company or organization, provided that the gift is given openly, with full knowledge by the company or organization, and is consistent with applicable law and the Company’s business interests; or (iii) attendance at social functions, provided such attendance is approved by management and does not present a conflict of interest or the appearance of a conflict of interest.

In some circumstances, local custom in countries other than the United States may call for the exchange of gifts having more than nominal value as part of a business relationship. In these situations, gifts may be given or received only if they comply with written guidelines that have been approved by the Vice President of Human Resources. Such gifts may be accepted only on behalf of the Company (not an individual). In all cases, the exchange of gifts must be conducted so there is no appearance of impropriety.

No “kickbacks” of any type may be given to any customer’s or vendor’s employees or representatives. No kickback of any type may be received by any Company employee, particularly those involved in any Company business transaction, including purchasing goods or services for the Company.

Outside vendors (including temporary agencies and contractors). When dealing with any outside vendors or potential vendors, Company employees must maintain the highest ethical standards.

Only arm’s length transactions should be conducted. Employees of outside vendors are also expected to maintain the highest ethical standards, including maintaining the confidentiality of any Company and third-party information they receive.

The examples above do not list all possible conflicts, but do illustrate some of the conflicts of interest Company employees must avoid. Ultimately, it is the responsibility of each individual to report any situation that would even appear to be a conflict of interest or to be improper. Each employee should feel free to discuss any potential conflict of interest situation with his or her manager or the Vice President of Human Resources, as appropriate.

Reporting conflicts of interest involving non-officer employees. Actual or potential conflicts of interest involving a non-officer employee, or a member of such person’s immediate family, must be reported in writing by the affected person (or by others having knowledge of the existence of the actual or potential conflicts of interest) to the employee’s immediate supervisor, who shall consult with the CFO to determine whether a conflict of interest actually exists and to recommend measures to be taken to neutralize the adverse effect of the conflict of interest reported, if such measures are available or appropriate under the circumstances. This procedure will be applied so as to minimize its effect on the personal affairs of employees consistent with the protection of the Company’s interests. The matter may also be referred to the Board for its approval or rejection.

Reporting conflicts of interest involving directors or officers. An actual or potential conflict of interest involving a director or officer, or a member of such person’s immediate family, must be reported by the affected person (or by others having knowledge of the existence of the actual or potential conflict of interest) to the CFO, who shall promptly disclose the possible conflict of interest to the Board at the earliest time practicable under the circumstances. The possible conflict of interest will be made a matter of record, and the Board will determine whether the possible conflict of interest indeed constitutes a conflict of interest. The Board’s approval will be required prior to the consummation of any proposed transaction or arrangement that is determined by the Board to constitute a conflict of interest.

Any member of the Board or any officer having a possible conflict of interest in any proposed transaction or arrangement is not permitted to vote (in the case of a member of the Board) or use his or her personal influence on the matter being considered by the Board. Any member of the Board having a possible conflict of interest is not counted in determining the quorum for consideration and vote on the particular matter. Finally, any member of the Board or any officer having a possible conflict of interest must be excused from any meeting of the Board during discussion (subject to the exception set forth in the paragraph below) and vote on the particular matter (in the case of an interested director). The minutes of the Board meeting should reflect the disclosure, the absence from the meeting of the interested director or officer, the abstention from voting (in the case of an interested director) and the presence of a quorum. The proposed transaction or arrangement is considered approved if it receives the affirmative vote of a majority of the disinterested members of the Board (even though the disinterested members are less than a quorum).

The foregoing requirements do not prohibit the interested director or officer from briefly stating his or her position on the matter or from answering pertinent questions of the disinterested members of the Board, as the interested director’s knowledge may be of assistance to the other Board members in their consideration of the matter.

