sc13da108762004_12052012.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D
(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
§ 240.13d-2(a)

(Amendment No. 1)1

STEC, Inc.
(Name of Issuer)

Common Stock, par value $0.001 per share
(Title of Class of Securities)

784774101
(CUSIP Number)
 
Simon J. Michael
Balch Hill Capital, LLC
2778 Green Street
San Francisco, CA 94123
(415) 474-7055

With copies to:

Steve Wolosky, Esq.
Olshan Frome Wolosky LLP
Park Avenue Tower
65 East 55th Street
New York, New York 10022
(212) 451-2300
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

December 6, 2012
(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See § 240.13d-7 for other parties to whom copies are to be sent.


_______________
1              The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
 
 
 
 
CUSIP NO. 784774101
 
1
NAME OF REPORTING PERSON
 
Balch Hill Partners, L.P.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
WC
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
- 0 -
8
SHARED VOTING POWER
 
4,190,000
9
SOLE DISPOSITIVE POWER
 
- 0 -
10
SHARED DISPOSITIVE POWER
 
4,190,000
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
4,190,000
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
9.0%
14
TYPE OF REPORTING PERSON
 
PN
 
 
2
 
CUSIP NO. 784774101
 
1
NAME OF REPORTING PERSON
 
Balch Hill Capital, LLC
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
DELAWARE
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
- 0 -
8
SHARED VOTING POWER
 
4,190,000
9
SOLE DISPOSITIVE POWER
 
- 0 -
10
SHARED DISPOSITIVE POWER
 
4,190,000
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
4,190,000
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
9.0%
14
TYPE OF REPORTING PERSON
 
OO
 
 
3
 
CUSIP NO. 784774101
 
1
NAME OF REPORTING PERSON
 
Simon J. Michael
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
  (a) x
  (b) o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS
 
PF, AF
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
 
¨
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7
SOLE VOTING POWER
 
- 0 -
8
SHARED VOTING POWER
 
4,190,000
9
SOLE DISPOSITIVE POWER
 
- 0 -
10
SHARED DISPOSITIVE POWER
 
4,190,000
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
4,190,000
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
9.0%
14
TYPE OF REPORTING PERSON
 
IN
 
 
4
 
CUSIP NO. 784774101
 
The following constitutes Amendment No. 1 to the Schedule 13D filed by the undersigned (“Amendment No. 1”).  This Amendment No. 1 amends the Schedule 13D as specifically set forth.
 
Item 4.
Purpose of Transaction.
 
Item 4 is hereby amended to add the following:
 
On December 6, 2012, the Reporting Persons delivered a letter to the Board of Directors of the Issuer (the “Board”) expressing their serious concerns about the strategic direction of the Issuer and its current performance.  In the letter, the Reporting Persons recognized the substantial value of the Issuer’s underlying technology, but noted that the Issuer’s performance has declined significantly over the past two years, mainly as a result of increasing competition.  The Reporting Persons conveyed their belief that the Issuer’s strategy, to increase its operating expenses, particularly in R&D spending, in order to gain scale and compete against larger industry players, has not resulted in commensurate growth in revenues.  Accordingly, the Reporting Persons called upon the Issuer to immediately consider (i) a reduction in expenses, particularly in R&D or, greater disclosure to stockholders as to why such spending is justified, (ii) focusing the Company’s efforts on its core products, particularly, the SAS market, and (iii) exploring all strategic alternatives, including a sale of the Company.  A copy of the letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
 
Item 7.
Material to be Filed as Exhibits.
 
 
99.1
Letter to the Board of Directors of the Issuer dated December 6, 2012.
 
 
5
 
CUSIP NO. 784774101
 
SIGNATURES
 
After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
 
Dated:  December 6, 2012

 
BALCH HILL PARTNERS, L.P.
   
 
By:
Balch Hill Capital, LLC
General Partner
   
 
By:
/s/ Simon J. Michael
   
Name:
Simon J. Michael
   
Title:
Manager


 
BALCH HILL CAPITAL, LLC
   
 
By:
/s/ Simon J. Michael
   
Name:
Simon J. Michael
   
Title:
Manager


 
/s/ Simon J. Michael
 
Simon J. Michael
 
 
6