| BUSINESS AS USUAL What to Expect with the Merger On February 9, 2016, Empire announced an Agreement and Plan of Merger under which Liberty Utilities, the U.S. subsidiary of Algonquin Power & Utilities Corporation, will indirectly acquire Empire and its subsidiaries. The proposed merger marks an exciting and significant evolution of our organization. When combined with Liberty Utilities, we will be part of a utility that serves approximately 780,000 customers. These customers lie in a diverse geographic territory stretching from California to New Hampshire. Joplin and Empire will serve as the geographic headquarters for Liberty Utilities Central and our executive team will lead operations for approximately 340,000 customers in the seven states included in the Central region. As a customer, we understand you have many questions about what this means for your service, your rates and Empire’s long-standing role in our communities. The short answer is, it will be Business as Usual leading up to the transaction closing and beyond. What will happen to Empire’s local operations? Empire’s local operations, staff and leadership will remain in place to continue serving customers. Empire’s corporate headquarters in Joplin will become the geographic headquarters for Liberty Utilities Central region, which will include approximately 340,000 customers in Missouri, Kansas, Oklahoma, Arkansas, Illinois, Iowa and Texas. This will provide expanded opportunities for Empire and our employees. Will Empire remain active in the communities it serves? Yes. With Liberty Utilities and Algonquin, we have found partners who share our same values of serving our customers and communities at a high level. They have pledged to continue our historic levels of community involvement and charitable contributions. How will my rates and service be impacted by the merger? Empire’s customers’ rates and service will not be affected by the merger. Customers will continue to receive excellent service from the same Empire employees they have contact with today. They will still call the same number to reach our Contact Center representatives. What will happen to the Empire name? The Empire name will be maintained for at least five years. This doesn’t mean the name will definitely change after five years, it simply means there is the option to make a change. Why did Empire agree to the merger? This will add scale for both companies, thus providing opportunities to pursue efficiencies, leverage best practices, and enhance service offerings. Also, we sought to proactively search out solutions to many market forces, from a position of strength. The combination will not only allow us to address industry trends (such as lower customer growth and changing environmental regulations), but also to more effectively capitalize on the growth and development opportunities they provide. This is where Algonquin’s expertise in renewable energy will provide a good complement. What is the timeline for the close of the merger? The transaction requires approval from Empire shareholders and regulators. The approval process is expected to take 9 – 18 months. Once all approvals are in place, the closing will be scheduled. As an Empire shareholder, when will I vote and when will I receive my payment? Approximately 60 days after the announcement of the agreement, an initial proxy statement describing the transaction and scheduled voting process in greater detail will be submitted to the Securities and Exchange Commission for approval. Upon approval, the proxy will be mailed to shareholders. Upon closing of the transaction, shareholders will receive $34 per share for their stock. ADDITIONAL INFORMATION AND WHERE TO FIND IT The proposed transaction will be submitted to shareholders of Empire for their consideration. In connection with the transaction, Empire will file a proxy statement and other materials with the U.S. Securities and Exchange Commission (the “SEC”). This communication is not a substitute for the proxy statement or any other document that Empire may send to its shareholders in connection with the proposed transaction. EMPIRE SHAREHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT FOR THE PROPOSED TRANSACTION WHEN IT IS FILED, AND ANY AMENDMENT OR SUPPLEMENT THERETO THAT MAY BE FILED, WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT EMPIRE AND THE TRANSACTION. All such documents, when filed, are available free of charge at the SEC’s website at www.sec.gov, at Empire’s website at www.empiredistrict.com or by sending a written request to Corporate Secretary, The Empire District Electric Company, 602 S. Joplin Avenue, Joplin, Missouri 64801. PARTICIPANTS IN THE SOLICITATION Empire and its directors and executive officers are deemed to be participants in any solicitation of Empire shareholders in connection with the proposed transaction. Information about Empire’s directors and executive officers is available in Empire’s definitive proxy statement, filed on March 18, 2016, in connection with its 2016 annual meeting of shareholders, and in Empire’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015. |