K. It’s a Matter of Record

Company books and records. The Company requires honest and accurate recording and reporting of information in order to make responsible business decisions. As such, the Company’s books, records and accounts must accurately and fairly reflect the Company’s transactions in reasonable detail and in accordance with the Company’s accounting practices and policies. The following examples are given for purposes of illustration and are not intended to limit the generality of the foregoing in any way:

• No false or deliberately inaccurate entries (such as overbilling or advance billing) are permitted. Discounts, rebates, credits and allowances do not constitute overbilling when lawfully granted. The reasons for the grant should generally be set forth in the Company’s records, including the party requesting the treatment;

• No payment shall be made with the intention or understanding that all or any part of it is to be used for any person other than that described by the documents supporting the payment;

• No undisclosed, unrecorded or “off-book” funds or assets are permitted; and

• No false or misleading statements, written or oral, shall be intentionally made, nor shall any material fact be omitted that is necessary to make the statements made, in light of the circumstances under which the statements were made, not misleading, to any internal accountant or auditor or the Company’s independent registered public accounting firm with respect to the Company’s financial statements or documents to be filed with the Securities and Exchange Commission (the “SEC”) or other governmental authority.

Internal accounting controls. The Company’s CEO and CFO are responsible for implementing and maintaining a system of internal accounting controls sufficient to provide reasonable assurances that:

• Transactions are executed in accordance with management’s general or specific authorization;

• Transactions are recorded as necessary to: (i) permit the preparation of financial statements in conformity with generally accepted accounting principles or any other applicable criteria and (ii) maintain accountability for assets;

• Access to assets is permitted only in accordance with management’s general or specific authorization; and

• The recorded accountability of assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

Employee conduct. No director, officer or other employee of the Company is permitted to willfully, directly or indirectly:

• Falsify, or cause to be falsified, any book, record or account of the Company;

• Make, or cause to be made, any materially false or misleading statement or omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with (i) any audit or examination of the Company’s financial statements or (ii) the preparation or filing of any document or report required to be filed by the Company with the SEC or other governmental agency; or

• Take any action to fraudulently influence, coerce, manipulate or mislead the Company’s independent registered public accounting firm.

Directors, officers and other employees must exercise reasonable due diligence in order to avoid the events described above. If an employee believes that the Company’s books and records are not being maintained in accordance with these requirements, the employee should follow the procedures outlined in the Company’s Complaint Procedures Regarding Accounting, Internal Control, Auditing and Financial Matters.

Records count. They are a vital part of maintaining a high level of ethical business transactions. Company records must be maintained and disposed of properly, in accord with established procedures and Company policies. All business and accounting transactions must be fully and accurately described in the Company’s formal records, and payments on the Company’s behalf should never be made other than as described in the records. There is never any reason for false or misleading entries, and there is no place for undisclosed or unrecorded funds, payments, or receipts.

The Company is required by local, state, federal, foreign and other applicable laws, rules and regulations to retain certain records and to follow specific guidelines in managing its records. Civil and criminal penalties for failure to comply with these guidelines can be severe for the Company and its employees, agents and contractors, and failure to comply with these guidelines may subject an employee, agent or contractor to disciplinary action, up to and including termination of employment or business relationship at the Company’s sole discretion.

Retention of documents and records. It is the Company’s policy to cooperate with all governmental investigative authorities. Each director, officer and other employee shall retain any record, document or tangible object of the Company that is known to be the subject of an investigation or litigation.

It is a violation of this Code for any director, officer or other employee to knowingly alter, destroy, mutilate, conceal, cover up, falsify or make a false entry in any record, document or tangible object with the intent to impede, obstruct or influence the investigation or proper administration of any matter within the jurisdiction of any state, federal department or agency or any bankruptcy or in relation to or contemplation of any such matter or case.

Legal hold. A “legal hold” suspends all document destruction procedures in order to preserve appropriate records under special circumstances, such as litigation or government investigations.

The Vice President of Human Resources determines and identifies what types of records or documents are required to be placed under a legal hold. Every Company employee, agent and contractor must comply with this policy. Failure to comply with this policy may subject the employee, agent or contractor to disciplinary action, up to and including termination of employment or business relationship at the Company’s sole discretion. The Company’s Vice President of Human Resources will notify you if a legal hold is placed on records for which you are responsible. You then must preserve and protect the necessary records in accordance with instructions from the Vice President of Human Resources.

RECORDS OR SUPPORTING DOCUMENTS THAT HAVE BEEN PLACED UNDER A LEGAL HOLD MUST NOT BE DESTROYED, ALTERED OR MODIFIED UNDER ANY CIRCUMSTANCES.

A legal hold remains effective until it is officially released in writing. If you are unsure whether a document has been placed under a legal hold, you should preserve and protect that document while you check with the Vice President of Human Resources. If you have any questions about this policy you should contact the Vice President of Human Resources.

