EXHIBIT 10.2 MEDICAL ACTION INDUSTRIES INC. 1989 NON-QUALIFIED STOCK OPTION PLAN, AS AMENDED

EXHIBIT 10.2

MEDICAL ACTION INDUSTRIES INC.

1989 NON-QUALIFIED STOCK OPTION PLAN, AS AMENDED

(a) The purpose and effect of this plan (the “Plan”) is to induce officers, directors and other senior executives and management and supervisory personnel of and consultants to Medical Action Industries Inc., a Delaware corporation (“Medical Action”) and its subsidiaries (Medical Action and its subsidiaries being hereinafter collectively referred to as the “Company”), who are in a position to make material contributions to the Company’s success, to remain in the service of the Company, to offer them incentives and rewards in recognition of their share in the Company’s progress, and to encourage them to continue to promote the best interests of the Company through the grant to them of options (the “Options”) for the purchase of Common Stock, $.001 par value, of Medical Action (the “Common Stock”). The Plan is also intended to aid the Company in competing with other enterprises for the services of new senior executives needed to help insure continued development. For purposes of this Plan, the term “subsidiaries” shall include all corporations at least 50% of the voting stock of which is owned directly or indirectly by Medical Action.

(b) In the event that this Plan is not approved by the stockholders of Medical Action, the Plan and all Options granted and to be granted hereunder shall be null and void, and the Company shall have no obligation of any nature whatsoever to any employee, director or other person arising out of either the Plan or any Options granted or to be granted thereunder.

(a) The Plan shall be administered by the Board of Directors of Medical Action (the “Board”), provided however, that the Board may, in the exercise of its discretion, designate from among its members a Compensation Committee (the “Committee”) consisting of no fewer than three directors, each of whom shall be a “disinterested person” within the meaning of Rule 16b-3 (or any successor rule or regulation) promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and may delegate to the Committee full power and authority, subject to such orders or resolutions not inconsistent with the provisions of the Plan as may from time to time be issued or adopted by the Board, to interpret the provisions and supervise the administration of the Plan. Any member of the Committee may be removed at any time either with or without cause by resolution adopted by the Board, and any vacancy on the Committee may at any time be filled by resolution adopted by the Board. Any or all powers and functions of the Committee may at any time and from time to time be exercised by the Board; provided, however, that with respect to the participation in the Plan of persons who are members of the Board, such powers and functions of the Committee may be exercised by the Board only if, at the time of such exercise, a majority of the members of the entire Board and a majority of the directors acting in the particular matter are “disinterested persons” within the meanings of Rule 16b-3 promulgated under the Exchange Act.

(b) Each Option shall be evidenced by an Option Agreement that shall contain terms and conditions (consistent with the terms and conditions of this Plan) as may be approved by the Board or the Committee, as the case may be, and shall be signed by an officer of Medical Action and the optionee (the “Optionee”).

(c) Subject to an applicable provision of Medical Action’s By-Laws, all decisions made by the Board or the Committee pursuant to the provisions of the Plan and related orders or resolutions of the Board shall be final, conclusive and binding on all persons, including the Company, stockholders, employees and Optionees.

(a) The shares of Common Stock to be delivered upon the exercise of Options granted under the Plan shall be made available, at the discretion of the Board, either from the authorized but unissued shares of Common Stock or from shares of Common Stock reacquired by Medical Action and held in treasury.

(b) Subject to adjustments made pursuant to provisions of Paragraph (c) of this Section 3, the aggregate number of shares to be delivered upon exercise of all Options that may be granted under this Plan shall be 2,650,000 shares. If an Option granted under the Plan shall expire or terminate for any reason during the term of the Plan, the shares subject to but not delivered under such Option shall be available for the grant of other Options. The foregoing notwithstanding, no person may be granted Options in any calendar year to purchase shares of Common Stock which in the aggregate have a fair market value of more than $100,000.

(c) In the event of a merger, reorganization, consolidation, recapitalization, stock dividend, stock split, or other change in corporate structure affecting the Common Stock, appropriate adjustment shall be made in the aggregate number of shares subject to the Plan and in the number of shares subject to unexercised Options previously granted under the Plan.

The persons eligible to receive Options shall consist of officers, directors and other