DEF 14A of Applied Digital Corp.
Filed Sep 22, 2025 · FY20250001493152-25-014495
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS Our Board, upon recommendation of our Nominating and Corporate Governance Committee, has nominated Wes Cummins, Ella Benson, Chuck Hastings, Rachel Lee, Douglas Miller and Richard Nottenburg for election as directors of the Board. Our Third Amended and Restated Bylaws (“Bylaws”) permit the Board to set the size of the Board, having at least one (1) or more members. Our Board currently consists of six (6) directors, each of whom are being nominated for reelection at the Annual Meeting. Each of our current directors serves until the next annual meeting of our stockholders or the earlier death, resignation or removal of such director. Despite the expiration of a director’s term, however, the director shall continue to serve until such director’s successor is elected and qualified or until there is a decrease in the number of directors. Our Bylaws provide that directors will be elected by a plurality of the votes cast. Thus, when the number of director nominees equals the number of directorships on the Board, each nominee needs at least one affirmative vote to be elected to the Board. As discussed below, we believe that each of our director nominees possesses the experience, skills and qualities to fully perform his or her duties as a director and contribute to our success. Our director nominees were nominated because each is of high ethical character, is highly accomplished in his or her field with superior credentials and recognition, has a reputation, both personal and professional, that is consistent with our image and reputation, has the ability to exercise sound business judgment, and is able to dedicate sufficient time to fulfilling his or her obligations as a director. Each director nominee’s principal occupation and other pertinent information about such director’s particular experience, qualifications, attributes and skills that led the Board to conclude that such person should serve as a director, appears on the following pages. There are no family relationships between any of our directors or executive officers.
Nominees for Election Until the Next Annual Meeting
Nominees for Election Until the Next Annual Meeting The following table sets forth the name, age, position and tenure of each of the nominees at the Annual Meeting:
Nominees for Election Until the Next Annual Meeting
| Name | Age | Position(s) Held With Applied Digital Corporation | Period of Service | | Wes Cummins | 47 | Chief Executive Officer and Chairman of the Board | Director from February 2007 to December 2020 and March 2021 to Present, sole officer from March 2012 to December 2020 and CEO, Secretary from March 2021 to November 2024 | | Ella Benson | 40 | Director | May 2024 to Present | | Chuck Hastings | 47 | Director | April 2021 to Present | | Rachel Lee | 41 | Director | February 2024 to Present | | Douglas Miller | 68 | Director | April 2021 to Present | | Richard Nottenburg | 71 | Director | June 2021 to Present |
Nominees for Election Until the Next Annual Meeting
Mr. Cummins has served as a member of our Board from 2007 until 2020 and from March 11, 2021, through present. During that time Mr. Cummins also served in various executive officer positions and he is currently serving as our chairman of the Board and Chief Executive Officer. Mr. Cummins is also the founder and CEO of 272 Capital LP, a registered investment advisor. Prior to founding 272 Capital and starting our operating business, Mr. Cummins was an analyst with Nokomis Capital, L.L.C., an investment advisory firm, a position he held from October 2012 until February 2020. Mr. Cummins also served as president of B. Riley & Co., from 2002 to 2011. Mr. Cummins also serves as a member of the board of Sequans Communications S.A. (NYSE: SQNS), a fabless designer, developer and supplier of cellular semiconductor solutions for massive, broadband and critical Internet of Things (IoT) markets. Mr. Cummins served on the board of Telenav (NASDAQ: TNAV) from August 2016 until February 2021. Mr. Cummins also served on the board of Vishay Precision Group, Inc. (NYSE: VPG) from July 2017 to June 2024. He holds a BSBA from Washington University in St. Louis where he majored in finance and accounting. We believe Mr. Cummins is qualified to serve on our Board because of his business and leadership experience, as well as a result of having served as a director since starting our operating business.
