UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

~~August~~January 2328, ~~2004~~2005

HYTEK MICROSYSTEMS, INC.

(Exact name of registrant as specified in its charter)

California

0-11880

94-2234140

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

400 Hot Springs Road

Carson City, NV 89706

(Address of principal executive offices, including zip code)

(775) 883-0820

(Registrant’s telephone number, including area code)

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

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 1.0102. ~~Entry~~Termination ~~into~~of a Material Definitive Agreement.

On ~~August~~January 2324, ~~2004~~2005, Hytek Microsystems, Inc. (“Hytek”) received notice (the ~~Board~~“Notice”) ofby ~~Directors~~e-mail offrom Medtronic A/S (“Medtronic”) that Medtronic would place no further purchase orders under that certain Supply Agreement dated August 1, 2003 between Hytek, ~~Microsystems~~as supplier, ~~Inc.~~and Medtronic, aas ~~California~~purchaser ~~corporation~~ (the “~~Company~~Agreement”), ~~adopted~~relating ~~the~~to ~~2004~~a ~~Nonstatutory~~specified ~~Stock~~product ~~Plan~~ (the “~~Plan~~Product”). ~~The~~Concurrently, ~~Company~~Medtronic ~~intends~~reduced its required 12-month forecast for the Product to ~~use~~be supplied by Hytek under the ~~Plan~~Agreement to ~~grant~~(i) ~~options~~existing purchase orders scheduled for delivery within the three months ending March 31, 2005 (although a grace period for the actual shipment of Products was given through April 15, 2005), (ii) material purchases previously committed to ~~employees~~Hytek for the period from April 1, 2005 through June 30, 2005, and ~~consultants~~(iii) ~~without~~zero ~~shareholder~~units ~~approval~~for delivery from July 1, 2005 through December 31, 2005. Medtronic’s Notice made it clear that Medtronic did not intend to place any additional orders with Hytek for the Product. Accordingly, on January 28, 2005, Hytek sent six-months’ notice of termination of the Agreement to Medtronic (through non-renewal), which termination shall be effective August 1, 2005.

~~Purpose~~During fiscal years 2003 and 2004, sales to Medtronic accounted for 13% and 21%, respectively, of Hytek’s revenues. Hytek has been a supplier of the Product to Medtronic since 2002.

The ~~purposes~~Agreement ofprovides ~~the~~for ~~Plan~~Hytek ~~are~~ to ~~attract~~use ~~and~~its ~~retain the~~ best ~~available~~efforts ~~personnel~~to ~~for~~manufacture ~~positions~~Medtronic’s requirements of ~~substantial~~the ~~responsibility~~Product. However, pursuant to ~~provide~~the ~~additional~~terms ~~incentive~~of the toAgreement, ~~employees~~Medtronic ~~and~~reserves ~~consultants,~~the ~~and~~right to ~~promote~~also ~~the~~use ~~success~~an alternative source of ~~the~~supply ~~Company’s~~for ~~business~~the Product. ~~Options~~The ~~granted~~Agreement ~~under~~sets ~~the~~a ~~Plan~~maximum ~~are~~unit price for Products sold to beMedtronic ~~nonstatutory~~and ~~stock~~obligates ~~options.~~Hytek, ~~Stock~~through ~~purchase~~cost ~~rights~~reduction ~~may~~efforts, ~~also~~to bereduce ~~granted~~the ~~under~~price of the ~~Plan~~Product over time.

~~Plan~~Medtronic ~~Administration~~is required under the Agreement to provide a 12-month forecast of its requirements for the Product from Hytek. The first three months of any such forecast are binding; the fourth through sixth months of any such forecast are binding only to the extent that Hytek has procured materials in anticipation of manufacturing Medtronic’s forecasted amount of Product during that period; the seventh through twelfth months of any such forecast are non-binding.