Company bank accounts. All Company bank accounts that are to be established must be approved and established by the Company’s Finance Department. All payments must be made by recorded and traceable methods: checks (correctly dated), bank drafts, or bank transfers. No payments shall be made in cash, except petty cash reimbursements.

3. Responsibilities to Others

A. Payments of Amounts Due to Customers, Agents or Distributors

Payments for third party services. All commission, distributor or agency arrangements shall be in writing and provide for the services to be performed and for a fee that is reasonable in amount and reasonably related to the services to be rendered.

Manner of payment. All payments for commissions, discounts or rebates should be made by the Company’s check or draft (not by cashier’s check or in currency) in the name of the agent, distributor or customer and should be (i) personally delivered to the payee in the country in which the business was transacted or (ii) sent to the payee’s business address or designated bank in the country in which the business was transacted.

Payments outside the United States. When the payee represents in writing or presents a written opinion from a reputable local counsel that a payment outside the country in which the business was transacted does not violate any law of that country, that payment may be permitted upon approval from the Company’s principal financial officer or other applicable officer.

Credit memoranda. Credit memoranda are the preferred method of effecting a rebate and generally should be issued to the customer unless the Company’s check or draft (not a cashier’s check or currency) is necessary due to the nature of the transaction. Any check or draft should refer to the sales invoices involved and indicate the amount of discount or rebate and number of units.

Accounting records. All payments or discounts, rebates and commissions shall be disclosed in the Company’s accounting records. Proper documentation of contracts and agreements shall be maintained.

B. Foreign Payments

The Company and its directors, officers and other employees must comply with the United States Foreign Corrupt Practices Act (the “FCPA”), which makes it illegal for U.S. companies to win, retain or direct business by offering, paying or approving payments to foreign government workers, political parties or their officials.

C. Quality in All We Do

There is no upper limit on the quality of the products and services that we want to provide. Employees should at all times strive for the highest quality in all they do. No employee shall knowingly misrepresent in any way the condition of any products. Testing must be done in a manner that verifies that products are being designed and manufactured to meet all appropriate quality criteria. Accurate documentation of all tests must be appropriately maintained.

D. Protection and Proper Use of Company Assets

The use of any Company funds or assets for any unlawful or improper purpose is prohibited. All employees should endeavor to protect the Company’s assets and ensure their efficient use. Theft, carelessness and waste have a direct impact on the Company’s profitability. Any suspected incident of fraud or theft should be reported immediately for investigation. Company equipment should not be used for non-business related purposes, though incidental personal use may be permitted (such as occasional use of the Company’s stationery, supplies, copying facilities or telephone when the cost to the Company is insignificant).

The obligation of employees to protect the Company’s assets includes an obligation to protect the Company’s proprietary information. Proprietary information includes intellectual property such as trade secrets, patents, trademarks and copyrights, as well as business, marketing and service plans, databases, records, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information violates Company policy, and it could also be illegal and result in civil or criminal penalties.

E. Using Company and Third-Party Copyrighted Material

Unauthorized duplication of copyrighted materials violates the law and is contrary to the Company’s standards of conduct. The Company will not tolerate the making or use of unauthorized copies under any circumstances and will comply with the law and all license or purchase terms regulating the use of any software and other copyrighted materials acquired or used by the Company.

All Company employees, temporary agency employees, and contractors must ensure that they use only authorized copies of copyrighted materials while performing their jobs. Before a Company employee, temporary agency employee, or contractor uses any third-party material, an appropriate license must be obtained. It is against Company policy for any Company employee, temporary agency employee, or contractor to copy, digitize, modify, translate, broadcast, perform, or distribute any part of a copyrighted work without first obtaining written permission from the copyright owner. It is also against Company policy to use Company facilities or equipment to make or distribute unauthorized copies of copyrighted works. This policy applies whether the copies are intended for personal use, internal use at the Company, or public distribution.

F. Environmental Health and Safety

At the Company, meeting the challenges of a rapidly expanding and changing healthcare landscape means more than making the finest products. The Company strives to produce those products in a manner that conserves the environment and protects the safety and health of its employees, its customers, and the community. To accomplish these objectives, the Company will:

• Comply with applicable environmental, health, and safety laws and regulations;

• Adopt corporate standards for protection of human health and the environment;

• Provide a safe work environment by integrating a comprehensive program of safety training and evaluation; and

• Strive to anticipate future environmental, health, and safety risks and regulatory requirements, and have a proactive approach to dealing with them whenever appropriate.