Overview
| ● | Attract, motivate, incentivize, and retain employees at the executive level who are critical to our long-term success; | | ● | Provide compensation packages to our executives that are competitive, reward the achievement of our business objectives and effectively align their interests with those of our stockholders; and | | ● | Focus on long-term equity incentives that correlate with the growth of sustainable long-term value for our stockholders. |
Peer Group
Peer Group The Compensation Committee reviews an analysis of competitive market data drawn from the executive compensation programs of companies that we believe are comparable to us. With Compensia’s assistance, the Compensation Committee developed a peer group for use when making its compensation decisions for the fiscal year ending May 31, 2025, which consisted of publicly traded technology companies headquartered in the U.S. that generally had a market capitalization between 0.25x and 4.0x the Company’s market capitalization. The Compensation Committee referred to the foregoing competitive market analysis using data drawn from this peer group and broader survey data (for similarly sized companies) when making base salary, cash bonus and equity award decisions for our executive officers for the fiscal year ending May 31, 2025. The following is a list of the public companies that composed our peer group for the fiscal year ending May 31, 2025:
Peer Group
| Alkami Technology | CleanSpark | Payoneer Global | | Backblaze | Couchbase | Red Violet | | Bit Digital | Digital Ocean Holdings | Rekor Systems | | Box | Fastly | Riot Platforms | | Cantaloupe | Marathon Digital Holdings | TeraWulf | | Cipher Mining | Marqeta | Verint Systems |
Summary Compensation Table
Summary Compensation Table The following table presents information regarding the total compensation awarded to, earned by, or paid to Named Executive Officers as of the fiscal years ended May 31, 2025 and May 31, 2024 for services rendered in all capacities to us for the fiscal years ended May 31, 2025 and May 31, 2024.
Summary Compensation Table
| Name and Principal Position(s) | Year | Salary(1) | Bonus | Stock Awards(2) | Non-Equity Incentive Plan Compensation | All Other Compensation(3) | Total | | Wes Cummins | 2025 | $706,251 | $1,500,000 | $25,462,000 | $- | $39,841 | $27,708,092 | | Chief Executive Officer, Chairman and President | 2024 | $600,000 | $600,000 | - | - | $37,002 | $1,237,002 | | Saidal Mohmand(4) | 2025 | $369,792 | $445,313 | $8,932,700 | - | $39,751 | $9,787,555 | | Chief Financial Officer | 2024 | - | - | - | - | - | - | | Laura Laltrello(5) | 2025 | $222,917 | $176,000 | $9,534,000 | - | $13,493 | $9,946,409 | | Chief Operating Officer | 2024 | - | - | - | - | - | - |
Summary Compensation Table
| (1) Amounts for Mr. Cummins represent a salary of $600,000 from June 1, 2024 through October 31, 2024 and $750,000 from November 1, 2024 through the end of the fiscal year. Mr. Cummins’ salary information also includes a $62,500 true-up payment in connection with his Employment Agreement entered into on October 10, 2024. | | Amounts for Mr. Mohmand represent a salary of $250,000 from June 1, 2024 through October 14, 2024 and $475,000 from October 15, 2024 through the end of the fiscal year. | | (2) Consists of the grant date fair value of restricted stock unit (“RSU”) awards made under the Applied Blockchain, Inc. 2022 Incentive Plan (the “2022 Incentive Plan”), performance stock unit (“PSU”) awards made under the 2022 Incentive Plan and the 2024 Incentive Plan, and RSU awards made outside of the 2022 Incentive Plan or the 2024 Incentive Plan, determined in accordance with Accounting Standards Codification Topic 718. These amounts do not correspond to the actual value that may be received by the named executive officers if the RSUs and PSUs vest. | | (3) The amounts reported in this column consist of the value of health care premiums paid by the Company for fiscal year 2025. | | (4) Information is not included for fiscal year 2024 for Mr. Mohmand because he was not a named executive officer in fiscal year 2024. | | (5) Information is not included for fiscal year 2024 for Ms. Laltrello because she joined the Company during fiscal year 2025. |
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control In addition to any payments provided by the Named Executive Officers’ employment agreements, offer letters or transition agreements, as described above, the following termination and/or change in control protection is provided in each Named Executive Officer’s respective restricted stock unit award agreement(s) (each, an “RSU Award”), restricted stock unit inducement award agreement (“Inducement Award”), or performance stock unit award agreement (“PSU Award”) as follows:
Outstanding Equity Awards at May 31, 2025
Outstanding Equity Awards at May 31, 2025 The following table summarizes, for each of the Named Executive Officers, the number of shares of common stock underlying outstanding stock awards held as of May 31, 2025.
