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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12


The Empire District Electric Company

(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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GRAPHIC

THE EMPIRE DISTRICT ELECTRIC COMPANY

602 S. Joplin Avenue
Joplin, Missouri 64801

March 19, 2014

Dear Stockholder:

You are cordially invited to attend our Annual Meeting of Stockholders to be held at 10:30 a.m., CDT, on Thursday, May 1, 2014, at the Holiday Inn, 3615 South Range Line, Joplin, Missouri.

At the meeting, stockholders will be asked to:

    •
    Elect four persons to our Board of Directors for three-year terms,

    •
    Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm,

    •
    Vote upon a non-binding advisory proposal to approve the compensation of our named executive officers,

    •
    Approve an amended and restated Employee Stock Purchase Plan,

    •
    Approve the 2015 Stock Incentive Plan, and

    •
    Approve an amended and restated Stock Unit Plan for Directors.

Your participation in this meeting, either in person or by proxy, is important. Even if you plan to attend the meeting, please promptly vote the enclosed proxy through the Internet, by telephone or by mail. Please note that brokers may not vote your shares on the election of directors in the absence of your specific instructions as to how to vote. Please return your proxy card so your vote can be counted.

At the meeting, if you desire to vote in person, you may withdraw the proxy.

Sincerely,



Bradley P. Beecher
President and Chief Executive Officer

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THE EMPIRE DISTRICT ELECTRIC COMPANY

602 S. Joplin Avenue
Joplin, Missouri 64801



NOTICE OF ANNUAL MEETING OF STOCKHOLDERS



To the Holders of Common Stock:

Notice is hereby given that the Annual Meeting of Stockholders of The Empire District Electric Company will be held on Thursday, the 1 st of May, 2014, at 10:30 a.m., CDT, at the Holiday Inn, 3615 South Range Line, Joplin, Missouri, for the following purposes:

    1.
    To elect four persons named in the accompanying proxy statement as Directors for terms of three years.

    2.
    To ratify the appointment of PricewaterhouseCoopers LLP as Empire's independent registered public accounting firm for the fiscal year ending December 31, 2014.

    3.
    To vote upon a non-binding advisory proposal to approve the compensation of our named executive officers as disclosed in this proxy statement.

    4.
    To approve an amended and restated Employee Stock Purchase Plan.

    5.
    To approve the 2015 Stock Incentive Plan.

    6.
    To approve an amended and restated Stock Unit Plan for Directors.

    7.
    To transact such other business as may properly come before the meeting or at any adjournment or adjournments thereof.

Any of the foregoing may be considered or acted upon at the first session of the meeting or at any adjournment or adjournments thereof.

This year, we are once again pleased to be using the U.S. Securities and Exchange Commission rule that allows companies to furnish their proxy materials over the Internet. As a result, we are mailing to many of our stockholders a notice instead of a paper copy of this proxy statement and our 2013 Annual Report. The notice contains instructions on how to access those documents over the Internet. The notice also contains instructions on how each of those stockholders can receive a paper copy of our proxy materials, including this proxy statement, our 2013 Annual Report and a form of proxy card or voting instruction card. All stockholders who do not receive a notice will receive a paper copy of the proxy materials by mail. We believe that this process will conserve natural resources and reduce the costs of printing and distributing our proxy materials.

Holders of Common Stock of record on the books of Empire at the close of business on March 3, 2014 will be entitled to vote on all matters which may come before the meeting or any adjournment or adjournments thereof. A complete list of the stockholders entitled to vote at the meeting will be open at our office located at 602 S. Joplin Avenue, Joplin, Missouri, to examination by any stockholder for any purpose germane to the meeting, for a period of ten days prior to the meeting, and also at the meeting.

Stockholders are requested, regardless of the number of shares of stock owned, to either vote the proxy through the Internet or by telephone or sign and date the proxy and mail it promptly in the envelope provided, to which no postage need be affixed if mailed in the United States. A stockholder who plans to attend the meeting in person may withdraw the proxy and vote at the meeting.

Please note that brokers may not vote your shares on the election of directors in the absence of your specific instructions as to how to vote. Please return your proxy card so your vote can be counted.

Joplin, Missouri
Dated: March 19, 2014

Janet S. Watson
Secretary—Treasurer

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PROXY STATEMENT




1.

GENERAL INFORMATION

1

2.

MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

2

Proposal 1—Election Of Directors

2

Information about Nominees and Directors

2

Director Independence

5

Executive Sessions

5

Board Leadership Structure

5

Risk Oversight

5

Committees of the Board of Directors

6

Compensation Committee Interlocks and Insider Participation

7

Director Nomination Process

7

Nominating/Corporate Governance Committee Report

8

Attendance at Annual Meetings

8

Proposal 2—Ratification of Appointment of Independent Registered Public Accounting Firm

9

Proposal 3—Non-Binding Advisory Vote on Compensation of Named Executive Officers

9

Proposal 4—Adopt an amended and restated Employee Stock Purchase Plan.

10

Purpose of the Plan

10

Summary of the ESPP

10

Proposal 5—Adopt the 2015 Stock Incentive Plan

12

Summary of the Plan

12

Proposal 6—Adopt an amended and restated Stock Unit Plan for Directors

16

Summary of the Plan

16

3.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

19

Stock Ownership of Directors and Officers

19

Other Stock Ownership

19

4.

EXECUTIVE COMPENSATION

20

Compensation Discussion and Analysis

20

Compensation Committee Report

35

Summary Compensation Table

36

Grants of Plan-Based Awards

38

Outstanding Equity Awards at Fiscal Year-End

40

Option Exercises and Stock Vested

40

Pension Benefits

40

Securities Authorized for Issuance Under Equity Compensation Plans

42

Potential Payments upon Termination and Change in Control

42

Director Compensation

45

5.

TRANSACTIONS WITH RELATED PERSONS

46

Transactions with Related Persons

46

Review, Approval or Ratification of Transactions with Related Persons

46

6.

OTHER MATTERS

47

Audit Committee Report

47

Fees Billed by our Independent Auditors during each of the Fiscal Years Ended December 31, 2013 and December 31, 2012

47

Communications with the Board Of Directors

48

Section 16(a) Beneficial Ownership Reporting Compliance

48

Other Business

48

7.

STOCKHOLDER PROPOSALS FOR 2015 ANNUAL MEETING

48

8.

HOUSEHOLDING

48

9.

ELECTRONIC PROXY VOTING

49

10.

INTERNET AVAILABILITY OF PROXY MATERIALS

49

11.

DIRECTIONS TO THE ANNUAL MEETING

49

Appendix A

A-1

Appendix B

B-1

Appendix C

C-1

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THE EMPIRE DISTRICT ELECTRIC COMPANY
602 S. Joplin Avenue
Joplin, Missouri 64801



PROXY STATEMENT



ANNUAL MEETING OF STOCKHOLDERS

May 1, 2014


1. GENERAL INFORMATION

This proxy statement is furnished in connection with the solicitation on behalf of the Board of Directors of The Empire District Electric Company, hereinafter referred to as Empire (Empire), a Kansas corporation, of proxies to be voted at our Annual Meeting of Stockholders to be held on Thursday, May 1, 2014, and at any and all adjournments of the meeting.

A form of proxy is available for execution by stockholders. The proxy reflects the number of shares registered in a stockholder's name. Any stockholder giving a proxy has the right to revoke it at any time before the proxy is exercised by written notice to the Secretary—Treasurer of Empire, by duly executing a proxy bearing a later date or by voting in person at the meeting.

A copy of our Annual Report for the year ended December 31, 2013 has been mailed or made available electronically to each stockholder of record for the meeting. You are urged to read the entire Annual Report.

The entire cost of the solicitation of proxies will be borne by us. Solicitation, commencing on or about March 19, 2014, will be made by use of the mails, telephone, Internet and fax and by our regular employees without additional compensation. We will request brokers or other persons holding stock in their names, or in the names of their nominees, to forward proxy material to the beneficial owners of stock or request authority for the execution of the proxies and will reimburse those brokers or other persons for their expense in so doing.

March 3, 2014 has been fixed as the record date for the determination of stockholders entitled to vote at the meeting and at any adjournment or adjournments thereof. The stock transfer books will not be closed. As of the record date, there were 42,956,035 shares of common stock outstanding. Holders of common stock will be entitled to one vote per share on all matters presented to the meeting.

The holders of a majority of the shares entitled to vote at the Annual Meeting, represented in person or by proxy, shall constitute a quorum for the purpose of transacting business at the Annual Meeting. Each outstanding share shall be entitled to one vote on each matter submitted to a vote at the Annual Meeting. Directors will be elected by a plurality of the votes of the stockholders present in person or represented by proxy at the meeting. For the ratification of the appointment of Empire's independent registered public accounting firm and the approvals of the amended and restated Employee Stock Purchase Plan, the 2015 Stock Incentive Plan and the amended and restated Stock Unit Plan for Directors, the vote of a majority of the shares voted on such matter, assuming a quorum is present, shall be the act of the stockholders on such matter.

With respect to the non-binding advisory proposal to approve the compensation of our named executive officers, the votes that stockholders cast "for" must exceed the votes that stockholders cast "against" to approve this advisory vote. However, because your votes are advisory on this proposal, they will not be binding.

A stockholder voting for the election of directors may withhold authority to vote for all or certain director nominees. A stockholder may also abstain from voting on any of the other proposals. Votes withheld from the election of any nominee for director, abstentions from any other proposal and broker non-votes will be treated as shares that are present and entitled to vote for purposes of determining the presence of a quorum, but will not be counted in the number of votes cast on a matter. With respect to shares allocated to a participant's account under our 401(k) Plan and ESOP, such participant may direct the trustee of the plan, as indicated on the proxy card, on how to vote the shares allocated to such participant's account. If no direction is given with respect to the shares allocated to a participant's account under the plan, the trustee will vote such shares in the same proportion as the shares for which directions were received from other participants in the plan.

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A "broker non-vote" occurs if a broker or other nominee who is entitled to vote shares on behalf of a record owner has not received instructions with respect to a particular item to be voted on, and the broker or nominee does not otherwise have discretionary authority to vote on that matter. Under the rules of the New York Stock Exchange ("NYSE"), brokers may vote a client's proxy in their own discretion on certain items even without instructions from the beneficial owner, but may not vote a client's proxy without voting instructions on "non-discretionary" items. The ratification of Empire's independent registered public accounting firm is considered a "discretionary" item. However, the election of directors is a "non-discretionary" item and brokers may not vote your shares on the election of directors in the absence of your specific instructions as to how to vote. The approvals of the amended and restated Employee Stock Purchase Plan, the 2015 Stock Incentive Plan and the amended and restated Stock Unit Plan for Directors, and the non-binding advisory proposal with respect to executive compensation are also "non-discretionary" items and brokers may not vote your shares without your instructions on these items. Please return your proxy card so your vote can be counted.


2. MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

A. ELECTION OF DIRECTORS
(Item 1 on Proxy Card)

The Board of Directors currently consists of eleven members and is divided into three classes with the Directors in each class serving for a term of three years. The term of office of one class of Directors expires each year in rotation so that one class is elected at each Annual Meeting for a full three-year term. Directors are required to retire when they reach the retirement age of 73 and, except as otherwise determined by the Board of Directors, no Director shall be nominated as a candidate for election to the Board of Directors if such Director was an officer of the Company who has been retired from the Company three or more years prior to the date of the next Annual Meeting of Stockholders.

During 2013, the Board of Directors held four regular meetings. At these meetings, the Board considered a wide variety of matters involving, among other things:

•

Strategic planning

•

New generation projects

•

The Company's financial condition and results of operations

•

Financings

•

Capital and operating budgets

•

Regulatory proceedings

•

Personnel matters

•

Succession planning

•

Risk management

•

Industry issues

•

Accounting practices and disclosure

•

Corporate governance practices

All of the members of the Board of Directors attended more than 75% of the aggregate of the Board meetings and meetings held by all committees of the Board on which the Director served during the periods that the Director served. The members of the Board of Directors conduct an annual self-evaluation to determine whether the Board and its committees are functioning effectively.

Unless otherwise specified, the persons named in the accompanying proxy intend to vote the shares represented by proxies for the election of Mr. Kenneth R. Allen, Mr. Bradley P. Beecher, Mr. William L. Gipson and Mr. Thomas M. Ohlmacher, all who are current members of the Board of Directors, as Class III Directors. While it is not expected that any of the nominees will be unable to qualify for or accept office, if for any reason one or more shall be unable to do so, proxies will be voted for nominees selected by the Board of Directors.


Information about Nominees and Directors

The Nominating/Corporate Governance Committee selects as candidates those nominees it believes would best represent the interests of the stockholders. This assessment includes such issues as experience, integrity, competence, diversity, skills and dedication in the context of the needs of the Board. The Committee does not have a formal diversity policy; however, the Committee endeavors to select candidates with a broad mix of professional and personal backgrounds in order to best meet the needs of the Board, Empire and our stockholders. The Nominating/Corporate Governance Committee begins the director search process by identifying specific experience, qualifications, attributes or skills they believe to be the most beneficial in enabling the Board of Directors to satisfy its responsibilities effectively in light of our business and structure. These have included

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financial expertise, capital markets experience, environmental and regulatory experience, utility leadership experience and service-area business experience. A third-party search firm is sometimes paid a fee to assist in the process of identifying and evaluating candidates that have the experience, qualifications, attributes and skills to match the search criteria. The Director nominees must also have a reputation for integrity, honesty and adherence to high ethical standards and have demonstrated superior business acumen and an ability to exercise sound judgment.