A comprehensive environmental health and safety program is an essential component of the Company’s business approach. The Company’s goal of providing a safe work environment depends on a conscientious effort and commitment to excellence from all Company employees.

Directors, officers and other employees should be aware that health and safety laws may provide for significant civil and criminal penalties against individuals and the Company for the failure to comply with applicable requirements. Accordingly, each director, officer and other employee must comply with all applicable safety and health laws, rules and regulations, including occupational safety and health standards.

Directors, officers and other employees should be aware that environmental laws may provide for significant civil and criminal penalties against individuals and/or the Company for failure to comply with applicable requirements. Accordingly, each director, officer and other employee must comply with all applicable environmental laws, rules and regulations.

Employees should report to work in a condition allowing them to perform their duties free from the influence of drugs, alcohol or other controlled substances. The use of illegal drugs in the workplace will not be tolerated.

Violence and threatening behavior are not permitted.

4. Responsibilities to the Public

A. Dealing with Government Contracts and Other Government Requirements

Special requirements may apply when contracting with any government body (including national, state, provincial, municipal, or other similar government divisions in local jurisdictions). Company employees are expected to read and comply with all applicable Company policies and laws relating to dealings with governmental bodies.

Disclosure and certification requirements. In addition to the Company’s own general high standards imposed on all Company employees, government agencies often place special disclosure and certification requirements on firms with which they do business. These requirements impose on Company employees the need to be especially vigilant to ensure that its general business practices conform to special government pricing, contracting, and certification requirements. In certain situations, for example, the Company may have to certify that it is supplying the government with its lowest price charged to its commercial customers. The Company may also have to certify that its prices have been arrived at independently, that is, without any collaboration with a third party. The Company depends on all of its employees to make sure that these and other promises to the government are satisfied. Any doubts about such matters should be brought to the attention of the CFO.

Gratuities for government officials. In addition to the limitations imposed on Company employees when giving or receiving any tips, gifts, and entertainment in the context of Company business generally, additional considerations may apply when dealing with government personnel and their representatives.

B. Questionable or improper payments and gifts

No payments or gifts from the Company’s funds or assets shall be made to or for the benefit of a representative of any domestic or foreign government (or subdivision thereof), labor union or any current or prospective customer or supplier for the purpose of improperly obtaining a desired government action or any sale, purchase, contract or other commercial benefit. This prohibition applies to direct or indirect payments made through third parties and employees and is also intended to prevent bribes, kickbacks or any other form of payoff. Directors, officers and other employees of the Company shall not accept payments or gifts of the kinds described in this section.

In the United States, nothing of value (for example, gifts or entertainment) may be provided to government personnel unless permitted by law and any applicable regulation. Commercial business entertainment and transportation that is reasonable in nature, frequency and cost is permitted. Reasonable business entertainment or transportation includes, without limitation, a lunch, dinner or occasional athletic or cultural event; gifts of nominal value (approximately $100 or less); entertainment at the Company’s facilities or other authorized facilities; or authorized and reasonable transportation in the Company’s vehicles. In addition, reasonable business entertainment covers traditional promotional events sponsored by the Company.

Governments have wrestled with determining when a gift or gratuity is a “bribe” or merely a “courtesy.” As a result, in many instances government regulations prohibit giving what might seem like a simple courtesy to a government employee. For example, the regulations of various United States governmental bodies prohibit employees of contractor firms (firms doing business with the government of the U.S., or a subcontractor to those firms) for providing meals, refreshments, entertainment, token gifts, or other business courtesies to government employees or military personnel. Even if a particular country does not prohibit the above activities, the FCPA places restrictions on American companies doing business with governmental agencies outside the United States.

Kickbacks, bribes and the FCPA. Kickbacks and bribes to obtain business are against the Company’s business practices. The FCPA makes it illegal for a United States citizen, a U.S. company and its U.S. and non-U.S. subsidiaries, and in some instances non-U.S. nationals, to offer or to give anything of value, directly or indirectly, to a foreign government official in order to gain or retain business or to obtain an unfair competitive advantage over competitors. Numerous countries have either passed similar laws or have committed to do so.

