Sec Form 4 Filing - REXROAD JERRY L @ CAROLINA FINANCIAL CORP - 2020-05-01

FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person REXROAD JERRY L 2. Issuer Name and Ticker or Trading Symbol CAROLINA FINANCIAL CORP [ CARO] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X __ Director _____ 10% Owner X __ Officer (give title below) _____ Other (specify below) President and CEO (Last) (First) (Middle) 288 MEETING STREET 3. Date of Earliest Transaction (MM/DD/YY) 05/01/2020 (Street) CHARLESTON, SC29401 4. If Amendment, Date Original Filed (MM/DD/YY) 6. Individual or Joint/Group Filing (Check Applicable Line) __ X __ Form filed by One Reporting Person _____ Form filed by More than One Reporting Person (City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned 1.Title of Security (Instr. 3) 2. Transaction Date (MM/DD/YY) 2A. Deemed Execution Date, if any (MM/DD/YY) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 05/01/2020 M 4,449 ( 2 ) A $ 16.56 249,028 D Common Stock 05/01/2020 F 4,276 D 244,752 D Common Stock 05/01/2020 D 4,949 D 239,803 D Common Stock 05/01/2020 D 239,803 D 0 D Common Stock 05/01/2020 D 11,040 D 0 I By Spouse

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities) 1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (MM/DD/YY) 3A. Deemed Execution Date, if any (MM/DD/YY) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) 6. Date Exercisable and Expiration Date (MM/DD/YY) 7. Title and Amount of Underlying Securities (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4) Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares Option to Purchase Common Stock $ 4.1667 05/01/2020 D 78,902 ( 2 ) 04/25/2023 Common Stock 78,902 $ 24.8233 0 D Option to Purchase Common Stock $ 11.5833 05/01/2020 D 24,590 ( 2 ) 01/21/2025 Common Stock 24,590 $ 17.4067 0 D Option to Purchase Common Stock $ 16.56 05/01/2020 D 16,613 ( 2 ) 01/20/2026 Common Stock 16,613 $ 16.32 0 D Option to Purchase Common Stock $ 16.83 05/01/2020 D 4,000 ( 3 ) 03/16/2026 Common Stock 4,000 ( 3 ) 0 D Option to Purchase Common Stock $ 30.9 05/01/2020 D 8,441 ( 3 ) 02/15/2027 Common Stock 8,441 ( 3 ) 0 D Restricted Stock Units ( 4 ) 05/01/2020 D 4,960 ( 4 ) ( 4 ) Common Stock 4,960 ( 4 ) 0 D Restricted Stock Units ( 4 ) 05/01/2020 D 2,480 ( 4 ) ( 4 ) Common Stock 2,480 ( 4 ) 0 D

Reporting Owners Reporting Owner Name / Address Relationships Director 10% Owner Officer Other REXROAD JERRY L 288 MEETING STREET CHARLESTON, SC29401 X President and CEO Signatures /s/Jerry L. Rexroad 05/05/2020 Signature of Reporting Person Date

Explanation of Responses:

( 1 )Disposed of in accordance with the Agreement and Plan of Merger, dated as of November 17, 2019 (the "Merger Agreement"), by and between Carolina Financial Corporation and United Bancshares, Inc., pursuant to which Carolina Financial Corporation was merged with and into United Bancshares, Inc., effective May 1, 2020 (the "Merger"). On May 1, 2020, the effective date of the Merger, each issued and outstanding share of Carolina Financial Corporation common stock was converted into the right to receive 1.13 shares of United Bancshares, Inc. common stock (subject to the payment of cash in lieu of fractional shares) (the "Merger Consideration"). As a result of the Merger, the reporting person no longer beneficially owns, directly or indirectly, any shares of Carolina Financial Corporation common stock. ( 2 )In accordance with the Merger Agreement and at the election of the reporting person, these options were cancelled in the merger in exchange for a cash payment in the amount indicated, representing the difference between the exercise price of the option and $28.99 per share, the market value of the underlying Carolina Financial Corporation common stock calculated in accordance with the provisions of the Merger Agreement, net of shares withheld by the issuer at the direction of the reporting person to cover payment of the exercise price and tax liabilities incident to the vesting of the options in accordance with Rule 16b-3. With respect to the options having an exercise price of $16.56 and an expiration date of January 20, 2026, 4,449 shares were issued to the reporting person following the withholding of shares by the issuer to cover payment of the exercise price and tax liabilities incident to the vesting of the options. ( 3 )Pursuant to the Merger Agreement, at the effective time of the Merger, each stock option not cashed out at the election of the reporting person, was converted into the right to acquire shares of United Bancshares, Inc. common stock, as adjusted to reflect the exchange ratio of 1.13. ( 4 )Represents restricted stock units previously granted to the reporting person. In accordance with the Merger Agreement and at the election of the reporting person, these restricted stock units were cancelled in the merger in exchange for paym ent in cash equal to the product of (x) $28.99 per share, the market value of the underlying Carolina Financial Corporation common stock calculated in accordance with the provisions of the Merger Agreement and (y) the number of restricted stock units subject to the award, assuming performance achieved at the maximum level, net of shares withheld by the issuer at the direction of the reporting person to cover payment of tax liabilities incident to the vesting of the restricted stock units in accordance with Rule 16b-3. ( 5 )Represents shares of restricted stock previously granted to the reporting person. In accordance with the Merger Agreement and at the election of the reporting person, 4,949 restricted shares were cancelled in the merger in exchange for payment in cash equal to the product of (x) $28.99 per share, the market value of the underlying Carolina Financial Corporation common stock calculated in accordance with the provisions of the Merger Agreement and (y) the number of restricted shares subject to the award, and 4,276 restricted shares were withheld by the issuer at the direction of the reporting person to cover payment of tax liabilities incident to the vesting of the restricted shares in accordance with Rule 16b-3.

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

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