The name, age, principal occupation for the last five years, period of service as a Director of Empire, other directorships of each Director and the qualifications of each Director are set forth below. In addition, included in the information below, is a discussion of the specific experience, qualifications, attributes or skills that led to the conclusion that the person should serve as a Director of Empire in light of our business and structure. See "—Director Nomination Process" below for more information on the selection of director nominees.

Nominees for Director

CLASS III DIRECTORS
Nominated Term Expiring at the 2017Annual Meeting

Kenneth R. Allen , age 56, joined our Board of Directors in 2005. Mr. Allen has served as Vice President, Finance and Chief Financial Officer of Texas Industries, Inc. (cement, aggregate and concrete products firm) since 2008 and was the Vice President, Treasurer and Director of Investor Relations from 1996 to 2008. Mr. Allen also worked as an economist and an analyst for an electric industry consultant early in his career which gives him additional insight into some of the challenges facing the industry. Mr. Allen has significant financial, capital markets, and investor relations experience with a small-cap, NYSE listed company in a highly capital and energy intensive industry. He also has considerable experience developing incentive compensation plans which serves him well as a member of the Compensation Committee. Mr. Allen has been designated an Audit Committee Financial Expert.

Bradley P. Beecher , age 48, joined our Board of Directors in 2011. Mr. Beecher, a professional engineer, has served as President and Chief Executive Officer of Empire since June 1, 2011. Mr. Beecher has also held the offices at Empire of Executive Vice President, Executive Vice President and Chief Operating Officer—Electric, Vice President—Energy Supply, Director of Strategic Planning as well as other operational and management positions during his career. His engineering background combined with 25 years of broad-based electric industry experience and proven leadership skills position him well to serve as a Director and leader of the Company.

William L. Gipson , age 57, joined our Board of Directors in 2002 and served as President and Chief Executive Officer of Empire from 2002 to 2011. Mr. Gipson held various operational and management positions during his thirty year career with Empire. His deep knowledge of all aspects of our business, combined with his exceptional business acumen and drive for innovation and excellence are invaluable to the Board of Directors.

Thomas M. Ohlmacher , age 62, joined our Board of Directors in 2011. Mr. Ohlmacher served as President and Chief Operating Officer, Non-regulated Energy of Black Hills Corporation from 2002 to 2011. He began his utility career with Black Hills Corporation (diversified energy company) in 1974 as a Performance Engineer and held various operational, strategic planning, and managerial positions. Mr. Ohlmacher's experience includes the construction and operation of conventional coal and natural gas fired generation and the integration of renewable wind, solar and hydro generation. He brings to the Board of Directors a wealth of industry and technical knowledge, as well as considerable insight into the leadership and business strategy of a public utility company.

The Board of Directors unanimously recommends that you vote FOR each nominee.

Members of the Board of Directors Continuing in Office

CLASS I DIRECTORS
Term Expiring at the 2015 Annual Meeting

D. Randy Laney , age 59, joined our Board of Directors in 2003 and has served as the Non-Executive Vice Chairman of the Board from 2008 to 2009 and Non-Executive Chairman of the Board since April 23, 2009. He retired as Vice-Chairman of Investlinc Group (private investment and wealth services) in 2008, a position he had held since 2003. Mr. Laney spent 23 years with Wal-Mart Stores in positions of Corporate Counsel/Corporate Secretary, Director of Finance, Vice President of Finance, Benefits and Risk Management and Vice President of Finance and Treasurer. In addition, Mr. Laney has provided strategic advisory services to both private and public

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companies and served on numerous profit and non-profit boards. Mr. Laney brings significant management and capital markets experience, and strategic and operational understanding to his position as Chairman of the Board.

Bonnie C. Lind , age 55, joined our Board of Directors in 2009. Ms. Lind has served as Senior Vice President, Chief Financial Officer and Treasurer, of Neenah Paper Inc. (global manufacturer of premium performance based papers) since 2004. Prior to the spin-off of Neenah Paper from Kimberly-Clark Corporation in 2004, she held various financial and strategic management positions at Kimberly-Clark from 1982 to 2003, most recently as the Assistant Treasurer from 1999 to 2003. Ms. Lind also became a Director of Federal Signal Corporation effective February 20, 2014. Ms. Lind has significant financial, capital markets and banking experience in a cyclical industry which consumes large quantities of energy and is affected by energy prices. Her financial, capital markets and banking experience in a small-cap, NYSE listed company brings to the Board and the Audit Committee a wealth of knowledge in dealing with financial and accounting matters in a comparable public company. Ms. Lind has been designated an Audit Committee Financial Expert.

B. Thomas Mueller , age 66, joined our Board of Directors in 2003. Mr. Mueller is the Founder and has served as the President since 1987 of SALOV North America Corporation, a U.S. subsidiary of an Italian multi-national group that imports and markets Filippo Berio olive oil throughout the U.S. As a Certified Public Accountant and an attorney, Mr. Mueller was formerly an international tax partner with KPMG Peat Marwick. His leadership skills and accounting and finance experience, as well as his experience with complex global financial issues, make him a skilled advisor with the knowledge necessary to lead our Audit Committee. Mr. Mueller has been designated an Audit Committee Financial Expert.

Paul R. Portney , age 68, joined our Board of Directors in 2009. Dr. Portney served as Dean of the Eller College of Management at the University of Arizona from 2005 to 2010, where he continues as a professor, teaching such courses as "Energy, Environment and Business Strategy." Dr. Portney has been at the center of public environmental policy for three decades. At Resources for the Future, where he worked from 1972-2005 and was President and Chief Executive Officer from 1995 to 2005, he conducted research on environmental protection and regulation, natural resources policy, federal energy policy, air pollution, health and safety regulation, and provision of public goods. Dr. Portney is author and co-author of ten books, including Public Policies for Environmental Protection . The Board of Directors values his deep knowledge of environmental policy and the environmental challenges and regulation facing our industry.


CLASS II DIRECTORS
Term Expiring at the 2016 Annual Meeting

Ross C. Hartley , age 66, joined our Board of Directors in 1988. Mr. Hartley is a private investor. He is also the Co-Founder and has been a Director of NIC Inc., an investor-owned company that is a leader in providing e-government solutions for federal, state and local governments since 1991. Mr. Hartley was a long-time leader in the independent insurance business in our tri-state area and has varied experience on both public and private boards including significant experience serving on Finance and Audit Committees. Mr. Hartley is a successful entrepreneur and is valued by the Board of Directors for his business acumen and experience gained from 26 years of service as a Director.

Herbert J. Schmidt , age 58, joined our Board of Directors in 2010. Mr. Schmidt served as the Executive Vice President of Con-way Inc. and President of Con-way Truckload (trucking services) from 2007 to 2012. Prior to the merger of Contract Freighters, Inc. ("CFI") with Conway Inc. in 2007, Mr. Schmidt held positions at CFI of President and Chief Executive Officer from 2005 to 2007 and President from 2000 to 2005. Prior to his becoming President and CEO in 2005, he was employed in a series of progressively more responsible positions at CFI where he gained extensive knowledge in risk management, safety, insurance, benefits, security, and compliance. Mr. Schmidt also serves as a Director of Covenant Transportation Group. Mr. Schmidt, a long-time, service-area resident and businessman, has demonstrated exceptional management ability, community involvement and leadership, and his knowledge of Empire's service area, customers and stockholders brings valuable insight to the Board of Directors.

C. James Sullivan , age 67, joined our Board of Directors in 2010. Mr. Sullivan has served as Principal of Sullivan Group LLC (utility and energy consulting) since 2008. He served as President of the Alabama Public Service Commission (the public utility regulator in Alabama) from 1983 to 2008 and has been active in the National Association of Regulatory Utility Commissioners ("NARUC") serving in various capacities including President from 1998-1999. He served as a member of the University of Chicago Board of Governors which administers the Argonne National Laboratory for the Department of Energy. He is also a member of the Alabama State Bar. Mr. Sullivan's diverse experience and vast knowledge of utility issues brings to the Board of Directors critical insight into utility regulation, the regulatory process and the challenges facing the utility industry.

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Director Independence

The Board of Directors has adopted the following standards to assist it in making determinations of independence in accordance with the New York Stock Exchange (the "NYSE") Listed Company Manual:

    1.
    A Director shall not fail to meet any of the independence tests set forth in Section 303A.02 of the NYSE Listed Company Manual or any successor provisions thereto.

    2.
    The Board of Directors shall affirmatively determine that, after taking into account all relevant facts and circumstances, the Director has no material relationships with Empire (either directly or as a partner, stockholder or officer of an organization that has a relationship with Empire). For purposes of this determination, the following relationships are not material (unless otherwise prohibited by clause 1 above):

    a.
    If a Director (or any family member of a Director) is a current or former customer, or a current or former employee or Director of a customer (or an affiliate of a customer), of Empire.

    b.
    If a Director is a former employee of an organization which provides investment banking services to Empire or which publishes research opinions with respect to any securities of Empire.

    c.
    If a family member of a Director is an employee of, or otherwise affiliated with, a charitable organization to which Empire contributes less than $25,000 in any fiscal year.

    d.
    If a Director (or any family member of a Director) receives benefits payments under Empire's Retirement Plan or Empire's Supplemental Executive Retirement Plan.

    e.
    If a Director is an executive officer of an organization which is affiliated with an organization where an executive officer of Empire serves on the board.

The Board of Directors has determined that each of the following meet the independence standards adopted above: Kenneth R. Allen, Ross C. Hartley, D. Randy Laney, Bonnie C. Lind, B. Thomas Mueller, Thomas M. Ohlmacher, Paul R. Portney, Herbert J. Schmidt, and C. James Sullivan. The Board of Directors has determined that Bradley P. Beecher and William L. Gipson do not meet the independence standards adopted above.


Executive Sessions

The terms of our Corporate Governance Guidelines provide that Directors will meet in two separate executive sessions chaired by the Chairman of the Board, as follows: (1) all of the Directors will meet in executive session and (2) all of the independent Directors will meet in executive session. Such is the practice at each Board meeting. With the exception of Mr. Beecher and Mr. Gipson, all of the Directors of Empire are independent Directors.


Board Leadership Structure

The positions of Chairman of the Board and Chief Executive Officer have been held by separate individuals since 2002 in recognition of the differences between the two roles. The Chairman of the Board provides leadership to the Board and works with the Board to define its structure and activities in the fulfillment of its responsibilities. The Chairman works with the Chief Executive Officer and other Board members to provide strong, independent oversight of our management and affairs. The Chairman approves Board meeting agendas and presides over meetings of the full Board.


Risk Oversight

Our Board of Directors is responsible for the oversight of management's responsibility to assess and manage our major financial and other risk exposures, including operational, legal, regulatory, business, financial, commodity, strategic, environmental, credit, liquidity, and reputation risks. The Board reviews with management the categories of risk we face, including any risk concentrations and risk interrelationships, as well as the likelihood of occurrence, the potential impact of those risks and mitigating measures. In addition, the Board reviews management's implementation of its risk practices, policies and procedures to assess whether they are being followed and are effective. As part of this oversight role, the Board participates in a bi-annual enterprise risk management assessment.

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While the Board of Directors has the ultimate oversight responsibility for risk management activities, various committees of the Board also have responsibility for the oversight of risk management. In particular, the Audit Committee focuses on financial risk, including counterparty credit risk, internal controls, and receives risk assessment reports from our internal auditors. In addition, in setting compensation, the Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with our business strategy. The Strategic Projects Committee works with management to oversee utility capital projects and operational issues of strategic importance.

The Risk Oversight Committee assists the Board in fulfilling its responsibility to oversee our risk management activities. The members of the Risk Oversight Committee consist of the Chairman of the Board as well as the Chairperson of each of the Audit, Compensation, Nominating/Corporate Governance and Strategic Projects Committees.


Committees of the Board of Directors

Audit Committee

We have an Audit Committee of the Board of Directors. The Board has adopted and approved a written charter for the Audit Committee. The charter is available on our website at www.empiredistrict.com . The Audit Committee meets the definition of an audit committee as set forth in Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the "Exchange Act").

In accordance with its written charter, the Audit Committee assists the Board in its oversight of:

    •
    The integrity of our financial statements,

    •
    Our compliance with legal and regulatory requirements,

    •
    The Independent Registered Public Accounting Firm's qualification and independence, and

    •
    The performance of our internal audit function and independent auditors.

In addition, the Audit Committee is directly responsible for the appointment, compensation, retention, termination and oversight of the work of our independent auditors. The Audit Committee held eight meetings during 2013. The members of the Audit Committee are Ms. Lind and Messrs. Allen, Hartley and Mueller, each of whom is independent (as independence is defined in the NYSE Listing Standards and the rules of the Securities and Exchange Commission (the "SEC") applicable to audit committee members) and is financially literate (as determined by the Board in its business judgment in accordance with NYSE Listing Standards). The Board has also determined that Ms. Lind and Messrs. Allen and Mueller are "audit committee financial experts" (as defined in the instructions to Item 407(d)(5)(i) of Regulation S-K). Ms. Lind began serving on the Audit Committee of Federal Signal Corporation on February 20, 2014. None of the other members of the Audit Committee serve on the Audit Committee of another public company. The report of the Audit Committee can be found below under the heading "Other Matters—Audit Committee Report."

