STEC Stec, Inc. (MM)

On October 25, 2007, the Board of Directors (the “Board”) of STEC, Inc. (the “Company”) approved certain changes to its policy for annual equity awards to non-employee directors. In lieu of receiving annual grants of restricted stock units, each non-employee director will receive an annual grant of stock options for 30,000 shares of the Company’s common stock under the Company’s 2000 Stock Incentive Plan upon such director’s re-election to serve on the Board by the Company’s shareholders at the Company’s Annual Shareholders Meetings (the “Annual Meetings”). Each stock option will be granted on the date of the Annual Meetings and will have an exercise price per share equal to the fair market value of the Company’s common stock as measured by the closing price of the common stock as reported on the Nasdaq Global Market on the date of such Annual Meeting. The stock options will vest and become exercisable in a series of four successive equal annual installments upon the non-employee director’s completion of each year of Board service over the four-year period measured from the date of grant. The stock options will have a term of 10 years measured from the grant date, subject to earlier termination following the non-employee director’s cessation of service on the Board. The stock options will immediately vest in full upon certain changes in control or ownership of the Company.

No changes were made to the other compensation arrangements for the non-employee directors. A summary of the Company’s current non-employee director compensation arrangements, reflecting the change referenced above, is attached as Exhibit 99.1 to this Current Report on Form 8-K.