Company employees may not, directly or indirectly, offer or give any payment or other gift (including equipment) that could even appear to be a bribe, kickback, payoff, or other irregular type of payment to a foreign government official to influence an official act or decision. More specifically, Company employees may not make payments or give anything of value to foreign officials or their representatives for the purpose of gaining or maintaining business or gaining an improper advantage.

These prohibitions apply to giving something to a third party, such as an agent, reseller or lobbyist, with the intention that they give it to a foreign official or with the reasonable belief that the third party will do so. Before retaining third parties to represent the Company in any business relationships with a government agency, a thorough and careful analysis of their ownership structure and business reputation in their relationship with the government agencies and officials must be undertaken.

To protect the Company and its employees, employees must check in advance with the CFO before giving, directly or indirectly, anything of value to government officials or their representatives.

Facilitating payments exceptions. Payments that are customary in a foreign country and that are necessary to facilitate or expedite ministerial actions ordinarily performed by foreign officials – such as obtaining routine permits or licenses; processing visas and work permits; or receiving customs, police, mail, and inspection services – are not prohibited by the FCPA. In the United States, facilitating payments are neither customary nor legal, and are not allowed by the Company’s policy. Further, it is not generally the Company’s policy to favor facilitating payments outside the U.S., even though legally permitted by U.S. laws. Therefore, all such facilitating payments outside the U.S. in excess of US $100 require prior approval by the CFO, except in exigent circumstances. In all cases, such payments must be accurately recorded in expense reports and in the Company’s books and records.

There are some exceptions, though. For example, in many countries, but not the United States, it is considered common courtesy to provide small gifts on certain occasions to government officials. Within limits appropriate to the country, such gifts may be permissible (see the discussion of the FCPA). Also, serving lunch to participants (including government officials) in a business conference held on Company premises is often not prohibited, if the purpose is to make the best use of the Company’s time and that of any government employee. Seeking advice from the government employee in advance may help to avoid embarrassment and protect the interest of Company employees. In other words, Company employees – before offering even the most common amenities of this sort – should check with the government employee. If circumstances warrant employees should check with the CFO to see if offering the courtesy is permissible in order to avoid situations that are potentially embarrassing or, possibly, illegal.

Proper documentation. All arrangements with third parties (such as distributors or agents) should be evidenced or memorialized in a written contract, order or other document that describes the goods or services that are in fact to be performed or provided and should be for reasonable fees or costs.

Extension of credit by the Company. No director, officer or employee may seek or accept from the Company credit, an extension of credit or the arrangement of an extension of credit in the form of a personal loan. Any personal loan existing at the time of adoption of this Code shall not be materially modified, extended or renewed.

C. Political Contributions and Activities

Corporate contributions to political causes are illegal in many jurisdictions and electoral processes. In those cases, no Company assets – including employee work time, use of Company premises, or equipment – may be contributed to any political candidate, party, or campaign. Even in those cases when political contributions are legal, no Company contributions shall be made without permission from the CFO. Company employees may participate in any political activities of their choice on an individual basis, with their own money, and on their own personal time, subject to all applicable laws and provided that their activities otherwise comply with Company policies.

Federal elections. The Company encourages the personal and financial participation of its directors, officers and other employees in federal, state and local elective processes. It is the Company’s policy to refrain from making any direct contribution or expenditure to a candidate or candidate’s campaign in any federal or state election.

Political contributions in U.S. elections. It is the Company’s policy not to make direct or indirect political contributions in support of any party or candidate in any U.S. election, whether federal, state or local, except as stated above. For the purposes of this policy, the purchase of tickets for dinners, advertising in political program booklets, use of the Company’s duplicating facilities, compensated employee activity, employee contributions reimbursed through expense accounts and similar donations in kind are considered political contributions. These are merely examples of political contributions, and the preceding list is not intended to be exhaustive.

Political contributions in state and local elections. The Company may on occasion contribute to state and local office candidate committees and to state and local initiatives or referendum campaigns where the Company’s interests are directly involved and where permitted by state and local law. Proposed political contributions require a brief description of the purpose of the proposed contribution and a written legal opinion that confirms that the proposed contribution is lawful under all applicable laws. The documentation for proposed contributions shall be approved in advance by the CFO to ensure full compliance with applicable state and local regulations and reporting requirements.

