OTTAWA SAVINGS BANK SALARY CONTINUATION AGREEMENT

Exhibit 10.12

OTTAWA SAVINGS BANK

SALARY CONTINUATION AGREEMENT

This SALARY CONTINUATION AGREEMENT (the “Agreement”) is adopted effective as of April 1, 2007, by and between OTTAWA SAVINGS BANK , a federally-chartered savings bank located in Ottawa, Illinois (the “Bank”) and JON L. KRANOV (the “Executive”).

The purpose of this Agreement is to provide specified benefits to the Executive, a member of a select group of management or highly compensated employees who contribute materially to the continued growth, development, and future business success of the Bank. This Agreement shall be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended from time to time.

ARTICLE 1

DEFINITIONS

Whenever used in this Agreement, the following words and phrases shall have the meanings specified:

“Accrued Benefit” means the amount of liability that should be accrued by the Bank (i.e., determined without regard to whether such liability is actually accrued) under Generally Accepted Accounting Principles (“GAAP”), for the Bank’s obligation to the Executive under this Agreement, by applying Accounting Principles Board Opinion Number 12 (“APB 12”) as amended by Statement of Financial Accounting Standards Number 1 06 (“FAS 106”).

“Beneficiary” means each designated person, or the estate of the deceased Executive, entitled to benefits, if any, upon the death of the Executive as determined pursuant to Article 4.

“Beneficiary Designation Form” means the form established from time to time by the Plan Administrator that the Executive completes, signs, and returns to the Plan Administrator to designate one or more Beneficiaries.

“Board” means the Board of Directors of the Bank.

“Change in Control” means any of the following events:

(a) Merger : The Company merges into or consolidates with another entity, or merges another corporation into the Company, and as a result, less than a majority of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were stockholders of the Company immediately before the merger or consolidation;

(b) Acquisition of Significant Share Ownership : There is filed, or is required to be filed, a report on Schedule 13D or another form or schedule (other than Schedule 13G) required under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of the Company’s voting securities, but this clause (b) shall not apply to beneficial ownership of Company voting shares held in a fiduciary capacity by an entity of which the Company directly or indirectly beneficially owns 50% or more of its outstanding voting securities;

(c) Change in Board Composition : During any period of two consecutive years, individuals who constitute the Company’s Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority of the Company’s Board of Directors; provided, however, that for purposes of this clause (c), each director who is first elected by the board (or first nominated by the board for election by the members) by a vote of at least two-thirds (  ² / 3 ) of the directors who were directors at the beginning of the two-year period shall be deemed to have also been a director at the beginning of such period; or

(d) Sale of Assets : The Company sells to a third party all or substantially all of its assets.

Notwithstanding anything in this Plan to the contrary, in no event shall the conversion of the Bank to the full stock holding company form of organization constitute a “Change in Control” for purposes of this Plan.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” means Ottawa Savings Bancorp, Inc., the holding company for the Bank.

“Disability” means the Executive’s (a) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) receipt of disability benefits for a period of 3 months under an accident and health plan of the employer by reason of the participant’s medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

“Effective Date” means April 1, 2007.

“Normal Retirement Age” means the Executive attaining age sixty-five (65).

“Normal Retirement Date” means the date of the Executive’s Separation from Service for any reason other than Termination for Cause on or after attaining Normal Retirement Age.

“Plan Administrator” means the plan administrator described in Article 6.

“Plan Year” means each twelve-month period commencing on January 1st and ending on December 31st of each year. The initial Plan Year shall commence on the Effective Date of this Agreement and end on the following December 31st.

“Schedule A” means the schedule attached to this Agreement and made a part hereof. Schedule A may be updated as necessary upon a change in any of the benefits under Articles 2 or 3.

“Separation from Service” means the Executive’s termination of employment with the Bank due to the Executive’s death, Disability, retirement, or such other termination of employment. The Executive will not be deemed to have experienced a Separation from Service if he is on military leave, sick leave, or other bona fide leave of absence, to the extent such leave does not exceed a period of six (6) months or such longer period of time as is protected by statute or contract. Whether or not the Executive has experienced a Separation from Service is dependent upon the facts and circumstances; provided, however, that the Executive will not be deemed to have experienced a Separation from Service if he continues to provide significant services for the Bank. For purposes of the preceding sentence, the Executive will be considered to provide “significant services” if he provides continuing services that average at least twenty percent (20%) of the services he provided during the immediately preceding three (3) full calendar years of employment.

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“Specified Employee” means, if the stock of the Company is publicly traded on an established securities market or otherwise, a key employee (as defined in Section 416(i)(1)(A)(i), (ii) or (iii) thereunder and disregarding Section 416(i)(5)), at any time ending on the last day of the Plan Year in which the Executive incurs a Separation from Service.

“Termination for Cause” shall mean the termination of the Executive’s employment by the Bank due to the Executive’s (a) personal dishonesty; (b) incompetence; (c) willful misconduct; (d) breach of fiduciary duty involving personal profit; (e) intentional failure to perform state duties; (f) willful violation of any law, rule or regulation (other than traffic violations or similar offenses); or (g) material breach by the Executive of any provision of this Agreement.

ARTICLE 2

DISTRIBUTIONS DURING LIFETIME

2.1 Normal Retirement Benefit. Upon Separation from Service for any reason other than Termination for Cause on or after Normal Retirement Age, or upon Separation from Service due to Disability prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.1 in lieu of any other benefit under this Article.