Outstanding Equity Awards at May 31, 2025
| | STOCK AWARDS | | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (8) | | Wes Cummins | 5-Aug-22 | 83,334(1) | 569,171 | | | 4-Apr-23 | 200,000(2) | 1,366,000 | | | 10-Oct-24 | 600,000(3) | 4,098,000 | | | 15-Nov-24 | 1,600,000(4) | 10,928,000 | | | 27-Mar-25 | 1,600,000(4) | 10,928,000 | | Saidal Mohmand | 5-Aug-22 | 41,668(1) | 284,592 | | | 4-Apr-23 | 25,000(5) | 170,750 | | | 17-Oct-24 | 408,334(6) | 2,788,921 | | | 15-Nov-24 | 490,000(4) | 3,346,700 | | | 27-Mar-25 | 245,000(4) | 1,673,350 | | Laura Laltrello | 6-Jan-25 | 600,000(7) | 4,098,000 | | | 27-Mar-25 | 600,000(4) | 4,098,000 |
Outstanding Equity Awards at May 31, 2025
(1) Comprised of restricted stock units that vested on August 5, 2025. (2) Comprised of restricted stock units that vest as follows: 100,000 on October 4, 2025 and 100,000 on April 4, 2026. (3) Comprised of restricted stock units that vest as follows: 200,000 on October 10, 2025, 100,000 on April 10, 2026, 100,000 on October 10, 2026, 100,000 on April 10, 2027, and 100,000 on October 10, 2027. (4) Comprised of performance stock units that may be earned during fiscal years 2026, 2027, and 2028 if certain performance criteria are met, as described in our Current Reports on Form 8-K, as amended, filed with the SEC on January 8, 2025, and April 17, 2025. (5) Comprised of restricted stock units that vest as follows: 12,500 on October 4, 2025 and 12,500 on April 4, 2026. (6) Comprised of restricted stock units that vest as follows: 81,667 on October 4, 2025, 81,667 on April 4, 2026, 81,666 on October 4, 2026, 81,667 on April 4, 2027, and 81,667 on October 4, 2027. (7) Comprised of restricted stock units that vest as follows: 200,000 on January 6, 2026, 100,000 on July 6, 2026, 100,000 on January 6, 2027, 100,000 on July 6, 2027, and 100,000 on January 6, 2028. (8) The values set forth in “Market Value of Shares or Units of Stock That Have Not Vested” have been calculated using the fair value at fiscal year end of outstanding and unvested RSUs and PSUs granted in the applicable fiscal year, rather than the grant date fair value of such awards, as required by Regulation S-K promulgated under the Securities Act.
PAY Versus Performance
PAY Versus Performance
Pay Versus Performance Table
Pay Versus Performance Table As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” (“CAP”) to our principal executive officer (“PEO”) and to our non-PEO Named Executive Officers (“Non-PEO NEOs”) and certain financial performance of the Company. The data included in the CAP columns does not reflect the actual amount of compensation earned or paid to our executive officers during the applicable fiscal year and it is reported solely pursuant to the requirements of Item 402(v). The CAP amount also does not represent amounts that have actually been earned or realized, including with respect to certain equity awards, for which performance conditions for these equity awards have not yet been satisfied. To this end, information in the following table may not reflect whether compensation actually realized is aligned with performance. The Compensation Committee did not consider the pay versus performance disclosure in making its pay decisions for any of the years shown. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the Overview of Executive Compensation above.