Political action committees. To the extent permitted by law, the Company’s resources may be used to establish and administer a political action committee or separate segregated fund. All proposed activities shall be submitted for review and approval by the Board prior to their implementation.

Foreign elections. In countries where corporate political contributions are permitted by law and encouraged by local custom, contributions may be appropriate and are permitted where approved by the proper corporate officer and the Board.

D. Business Practices

Compliance with laws, rules and regulations (including insider trading laws). Obeying the law, both in letter and spirit, is the foundation upon which the Company’s ethical standards are built. All directors, officers and other employees must respect and obey the laws of the cities, states and countries in which the Company operates. Although directors, officers and other employees are not expected to know every law that is applicable to the Company, it is important that directors, officers and other employees know enough to ask questions and seek advice from supervisors, managers, lawyers or other appropriate personnel if they have any doubt regarding the legality of an action taken, or not taken, on behalf of the Company.

Buying and selling Company stock. Purchasing or selling, whether directly or indirectly, the Company’s securities while in possession of material non-public information is both unethical and illegal. The Company’s Insider Trading Policy prohibits Company employees from making transactions (i.e., buying or selling) in Company stock, at any time when the employee may possess material information about the Company that has not been publicly disclosed. United States securities laws dictate this policy, and it applies to all executive officers, members of the Board, employees, consultants and contractors, including members of their immediate families, and members of their households, who receive or have access to material nonpublic information regarding the Company.

In addition, members of the Board, executive officers and other individuals with access to material nonpublic information are subject to additional restrictions on the trading of stock, including mandatory “blackout periods” during which they may not engage in any Company securities transactions. Company employees should contact the CFO for any questions about buying or selling Company stock.

Section 16 reporting. Pursuant to Section 16 of the Securities Exchange Act of 1934, as amended, most purchases or sales of the Company’s securities by directors, executive officers and 10% stockholders must be disclosed within two business days of the transaction.

Fair dealing. Directors, officers and other employees should endeavor to deal fairly with the Company’s customers, suppliers, competitors and employees. No director, officer or other employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other practice involving unfair dealing.

Confidentiality. Directors, officers and other employees shall maintain the confidentiality of information entrusted to them by the Company or its customers, except when disclosure is authorized or legally mandated. Confidential information includes all non-public information that, if disclosed, might be of use to competitors or harmful to the Company or its customers. Confidential information also includes written material provided and information discussed at all meetings of the Board or any committee thereof and all information that is learned about the Company’s suppliers and customers that is not in the public domain. The obligation to preserve confidential information continues even after employment or agency with the Company ends. Any documents, papers, records or other tangible items that contain trade secrets or proprietary information are the Company’s property.

E. Trade Practices

The economy of the United States is based on the principle that competition and profit will produce high-quality goods at fair prices. To ensure that this principle is allowed to thrive in the marketplace, most countries have laws prohibiting certain business practices that could inhibit the competitive process. The Company supports these laws not only because they are the law, but also because we believe in the free market and the idea that healthy competition is essential to our long-term success. Company employees should keep these thoughts in mind while performing their jobs, because the penalties for violations can be very serious – both to the Company and to the individual.

Customers. Generally, the Company may choose the parties with which it wants to do business. Company employees should follow established procedures to respond to persons and parties seeking a business relationship with the Company, and should treat all applicants with dignity and respect. The Company may not agree with other companies, whether they are competitors or not, to refrain from doing business with a particular buyer or vendor. The Company must make such decisions independently and without collaboration with third parties. In certain countries, the Company may not condition the sale of one product to a customer on a commitment by the customer that it will purchase a second product.

Competitors. The Company must be especially careful when dealing with competitors. For example, agreements with competitors that affect product or service pricing or output, or allocate customers or sales territories, are prohibited, because they are counter to the principle of free competition, and often illegal under applicable law. Company employees must not discuss these topics with competitors, because there is no way to legally justify any understanding that might be reached that limits our competition with such companies. Also, Company employees must not discuss terms of sale, costs, inventories, product plans, or any other confidential or proprietary information with a competitor.

5. Compliance and Consequences

A. Being vigilant

It is essential that all employees be sensitive to possible violations of the Company’s business ethics, whether these violations occur in dealings with the government or the private sector, and whether they occur due to oversight or intention. Any Company employee who has knowledge of possible violations must notify his or her manager, the Vice President of Human Resources or the CFO.