2.1.1 Amount of Benefit. The annual benefit under this Section 2.1 is the amount set forth in Schedule A, attached hereto. The annual benefit shall be payable for a period of twenty (20) years following the Executive’s Normal Retirement Date or Separation from Service due to Disability prior to Normal Retirement Age. The annual benefit amount shall be subject to a simple cost of living adjustment (COLA) of three percent (3%) per year from the date benefits commence until the complete distribution of all benefit payments. If the Executive separates from service on a date following his Normal Retirement Age, his annual benefit shall equal the benefit list on Schedule A at his Normal Retirement Age increased annually, using the discount rate specified in Code Section 1274 (in effect on the date of termination) with annual payments subject to the 3% COLA.

2.1.2 Distribution of Benefit. The Bank shall distribute the benefit under this Section 2.1 to the Executive in two hundred and forty (240) consecutive monthly installments, commencing on the first day of the month following Separation from Service or, in the event of Separation from Service due to Disability, commencing on the first day of the month following the Executive’s attainment of Normal Retirement Age. Alternatively, the Executive may elect, subject to the requirements of Section 409A of the Code and Section 2.6, to receive a lump sum payment that is actuarially equivalent to the Normal Retirement benefit amount described in Section 2.1.1 (calculated as of the date of Separation from Service and using the discount rate specified in Code Section 1274 in effect on the date of termination). Such payment shall be made to the Executive within sixty (60) days after his Separation from Service.

2.2 Early Retirement Benefit. Upon Separation from Service for any reason other than Termination for Cause or Disability prior to Normal Retirement Age, the Bank shall distribute to the Executive the benefit described in this Section 2.2 in lieu of any other benefit under this Article.

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2.2.1 Amount of Benefit. The annual benefit under this Section 2.2 is the Accrued Benefit as of the date of the Executive’s Separation from Service.

2.2.2 Distribution of Benefit. The Bank shall distribute the Accrued Benefit under this Section 2.2 to the Executive in a lump sum payment. Such payment shall be made to the Executive within sixty (60) days after his Separation from Service.

2.3 Change in Control Benefit. Upon the Executive’s Separation from Service (other than Termination for Cause) following a Change in Control, the Executive shall be entitled to the benefit described in this Section 2.3 in lieu of any other benefit under this Article.

2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the Normal Retirement Benefit amount described in Section 2.1.1.

2.3.2 Distribution of Benefit. The Bank shall distribute the benefit to the Executive in two hundred and forty (240) consecutive equal monthly installments commencing the first day of the month following the Executive’s attainment of Normal Retirement Age. Alternatively, the Executive may elect, subject to the requirements of Section 409A of the Code and Section 2.6, to receive a lump sum payment that is actuarially equivalent to the Normal Retirement benefit amount described in Section 2.1.1 (calculated as of the date of Separation from Service and using the discount rate specified in Code Section 1274 in effect on the date of termination). Such payment shall be made to the Executive within sixty (60) days after his Separation from Service.

2.4 Restriction on Timing of Distributions. Notwithstanding any provision of this Agreement to the contrary, if the Executive is considered a Specified Employee at Separation from Service as determined by the Bank in accordance with Section 409A of the Code, benefit distributions made upon Separation from Service may not commence earlier than six (6) months after the date of such Separation from Service. Therefore, in the event this Section 2.4 is applicable to the Executive, any distribution which would otherwise be paid to the Executive within the first six months following Separation from Service shall be accumulated and paid to the Executive in a lump sum (together with interest thereon at the then-prevailing prime rate) on the first day of the seventh month following the Separation from Service. All subsequent distributions shall be paid in the manner specified under this Article 2 of the Plan with respect to the applicable benefit.

2.5 Distributions Upon Income Inclusion Under Section 409A of the Code. Upon the inclusion of any amount into the Executive’s income as a result of the failure of this Agreement to comply with the requirements of Section 409A of the Code, to the extent such tax liability can be covered by the amount which the Bank has accrued with respect to the obligations described in this Article 2, a distribution shall be made as soon as is administratively practicable following the discovery of the compliance failure.

2.6 Change in Form or Timing of Distributions. For distributions of benefits under this Article 2, the Executive and the Bank may, subject to the terms of Section 8.1, amend the Agreement to delay the timing or change the form of distributions. Any such amendment:

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ARTICLE 3

DISTRIBUTION AT DEATH

3.1 Death While in Service. If the Executive dies while employed by the Bank, the Executive’s Beneficiary shall be entitled to a death benefit equal to the Accrued Benefit under this Agreement. The Bank shall distribute the Accrued Benefit to the Executive’s Beneficiary in a lump sum within sixty (60) days following the date of the Bank’s receipt of the Executive’s death certificate. The Accrued Benefit shall be distributed in lieu of the benefits described under Article 2.

3.2 Death During Distribution Period. If the Executive dies after Separation from Service while entitled to or receiving benefit distributions under this Agreement, the Bank shall distribute to the Beneficiary the Executive’s remaining benefit in a lump sum within sixty (60) days following the date of the Bank’s receipt of the Executive’s death certificate. The lump sum benefit shall be distributed in lieu of the benefits described under Article 2.

ARTICLE 4

BENEFICIARIES

4.1 Beneficiary. The Executive shall have the right, at any time, to designate a Beneficiary to receive any benefit distributions under this Agreement upon the death of the Executive. The Beneficiary designated under this Agreement may be the same as or different from the beneficiary designation under any other plan of the Bank in which the Executive participates.

4.2 Beneficiary Designation: Change. The Executive shall designate a Beneficiary by completing and signing the Beneficiary Designation Form, and delivering it to the Plan Administrator or its des