Pay Versus Performance Table
| Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs (1) | Average Compensation Actually Paid to Non-PEO NEOs (3) | Value of Initial Fixed $100 Investment Based on Total Stockholder Return (4) | Net Income (Loss) (thousands) (5) | | 2025 | $27,708,092 | $29,648,593 | $9,866,986 | $9,028,329 | $417 | $(233,680) | | 2024 | $1,237,002 | $(2,864,834) | $1,385,106 | $98,090 | $220 | $(149,274) | | 2023 | $5,954,578 | $19,471,246 | $1,928,843 | $5,883,078 | $173 | $(44,646) |
Pay Versus Performance Table
| (1) Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in the case of Wes Cummins and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s NEOs for the applicable year other than the PEO for such years. | | (2) Amounts reported in this column represent the CAP to Wes Cummins as the Company’s PEO in the indicated fiscal years, as calculated per the SEC disclosure rules based on his total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the table below: |
Pay Versus Performance Table
| PEO | 2023 | 2024 | 2025 | | Summary Compensation Table - Total Compensation (a) | $5,954,578 | $1,237,002 | $27,708,092 | | Minus | | | | | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year (b) | $5,455,000 | $- | $25,462,000 | | Plus | | | | | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year (c) | $20,227,503 | $- | $25,954,000 | | Plus | | | | | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years (d) | $- | $(2,691,000) | $736,668 | | Plus | | | | | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year (e) | $274,166 | $- | $- | | Plus | | | | | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year (f) | $(1,530,000) | $(1,410,836) | $711,832 | | Minus | | | | | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year (g) | $- | $- | $- | | Compensation Actually Paid | $19,471,247 | $(2,864,834) | $29,648,593 |
Pay Versus Performance Table
| (a) Represents Total Compensation as reported in the Summary Compensation Table for the indicated fiscal year. | | (b) Represents the aggregate grant date fair value of the stock awards and option awards granted to Wes Cummins during the indicated fiscal year, computed in accordance with FASB ASC 718. Amounts shown are the amounts reported in the Summary Compensation Table. | | (c) Represents the aggregate fair value as of the indicated fiscal year-end of Wes Cummins outstanding and unvested stock awards and option awards granted during such fiscal year, computed in accordance with FASB ASC 718. | | (d) Represents the aggregate change in fair value during the indicated fiscal year of the outstanding and unvested stock awards and option awards held by Wes Cummins as of the last day of the indicated fiscal year, computed in accordance with FASB ASC 718. | | (e) Represents the aggregate fair value at vesting of the stock and option awards that were granted to Wes Cummins and vested during the indicated fiscal year, computed in accordance with FASB ASC 718. | | (f) Represents the aggregate change in fair value, measured from the prior fiscal year-end to the vesting date, of each stock award and option award held by Wes Cummins that was granted in a prior fiscal year and which vested during the indicated fiscal year, computed in accordance with FASB ASC 718. | | (g) Represents the aggregate fair value as of the last day of the prior fiscal year of Wes Cummins’s stock awards and option awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year, computed in accordance with FASB ASC 718. |
Pay Versus Performance Table
| (3) Amounts reported in this column represent the average CAP to the Company’s Non-PEO NEOs in the indicated fiscal years, as calculated per the SEC disclosure rules based on his total compensation reported in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the table below: |
Pay Versus Performance Table
| NEO Average | 2023 | 2024 | 2025 | | Summary Compensation Table - Total Compensation (a) | $1,928,843 | $1,385,106 | $9,866,982 | | Minus | | | | | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year (b) | $1,299,790 | $514,000 | $9,233,350 | | Plus | | | | | Fair Value at Fiscal Year End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year (c) | $5,440,483 | $423,000 | $8,002,486 | | Plus | | | | | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years (d) | - | (798,674) | $86,668 | | Plus | | | | | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year (e) | $68,541 | $- | 200,898 | | Plus | | | | | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year (f) | $(254,999) | $(397,341) | $104,645 | | Minus | | | | | Fair Value as of Prior Fiscal Year End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year (g) | - | - | - | | Compensation Actually Paid | $5,883,078 | $98,090 | $9,028,329 |
Pay Versus Performance Table
| (a) Represents the average Total Compensation as reported in the Summary Compensation Table for the reported NEOs other than the PEO in the indicated fiscal year. |
Pay Versus Performance Table
| (b) Represents the average aggregate grant date fair value of the stock awards and option awards granted to the reported NEOs excluding the PEO during the indicated fiscal year computed in accordance with FASB ASC 718. Amounts shown are the amounts reported in the Summary Compensation Table. | | (c) Represents the average aggregate fair value as of the indicated fiscal year-end of the reported NEOs’ (excluding the PEO) outstanding and unvested stock awards and option awards granted during such fiscal year, computed in accordance with FASB ASC 718. | | (d) Represents the average aggregate change in fair value during the indicated fiscal year of the outstanding and unvested stock awards and option awards held by the reported NEOs excluding the PEO as of the last day of the indicated fiscal year, computed in accordance with FASB ASC 718. | | (e) Represents the average aggregate