Applied Digital Corp. 8-K

What Happened
Applied Digital Corporation filed an 8‑K (Feb 9, 2026) disclosing that on Feb 6, 2026 the Board approved long‑term equity awards to Jason Zhang (new President & Co‑Founder) and CFO Saidal Mohmand under the 2024 Omnibus Equity Incentive Plan. Jason Zhang received 1,500,000 performance stock units (PSUs) and 500,000 restricted stock units (RSUs); Saidal Mohmand received 750,000 PSUs and 250,000 RSUs. The awards are intended to replace future equity grants for the next five years (absent unusual circumstances) and are tied to operational milestones and long‑term financial targets as the company scales its high‑performance computing data‑center business.

Key Details

• Grant date: February 6, 2026. Awards under the Company’s 2024 Omnibus Equity Incentive Plan.
• Zhang PSUs (1,500,000): vest in four equal tranches of 375,000 based on (a) Signing‑Based Hurdles (contracts with investment‑grade hyperscalers of 600 MW and 1.6 GW) and (b) Ready‑for‑Service‑Based Hurdles (600 MW and 1.6 GW), all to be achieved within five years and subject to continued employment.
• Mohmand PSUs (750,000): vest in two tranches of 375,000 tied to trailing‑12‑month net operating income (NOI) from the HPC Hosting Business: $1,000,000,000 and $2,000,000,000, achievable by Feb 28, 2031; change‑in‑control and Contracted NOI rules apply.
• RSUs: Zhang 500,000; Mohmand 250,000. One‑fifth cliff at 1 year, then semiannual installments (50,000 for Zhang; 25,000 for Mohmand) so full vesting at five years. Upon certain terminations (without Cause or for Good Reason) 50% of unvested RSUs accelerate (100% on certain change‑in‑control terminations).
• Other terms: shares issued on vesting are subject to a two‑year resale restriction (except for tax withholding and estate transfers); awards can be forfeited for breach of restrictive covenants; awards are each <1% of outstanding shares at grant date (company says dilution is minimal).
• Company context: in 2025 Applied Digital’s stock rose ~214% and the company reported revenue of $190.8M for the six months ended Nov 30, 2025 (up 176% vs prior year $69.1M); the company has leased Polaris Forge 1 (400 MW) and Polaris Forge 2 (200 MW) capacity and has begun recognizing related revenue.

Why It Matters
These awards align senior management pay with the company’s data‑center growth and financial performance: Zhang’s PSUs focus on customer signings and facility readiness (capacity milestones), while Mohmand’s PSUs tie directly to large NOI thresholds. For investors, key takeaways are (1) management’s incentives are heavily performance‑contingent and long‑dated, (2) potential dilution is limited per the filing (<1% per award class), and (3) vesting depends on both milestone achievement and continued employment, with specific change‑in‑control and forfeiture rules. The filing also reiterates forward‑looking risks around construction, customer leases, and financing that could affect whether the milestones are met.