Excessive or Luxury Expenditures Policy

Board Approved: 9/9/2009

This policy is intended to fulfill the requirements outlined in Section 111 of the Emergency Economic Stabilization Act of 2008 (EESA), as amended by the American Recovery and Reinvestment Act of 2009 (ARRA) enacted on February 17, 2009. Under the interim rule (31CFR Part 30), ARRA requires each recipient of funds under the Capital Purchase Program (CPP) of the Troubled Assets Relief Program (TARP) to have in place a company-wide policy regarding excessive or luxury expenditures, as identified by the Secretary of the Department of the U.S. Treasury.

Waukesha Bankshares, Inc. (the "Company") and its subsidiary, Sunset Bank & Savings (the "Bank"), prohibit excessive or luxury expenditures that are not reasonable expenditures for conferences, staff development, facility renovation, reasonable performance incentives, customer retention and attraction, or other similar measures conducted in the normal course of business operations. This policy covers expenditures related to facility renovations, transportation services, entertainment, conferences, employee recognition/holiday parties and board/management retreats.

Conferences:

We encourage our staff to attend conferences that are appropriate educational opportunities. These conferences are related to the financial services industry and have a direct correlation to their job. Typically these conferences are sponsored by vendors, banking associations, or other industry related entities and help employees stay abreast of regulatory changes and current events within the financial industry. At times, it may be appropriate that a spouse would travel to these conferences with the Company or Bank attendees. At all times, travel related expenses will adhere to the Bank's Director and Officer Travel Policy.

Renovations:

Renovations of facilities should be relative to the current approved budget and/or strategic plan of the Company or the Bank. An exception to this is allowed in the event management must deal with an emergency situation, such as an act of nature, and/or the expenditure is necessary to make the facility operational for either employee or customer use. At no time should renovations be considered that would have the appearance of being extraordinary or excessive from a shareholder perspective.

Employee Recognition/Holiday Parties:

We feel that employee recognition/holiday parties are important in terms of employee appreciation and employee morale. Accordingly, this policy does not prohibit expenditures in conjunction with such events. However, these events will be held locally in nature and neither overnight or travel expenses will be paid by the Company or Bank and the expenses associated with such an event should not cost the Company or Bank more than approximately an average 2 day's gross payroll.

Entertainment:

Entertainment is defined as an activity that an employee would use corporate funds for business development purposes relating to a current customer or prospective customer, or to further enhance the Company's or Bank's marketing efforts.

Our policy is that all expenses incurred by the Company or the Bank would be for Company or Bank purposes, and used to steer and/or increase business to the bank. Occasional events such as taking customers or prospects or vendors on trips, playing golf, eating dinner, taking them to other events the customer/prospect/vendor would find pleasurable is a necessary part of the Company's and Bank's marketing efforts and is not deemed as "luxury" or a violation of this policy. Events, parties or other expenditures focused on customers for the purpose of attracting their business, or retaining their business, would not fall under this policy.

Board/Management Retreats:

Board and/or Management Retreats shall only be used for educational or business planning purposes with the corresponding expenditures being reasonable by any standard. Board and Management education is a vital part of attracting and maintaining a dynamic director base, and this policy does not prohibit a retreat that is focused on strategic planning or board education.

Transportation Services:

Transportation for Company or Bank staff to locations for conferences, business development purposes, merger and acquisition research or other related business purposes should be conducted in the most cost appropriate way for the Company or the Bank. Modes of transportation to be used may consist of vehicle, commercial air or rail services. The selection of transportation services will factor in cost, efficiency and timeliness of travel. Private air services are not allowed without the approval of the Chairman of the Company's or the Chairman of the Bank's Board of Directors (as the case may be), or in emergency situations that do not allow other means of transportation to be used to accomplish the goal or purpose of a trip in a timely manner. Following and approval of private air services by the Chairman or use of private air services in an emergency situation, the CFO and CEO of the entity shall certify that such an approval was obtained and such certification shall be maintained in the Company's or Bank's corporate records.

Administration of Policy:

The CFO of the Company and the Bank is responsible for the day-to-day administration of this Policy for each entity, and the CEO of the Company and the Bank is accountable for overall adherence to this Policy for each entity and must approve any exceptions. Strict adherence to this Policy is mandated for Company and Bank employees. Violations of this Policy shall be promptly reported to the Board of Directors of the entity.

This policy, and any amendments hereto, shall be posted on the Bank's Internet website and provided to the U.S. Department of the Treasury and the Federal Deposit Insurance Corporation (FDIC)