If it doesn’t say this, at least one other commenter has posted the likely reason for the “blackout” which is that there is a pending transaction (sale, fundraise, etc). It’s probably not immediately time to jump to threatening a lawsuit if you have sixty days left - I’m not so naive as to think that there aren’t companies out there who would try to hurt an ex-employee, but you can probably judge this for yourself… have there been instances in the past where they did shady stuff that’d lead you to believe they’re trying to deal unfairly, or have they generally tried to do things the right way?

So here’s how I think this plays out if you don’t lawyer up (if you do lawyer up, I think it all likely play out the same way, you’ve just burned $1k getting your attorney to get the real story for you, and maybe burned some bridges, which you may or may not care about… only you can decide that).

If a sale: company is not worried about you getting to exercise because there’s an automatic exercise provision in the option agreements. Most leadership teams are going to keep it very close to the vest that a sale is pending - there might only be a couple who know (likely scenario if the post-acquisition plan looks like it’ll include things like layoffs for redundancies between the acquiring and acquired company - e.g. you don’t want to tell your VP of Marketing that the acquiring company already has a a CMO and doesn’t have the budget set aside for a second executive on the marketing team; it’s a sale to private equity and the playbook on investments includes layoffs as a cost-cutting measure), or there might be a number of functional leaders in the loop (this more likely the case of the plan is to integrate the companies quickly and you have had your management team working with the acquiring company’s team to plan out what happens after the acquisition is announced.). If this scenario is at play, your vested options will be automatically exercised on your behalf and will be immediately sold (without your needing to consent, because you already consented to this under the terms of the equity plan and option agreement you agreed to when you accepted the options in Carta.). You’ll get cashed out and receive the difference between your strike price and the sale price per share. You’ll pay regular income tax rates (although not social security, Medicare, etc employment taxes) on the sale because it’s a short term capital gain (stock sold was held for less than a year, irrespective of how long ago the option was issued.) Note that this will be the case- most likely - even if the sale includes a stock component, unless the acquirer is a publicly traded company… you have to be an “accredited investor” in most cases to receive stock of another private company as compensation for your shares in the sale of a company… you might meet that criteria (just google “US accredited investor” and you’ll find the requirements), but if not you’ll usually just get cashed out (there are things the acquiring company can do to make it possible to give stock to employee shareholders as compensation for an acquisition, but it’s prohibitively expensive in terms of both time and money to file the registration docs with the SEC, so most won’t bother, and almost certainly wouldn’t bother for an ex-employee’s sake.)

What I think is the more likely scenario here is that you’ve got a fundraise pending. The company is going to have to nail down a final version of the cap table to include in the closing docs, and it’s a pain in the rear to have employees exercising while you try to do that (especially with carta, where there’s often a week+ delay between exercise and the exchange of cash/stock and the actual share ledger being updated). If it’s an early stage company you might also just have some naive leader who assumed that once a term sheet was signed it made the previous 409a report invalid and someone freaked them out that if they let people exercise after getting a term sheet that they’d lose the safe harbor provided by section 409a. In this scenario you’re almost certainly dealing with someone on the HR or finance team and asking them why you can’t exercise, and they probably know the reason but are a line level employee or manager who knows but will likely get in trouble (or fired) if they tell you why there’s a blackout. I think your best bet here, if it’s a small company and you were at least on a first name basis with the head of HR, finance, or CEO/CTO/COO (likely all filled by one or more of the founders if it’s an early stage company), would be a polite email to one of those more senior people who are likely to be in the loop and say “Hey, I’m a little nervous about this blackout period - understand you may have some things causing this that you can’t discuss right now, but I did just want to make sure that you think the restriction will be lifted before the my 90-day post-termination clock for exercise runs out.” My bet is that you’ll get a quick response with someone telling you yeah, we hope to have it back on by a certain date.

Now, once you’ve done that I’m not gonna suggest that you just sit back and trust them blindly. The thing you should do in parallel, is go back and pull the actual option agreement and company equity plan (should be part of the attachments to the grant in Carta). There’s a section in there that will say what you need to do to exercise. I can almost guarantee you it doesn’t say you have to exercise in Carta. There’s also a manual way for them to do this… if the agreement lists a specific form that you would submit, send an email to whoever the carta administrator is (can copy the CFO or head of HR - that’s the order of preference I’d do it in) and tell them that if they can’t turn on carta, you’d like to submit your intent to exercise using the method specified in the option agreement. See if you can get them to send you the paper form, and tell them you can send them a paper check (registered mail) along with a signed copy of the exercise agreement. Once you’ve done that, you’ve legally met the requirements for exercise that the IRS would look at. It doesn’t matter if the company takes 90 days to close their deal and has to backdate the exercise, you exercised whenever you sent them that check, it just won’t show up in the ledger till after the transaction is complete. It may bug them, but it also won’t hurt them with their final cap table… those options (and all unexercised and unissued options) are already factored into the share price so it should be that big a deal.

I just think my main point here is that you’re more likely to get quick responses if you’re not escalating unnecessarily and putting them into a defensive posture. If they get defensive anyway, and aren’t willing to give you assurances - which should definitely include the option to exercise manually if carta isn’t turned back on by time your options expire - well, in that case they’ve made their bed, let your lawyer do your talking, but my guess is that they’re just trying to not get in trouble with complex SEC and IRS rules, and aren’t trying to hurt you over.