Compensation Committee

We have a Compensation Committee of the Board of Directors. The Compensation Committee assists the Board in establishing and overseeing Director and executive officer compensation policies and practices of Empire on behalf of the Board. The Compensation Committee determines the compensation of each of our executive officers as more fully described under "Executive Compensation—Compensation Discussion and Analysis." Also, as more fully described under "Executive Compensation—Compensation Discussion and Analysis," our Chief Executive Officer makes recommendations to the Compensation Committee with respect to certain aspects of executive compensation. The charter for the Compensation Committee is available on our website at www.empiredistrict.com . The Compensation Committee held three meetings during 2013. The members of our Compensation Committee are Messrs. Allen, Laney, Ohlmacher, Portney and Schmidt. The Board has determined that each member of the Compensation Committee is "independent" as defined by the NYSE Listing Standards. The report of the Compensation Committee can be found below under the heading "Executive Compensation—Compensation Committee Report."

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Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee has ever been an officer or employee of Empire or any of its subsidiaries. None of the members of our Compensation Committee had any relationship requiring disclosure under "Transactions with Related Persons" below. None of our current executive officers has ever served as a Director or member of the Compensation Committee (or other Board committee performing equivalent functions) of another for-profit corporation.

Nominating/Corporate Governance Committee

We have a Nominating/Corporate Governance Committee of the Board of Directors. The Nominating/Corporate Governance Committee is primarily responsible for:

    •
    Identifying individuals qualified to become Board members, consistent with criteria approved by the Board, and recommending that the Board select (or re-nominate) the Director nominees for the next annual meeting of stockholders,

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    Developing and recommending to the Board a set of corporate governance guidelines applicable to Empire,

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    Developing, approving and administering policies and procedures with respect to related person transactions,

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    Overseeing the evaluation of the Board and its committees,

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    Annually reviewing and recommending Board committee membership, and

    •
    Working with the Board to evaluate and/or nominate potential successors to the CEO.

The charter for the Nominating/Corporate Governance Committee is available on our website at www.empiredistrict.com . The Committee held four meetings in 2013. The members of the Committee are Ms. Lind and Messrs. Allen, Hartley, Laney, and Sullivan. The Board has determined that each member of the Nominating/Corporate Governance Committee is "independent" as defined by the NYSE Listing Standards. The report of the Nominating/Corporate Governance Committee can be found below under the heading "—Nominating/Corporate Governance Committee Report."


Director Nomination Process

The Nominating/Corporate Governance Committee selects as candidates those nominees it believes would best represent the interests of the stockholders. This assessment includes such issues as experience, integrity, competence, diversity, skills and dedication in the context of the needs of the Board. The Committee does not have a formal diversity policy; however, the Committee endeavors to select candidates with a broad mix of professional and personal backgrounds in order to best meet the needs of the Board, Empire and our stockholders. In addition, the Committee takes into account the nature of and time involved in the Director's other employment and service on other boards. The Committee reviews with the Board, as required, the requisite skills and characteristics of individual Board members, as well as the composition of the Board as a whole, in the context of the needs of Empire. The Director nominees must also have a reputation for integrity, honesty and adherence to high ethical standards and have demonstrated superior business acumen and an ability to exercise sound judgment. When seeking new candidates, the Committee has sometimes paid a fee to a third party to assist in the process of identifying and evaluating candidates.

The Nominating/Corporate Governance Committee will consider nominees recommended by stockholders for election to the Board of Directors. In order to be considered, proposals for nominees for director by stockholders must be submitted in writing to Corporate Secretary: The Empire District Electric Company, 602 S. Joplin Avenue, Joplin, Missouri 64801.

In order to nominate a director at the Annual Meeting, Empire's By-Laws require that a stockholder follow the procedures set forth in Article VI, Section 5 of Empire's Restated Articles of Incorporation. In order to recommend a nominee for a director position, a stockholder must be a stockholder of record at the time it gives notice of recommendation and must be entitled to vote for the election of directors at the meeting at which such nominee will be considered. Stockholder recommendations must be made pursuant to written notice delivered (i) in the case of a nomination for election at an annual meeting, not less than 35 days nor more than 50 days prior to the annual meeting; and (ii) in the event that less than 45 days notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be received not

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later than the close of business on the tenth day following the day on which notice of the date of the meeting was mailed or the public disclosure was made.

The stockholder notice must set forth the following:

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    As to each person the stockholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for the election of directors, or is otherwise required by applicable law (including the person's written consent to being named as a nominee and to serving as a director if elected), and

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    As to the nominating stockholder on whose behalf the nomination is made, (a) the name and address, as they appear on Empire's books, (b) a representation that the stockholder is a holder of record of the common stock entitled to vote at the meeting on the date of the notice and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice, and (c) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder.

In addition to complying with the foregoing procedures, any stockholder nominating a director must also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder. We did not receive any recommendations for director nominees for the current Annual Meeting of Stockholders by any of our stockholders.


Nominating/Corporate Governance Committee Report

The Nominating/Corporate Governance Committee recommended that the Board of Directors nominate Mr. Kenneth R. Allen, Mr. Bradley P. Beecher, Mr. William L. Gipson and Mr. Thomas M. Ohlmacher as Class III Directors. Mr. Allen, Mr. Beecher, Mr. Gipson and Mr. Ohlmacher have been nominated by the Board as Class III Directors subject to stockholder approval, for three-year terms ending at the Annual Meeting of Stockholders in 2017.

Empire's Board of Directors operates pursuant to a set of written Corporate Governance Guidelines that set forth Empire's corporate governance philosophy and the governance policies and practices that the Board has established to assist in governing Empire and its affiliates. The Guidelines describe the Board membership criteria and the internal policies and practices by which Empire is operated and controlled on behalf of its stockholders.

In 2013, the Board and its committees continued to examine their processes and strengthen them as appropriate, and the Board's evaluation of Empire's corporate governance processes is ongoing. This assures that the Board and its committees have the necessary authority and practices in place to review and evaluate Empire's business operations as needed, and to make decisions that are independent of Empire's management. As examples, the Board and its committees undertake an annual self-evaluation process, meet regularly without members of management present, have full access to officers and employees of Empire, and retain their own advisors as they deem appropriate.

The Code of Business Conduct and Ethics, which is applicable to all of our Directors, officers and employees, and the Corporate Governance Guidelines comply with the Sarbanes-Oxley Act of 2002 and the listing standards of the New York Stock Exchange. We also have a separate code of ethics that applies to our chief executive officer and our senior financial officers, including our chief financial officer and our chief accounting officer. All of our corporate governance materials, including our codes of conduct and ethics, our Corporate Governance Guidelines, and our Policy and Procedures with Respect to Related Person Transactions are available for public viewing on our website at www.empiredistrict.com under the heading Investors, Corporate Governance. Copies of our corporate governance materials are also available without charge to interested parties who request them in writing from: Corporate Secretary, The Empire District Electric Company, 602 S. Joplin Avenue, Joplin, Missouri 64801.

Ross C. Hartley, Chairman
Kenneth R. Allen
D. Randy Laney
Bonnie C. Lind
C. James Sullivan


Attendance at Annual Meetings

Empire's Corporate Governance Guidelines provide that Directors are expected to attend the annual meeting of stockholders. All members of Empire's Board of Directors attended the Annual Meeting of Stockholders in 2013.

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B. RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
(Item 2 on Proxy Card)

Empire is asking the stockholders to ratify the appointment of PricewaterhouseCoopers LLP ("PwC") as our independent registered public accounting firm for the fiscal year ending December 31, 2014. PwC was appointed by the Audit Committee of the Board of Directors on February 5, 2014, and has acted in this capacity since 1992.

Although ratification by the stockholders is not required by law, the Board of Directors has determined that it is desirable to request approval of this selection by the stockholders. In the event the stockholders fail to ratify the appointment, the Audit Committee will consider this factor when making any future determination regarding PwC. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent accounting firm at any time during the year if it determines that such a change would be in the best interests of Empire and its stockholders.

Passage of the proposal requires the affirmative vote of a majority of the votes cast.

The Board of Directors unanimously recommends that you vote FOR the ratification of the appointment of PwC as the independent registered public accounting firm for fiscal year ending December 31, 2014.


C. NON-BINDING ADVISORY VOTE OF THE STOCKHOLDERS
ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
(Item 3 on Proxy Card)

The Company is providing its stockholders with the opportunity to cast an advisory vote on executive compensation (a "say-on-pay advisory proposal") as described below. The Company believes that it is appropriate to seek the views of stockholders on the design and effectiveness of the Company's executive compensation program.

At our annual meetings of stockholders held in April 2013, April 2012 and April 2011, a substantial majority of the votes cast on the say-on-pay advisory proposal were voted in favor of the proposal. The Compensation Committee believes this affirms the stockholders' support of our approach to executive compensation.

As described in detail under the heading "Executive Compensation—Compensation Discussion and Analysis," our executive compensation program is designed to provide a competitive compensation package that will enable us to attract and retain highly talented individuals for key positions and promote the accomplishment of our performance objectives. The overarching objective is to provide a conservative, yet secure, base salary, with the opportunity to earn a higher total level of compensation under programs that link executive compensation to Company and individual performance factors.

We are asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement. This say-on-pay advisory proposal gives our stockholders the opportunity to express their views on our named executive officers' compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement pursuant to Item 402 of Regulation S-K, the compensation disclosure rule of the SEC. Accordingly, we will ask our stockholders to vote "FOR" the following resolution at the Annual Meeting of Stockholders:

"RESOLVED, that the Company's stockholders approve, on a non-binding advisory basis, the compensation of the named executive officers, as disclosed in the Company's Proxy Statement for the 2014 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and narrative discussion."

The say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or our Board of Directors. Our Board of Directors and our Compensation Committee value the opinions of our stockholders, including those expressed by their vote on this proposal, and will consider the outcome of this vote when making future decisions with respect to our executive compensation program.

The Board of Directors unanimously recommends a vote "FOR" the approval of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K .

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D. PROPOSAL TO APPROVE THE AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
(Item 4 on Proxy Card)

We have offered participation in the Employee Stock Purchase Plan (the "ESPP") to employees and officers of Empire since 1970. Since that time forty-three purchase periods have been completed and almost 1.1 million shares have been purchased by employees.

On February 6, 2014, the Board of Directors amended the ESPP, subject to stockholder approval, to reserve an additional 750,000 shares for offering and purchase under the ESPP.

The closing price of Empire's common stock on the New York Stock Exchange was $23.74 on February 28, 2014.

This summary is qualified in its entirety by the full text of the ESPP, which is attached to this Proxy Statement as Appendix A.


Purpose of the Plan

The Board of Directors believes that the ESPP provides employees with a favorable opportunity to acquire a proprietary interest in Empire through the purchase of common stock and provides employees with an added incentive to continue in employment with Empire and to promote its welfare. Purchases under the ESPP are made without any fee, commission or charge payable by participants, other than the purchase price. The purchase price reflects a 10% discount from prevailing market prices for participants.


Summary of the ESPP

Description of the ESPP

The first purchase period began on June 1, 1970 and ended on May 31, 1971, with each June 1st thereafter beginning a new one-year purchase period (the "Purchase Period"). The price per share at which shares of common stock are purchased under the ESPP in any Purchase Period is 90% of the lower of the closing price on the first and last trading days of the Purchase Period. An employee may enter into the ESPP only as of the beginning of a Purchase Period. If an individual becomes an employee after the beginning of a Purchase Period, he or she may not enter into the ESPP until the beginning of the next Purchase Period.

At the beginning of a Purchase Period, participants elect the number of shares of common stock which they wish to purchase in the period, but the election does not become binding until the day prior to the end of the Purchase Period. Throughout the Purchase Period, amounts are deducted from the participant's payroll and credited to the participant's account to provide funds for the purchase of shares at the end of the Purchase Period. At the end of the Purchase Period, the amount credited to the participant's account through these payroll deductions and interest (5% per annum on the amounts deducted) is used to purchase the shares as elected by the participant. Any amounts left over in the accounts of participants at the end of a Purchase Period are refunded to the participants. Payroll deductions may not be less than 2% nor more than 20% of a participant's base pay. Participants may not make direct cash payments to their accounts nor purchase more shares than elected at the beginning of the Purchase Period.

The ESPP is intended to qualify as an employee stock purchase plan within the meaning of Section 423(b) of the Internal Revenue Code.

Administration

We make no cash contributions to the ESPP, but bear the expense of administering the ESPP. The ESPP is currently administered by the Secretary-Treasurer of Empire who has the authority to make rulings and interpretations.

The purchase price of each share is received by us and is used for general corporate purposes.

Eligibility and Participation

All regular full-time employees of Empire and its subsidiaries, and employees whose customary employment is for more than five months in any calendar year or 20 hours per week (approximately 760 individuals) are eligible to participate in the ESPP.

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Participation in the ESPP is voluntary and participants may withdraw at any time or terminate their authorization to purchase shares of common stock except on the date on which common stock is being purchased under the ESPP. Participants who have withdrawn from the ESPP may rejoin it at the beginning of any future Purchase Period.

No employee may purchase stock through the ESPP having a fair market value of more than $25,000 per Purchase Period (determined at the beginning of the Purchase Period). A participant may not transfer, pledge or assign his or her rights under the ESPP.

Adjustments

The purchase price of subscribed shares, the number of shares elected to be purchased and the maximum number of shares which may be issued under the ESPP, will be proportionately increased or decreased in the event of a stock split, a stock dividend, or a combination or consolidation of the common stock into a lesser number of shares.

