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 (Date of earliest event reported): January 14, 2005

HEI, Inc.

(Exact Name of Registrant as Specified in Charter)

Minnesota	0-10078	41-0944876
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
PO Box 5000, 1495 Steiger Lake Lane, Victoria, Minnesota 55386
(Address of Principal Executive Offices, Including Zip Code)
Registrant’s telephone number, including area code:		(952) 443-2500
N/A
(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 obligations of the registrant under any of the following provisions (see General Instruction A.2.):

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

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

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

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

TABLE OF CONTENTS

	Item 1.02 Termination of a Material Definitive Agreement.
	Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
Exhibit Index
Press Release

Item 1.02 Termination of a Material Definitive Agreement.

     As discussed in Item 5.02 below, on January 14, 2005, Douglas J. Nesbit resigned from his positions as Chief Financial Officer, Treasurer and Secretary of HEI, Inc. (the “Company”), effective immediately. Mr. Nesbit previously entered into an Employment Agreement with the Company on October 1, 2003, which provided for his employment as Chief Financial Officer of the Company. This Employment Agreement also terminated on January 14, 2005; however, certain provisions of such Employment Agreement regarding noncompetition, confidentiality, return of property and invention survive termination of such Employment Agreement and termination of Mr. Nesbit’s employment with the Company. The terms and conditions of such Employment Agreement are more fully set forth in Exhibit 10.35 to the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2003, which exhibit is incorporated herein by reference in its entirety.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

     On January 14, 2005, the Company issued a press release announcing that Douglas J. Nesbit resigned from his positions as Chief Financial Officer, Treasurer and Secretary of the Company, effective immediately, and that Timothy Clayton, age 50, of Emerging Capital was appointed as interim Chief Financial Officer, effective January 17, 2005. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99 to this Current Report on Form 8-K.

     Mr. Clayton is a principal of Emerging Capital, a Minneapolis-based consulting firm which focuses on financial management and strategic planning for emerging growth companies. Since founding Emerging Capital in 2000, Mr. Clayton has served as a key advisor to a number of public and private companies. Previously, from 1997 to 2000, Mr. Clayton was Executive Vice President, Chief Financial Officer and Treasurer of Building One Services, a $1.6 billion provider of facility services. Prior to that, from 1988 to 1997, Mr. Clayton served as an audit partner with what is now PriceWaterhouseCoopers, an independent registered public accounting firm. Mr. Clayton is a certified public accountant and holds a bachelor’s degree in accounting from Michigan State University. Mr. Clayton is a Member of the Board of Directors for the National Federation of Independent Businesses and Agribank.

     The Company anticipates that it will enter into a written consulting agreement with Emerging Capital pursuant to which, among other things, the Company will pay Emerging Capital a monthly fee of $15,000 for Mr. Clayton’s services. The Company also anticipates that it will enter into a written separation agreement with Mr. Nesbit. The Company will file copies of such employment and separation agreements by amendment to this Current Report on Form 8-K if and when such agreements are executed.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

     The following exhibit relating to Item 5.02 shall be deemed furnished and not filed as a part of this Current Report on Form 8-K.

Item No.	Description
99	Press Release dated January 14, 2005.

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.

	HEI, INC.
Date:  January 21, 2005	By /s/ Mack V. Traynor, III
	Mack V. Traynor, III
	Chief Executive Officer and President (Duly Authorized Officer)

Exhibit Index

Item No.	Description
99	Press Release dated January 14, 2005.

EX-99

Exhibit 99

NEWS RELEASE

1495 Steiger Lake Lane
Victoria, Minnesota 55386 USA
952-443-2500

For Immediate Release

CONTACTS:
Dennis J. Leisz, Chairman of the Board
Mack V. Traynor III, CEO

HEI, INC. ANNOUNCES INTERIM CHIEF FINANCIAL OFFICER

     MINNEAPOLIS, January 14, 2005 — HEI, Inc. (NASDAQ: HEII, www.heii.com) announced today the resignation of its Chief Financial Officer, Douglas J. Nesbit, and the appointment of Timothy Clayton of Emerging Capital, as interim CFO, effective January 17, 2005.

     Mr. Clayton is a principal of Emerging Capital, a Minneapolis-based consulting firm which focuses on financial management and strategic planning for emerging growth companies. Since founding Emerging Capital in 2000, Mr. Clayton has served as a key advisor to a number of public and private businesses. Previously, Mr. Clayton was Executive Vice President, CFO and Treasurer of Building One Services, a $1.6 billion provider of facility services. Prior to that, Mr. Clayton served as an audit partner with what is now PriceWaterhouseCoopers for ten years. He is a certified public accountant and holds a bachelor’s degree in accounting from Michigan State University. Mr. Clayton is a Member of the Board of Directors for the National Federation of Independent Businesses and Agribank.

     Announcing this management change, Mack Traynor, Chief Executive Officer of HEI, stated; “HEI is delighted to announce that Tim Clayton has accepted the role of interim Chief Financial Officer for HEI, Inc. Tim brings a wealth of highly relevant experience in the fields of public accounting and reporting for growth companies. In addition, having founded and having served as Chief Financial Officer of a billion dollar business, he will be able to implement the financial controls required by HEI as the Company begins a relationship with a new external audit firm. I also anticipate that Tim will fully participate in the strategic planning process ongoing at HEI.”

     HEI, Inc. designs, develops and manufactures microelectronics, subsystems, systems, connectivity and software solutions for OEMs engaged in the medical equipment and medical device, hearing, communications and RFID industries. HEI provides its customers with a single point of contact that can take an idea from inception to a fully functional, cost effective and manufacturability product utilizing innovative design solutions and by the application of state-of-the-art materials, processes and manufacturing capabilities.

Headquarters & Microelectronics Division
- -Advanced Medical Division
- -High Density Interconnect Division
RF Identification and Smart Card Division PO Box 5000, 1495 Steiger Lake Lane, Victoria, MN 55386
4801 North 63rd Street, Boulder CO 80301
610 South Rockford Drive, Tempe, AZ 85281
1546 Lake Drive West, Chanhassen, MN 55317

FORWARD LOOKING INFORMATION

Information in this news release, which is not historical, includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements contained in this press release, including statements regarding the results of the Company under the interim CFO and the relationship between the Company and its new external audit firm are forward looking statements. All of such forward-looking statements involve risks and uncertainties including, without limitation, continuing adverse business and market conditions, the ability of HEI to secure and satisfy customers, the availability and cost of materials from HEI’s suppliers, HEI’s ability to satisfy financial or other obligations or covenants set forth in its banking agreements, adverse competitive developments, change in or cancellation of customer requirements, the integration of the Advanced Medical Division, collection of outstanding debt, HEI’s ability to succeed on the merits and defend against litigation, and other risks detailed from time to time in HEI’s SEC filings. HEI undertakes no obligation to update these statements to reflect ensuing events or circumstances or subsequent actual results.