fair value at vesting of the stock awards and option awards that were granted to the reported NEOs (excluding the PEO) and vested during the indicated fiscal year, computed in accordance with FASB ASC 718. | | (f) Represents the average aggregate change in fair value, measured from the prior fiscal year-end to the vesting date, of each stock award and option award held by the reported NEOs (excluding the PEO) that was granted in a prior fiscal year and which vested during the indicated fiscal year, computed in accordance with FASB ASC 718. | | (g) Represents the average aggregate fair value as of the last day of the prior fiscal year of the reported NEOs’ (excluding the PEO) stock awards and option awards that were granted in a prior fiscal year and which failed to meet the applicable vesting conditions in the indicated fiscal year computed in accordance with FASB ASC 718. |
Pay Versus Performance Table
| (4) Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. No dividends were paid on stock or option awards in fiscal 2025, 2024 or 2023. | | (5) The dollar amounts reported represent the amount of net loss reflected in our consolidated audited financial statements for the applicable year. |
Pay Versus Performance Relationships Descriptions
Pay Versus Performance Relationships Descriptions In accordance with Item 402(v) of Regulation S-K, the graphs below compare the compensation actually paid to our PEO and the average of the compensation actually paid to our Non-PEO NEOs, with (i) our TSR, and (ii) our net income, in each case, for the fiscal years ended May 31, 2025, May 31, 2024 and May 31, 2023. TSR amounts reported in the graph assume an initial fixed investment of $100. A portion of our NEO’s compensation consists of equity awards. As a result, the change between the values disclosed in our Summary Compensation Table and CAP tends to be directionally aligned with changes in our TSR. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference in any filing of our company under the Securities Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation Table
Director Compensation Table The following table sets forth information concerning the compensation paid to certain of our directors who served on our Board during fiscal year ended May 31, 2025, except for Wes Cummins, whose compensation is set forth in the Summary Compensation Table above:
Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) | All Other Compensation ($) | Total ($) | | Ella Benson | $52,000 | $240,004(2) | $- | $292,004 | | Charles Hastings | $56,000 | $240,004(3) | $- | $296,004 | | Rachel Lee | $53,500 | $240,004(4) | $- | $293,504 | | Douglas Miller | $92,500 | $240,004(5) | $- | $332,504 | | Richard Nottenburg | $71,000 | $240,004(6) | $- | $311,004 | | Kate Reed(7) | $- | $- | $- | $- |
Director Compensation Table
| (1) Amounts shown represent the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, of awards of restricted stock and restricted stock units granted during fiscal year ended May 31, 2025. | | (2) Ms. Benson held unvested restricted stock awards for 40,650 shares of common stock and unvested restricted stock units of 28,606 as of May 31, 2025. | | (3) Mr. Hastings held unvested restricted stock units of 28,606 as of May 31, 2025. | | (4) Ms. Lee held unvested restricted stock awards for 30,794 shares of common stock and unvested restricted stock units of 28,606 as of May 31, 2025. | | (5) Mr. Miller held unvested restricted stock units of 28,606 as of May 31, 2025. | | (6) Mr. Nottenburg held unvested restricted stock awards for 200,000 shares of common stock and unvested restricted stock units of 28,606 as of May 31, 2025. | | (7) Ms. Reed served as a director through November 20, 2024 and served as the Chief Growth Officer of the Company from May 2024 through December 2024. Upon the cessation of her service on the Board, Ms. Reed forfeited 15,650 shares of unvested restricted stock, previously granted with respect to her Board service. |
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy The following table shows the annual cash retainer fees for non-employee directors:
Non-Employee Director Compensation Policy
| Base retainer | $40,000 | | Audit Committee Chair | $20,000 | | Audit Committee Member | $10,000 | | Compensation Committee Chair | $15,000 | | Compensation Committee Member | $7,500 | | Nominating and Corporate Governance Committee Chair | $12,000 | | Nominating and Corporate Governance Committee Member | $6,000 | | Lead Independent Director | $25,000 |
Non-Employee Director Compensation Policy
Non-employee directors serving in multiple leadership roles receive incremental compensation for each role. Directors are not expected to receive additional compensation for attending regularly scheduled Board or committee meetings. For less than full years of service, the compensation paid to the non-employee directors will be prorated based on the number of days of service. Directors also receive customary reimbursement for reasonable out-of-pocket expenses related to Board service. In addition to the annual cash retainer fees, directors also receive an annual grant of restricted stock valued at $240,000, calculated using the closing price of the common stock on the Nasdaq Global Select Market on the date of grant, which is the date of each annual meeting of stockholders, and vesting on the first anniversary of the date of grant. On December 27, 2024, each non-employee director received a grant of restricted stock awards for 28,606 shares of common stock that will vest on November 20, 2025, in order to compensate such elected or re-elected director (at the Annual Meeting of the Company’s stockholders held on November 20, 2024) to serve on the Company’s Board for the subsequent 12 months. Directors who are employees of the Company do not receive any additional compensation for Board service.