Shares Available for Awards

As of December 31, 2013, the maximum number of shares of stock which may be purchased under the ESPP is 1,662,175 shares of which 1,534,401 shares have already been purchased by Empire employees. The additional 750,000 shares approved by the Board of Directors, subject to stockholder approval, will increase the maximum number of shares of stock which may be purchased under the ESPP to 2,412,175 shares.

Termination, Suspension and Modification

The Board of Directors may, at any time, terminate, suspend or amend the ESPP. The authority of the Board of Directors has been limited so that it may not amend the ESPP to increase the maximum number of shares to be issued without the approval of stockholders.

Future Plan Benefits

The shares of stock, if any, that an individual may elect to purchase under the ESPP is at the discretion of the employee subject to the limitations imposed by the ESPP and therefore cannot be determined in advance.

Federal Income Tax Consequences

The following discussion summarizes the material federal income tax consequences of participation in the ESPP. This discussion is general in nature and does not address issues related to the tax circumstances of any particular employee. The discussion is based on federal income tax laws in effect on the date hereof and is, therefore, subject to possible future changes in law. This discussion does not address state, local or foreign tax consequences.

An employee will not recognize any income upon the commencement of a Purchase Period nor upon the purchase of shares at the end of a Purchase Period. However, an employee will be taxed on any interest credited to his or her account in the year in which it is so credited. The treatment of any gain realized upon sale or other disposition of our common stock purchased under the ESPP will depend on the holding period. If the employee does not dispose of the stock received until more than one year after the purchase and more than two years after the beginning of the Purchase Period, or if the employee dies without having disposed of the shares, the employee will recognize ordinary income in the year of disposition or death equal to the lesser of (1) the amount by which the fair market value of the shares on the date of disposition or death exceeded the purchase price paid for the shares (calculated as if the purchase occurred on the first day of the Purchase Period), or (2) the amount by which the fair market value of the shares on the first day of the Purchase Period in which the shares were acquired exceeded the purchase price for the shares (calculated as if the purchase occurred on that date). Any additional gain on disposition will be taxed as long-term capital gain. If the employee disposes of his or her shares within one year after the purchase or within two years after the beginning of the Purchase Period, such disposition will be a disqualifying disposition. In the case of the disqualifying disposition, the portion of the gain realized on disposition equal to the excess of the fair market value of the shares at the time the shares were purchased over the purchase price will be ordinary income taxable as compensation in the year of disposition. The balance, if any, of the gain will be capital gain.

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We are entitled to a deduction with respect to a share purchased under the ESPP only if a disqualifying disposition occurs. In that event, the deduction would be available in the taxable year of the Company in which the disqualifying disposition occurs and would generally be equal to the ordinary income, if any, recognized by the employee upon disposition of the shares.

THE BOARD HAS APPROVED THE AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN AND BELIEVES THAT IT IS FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS. THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSAL D.


E. PROPOSAL TO APPROVE THE ADOPTION
OF THE COMPANY'S 2015 STOCK INCENTIVE PLAN
(Item 5 on Proxy Card)

We currently maintain a 2006 Stock Incentive Plan (the "2006 Plan"), which was approved by our stockholders in 2005 and which was designed to enable qualified executive, managerial, supervisory and professional personnel and directors of Empire to acquire or increase their ownership of Common Stock on reasonable terms. The opportunity so provided was intended to foster in participants a strong incentive to put forth maximum effort for the continued success and growth of Empire, to aid in retaining individuals who put forth such efforts and to assist in attracting the best available individuals in the future. The 2006 Plan expires on December 31, 2015. The Board of Directors believes that the 2006 Plan has helped us achieve these goals and accordingly has adopted the 2015 Stock Incentive Plan (the "2015 Plan") and is submitting the 2015 Plan for stockholder approval.

The Board has reserved 500,000 shares of Common Stock for issuance upon the grant or exercise of awards pursuant to the 2015 Plan. A total of 465,773 shares of Common Stock currently remain available for issuance under future grants of awards pursuant to the 2006 Plan. If stockholders approve the 2015 Plan, the 2015 Plan will become effective on January 1, 2015. No further awards will be made under the 2006 Plan after December 31, 2014.

The closing price of Empire's common stock on the New York Stock Exchange was $23.74 on February 28, 2014.

A summary of the 2015 Plan is set forth below. This summary is qualified in its entirety by the full text of the 2015 Plan, which is attached to this Proxy Statement as Appendix B.


Summary of the Plan

Administration

The 2015 Plan will be administered by the Compensation Committee of the Board of Directors. All of the members of the Compensation Committee are "Non-Employee Directors" as defined in Rule 16b-3 adopted pursuant to the Exchange Act and "outside directors" within the meaning of Section 162(m) of the Internal Revenue Code. The Secretary of Empire is to administer the portion of the 2015 Plan under which non-employee directors may elect to receive common stock in lieu of cash remuneration for services as a Director.

The Compensation Committee will have the authority to designate participants; determine the type or types of awards to be granted to each participant and the number, terms and conditions thereof; establish, adopt or revise any rules and regulations as it may deem advisable to administer the 2015 Plan; and make all other decisions and determinations that may be required under the 2015 Plan.

Eligibility

The Compensation Committee may select as a participant in the 2015 Plan any qualified executive, managerial, supervisory or professional employee, including officers of Empire or any subsidiary (approximately 180 individuals). A Director who is not an employee is not eligible to receive awards under the 2015 Plan. Non-employee directors may, however, elect to receive common stock under the 2015 Plan in lieu of cash remuneration for services as a Director. Awards may be made to eligible employees whether or not they have received prior awards under the 2015 Plan or under any other plan, and whether or not they are participants in our other benefit plans.

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Permissible Awards

    The 2015 Plan authorizes the granting of awards in any of the following forms:

    Stock Options. A stock option (an "Option") is the right to purchase, in the future, shares of common stock at a set price. Under the 2015 Plan, the purchase price of shares subject to any Option must be at least 100% of the fair market value of the shares on the date of grant. Fair market value is defined as the closing price of the common stock on the day the grant is made. Options granted may be either non-qualified stock options or incentive stock options under the Internal Revenue Code.

    The maximum term of any Option is ten years from the date the Option was granted. The Compensation Committee can fix a shorter period, and can impose such other terms and conditions on the grant of Options as it chooses, consistent with applicable laws and regulations. No Option shall become exercisable prior to the third anniversary of the date granted. Repricing of outstanding Options is not permitted.

    Restricted Stock Awards. A Restricted Stock Award is the grant of a right to receive common stock, either immediately or on a future date upon certain conditions, which may be upon the attainment of specified performance goals. Restricted Stock Awards restrict transfer of the shares received and affect the timing of the realization of tax consequences on the transaction. The restriction on the transfer of the shares granted shall lapse no earlier than the third anniversary, nor later than the tenth anniversary, of the date on which the Restricted Stock Award was granted. The conditions established by the Compensation Committee on which the shares included in a Restricted Stock Award will be subject to forfeiture may, but need not, include conditions tied to performance measures selected by the Compensation Committee.

    The Compensation Committee may also allow the grantee to receive a credit equal to the dividends payable on the restricted shares awarded to the grantee, but not yet delivered to him, and may provide for the payment of such amounts currently or at the time the related shares are distributed.

    Restricted Stock Units. A Restricted Stock Unit Award is the grant of a right to receive common stock or cash, upon expiration of a deferral period specified by the Compensation Committee. The Committee may also allow the grantee to elect the deferral period. Restricted Stock Units are subject to restrictions imposed by the Committee at the date of grant or later that may include the achievement of performance measures. The restrictions shall lapse no earlier than the third anniversary, nor later than the tenth anniversary, of the grant date.

    The Compensation Committee may also allow the grantee to receive dividend equivalents paid in either cash or in shares on the dividend payment date or deferred until the related shares are distributed.

    Stock Appreciation Rights. A Stock Appreciation Right ("SAR") is the grant of a right to be paid an amount measured by the difference between the exercise price of the right and the fair market value of shares on the date of exercise. The Compensation Committee determines the time or times that the SAR may be exercised in whole or in part on a date not earlier than the third anniversary, nor later than the tenth anniversary, of the grant date. SARs may be paid in cash, shares or property.

    Dividend Equivalents. A dividend equivalent is the right to receive cash, shares or other property equal in value to dividends paid on shares of stock. Dividend Equivalents may be awarded on a free-standing basis or in connection with another award and may be paid currently or on a deferred basis as determined by the Compensation Committee.

    Other Stock-Based Awards. The Compensation Committee is authorized to grant other awards to eligible employees that are consistent with the purposes of the 2015 Plan including rights convertible or exchangeable into shares, purchase rights for shares, awards with value and payment contingent upon performance of the Company and awards valued by reference to the performance of specified subsidiaries.

    Share Delivery in Lieu of Cash Incentive Awards. The 2015 Plan also provides that an employee otherwise eligible for a grant or an award under the 2015 Plan may, if the employee is eligible to receive a cash payment under any other management bonus or incentive plan of the Company (a "Cash Payment") applicable to the employee, make application to the Compensation Committee requesting the delivery of common stock in lieu of all or a portion of the Cash Payment.

    The number of shares so delivered will be equivalent in dollar value to that of the Cash Payment which would otherwise have been made, determined on the basis of the fair market value of the shares on the date of the share delivery.

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    Share Delivery in Lieu of Directors Fees. The 2015 Plan also provides that a non-employee Director may elect to receive common stock under the 2015 Plan in lieu of all or any portion of future cash payments for services rendered as a Director.

Shares Available for Awards

The maximum number of shares of common stock which may be used in connection with awards under the 2015 Plan, or share deliveries as described above, is 500,000. The 2015 Plan limits the grant of Options or SARs under the Plan to any grantee during any three consecutive calendar years to 100,000 shares.

Adjustments

If any change in the number of outstanding shares of our common stock after adoption of the 2015 Plan occurs through stock splits, a stock dividend, recapitalization or a combination or consolidation of the common stock into a lesser number of shares, the share authorization limits under the 2015 Plan will automatically be adjusted proportionately. The shares then subject to each award, and per share option prices, will automatically be adjusted proportionately as well. If we are involved in another corporate transaction or event that affects the common stock, such as an extraordinary cash dividend, reorganization, merger, consolidation, split-up, spin-off or exchange of shares, the Compensation Committee may adjust the 2015 Plan's share authorization limits and outstanding awards to preserve the benefits or potential benefits of the awards.

Any shares granted under the 2015 Plan which expire, terminate, cancel, or are withheld for a cashless option exercise or tax obligation, will be considered available for the grant of awards and delivery of shares. The number of shares issued in settlement of a SAR rather than the number of shares underlying the exercised portion shall be counted against the number of shares available for issuance. Shares delivered in lieu of cash payments are considered to have been used by the 2015 Plan and are not available for further awards.

Exercise of Options and Purchase Price

Upon the exercise of an Option, the full purchase price of the shares represented by the Option being exercised must be delivered to the Company. The purchase price can be paid either in cash or common stock having a then fair market value equivalent to the purchase price, or any combination thereof. The Compensation Committee may also permit the exercise through broker-assisted arrangements.

Termination, Suspension and Modification

The Board of Directors may, at any time, terminate, suspend or amend the 2015 Plan. Any amendment or modification of the 2015 Plan for which stockholder approval is required by applicable rule or regulation of any governmental regulatory body, or under the rules of any stock exchange in which the shares are listed, shall be subject to the approval of our stockholders. No termination, suspension or modification of the 2015 Plan may adversely affect any award previously granted under the 2015 Plan without the written consent of the participant. No awards may be granted under the Plan after January 1, 2025 and no incentive stock option awards (an "ISO") may be granted under the 2015 Plan after May 1, 2024.

Prohibition on Repricing

Unless the approval of stockholders of the Company is obtained, (1) the exercise price of Options and SARs will not be amended, (2) Options and SARs will not be exchanged for other Options and SARs with lower exercise prices, (3) Options and SARs with an exercise price in excess of the Fair Market Value of the underlying shares will not be exchanged for cash, awards or other property, and (4) no other action will be taken that would be treated as a repricing under the rules of the New York Stock Exchange.

Withholding Taxes

We will be entitled to withhold the amount of any withholding tax payable with respect to any awards and share deliveries, and to sell the number of shares necessary to produce the amount required to be withheld, unless the recipient supplies the cash in the amount requested by the Company for this purpose. The Compensation Committee may adopt rules allowing the recipient of any award payable in shares, or any person electing to receive shares, to satisfy any applicable tax withholding requirements in whole, or in part, by delivering to us

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shares or by instructing us to withhold shares otherwise deliverable to the person as part of the award, in either case with a fair market value not in excess of the amount of the applicable withholding requirements.

Future Plan Benefits

The persons to whom awards will be granted during the term of the 2015 Plan and the positions they hold, or the type of award or number of shares to be covered by any such awards if the 2015 Plan is approved by our stockholders, have not yet been determined and it is not anticipated that any such determination will be made prior to such approval. Therefore, it is not possible to state in advance the number or type of awards to be made or the identities of future grantees under the Plan. However, the 2015 Plan is similar in operation to the 2006 Plan, under which Messrs. Beecher, Gatz, Palmer and Ms. Delano and Ms. Walters received in 2013 the awards set forth in the Summary Compensation Table and other compensation tables included in this Proxy Statement.