To assist employees in the day-to-day protection of the Company’s business, below is a list of some areas where violations of ethics policies, practices, and principles could occur.

Danger areas

• Improper or excessive payments of any of the following:

• Consulting fees

• Public relations fees

• Advertising fees

• Legal fees

• Agents’ fees

• Commissions

• Insurance premiums

• Other professional fees

• Expense reports

• Employee bonuses or compensation arrangements

• Employee loans

• Miscellaneous expenses

• Nondeductible expenses

• Director and officer payments

• Payroll-related expenditures, bonuses, awards, and non-cash gifts given to or by Company employees without proper approval and adequate documentation;

• Payments made in cash;

• Checks drawn payable to “Cash” or “Bearer;”

• Transfers to or deposits in the bank account of an individual, rather than in the account of the company with which the Company is doing business;

• Bank accounts or property titles not in the Company’s name;

• Billings made higher or lower than normal prices or fees, at a customer’s request;

• Payments made for any purpose other than that described in supporting documents;

• Payments made to employees of customers or agencies through intermediary persons or organizations, or that seem to deviate from normal business transactions;

• Any large, abnormal, unexplained or individually approved contracts or expenditures made without review of supporting documentation. Specific attention should also be given to large individual gifts;

• Unusual transactions occurring with nonfunctional, inactive, or shell subsidiaries;

• Undisclosed or unrecorded assets or liabilities.

• Use of unethical or questionable means to obtain information, including information about competitors or information about government acquisition plans, procurement decisions, or actions;

• An employment, consulting, or business relationship between a Company employee and another company, especially a company in the same, or a related, business as the Company; and

• Frequent trading (buying and selling over short intervals) in Company stock or in the stock of a company with which the Company does business.

Disclosure controls. It is the Company’s policy to promote full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the SEC and in other public communications made by the Company. The Audit Committee shall oversee the Company’s internal controls and will take the actions that are necessary and appropriate to fulfill the Company’s disclosure requirements. The Audit Committee will report to senior management, including the Company’s chief executive officer and CFO. The Audit Committee shall consider the materiality of information and determine disclosure obligations on a timely basis.

B. Company Compliance

The Company is committed to integrity in all of its dealings with employees, customers, and the general public.

Voluntary disclosures. In accordance with the Company’s commitment to an effective relationship with its customers, it is the Company’s policy to make voluntary disclosures, when appropriate, of problems affecting corporate relationships with any client, including any government body and to cooperate with the appropriate government agency in any resulting investigation or audit. Any Company employee who becomes aware of possible violations of any Company policy or practice, or of any applicable law, rule, or regulation affecting the Company’s business, must notify his or her manager, the Vice President of Human Resources or the CFO. The Vice President of Human Resources and the CFO must also be notified immediately of any government inquiry, investigation, audit, or other legal notice.

To be sure the Company is meeting its obligations, particularly in dealing with government customers, employees need to understand the numerous rules and regulations that apply to their job duties. Employees should consult their managers, the Vice President of Human Resources or the CFO for guidance on the Company’s and the employee’s obligations.

Reporting violations. Directors, officers and other employees should report violations of applicable laws, rules and regulations (including, without limitation, the listing requirements of NASDAQ), this Code or any other code, policy or procedure of the Company to appropriate personnel or follow the procedures outlined in the Company’s Complaint Procedures Regarding Accounting, Internal Control, Auditing and Financial Matters (as appropriate). Directors, officers and other employees are expected to cooperate in internal investigations of misconduct.

Report inappropriate behavior. Employees are required to report any conduct they believe to be inconsistent with the Company’s policies or standards, or inconsistent with the Company’s obligations to the government. Reports will be handled confidentially, on a need to know basis, so that no employee experiences retaliation for bringing these matters to the attention of Company management, the Vice President of Human Resources, the CFO or to members of the Audit Committee of the Board.

C. Consequences

The Company expects its employees to comply with all Company ethical and business principles, as well as all policies, to rely on their own high standards and reasoned evaluation in ambiguous situations, and to seek the advice and counsel of Company management, the Vice President of Human Resources, or the CFO to clarify issues not covered by this policy or good judgment. These principles and policies are based in part on various laws. Violations of those laws may result in civil and criminal penalties for the Company and its employees. Therefore, the Company will take appropriate action, which may include termination of employment or other business relationships, legal action, or referral to law enforcement authorities.