~~The~~During ~~Plan is administered by~~ the ~~Company’s~~term ~~board~~ of ~~directors or a committee appointed by~~ the ~~Company’s~~Agreement ~~board~~and offor ~~directors.~~one Toyear ~~the extent desirable to qualify transactions under the Plan as exempt under Rule 16b-3 of the Securities Exchange Act of 1934~~thereafter, asHytek ~~amended,~~cannot manufacture the ~~transactions~~Product ~~shall~~or beany ~~structured~~substantially ~~to satisfy~~similar ~~the~~product ~~requirements~~ for ~~exemption~~any ~~under~~third ~~Rule 16b-3~~party. ~~The~~This ~~administrator~~obligation ofwill ~~the~~therefore ~~Plan~~terminate ~~has~~on ~~final~~August ~~authority~~1, ~~to interpret any provision of the Plan or any grant made under the Plan~~2006.

~~Shares~~As ~~Available~~disclosed in Hytek’s Quarterly Reports on Form 10-QSB for the second and third quarters of fiscal 2004, Medtronic previously indicated its intent to develop a second source for the Product. Medtronic has recently indicated to Hytek that it intends to develop an internal source of supply for the Product based upon its own business considerations. Medtronic confirmed to Hytek that its discontinuation of purchases of the Product from Hytek was not based upon any dissatisfaction with the quality of Products manufactured by Hytek for Medtronic. Due to the fact Hytek has been successful in booking new business from other customers, Hytek believes this event will not have a material adverse effect on results of operations for fiscal 2005.

~~The~~Safe ~~maximum~~Harbor ~~aggregate~~for ~~number~~Forward-Looking ofStatements ~~shares that may be sold under the Plan is 250,000 shares of the Company’s common stock.~~

~~Eligibility~~This Report contains a forward-looking statement concerning the effect of this event on the results of operations in 2005. This forward-looking statement is based on the opinions and estimates of management at the time the statement is made and is subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statement. Factors that could cause Hytek’s actual results to differ materially from those set forth in the forward-looking statement include, but are not limited to: the inability of Hytek to continue to book new orders, decrease in demand for Hytek’s other products, manufacturing problems and cancellation of orders or re-scheduling of deliveries by other customers. For additional information, readers are referred to the documents filed by Hytek with the SEC, including the risk factors set forth in Hytek’s Annual Report on Form 10-KSB for fiscal 2003 and the Quarterly Reports on Form 10-QSB for the first, second and third quarters of fiscal 2004.

Nonstatutory stock options and stock purchase rights may be granted to employees and consultants.

Term of the Plan

The Plan shall continue in effect for a term of ten (10) years unless terminated earlier in accordance with the terms of the Plan.

Option Exercise Price

The exercise price of nonstatutory options under the Plan may not be less than 85% of the fair market value of a share of common stock on the date of grant.

Transferability

Unless determined otherwise by the Plan administrator, an option or stock purchase right may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution, and only the optionee may exercise options and stock purchase rights during his or her lifetime. If the administrator makes an award transferable, the award will contain additional terms and conditions the administrator deems appropriate.

Acceleration of Exercisability in Change of Control

In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the Company, each outstanding option and stock purchase right shall be assumed or an equivalent option or right substituted by the successor corporation or a parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option or stock purchase right, the optionee shall fully vest in and have the right to exercise the option or stock purchase right as to all of the optioned stock, including shares as to which it would not otherwise be vested or exercisable.

In the event of a Change in Control (as defined in the Plan) of the Company, unless otherwise determined by the administrator prior to the occurrence of such Change in Control, any options outstanding on the date such Change in Control is determined to have occurred that are not yet exercisable and vested on such date shall become fully exercisable and vested.

Amendment and Termination

The board of directors may at any time amend, alter, suspend or terminate the Plan.

The foregoing summary description of the Plan is not intended to be complete and is qualified in its entirety by the complete text of the Plan attached hereto as Exhibit 10.1 and incorporated by reference herein.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.		Description
10.1		2004 Nonstatutory Stock Plan and form of nonstatutory option agreement thereunder.

SIGNATURES

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 hereunto duly authorized.

	HYTEK MICROSYSTEMS, INC.
Date: December 16, 2004
Date: January 31, 2005	By:	/s/ Philip S. Bushnell
	By:	/s/ Philip S. Bushnell
		Philip S. Bushnell Chief Financial Officer
		Philip S. Bushnell Chief Financial Officer and Secretary

EXHIBIT INDEX

Exhibit No.		Description
10.1		2004 Nonstatutory Stock Plan and form of nonstatutory option agreement thereunder.

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