Federal Income Tax Consequences

The following discussion summarizes the material federal income tax consequences of participation in the 2015 Plan. This discussion is general in nature and does not address issues related to the tax circumstances of any particular employee or director. The discussion is based on federal income tax laws in effect on the date hereof and is, thereof, subject to possible future changes in law. This discussion does not address state, local and foreign tax consequences.

    ISOs. An optionee will not recognize any income upon either grant or exercise of an incentive stock option ("ISO") although the exercise may subject the optionee to alternative minimum tax liability in the year of exercise because the excess of the fair market value of the shares at the time of exercise over the purchase price of the shares is included in income for purposes of the alternative minimum tax. The treatment of any gain realized upon sale or other disposition of our common stock received upon exercise of an ISO will depend on the holding period. If the optionee does not dispose of the stock received until more than one year after exercise of the ISO and more than two years after grant, any gain realized upon disposition will be characterized as long-term capital gain. If the optionee disposes of his or her shares within either one year after exercise of the ISO or two years after grant, such disposition will be a disqualifying disposition. In the case of a disqualifying disposition, the portion of the gain realized on disposition equal to the excess of the fair market value of the shares at the time the ISO was exercised over the purchase price will be ordinary income taxable as compensation in the year of disposition. The balance, if any, of the gain will be capital gain.

    If the optionee sells the shares in a disqualifying disposition at a price that is below the fair market value of the shares at the time the ISO was exercised, the optionee's ordinary income will be limited to the excess of the amount realized upon the disposition over the adjusted basis in the shares.

    We are entitled to a deduction with respect to an ISO only if a disqualifying disposition occurs. In that event, the deduction would be available in the taxable year of Empire in which the disqualifying disposition occurs and would generally be equal to the ordinary income, if any, recognized by the optionee upon disposition of the shares.

    Nonqualifying Stock Options. An optionee will not recognize any income upon either grant or vesting of a nonqualifying stock option ("NQSO"). Upon exercise of any part of an NQSO, the optionee will recognize ordinary income in an amount equal to the difference between the then fair market value of the shares acquired and the purchase price.

    In general, upon a subsequent disposition of the shares, the optionee's basis for determining taxable gain or loss would be the amount paid for such shares plus the amount that was includable in the optionee's income at the time of exercise. Any gain recognized on such disposition would generally be taxed as long-term or short-term capital gain depending on the length of time the optionee is deemed to have held these shares. We will generally be entitled to a deduction for federal income tax purposes upon exercise of an NQSO in an amount equal to the ordinary income recognized by the optionee.

    Restricted Stock. The recipient of a Restricted Stock Award will not be subject to tax upon its grant, unless the shares are issued and the recipient makes an election under Section 83(b) of the Internal Revenue Code. Assuming no election under Section 83(b) is made, the holder will be subject to tax at ordinary income tax rates at the time of the lapse or earlier termination of the restrictions in an amount equal to the fair market value of the shares covered by the Restricted Stock Award at the time that the restrictions lapse or terminate.

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    The tax basis of the shares will be the amount so included in income, and their holding period for capital gains purposes will commence on the date the restrictions lapse or terminate. If a holder makes an election under Section 83(b) of the Internal Revenue Code, the holder will be subject to tax at ordinary income rates based on the fair market value of the shares covered by the Restricted Stock Award at the date of grant. The tax basis of the shares will be the amount so included in income, and their holding period for capital gains purposes will commence on the date of grant. We will generally be entitled to a deduction with respect to the amount of ordinary income recognized by the employee.

    Restricted Stock Units. The recipient of a Restricted Stock Unit Award will not be subject to tax upon its grant. The holder will be subject to tax at ordinary income tax rates at the time of receipt of shares issued under the Restricted Stock Unit in an amount equal to the fair market value of the shares at that time. The tax basis of the shares will be the amount so included in income, and their holding period for capital gains purposes will commence upon their receipt. We will generally be entitled to a deduction with respect to the amount of ordinary income recognized by the employee.

    Share Delivery in Lieu of Cash Incentive Awards or Directors' Fees. If an employee or Director receives shares of our common stock in lieu of a cash payment, the employee or Director will be subject to tax at ordinary income rates in an amount equal to the fair market value of the shares that the employee or director receives. The tax basis of the shares so received will be their fair market value on the date of their receipt, and the holding period for capital gains purposes will commence upon their receipt. Empire will generally be entitled to a deduction with respect to the amount of ordinary income recognized by the employee or director.

THE BOARD HAS APPROVED THE 2015 STOCK INCENTIVE PLAN AND BELIEVES THAT IT IS FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS. THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSAL E.

F. PROPOSAL TO APPROVE THE COMPANY'S AMENDED AND RESTATED
STOCK UNIT PLAN FOR DIRECTORS
(Item 6 on Proxy Card)

Our Board of Directors adopted the Stock Unit Plan for Directors (the "Stock Unit Plan") in 1998 in order to enhance our ability to attract and retain competent and experienced persons to serve as Directors and to recognize the service of Directors of Empire by providing non-employee Directors with a stock-based retirement compensation program. Shareholder approval in 2005 modified the Stock Unit Plan from a stock-based retirement plan providing for payout only after termination of service to a stock-based compensation program for Directors that allowed payouts of awards prior to termination of service. The Board of Directors adopted the stock-based compensation program to allow directors to acquire or increase their ownership of Common Stock and the opportunity so provided is intended to foster in Directors a strong incentive to put forth maximum effort for the continued success and growth of Empire. The Stock Unit Plan currently has 400,000 shares reserved for issuance under the Plan with 183,464 shares issued to Directors and an additional 159,080 shares currently subscribed under the Plan. On February 6, 2014, the Board of Directors amended the Stock Unit Plan, subject to stockholder approval, to reserve an additional 500,000 shares for issuance under the Plan, resulting in a total of 900,000 shares reserved for issuance under the Plan.

The closing price of Empire's common stock on the New York Stock Exchange was $23.74 on February 28, 2014.

A summary of the Stock Unit Plan is set forth below. This summary is qualified in its entirety by the full text of the Stock Unit Plan, which is attached to this Proxy Statement as Appendix C.


Summary of the Plan

Background of Plan

The Stock Unit Plan for Directors was implemented in 1998 to replace a cash retirement plan in effect for Directors since 1990. The Directors on the Board in 1998 who had not previously been employees of Empire were eligible to convert accrued benefits under the existing cash retirement plan into stock units or remain under the cash retirement plan. All eligible Directors converted their cash benefits to stock units.

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Eligibility

Any Director who is not currently an officer of Empire is eligible to participate in the Stock Unit Plan.

Description of Stock Units

A stock unit is a measure of value, expressed as a share of our common stock, credited to an eligible Director's account and payable in common stock upon a payment date.

Annual Credits

As of January 1st of each calendar year, there is credited to the account of each person who is an eligible Director on that date, a number of stock units equal to an amount established by the Compensation Committee divided by the fair market value of a share of common stock on January 1st. "Fair market value" means the closing price of shares of common stock reported on the New York Stock Exchange Composite Tape on the day of the required calculation or, if there should be no sale on that date, on the next preceding day on which there was a sale.

A new Director elected to the Board after January 1st of any year will have credited to his account a number of stock units equal to the annual credit set by the Compensation Committee for that year divided by the fair market value of a share of common stock on the date on which the Director is elected to the Board and prorated for the number of whole months remaining in the year.

Dividend Credits

Until the stock units are fully paid out to the eligible Director, we credit to the Director's account, on each day that we pay a cash dividend on our common stock, a number of stock units that is equal to the total number of stock units in the Director's account on the record date multiplied by the cash dividend per share of common stock and divided by the fair market value of a share of common stock on the record date.

Payment Date

Stock units credited to a Director's account prior to January 1, 2006 (and stock units representing dividend credits on these stock units) are payable upon the earlier of the Director's retirement from the Board of Directors or upon his death. A Director may select a lump sum payout of the stock units credited to his account upon his death or retirement or may select an annual payout over a period of years not to exceed ten years following his death or retirement.

For stock units credited to a Director's account on or after January 1, 2006 (other than stock units representing dividend credits on stock units credited before January 1, 2006), each eligible Director elects the date on which payment of the stock units to be credited to his or her account for that calendar year (together with any stock units reflecting dividend credits attributable to these stock units) will be made; provided, however, that this elected payment date may not be earlier than January of the third calendar year following the calendar year in which the election is made. In the case of a new Director entitled to a credit to his or her account on the date he or she becomes a Director, the new Director shall have the right to elect, prior to the date on which he or she first becomes eligible to participate in the Stock Unit Plan, the date on which payment of the stock units to be credited to his or her account (together with any stock units reflecting dividend credits attributable to these stock units) will be made; provided, however, that this elected payment date may not be earlier than the third anniversary of the date on which the new Director first became eligible to participate in the Stock Unit Plan. In the absence of a timely election by an eligible Director, the elected payment date shall be the earliest elected payment date that the eligible Director could have elected with respect to the applicable stock units. The stock units will be payable on the elected payment date or, if earlier, the Director's retirement or death, and may be paid in a lump sum or in annual installments over a period not to exceed ten years, as elected by the Director. An eligible Director may, at any time not later than twelve months before an elected payment date, elect a later elected payment date for the applicable stock units which shall be no less than five years later than the prior elected payment date. Any election shall be made by filing a prescribed form with the Compensation Committee.

Administration

The Stock Unit Plan is administered by the Compensation Committee of the Board of Directors. The Compensation Committee has full authority and absolute discretion to construe and interpret the Stock Unit Plan,

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reconcile inconsistencies and supply omissions and to make all determinations and take all other actions necessary or advisable for the proper administration of the Stock Unit Plan.

The Board of Directors has the right to amend, suspend, or terminate the Stock Unit Plan in any respect at any time except as provided below. No amendment, suspension or termination of the Stock Unit Plan (other than through adjustment for changes in capitalization or corporate transactions) shall adversely affect any previously accrued benefits under the Stock Unit Plan unless the affected eligible Director consents to the change.

Any increase in the number of shares of our common stock reserved for issuance under the Stock Unit Plan (except for a change in capitalization), and any other amendment or modification of the Stock Unit Plan for which stockholder approval is required under any applicable law or applicable rule or regulation of any governmental regulatory body or under the rules of any stock exchange on which our common stock is listed, shall be subject to approval of our stockholders.

Change in Capitalization

In the event of any change in the outstanding shares of our common stock by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination of shares or other similar corporate change, the Board shall make such adjustments as it deems appropriate in the number of stock units in the eligible Director's account and in the kind of shares to which the stock units relate, and in the number and kind of shares available under the Stock Unit Plan.

Future Plan Benefits

The Stock Unit Plan is limited to the non-employee members of the Board of Directors. The number of stock units that each individual Director may receive will be determined by his years of service on the Board and therefore cannot be determined in advance.

Federal Income Tax Consequences

The following discussion summarizes the material federal income tax consequences of participation in the Stock Unit Plan for Directors. This discussion is general in nature and does not address issues related to the tax circumstances of any particular Director. The discussion is based on federal income tax laws in effect on the date hereof and is, therefore, subject to possible future changes in law. This discussion does not address state, local or foreign tax consequences.

A Director will not recognize income upon the crediting of stock units to his or her account. Upon the payment of shares representing stock units to the Director, the Director will be subject to tax at ordinary income rates in an amount equal to the fair market value of the shares that the Director receives. The tax basis of the shares so received will be their fair market value on the date of receipt, and the holding period for capital gains purposes will commence upon their receipt. We will generally be entitled to a deduction with respect to the amount of ordinary income recognized by the Director.

THE BOARD HAS APPROVED THE AMENDED AND RESTATED STOCK UNIT PLAN FOR DIRECTORS AND BELIEVES THAT IT IS FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS. THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" PROPOSAL F.

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3. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Stock Ownership of Directors and Officers

The following table shows information with respect to the number of shares of our common stock beneficially owned as of March 3, 2014 by each of our executive officers named in the Summary Compensation Table, each Director, each Director nominee and our Directors and executive officers as a group.

Name
Position Shares of
Common Stock
Beneficially
Owned(1)

D. Randy Laney

Director, Chairman of the Board 20,639

Kenneth R. Allen

Director 14,121

William L. Gipson(2)

Director 53,485

Ross C. Hartley(3)

Director 49,904

Bonnie C. Lind

Director 500

B. Thomas Mueller

Director 10,270

Thomas M. Ohlmacher

Director 3,856

Paul R. Portney

Director 7,665

Herbert J. Schmidt

Director 6,538

C. James Sullivan

Director 15,325

Bradley P. Beecher(2)

President and Chief Executive Officer and Director 29,527

Laurie A. Delano

Vice President—Finance and Chief Financial Officer 7,029

Kelly S. Walters(2)

Vice President and Chief Operating Officer-Electric 14,790

Ronald F. Gatz(2)

Vice President and Chief Operating Officer-Gas 27,307

Michael E. Palmer(2)

Vice President—Transmission Policy and Corporate Services 29,989

Directors and named executive officers, as a group

290,945

(1)
No Director or executive officer owns more than 0.5% of the outstanding shares of our common stock and all Directors and executive officers as a group own less than 1% of the outstanding shares of our common stock.

(2)
Includes 25,400, 8,400, 5,600, 6,100 and 6,600 shares, respectively, issuable upon the exercise of currently exercisable stock options for Mr. Gipson, Mr. Beecher, Ms. Walters, Mr. Gatz, and Mr. Palmer.