Waivers of this Code. Any waiver of a provision of this Code may be made only by the Board and will be disclosed in a Current Report on Form 8-K filed with the SEC within four business days. The disclosure must also provide the reasons for the waiver.

Amendments to this Code. Any amendment to this Code shall be made only by the Board. If an amendment to this Code is made, appropriate disclosure will be made within four business days after the amendment has been made in accordance with legal requirements and the listing requirements of the NASDAQ.

Posting requirement. The Company shall post this Code on the Company’s website as required by applicable rules and regulations. In addition, the Company shall disclose in its proxy statement for its annual meeting of stockholders that a copy of this Code is available on the Company’s website and provide the website address.

* * *

This document states a policy of Medical Action Industries Inc. and is not intended to be regarded as the rendering of legal advice.

ANNEX A

CODE OF ETHICS

CERTIFICATION

I have read and understand the Code of Ethics (the “Code”) of Medical Action Industries Inc. (the “Company”). I agree that I will comply with the policies and procedures set forth in the Code. I understand and agree that, if I am an employee of the Company or one of its subsidiaries or other affiliates, my failure to comply in all respects with the Company’s policies, including the Code, is a basis for termination for cause of my employment with the Company and any subsidiary or other affiliate to which my employment now relates or may in the future relate.

In addition, I agree to promptly submit a written report to the CFO or Vice President of Human Resources, as applicable, describing any circumstances in which:

• I have reasonable basis for belief that a violation of the Code by any person has occurred;

• I have, or any member of my family has or may have engaged in any activity that violates the letter or the spirit of the Code;

• I have, or any member of my family has or may have an interest that violates the letter or the spirit of the Code; and

• I or any member of my family may be contemplating an activity or acquisition that could be in violation of the Code.

I am unaware of any violations or suspected violations of the Code by any employee except as described below or on the attached sheet of paper. (If no exceptions are noted, please check the space provided below.)

             No exceptions

To the best of my knowledge and belief, neither I nor any member of my family has any interest or affiliation or has engaged in any activity that might conflict with the Company’s interest, except as described below or on the attached sheet of paper. (If no exceptions are noted, please check the space provided below.)

             No exceptions

I am aware that this signed Certification will be filed with my personal records in the Company’s Human Resources Department.

Signature

Type or Print Name

Date

ANNEX B

CODE OF ETHICS

COMPLIANCE PROCEDURES

Directors, officers and other employees must work together to ensure prompt and consistent action against violations of the Code. However, a director, officer or other employee may encounter a situation in which it is difficult to determine how to proceed while also complying with the Code. Since not every situation that will arise can be anticipated, it is important to have a way to approach a new question or problem. When considering these situations, a director, officer or other employee should:

1. Make sure to have all the facts. In order to reach the right solution, all relevant information must be known.

2. Consider what he or she specifically is being asked to do and whether it seems unethical or improper. This will enable the individual to focus on the specific question and the alternatives he or she has. If something seems unethical or improper, it probably is.

3. Understand his or her individual responsibility and role. In most situations, there is shared responsibility. Are other colleagues informed? It may help to get other individuals involved and discuss the problem.

4. Discuss the problem with a supervisor. In many cases, supervisors will be more knowledgeable about the question and will appreciate being brought into the decision-making process. Employees should remember that it is the responsibility of supervisors to help solve problems and ensure that the Company complies with this Code.

5. Seek help from Company resources. In the rare case in which it may not be appropriate to discuss an issue with a supervisor or a supervisor is not available to answer a question, employees should discuss it locally with the office manager or Human Resources manager. If that is not appropriate or if a satisfactory resolution is not obtained, call or send concerns to the Vice President of Human Resources or follow the procedures outlined in the Company’s Policy for Complaint Procedures Regarding Accounting, Internal Control, Auditing and Financial Matters.

6. Report ethical violations in confidence and without fear of retaliation. If the situation so requires, anonymity will be protected. The Company does not permit retaliation of any kind for good faith reports of ethical violations.

7. Always ask first, act later. When unsure of what to do in any situation, the individual should seek guidance and ask questions before the action in question is taken.