We present a new micro-electro-mechanical system (MEMS) spatial light modulator (SLM) with a two-dimensional array of tightly-spaced square micromirrors (or pixels) designed to sag (or piston motion). This diffractive MEMS modulator is to be used for independently applying amplitude attenuation and phase control to spectrally-dispersed light along one dimension. The spectral phase and amplitude modulator operate in conjunction with a dispersive optical setup, where spatially resolved frequency components are to be incident onto and independently modulated by the device. The MEMS design is based on two common actuators per array column, in order to set the two degrees of freedom of amplitude and phase for every spectral component. This MEMS SLM is thus optimal in actuator/electrode count, especially when compared to conventional SLM where each pixel is independently actuated. The MEMS sag range is compatible with near-IR wavelengths used in the fiber-optic communication band.