(3)
Includes 2,422 shares for which Mr. Hartley holds a power of attorney for a non-resident relative.


Other Stock Ownership

The following table reflects the holdings of those known to us to own beneficially more than 5% of our common stock as of March 3, 2014.

Name and Address of Beneficial Owner
Amount and Nature of
Beneficial Ownership
Percent of Class

BlackRock, Inc.
40 East 52nd Street
New York, NY 10022

2,540,108 (1) 5.90 %

The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355


2,752,851

(2)

6.40

%

(1)
Based on a Schedule 13G/A dated February 3, 2014, filed with the Securities and Exchange Commission by BlackRock, Inc. BlackRock, Inc. has sole voting power with respect to 2,380,033 shares and dispositive power with respect to 2,540,108 shares.

(2)
Based on a Schedule 13G dated February 12, 2014, filed with the Securities and Exchange Commission by The Vanguard Group. The Vanguard Group has sole voting power with respect to 181,234 shares, sole dispositive power with respect to 2,690,117 shares and shared dispositive power with respect to 62,734 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 62,734 shares or 0.14% of the Common Stock outstanding of the Company as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 118,500 shares or 0.27% of the Common Stock outstanding of the Company as a result of its serving as investment manager of Australian investment offerings.

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4. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

The compensation program for executive officers is designed to provide a conservative yet competitive compensation package that will enable us to attract and retain highly talented individuals for key positions, promote the accomplishment of our performance objectives, and achieve Company results beneficial to our stockholders, customers and other stakeholders. The program is administered by our Compensation Committee ("Committee") which is composed entirely of non-employee, independent directors who are appointed by and serve at the sole discretion of the Board of Directors. The overarching objective of the Committee is to provide a conservative, yet secure, base salary, with the opportunity to earn a higher level of total compensation under cash and equity incentive opportunities that link executive compensation to Company and individual performance factors.

In order to align the Company's executive compensation program with the interests of our stockholders, a substantial portion of each executive's total compensation opportunity is presented in the form of equity compensation. In addition, equity and other at-risk elements of compensation are tied to both short-term and long-term performance measures. In essence, at-risk compensation must be "re-earned" annually.

The Committee is assisted in accomplishing its responsibilities by an independent compensation consultant ("Consultant"). The Committee is directly responsible for the appointment, compensation and oversight of the work of the Consultant. The Consultant does not perform other services for us outside of its engagement with the Committee, but may interact directly with the President and CEO, our legal counsel and/or other Company personnel for the purpose of obtaining executive officer compensation and performance data to be used in its review and analysis. The Committee retains all decision-making and approval authority with regard to determining executive compensation levels.

The Committee structures the executive compensation program to motivate executives to achieve specified business goals and to reward the achievement of those goals. Compensation decisions made by the Committee are based on market analysis, Company performance, achievement of individual performance objectives, the level and nature of the executive's responsibilities and the level of experience in his or her position.

Our compensation program includes three basic compensation elements:

•

Base Salary

•

Annual Cash Incentives

•

Long-Term Stock Incentives

Base Salary combined with Annual Cash Incentives make up Total Cash Compensation. Total Cash Compensation combined with Long-Term Incentives make up Total Direct Compensation. Each of these compensation elements is discussed more fully below.

As described in our Proxy Statement dated March 13, 2013, the Committee modified its compensation philosophy beginning in 2013 to target the 25 th percentile levels of our industry-specific peer group of companies (as provided to the Committee by the Consultant from their most recent executive compensation review performed in 2012) for Base Salary, Total Cash Compensation, and Total Direct Compensation (see "—Benchmarking" and "—Base Salary" below). The Committee initiated a process to transition our executive officers to this target level. Under this modified design, Base Salary is conservative compared to the median Base Salary of our industry-specific peer group. Annual Cash Incentive and Long-Term Incentive targets are set at fixed percentages of Base Salary. These incentive compensation elements provide each executive the potential to earn higher levels of Total Direct Compensation depending on Company and individual performance.

The Committee believes the compensation approach discussed above appropriately balances stockholder, customer and other stakeholder interests and is a responsible approach to executive compensation. It includes the following features:

    •
    Short-term incentive compensation focused on tactical near-term objectives that support the Company's longer-term goals,

    •
    Limitations on potential incentive compensation awards equal to 200% of target opportunity,

    •
    Long-term performance-based stock awards linked to stockholder returns over a three-year period,

    •
    Time-vested stock awards designed to promote a proper focus on the creation of stockholder value,

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    •
    Participation in the same health and welfare benefits and qualified pension plan offered to all our full-time employees, and

    •
    A traditional supplemental retirement plan that only covers compensation not included in the qualified pension plan due solely to tax limitations.

In addition, the executive compensation approach includes the following provisions:

    •
    A Change In Control Severance Pay Plan ("Severance") that includes a "double-trigger" (requiring a change in control and termination of employment) and a payment equal to 36 months of severance pay benefits (see discussion under "—Potential Payments upon Termination and Change in Control"),

    •
    A provision that non-vested equity awards do not accelerate after a change in control unless the executive is terminated, and

    •
    No employment agreements or guaranteed compensation arrangements between the Company and the executive officers other than the Change In Control severance agreement.

Analysis of Executive Officer Compensation

The Committee believes the 2013 mix of compensation elements (based on target-level incentive opportunities) available to our President and Chief Executive Officer ("CEO") and all other Named Executive Officers ("NEOs") as illustrated below reflects our commitment to an executive compensation program that rewards individuals for performance. The Committee has adopted the same mix of compensation elements for 2014.


2013 Target Compensation Mix


President and CEO


Average of Other NEOs


GRAPHIC



GRAPHIC

With respect to the 2013 compensation of Mr. Bradley P. Beecher, our President and CEO, approximately 57% of his total target direct compensation opportunity consisted of at-risk compensation in the form of short-term and long-term incentives. In accordance with the transition process mentioned previously, the Committee set Mr. Beecher's total 2013 target direct compensation opportunity below the 25 th percentile levels of our industry-specific peer group of companies, as illustrated below.

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2013 Target Compensation Mix
(in thousands)


President and CEO Target
Compensation Mix


Most Recent Peer Group P25 Target
Compensation Mix


GRAPHIC



GRAPHIC

When establishing Mr. Beecher's compensation, the Committee considers the actuarially-estimated change in pension value reported under the "—Change in Pension Value and Nonqualified Deferred Compensation Earnings" column in the Summary Compensation Table of our Proxy Statements. The Committee believes that the estimated change in pension value does not represent current compensation paid to Mr. Beecher for his service as President and CEO, as Mr. Beecher's pension benefits are not realizable until the time of his retirement. In calculating Mr. Beecher's future pension benefits, his total years of service with our Company are included in our benefit formula, rather than only those years he has served as our President and CEO. Additionally, the estimated change in Mr. Beecher's pension value is based on a life expectancy of 83 years. The table below shows Mr. Beecher's total compensation as reported in our Summary Compensation Tables since his election to the position of President and CEO in 2011, the annual amounts of estimated change in pension value included in his total compensation since and including his year of election, and the amount of his compensation that excludes the change in his estimated pension value.

Year
Total Compensation
Reported on Summary
Compensation Table
Change in Pension Value
Reported on Summary
Compensation Table
Total Compensation
Excluding Change in
Pension Value

2013

$ 1,333,504 $ 62,628 $ 1,270,876

2012

$ 929,198 $ 252,290 $ 676,908

2011

$ 683,706 $ 277,308 $ 406,398

The Committee believes the Total Compensation Excluding Change in Pension Value is more representative of the actual compensation value Mr. Beecher received for his service as President and CEO during each year of service. This same assessment regarding actuarially-estimated change in pension value and the realization of pension benefits is applicable to each NEO.

The Role of the Compensation Committee

The Compensation Committee ("Committee"), on behalf of the Board of Directors, administers our director and executive compensation programs. The Committee meets at scheduled times during the year and on an as-needed basis. The duties and responsibilities of the Committee are described in its charter (which has been approved by the full Board of Directors) and include:

    •
    Assisting the Board of Directors in establishing and overseeing director and executive officer compensation policies and practices,

    •
    Hiring, terminating and directing the activities of the independent compensation consultant,

    •
    Reviewing and analyzing general industry and peer group compensation data,

    •
    Reviewing and approving executive officer goals, objectives and compensation levels,

    •
    Evaluating executive officer performance,

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    •
    Making recommendations to the Board of Directors as to the form and amount of director compensation levels, and

    •
    Considering the outcome of the stockholder advisory votes on executive compensation when evaluating executive compensation policies and practices and when making future executive compensation decisions.

The Role of the President and CEO

The President and CEO attends Committee meetings, including the meeting where the Committee deliberates base salary changes and annual incentive metrics and performance measures for executive officers. His role at these meetings includes:

    •
    Reviewing the performance of each executive officer against position accountabilities and Annual Incentive Plan ("AIP") metrics and performance measures, and recommending AIP awards for the just-ended fiscal year for each executive officer,

    •
    Making base salary adjustment recommendations for the ensuing performance year for each executive officer,

    •
    Reviewing and recommending AIP metrics and performance measures for the ensuing fiscal year, and

    •
    Responding to questions Committee members may have regarding base salary levels and AIP metrics, performance measures and awards.

The President and CEO does not directly participate in the deliberations of the Committee and he is not present during nor does he take part in any way in the Committee's deliberations with respect to establishing his compensation.

The Role of the Consultant

As previously discussed, the Committee periodically directly engages a compensation consultant to assist it in accomplishing its responsibilities. During 2012, the Committee engaged Hay Group (the "Consultant"), an independent compensation consulting firm, to perform a review of executive compensation practices, which included:

    •
    Analysis of leading practices and trends in the utility industry,

    •
    Analysis of the relative positioning of each of our executive officer positions to similar positions within its proprietary national market database,

    •
    Review and evaluation of our compensation program and compensation levels as compared to compensation practices of other companies with similar characteristics, including size and type of business (see discussion of industry-specific peer group under "—Benchmarking"),

    •
    Recommendation of appropriate industry-specific peer group of companies,

    •
    Performing calculations necessary to determine recommendations for performance-based equity awards, and

    •
    Recommending the structure of the executive compensation program relative to the results of its analysis of national market and industry-specific peer group companies.

The Consultant's 2012 review served as the basis for compensation decisions beginning in 2013 and will continue to be the basis for compensation decisions until such time that the Committee engages an independent consultant to perform a subsequent review.

During 2013, the Committee engaged Hay Group to perform calculations necessary to determine performance-based equity awards.

The Role of Stockholder Say-on-Pay Advisory Votes

We provide our stockholders with the opportunity to cast an annual advisory vote on executive compensation (a "say-on-pay advisory proposal" as described under Section 2, "—MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING"). At our annual meeting of stockholders held on April 25, 2013, a substantial majority of the votes cast on the say-on-pay advisory proposal at that meeting were voted in favor of the proposal. The Committee believes this affirms stockholders' support of our approach to executive compensation.

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Compensation Philosophy

The Committee sets target compensation levels in a manner designed to:

    •
    Be competitive and permit us to attract and retain executive talent,

    •
    Be conservative with respect to our peer group and, prior to 2013, the national market, and

    •
    Provide incentive for executives to achieve individual and company performance goals.

Beginning in 2013, the Committee modified its compensation philosophy to target the 25 th percentile levels of the industry-specific peer group of companies (see "—Benchmarking" below) for Base Salary, Total Cash Compensation and Total Direct Compensation, while continuing to maintain a range concept to recognize differing levels of experience. The Committee believes the comparison to compensation levels of similar peer group positions is more reflective of our executive officer's roles and responsibilities and is therefore more appropriate than comparison to the national market.

Benchmarking

As noted above, during 2013 the Committee set the compensation benchmark (i.e., the 25 th percentile) based on a 2012 industry-specific peer group company survey developed by the Consultant. Prior to 2013, the Committee set the benchmarks based on a national market survey developed by the Consultant. Under the prior process, the Committee compared the compensation values resulting from the national market survey to corresponding compensation values of an industry-specific peer group of companies also developed by the Consultant. The comparison was done to insure competitiveness and appropriateness of compensation levels within the industry. This comparison was a contributing factor in the Committee's decision to modify its compensation philosophy beginning in 2013 to both reduce the targets to the 25 th percentile levels (prior to 2013, benchmark targets included the 25 th percentile, the 50 th percentile, and the midpoint between the 25 th and 50 th percentiles) and to change the benchmark to that of the industry-specific peer group of companies.

The industry-specific peer group of companies that was recommended by the Consultant and adopted by the Committee for 2013 represented publicly traded electric, gas, combined electric and gas, and water utilities comparable to Empire in terms of sales, market value, growth characteristics, and assets. The 2013 peer group of companies, set forth in the table below, was also adopted by the Committee for 2014.

