Applied Digital Corporation Files Amended Form 8-K/A: Correction to Performance Stock Unit Award Agreement with President Jason Zhang

Key Highlights:

• Applied Digital Corporation (“the Company”) has filed an amended Form 8-K/A with the SEC on March 13, 2026, correcting a significant error in a previously reported executive compensation agreement.
• The amendment specifically addresses the Performance Stock Unit (PSU) Award Agreement with President Jason Zhang, originally entered into on February 6, 2026.
• This corrected filing clarifies the method for calculating achievement of performance “Hurdles”—a critical factor in the vesting of a substantial PSU grant to Mr. Zhang.
• The corrected method now aligns with what was actually approved by the Board of Directors, based on recommendations from the Compensation Committee.
• The amendment may affect Mr. Zhang’s potential equity compensation and could impact dilution, executive incentives, and long-term shareholder value.

Details of the Amendment

The Company initially reported on February 9, 2026, that it had entered into a Performance Stock Unit Award Agreement with President Jason Zhang. This agreement provides Mr. Zhang with the opportunity to earn shares of Applied Digital’s common stock upon the achievement of certain business milestones, referred to as “Hurdles.” However, a scrivener’s error was identified in how the achievement of these Hurdles was calculated.

To address the error and ensure consistency with the Board’s intent, an Amended and Restated Performance Stock Unit Award Agreement was executed on March 10, 2026. This new agreement replaces the original in its entirety and corrects the calculation method for achieving the performance milestones that trigger the vesting of PSUs.

Potentially Price-Sensitive Information

• Nature of the Correction: The amendment clarifies the exact method by which PSU milestones are measured and achieved, which directly influences the number of shares that may be granted to the President. Any change in the executive compensation structure, especially one that involves substantial equity awards, can be material to shareholders as it may affect dilution, incentive alignment, and the company’s expense profile.
• Vesting and Forfeiture: Unvested PSUs that do not meet the specified Hurdles will be automatically forfeited without payment or further action. The company’s Chief Financial Officer is tasked with tracking milestone achievements and reporting to the Compensation Committee, which will then determine if and when PSUs vest. Shares are to be delivered promptly, but in any case, no later than March 15 of the year following achievement of the Hurdle.
• Alignment with Shareholder Interests: The correction ensures that Mr. Zhang’s incentives are in line with the actual intentions of the Board and the interests of shareholders, potentially impacting management’s focus and company performance.
• Disclosure of Forward-Looking Statements: The Company cautions that this amendment, and other filings, may contain forward-looking statements regarding future business strategy, market position, and financial performance, which are subject to risks and uncertainties.

Summary Table of Relevant Securities Information

Additional Shareholder Considerations

• Regulatory Compliance: The issuance of shares under the PSU agreement is subject to all applicable laws, including securities regulations.
• Tax Withholding: Mr. Zhang is responsible for paying all required federal, state, and local tax withholdings prior to receipt of shares. The company will not issue shares until satisfactory arrangements are made for these obligations.
• Lock-up Provisions: If shares vest during a period when company directors/officers are under lock-up agreements with underwriters, Mr. Zhang must also agree to comparable restrictions.
• Securities Law Restrictions: Shares may not be sold, transferred, or otherwise disposed of unless registered or exempt from registration as determined by company counsel.

Why This Matters for Investors

This amendment is important for shareholders because it directly impacts the incentives of a key executive, the potential dilution from equity awards, and the alignment of management’s interests with those of shareholders. Corrections to executive compensation agreements, especially those involving performance-based equity, are often closely watched by investors, activists, and analysts as they can signal changes in corporate governance practices, oversight effectiveness, or future executive behavior.

Furthermore, any material change to the terms under which a top executive can earn a substantial equity award can influence the company’s expense recognition (under accounting rules), future share count, and market perceptions of management’s focus on growth or profitability milestones.

Forward-Looking Statements Disclaimer

This article contains summaries of forward-looking statements made by Applied Digital Corporation. These statements are subject to risks and uncertainties, including the company’s ability to achieve performance milestones, market conditions, and other factors described in its SEC filings. Investors are cautioned not to place undue reliance on such statements and should review all company disclosures and consult with financial advisors before making investment decisions.

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