Form 4: Avidity Biosciences CEO Sells Shares to Cover Tax Obligations

Avidity Biosciences CEO Sarah Boyce sold 31,540 shares of common stock on March 20, 2025, to cover tax withholding obligations related to the vesting of restricted stock units.

Summary

• On March 20, 2025, Sarah Boyce, the President and CEO of Avidity Biosciences, sold 31,540 shares of the company's common stock.
• The sale was executed at a weighted-average price of $31.0578 per share, with individual transactions ranging from $30.92 to $31.06.
• The purpose of the sale was to cover tax withholding obligations associated with the vesting and settlement of 62,500 time-based restricted stock units (RSUs) that vested on March 19, 2025.
• These RSUs were initially granted as performance-based restricted stock units (PSUs) and converted to time-based RSUs after the company achieved a performance objective on September 19, 2024.
• The sale was mandated by Avidity Biosciences' policy to require tax withholding obligations to be funded through a 'sell-to-cover' transaction.
• The CEO has an instruction letter in place for the automatic sale of such shares, intended to satisfy the affirmative defense conditions of Rule 10b5-1.
• Following the transaction, Sarah Boyce directly owns 305,871 shares of Avidity Biosciences common stock.

Sentiment

Score: 5

Explanation: The document describes a routine transaction (sell-to-cover) for tax purposes, which is neither particularly positive nor negative. It's a neutral event.

Industry Context

Sales of shares to cover tax obligations are a common practice among executives who receive equity compensation. The use of a 10b5-1 plan suggests the executive is following best practices to avoid accusations of insider trading.

Comparison to Industry Standards

• Sell-to-cover transactions are a standard method for executives to manage tax obligations related to equity compensation, aligning with practices seen at companies like Alnylam Pharmaceuticals and Ionis Pharmaceuticals.
• The use of a Rule 10b5-1 trading plan is a common practice among corporate executives to demonstrate that trades are pre-planned and not based on inside information, similar to plans used by executives at Regeneron and Biogen.

Stakeholder Impact

• The sale of shares by the CEO could have a minor, temporary impact on the stock price, but is unlikely to have a significant long-term effect.
• The 'sell-to-cover' policy ensures that the company meets its tax obligations related to equity compensation.

Key Dates

Keywords

Avidity Biosciences, Sarah Boyce, stock sale, Form 4, insider trading, tax withholding, RSUs, Rule 10b5-1, equity compensation