ALLETE, Inc. Cleco Corporation NorthWestern Corporation
American States Water Company El Paso Electric Company Otter Tail Corporation
Aqua America, Inc. IDACORP, Inc. South Jersey Industries, Inc.
Black Hills Corporation MGE Energy, Inc. Unitil Corporation
California Water Services Group Northwest Natural Gas Company UNS Energy Corporation
Chesapeake Utilities

An essential part of the benchmarking process involves the Consultant's use of a systematic approach to evaluate the duties and responsibilities of our executive positions. This approach recognizes the practical reality that job responsibilities of persons with similar titles may vary significantly from company to company, and that a person's title is not necessarily descriptive of a person's duties. In its evaluation, the Consultant considered the scope and complexity of incumbent positions among the peer group companies and compared those positions to the scope and complexity of our executive positions. The result was an assessment of the relative position of the compensation being paid to our executives in light of the compensation being paid to persons performing duties of similar scope and complexity. The Committee used this assessment to assist it in making decisions regarding appropriate compensation levels for our executive positions. The underlying principle of the evaluation methodology is to focus on identifying those positions that have a scope and complexity of responsibilities that are comparable to those duties exercised by each of our particular executives.

Base Salary

During their most recent review, the Consultant made base salary target recommendations to the Committee for each position with consideration given to our compensation philosophy. Base salary targets are reviewed periodically as described above to ensure our executive positions are comparable with the marketplace in terms of expertise, scope and accountability.

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At the beginning of the fiscal year, the President and CEO reviewed executive officer performance with, and made Base Salary recommendations to, the Committee for all executive officers other than himself. Based upon his review and recommendations, and with consideration given to market information provided by the Consultant, the Committee set the Base Salary of each such executive officer for the fiscal year. The Committee independently appraised the performance of the President and CEO, and set his Base Salary accordingly. The Committee will determine any Base Salary adjustments necessary throughout the year should material changes in office or responsibilities occur.

As mentioned above, the Committee modified its compensation philosophy beginning in 2013 to target the 25 th percentile levels of the industry-specific peer group of companies, including the 25 th percentile of Base Salary. The 25 th percentile Base Salary of the President and CEO position of the industry-specific peer group determined by the Consultant in its most recent review was $509,000. In order to begin the transition of Mr. Beecher's Base Salary to this 25 th percentile level, the Committee set his 2013 Base Salary at $459,000. Similarly, the Committee set 2013 base salaries for each of the other NEOs as follows: Ms. Delano, $261,000; Ms. Walters, $266,000, Mr. Gatz, $250,000; and Mr. Palmer, $225,000. To complete the transition, the Committee set Mr. Beecher's 2014 Base Salary at $510,000, Ms. Delano's 2014 Base Salary at $290,000, and Ms. Walter's 2014 Base Salary at $295,000. The transition to the 25 th percentile level for the remaining NEO's was accomplished by the 2013 adjustment.

Annual Cash Incentives

The Annual Cash Incentive portion of Total Cash Compensation is designed to reward executive officers for performance that benefits our shareholders, customers, and employees. Performance incentive opportunities are derived from individual AIPs, whereby executive officers can earn additional cash compensation based on performance measured against short-term tactical goals that focus on operating conditions and circumstances of a particular year. These tactical goals are developed from and lend support to our long-term vision and goals.

    2013 AIP Results and Awards

The 2013 AIPs included common corporate performance metrics, specific operational metrics related to each NEO's area of responsibility, and subjective performance metrics whereby each NEO was evaluated in areas of leadership, engagement of workforce, accountability, and overall job performance. As illustrated below, the corporate performance metrics comprised the most significant portion of the 2013 AIPs. These metrics are composed of performance measures related to Earnings Per Share on the Company's common stock, control of capital expenditures and operating and maintenance expenses, and overall corporate safety. The Annual Cash Incentive opportunity blend by category of performance metric for each NEO is illustrated below:

Position
Corporate
Performance
Metrics
Operational
Performance
Metrics
Subjective
Performance
Metrics

President and Chief Executive Officer

60 % 20 % 20 %

All Other NEOs

50 % 40 % 10 %

Each executive officer provided the President and CEO input on a set of proposed operational performance metrics and measures related to their areas of responsibility for the 2013 fiscal year. One or more performance measures were developed for each metric. The President and CEO evaluated the proposed metrics and performance measures, made any necessary modifications, and presented the recommended suite of performance metrics and measures for himself and all other executive officers to the Committee. The Committee reviewed his recommendations for consistency, measurability, and equity relative to individual responsibilities and, together with their assessment of our near-term objectives, made any necessary adjustments to individual AIPs before approving.

Once metrics, performance measures and weightings were determined, total target Annual Cash Incentive amounts were calculated for each executive officer with consideration given to the Total Cash Compensation philosophy discussed above. Threshold and maximum performance levels may also be developed for each performance measure. Threshold and maximum amounts are equal to 50% and 200%, respectively, of the target level amount. If an executive does not perform at least at a threshold level of expected performance with regard to any particular individual performance measure, no incentive compensation is awarded with respect to that performance measure. Likewise, no award greater than the maximum award is paid when performance exceeds the maximum level of expected performance required to earn such award.

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Beginning in 2013, in order to provide the opportunity to achieve the 25 th percentile level of peer group Total Cash Compensation, the Committee modified the Annual Cash Incentive amount available at target levels of performance for the Vice-President and Chief Financial Officer, the Vice-President and Chief Operating Officer—Electric, and the Vice-President and Chief Operating Officer—Gas to represent 40% of their annual base salary (compared to 35% in 2012). During 2013, the Annual Cash Incentive opportunity at target levels of performance for each NEO was as follows:

Position
Annual Cash
Incentive as a
Percentage of
Base Salary

President and Chief Executive Officer

55 %

Vice President and Chief Financial Officer

40 %

Vice President and Chief Operating Officer—Electric

40 %

Vice President and Chief Operating Officer—Gas

40 %

All Other NEOs

35 %

Performance measure ranges are generally linked to the threshold, target and maximum performance award levels. For instance, to qualify for the threshold performance award under a performance measure of operating and maintenance expense control, an executive must operate their responsibility area at no greater than +10% of budgeted expenses. To qualify for the maximum performance award under the same performance measure, an executive must operate their responsibility area at -10% of budgeted expenses. The qualification criteria for other performance measures may be whether the executive accomplished or did not accomplish the measure. Under this criterion, the executive must fully accomplish the measure to qualify for any award. AIP measurements may be either quantitative or qualitative. Measurements considered qualitative, if any, are identified as such below.

Each executive officer's AIP performance and indicated payout were reviewed by the President and CEO with the Committee following the conclusion of the fiscal year. The Committee considered his review and recommendations, made any appropriate adjustments and determined the amount of Annual Cash Incentive earned by each executive. The Committee independently appraised the performance of the President and CEO, and determined his incentive award accordingly.

    Corporate Performance Metrics:

The results of common corporate performance metrics and related performance measures that, at target-level performance, are equal to 50% of the Annual Cash Incentive opportunity available to each executive officer (or 60% of the President and CEO's Annual Cash Incentive opportunity) are as follows:

Metric
Performance Measures

Weighting(1)
Threshold
50%

Target
100%

Maximum
200%

Actual
Performance

Earnings Per Share

CEO

30 % $1.00 $1.26 - $1.43 > $1.43 Maximum

All other NEOs

20 % $1.00 $1.26 - $1.43 > $1.43 Maximum

Corporate Level Expense Control


Capital Expenditures

10 % Budget +10% At Budget Budget -10% 171% of Target

Operating and Maintenance Expense

10 % Budget +5% At Budget Budget -5% 139% of Target

Safety Performance


DART Rate(1)

5 % 2.95 2.35 2.10 Maximum

Man hours worked no lost time

5 % 300,000 500,000 1,000,000 Maximum
(1)
Days Away from work, Restricted work activity, or job Transfer.

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Based upon the actual performance results relative to target for the corporate performance metrics, each NEO was awarded the following Annual Cash Incentive:


Corporate Performance
Metrics

Target Award
Opportunity
Actual
Award

Mr. Beecher

$ 151,471 $ 280,345

Ms. Delano

$ 52,200 $ 95,056

Ms. Walters

$ 53,200 $ 96,878

Mr. Gatz

$ 50,000 $ 91,050

Mr. Palmer

$ 39,376 $ 71,702

    Operational Performance Metrics:

The results of Mr. Beecher's total Company-level operational metrics and performance measures, which represent 20% of his Annual Cash Incentive opportunity, are illustrated below.

Mr. Beecher

Metric
Performance Measures

Weighting
Threshold
50%

Target
100%

Maximum
200%

Actual
Performance

Expense Control

Fuel and Purchased Power Expenses

10 % Budget +10% At Budget Budget -10% 133% of Target

Capital Markets/Governance
Rating Agency Interaction

5 % Present once to
Each Agency
Threshold +
present to
1 agency 2 times
Present to Each Agency 2 Times Target

Institutional Investors Interactions

5 % 5 10 15 Maximum

The results of the operational metrics and performance measures for each NEO other than the President and CEO, which represents 40% of their Annual Cash Incentive opportunity, are illustrated below.

Ms. Delano

Metric
Performance Measures

Weighting
Threshold
50%

Target
100%

Maximum
200%

Actual
Performance

Operational Area Expense Control

Operating and Maintenance Expenses

10 % Budget +10% At Budget Budget -10% 179% of Target

Capital Markets/Governance
Rating Agency Interactions

5 % Present once to Each Agency Threshold + present to 1 agency 2 times Present to Each Agency 2 Times Maximum

Institutional Investors Interactions


5

%

5

10

15

Maximum

Investor Relations

10 % Plan Development Plan Dev/Updated Target +5 Contacts Maximum

Analyst Coverage


10

%

Current Coverage

Threshold + 1

Threshold + 2

Target

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Table of Contents

Ms. Walters

Metric
Performance Measures

Weighting
Threshold
50%

Target
100%

Maximum
200%

Actual
Performance

Operational Area Expense Control

Operating and Maintenance Expense

10 % Budget +10% At Budget Budget -10% 125% of Target

Fuel and Purchased Power Expenses

5 % Budget +10% At Budget Budget -10% 133% of Target

Operations


Customer Service—SAIFI Rate(1)

5 % 1.64 1.43 1.22 140% of Target

Customer Service—SAIDI Rate(2)

5 % 183 159 135 150% of Target

Customer Response Performance

2.5 % <= 30 Second Response, 60% or Greater <= 30 Second Response, 70% or Greater <= 30 Second Response, 80% or Greater Maximum

Customer Service Structure (a qualitative measure)

2.5 % Customer Service Restructuring Plan Threshold + Completed Restructuring Target + achieved Cost Reduction and/or Service Improvement Maximum

Project Completion


Riverton Unit 12 Combined Cycle

5 % Air/Intake Permits by December 31, 2013 Air/Intake Permits by July 1, 2013 Air/Intake Permits by May 1, 2013 Target

Asbury Air Quality Control System (AQCS) Project


5

%

On Schedule and Budget +10%

On Schedule and Budget

On Schedule and Budget -10%

103% of Target

(1)
System Average Interruption Frequency Index

(2)
System Average Interruption Duration Index

Mr. Gatz

Metric
Performance Measures

Weighting
Threshold
50%

Target
100%

Maximum
200%

Actual
Performance

Operational Area Expense Control

Capital Expenditures

10 % Budget +10% At Budget Budget -10% Target

Operating and Maintenance Expenses

10 % Budget +10% At Budget Budget -10% 80% of Target

Operations


Annual Missouri Public Service Commission (MPSC) Safety Audits

5 % No Material Probable Violations (PV) + >50% No Material Areas of Concern (AC) No Material PVs + >75% No Material ACs No Material PVs +100% No Material ACs Under Threshhold

Residential Customer Growth

10 % -0.50% 0.00% 0.50% 87% of Target

MPSC Non-Payment Related Commission Complaints (CC)


5

%

CCs >=25

Non-Payment
Related CCs =15

CCs <=5

Maximum

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Table of Contents

Mr. Palmer

Metric
Performance Measures

Weighting
Threshold
50%

Target
100%

Maximum
200%

Actual
Performance

Operational Area Expense Control

Purchasing Capital Expenditures

6 % Budget +10% At Budget Budget -10% 115% of Target

Operating and Maintenance Expenses

10 % Budget +10% At Budget Budget -10% 87% of Target

Operations

North American Electric
Reliability Corporation (NERC)
Critical Infrastructure Protection
Audit Performance


6

%

Develop Action Plan
to Mitigate Audit
Findings

Plan to Mitigate Potential
Alleged Violations (PAV) + No
Material NERC Action Expected

No
Violations/PAV/
Penalties

Target

Cyber/Physical Security Plan
(a qualitative measure)

6 % Establish Team,
Develop
Recommendations
50% Recomendations
Implemented
All
Recommendations
Implemented
Maximum

Legislative Changes
(a qualitative measure)

6 % Infrastructure
System Replacement
Surcharge (ISRS)
Passed Through 1
Missouri Chamber
ISRS Passed Through 2
Missouri Chambers
ISRS Becomes
Law
Under
Threshold

Social Media
(a qualitative measure)

6 % Develop Strategy Threshold + 50%
Implementation
Implement All New Strategy Maximum

Based upon actual performance results relative to target for the operational performance metrics described above, the Annual Cash Incentive award for each NEO was as follows:


Operational Performance
Metrics

Target Award
Opportunity
Actual
Award

Mr. Beecher

$ 50,491 $ 71,570

Ms. Delano

$ 41,760 $ 70,888

Ms. Walters

$ 42,560 $ 57,254

Mr. Gatz

$ 40,000 $ 36,700

Mr. Palmer

$ 31,500 $ 35,910

    Subjective Performance Metrics:

It was the Committee's evaluation that the executive management team provided effective leadership, employee engagement, and noteworthy performance as a team and on an individual level that resulted in increased customer and shareholder value, a safe and productive work environment, and fulfillment of short- and long-term performance goals. Based upon the Committee's evaluation of individual performance, the Annual Cash Incentive award related to the subjective performance metrics (a qualitative measure), which represents 20% of the total target Annual Cash Incentive opportunity for the President and CEO and 10% of the total target Annual Cash Incentive opportunity for each other NEO, was as follows:

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Table of Contents


Subjective Performance
Metrics

Target Award
Opportunity
Actual
Award

Mr. Beecher

$ 50,490 $ 50,490

Ms. Delano

$ 10,440 $ 15,660

Ms. Walters

$ 10,640 $ 15,960

Mr. Gatz

$ 10,000 $ 15,000

Mr. Palmer

$ 7,875 $ 7,875

Since the adoption of the current form of the Executive Officer AIP in 2001, the average Annual Cash Incentive award for all executive officers, including the President and CEO, but excluding the 2011 award that was earned but not paid and partial year results for retiring executive officers, was approximately 115% of the target opportunity amounts.

Total AIP target award opportunities and actual AIP award results for each of the Company's NEOs during fiscal 2013 were:

GRAPHIC

    2014 AIP Metrics and Measure

The Committee has structured the 2014 AIP so that the Annual Cash Incentive award opportunity as a percentage of Base Salary is unchanged from 2013. The blend of award opportunity by category of performance metric for each NEO is described below:

Position
Corporate
Performance
Metrics
Operational
Performance
Metrics
Subjective
Performance
Metrics

President and Chief Executive Officer

70 % 0 % 30 %

Vice-President—Finance and CFO

55 % 35 % 10 %

All Other NEOs

50 % 40 % 10 %

As in 2013, threshold and maximum opportunities during 2014 will be equal to 50% and 200%, respectively, of the target level opportunity. The Committee established the corporate performance Earnings Per Share metric as the most significant single metric of the 2014 AIP. At target performance levels, this metric encompasses 40% of the CEO's Annual Cash Incentive opportunity, 25% of the CFO's Annual Cash Incentive Opportunity, and 20% of each other NEO's Annual Cash Incentive opportunity. The Committee set Earnings Per Share target performance at $1.44, the midpoint of our published 2014 full-year earnings guidance range of $1.38 to $1.50. Threshold and maximum performance levels were set at $0.05 below and $0.05 above our published guidance range, respectively.

Control of capital expenditures and operating and maintenance expenses comprise 15% of each NEO's corporate performance metric. The Committee established the targets at budgeted capital expenditures (excluding major generation and environmental projects) and budgeted operating and maintenance expenses. For corporate performance purposes, the Committee set the threshold level of opportunity for capital expenditures at 10% above budgeted expenditures, while the maximum level of opportunity was set at 10% below budgeted expenditures. Similarly, the Committee established threshold and maximum levels of opportunity at 5% above and 5% below the

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Table of Contents

budgeted level of operating and maintenance expenses, respectively. Capital expenditure and operating and maintenance expense control have also been established as specific operational-area metrics for Ms. Delano, Ms. Walters and Mr. Gatz. The Committee set the capital expenditure measurement range for operational areas similarly to the corporate performance range, but increased the measurement range for operating and maintenance expenses to 10% above and 10% below the operating area budget, respectively.

The corporate safety performance DART rate metric comprises 10% of each NEO's corporate performance metric. For 2014, the Committee set the DART rate target at 1.20. The corporate operations performance SAIDI rate metric makes up 5% of each NEO's corporate performance metric. For 2014, the SAIDI rate target was set at 145. The 2014 target level performance value for both of these metrics represents an improvement over 2013 actual performance levels.

Ms. Delano's Investor Relations and Rating Agency Interactions metric involves activities designed to promote and maintain constructive relationships with credit rating agencies and the investor community, including research coverage. Her Internal Control Environment metric focuses on ensuring the Company does not experience financial restatements or material control weaknesses, and maintaining an internal control environment that reflects the most recent Commission of Sponsoring Organizations (COSO) framework.

The 2014 corporate, operational, and subjective performance metrics and measures, expressed as a percentage of the total target Annual Cash Incentive opportunity available to each NEO relative to the level of performance attained, are presented in the following tables.

    Corporate Performance Metrics:

Metric
Performance Measures

Weighting
Threshold
Opportunity

Target
Opportunity

Maximum
Opportunity

Earnings Per Share

CEO

40 % 20 % 40 % 80 %

CFO

25 % 12.5 % 25 % 50 %

All other NEO's

20 % 10 % 20 % 40 %

Corporate Level Expense Control

Capital Expenditures

5 % 2.5 % 5 % 10 %

Operating and Maintenance Expense


10

%

5

%

10

%

20

%

Safety Performance

DART Rate

10 % 5 % 10 % 20 %

Operations Performance

SAIDI Rate

5 % 2.5 % 5 % 10 %

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Table of Contents

    Operational Performance Metrics:

    Ms. Delano

Metric
Performance Measures

Weighting
Threshold
Opportunity

Target
Opportunity

Maximum
Opportunity

Operational Area Expense Control

Operating and Maintenance Expenses

10 % 5 % 10 % 20 %

Interest costs (excl. long term debt) and AFUDC(1)

5 % 2.5 % 5 % 10 %

Capital Markets/Governance

Investor Relations and Rating Agency Interactions

10 % 5 % 10 % 20 %

Internal Control Environment

10 % 5 % 10 % 20 %
(1)
Allowance for Funds Used During Construction

    Ms. Walters

Metric
Performance Measures

Weighting
Threshold
Opportunity

Target
Opportunity

Maximum
Opportunity

Operational Area Expense Control

Operating and Maintenance Expense

10 % 5 % 10 % 20 %

Fuel and Purchased Power Expenses

5 % 2.5 % 5 % 10 %

Operations Performance

SAIFI Rate (target = 1.43)

5 % 2.5 % 5 % 10 %

SAIDI Rate (additional corporate metric)

5 % 2.5 % 5 % 10 %

Customer Service Performance

Customer Contacts—response and resolution times

5 % 2.5 % 5 % 10 %

Capital Projects—timeline and cost management

Asbury Air Quality Control System Project

5 % 2.5 % 5 % 10 %

Riverton Unit 12 Combined Cycle (CC) Project

5 % 2.5 % 5 % 10 %

    Mr. Gatz

Operational Area Expense Control

Capital Expenditures

10 % 5 % 10 % 20 %

Operating and Maintenance Expenses

10 % 5 % 10 % 20 %

Operations—Gas

Annual Missouri Public Service Commission (MPSC) Safety Audits—material violations and areas of concern

5 % 2.5 % 5 % 10 %

Residential Customer Growth (target = 0.25%)

10 % 5 % 10 % 20 %

MPSC Non-Payment Related Commission Complaints (CC)—(target = 15)

5 % 2.5 % 5 % 10 %

    Subjective Performance Metrics:

The subjective performance metric (a qualitative measure) is weighted at 30% of the total target Annual Cash Incentive opportunity for the President and CEO and 10% of the total target Annual Cash Incentive opportunity for each other NEO. Similar to 2013, the Committee will evaluate each NEO's performance in areas of leadership, engagement of workforce, accountability, and overall job performance.

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Table of Contents

Total AIP target award opportunities attainable by each of the Company's NEOs during fiscal 2014 are:

GRAPHIC

The 2014 AIP metrics and measures are not presented for Mr. Palmer due to his retirement from the Company on March 31, 2014.

Long-Term Incentives

Long-Term Incentives consist of time-vested restricted stock awards (which replaced stock options and dividend equivalent rights effective January 1, 2011) and performance-based restricted stock awards. Both forms of award are discussed in more detail below. Equity awards were granted under our 2006 Stock Incentive Plan (SIP), which was approved by stockholders in 2005. The 2006 SIP will expire on December 31, 2015. Included as Appendix B to this Proxy Statement is a proposed replacement of the 2006 SIP which, if approved by stockholders, will become effective January 1, 2015.

The Long-Term Incentive element is designed to motivate executive officers over the long-term to put forth maximum effort in contributing to the continued success and growth of Empire, and to ensure the interests of the executive officers are aligned with those of stockholders. In addition, Long-Term Incentives provide a measure of retention incentive for executive officers, leading to enhanced stability of our senior management team.

During 2013, the target Long-Term Incentive opportunity for the President and CEO was equal to 80% of his annual base salary. The target Long-Term Incentive opportunity for the Vice-President and Chief Financial Officer, Vice-President and Chief Operating Officer—Electric, and the Vice-President and Chief Operating Officer—Gas was equal to 45% of their annual base salary. The Long-Term Incentive opportunity for all other executive officers was equal to 30% of their annual base salary. As with Total Cash Compensation, Total Direct Compensation at target-level performance will approximate the 25 th percentile of the Total Direct Compensation of the industry-specific peer group of companies for all executive officers. In order to achieve this 25 th percentile level, the 2013 percentages described above were increased from 2012, when the target Long-Term Incentive opportunity for the President and CEO was equal to 65% of his annual base salary and the target Long-Term Incentive opportunity for all other executive officers was equal to 15% of their annual base salaries.

At target levels of performance, the time-vested restricted stock award is intended to represent approximately one-half the total value of each executive officer's Long-Term Incentive opportunity, with the performance-based restricted stock award representing the remaining half.

    Time-Vested Restricted Stock

Time-vested restricted stock awards granted to executive officers provide the opportunity to receive a number of shares of common stock at the end of a three-year vesting period. As noted above, this award replaced the stock option and dividend equivalent portions of the Long-Term Incentive opportunity effective January 1, 2011. No dividend rights accumulate during the vesting period.

Time-vested restricted stock is valued at an amount equal to the average price of our common stock on the grant date. In accordance with the Stock Incentive Plan, this average price is determined by calculating the average value between the high and low stock trading prices on the day of the grant.

If employment terminates during the vesting period because of death, retirement, or disability, the executive is entitled to a pro-rata portion of the time-vested restricted stock awards such executive would otherwise have earned. If employment is terminated during the vesting period for reasons other than those listed above, the time-vested restricted stock awards will be forfeited on the date of the termination unless the Committee determines, in its sole discretion, that the executive is entitled to a pro-rata portion of such award.

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Table of Contents

    Performance-Based Restricted Stock

Performance-based restricted stock awards granted to executive officers provide the opportunity to receive a number of shares of common stock at the end of a three-year performance period if performance goals set forth in the award are satisfied. The performance goals are tied to the percentile ranking of Empire's total stockholder return (share price appreciation or decline over the performance period plus cumulative value of dividends paid over the performance period, assuming reinvestment, divided by the stock price at the beginning of the performance period) for the three-year performance period as measured over the same period against all publicly traded, investor-owned electric utility companies. The target level of performance under the 2013 grants was set at the 50 th percentile ranking when compared to this group. The threshold level was set at the 20 th percentile, while the maximum level was set at the 80 th percentile.

At the end of the performance period (December 31, 2015 for awards granted in 2013), the executive would earn 100% of the target number of shares if the target (50 th percentile) level of performance is reached. If the threshold level of performance is reached, the executive would earn 50% of the target number of shares. If performance reaches or exceeds the maximum level, the executive would earn 200% of the target number of shares. When performance levels are between the threshold and maximum performance levels, the amount of shares the executive earns is interpolated. No shares are earned if the threshold level of performance is not reached. The Consultant prepares an analysis of our total stockholder return percentile ranking for the just-ended three-year performance period relative to the comparator group described above. Based upon this analysis, the Consultant calculates the appropriate number of performance-based restricted stock shares to be awarded each executive. Performance-based restricted stock awards are approved by the Committee at the first meeting of the year. The total stockholder return for the three year performance period ended December 31, 2013 (for awards granted in 2011), was 5.1%, or just above the 11 th percentile of the comparator group. Since the adoption of the 2006 Stock Incentive Plan, we have averaged a total stockholder return ranking slightly above the 34 th percentile.

If employment terminates during the performance period because of death, retirement, or disability, the executive is entitled to a pro-rata portion of the performance-based restricted stock awards such executive would otherwise have earned. If employment is terminated during the performance period for reasons other than those listed above, the performance-based restricted stock awards will be forfeited on the date of the termination unless the Committee determines, in its sole discretion, that the executive is entitled to a pro-rata portion of such award.

Change in Control

We maintain a Change In Control Severance Pay Plan that covers executive officers as well as our other key employees who are not executive officers. The purpose of the plan is to assure continuity in leadership, continued focus, and dedication to customer and stockholder interests during and immediately after a change in control by mitigating the personal concerns that may confront a participant as a result of such an event. The plan provides severance pay benefits upon termination of employment after a change in control. This requirement of a "double-trigger" (i.e., the requirement that there be a change in control and a termination of employment) was instituted to balance the interests of the executive, Empire and our stockholders. There are several conditions that could constitute a change in control, but primarily, a change in control occurs if a merger or consolidation with, or sale to, another corporation or entity is consummated. The Change In Control Severance Pay Plan is discussed more fully under the section entitled "—Potential Payments upon Termination and Change in Control."

We have not entered into any form of employment agreements with any executive officer other than agreements under the Change In Control Severance Pay Plan.

Other Benefits

Executive officers participate in the same 401(k) and Retirement Plans that cover substantially all our other employees. The Pension Plan is a noncontributory, trusteed pension plan designed to meet the requirements of Section 401(a) of the Internal Revenue Code. Normal retirement is at age 65, with early retirement at a reduced benefit level permitted under certain conditions. We also maintain a Supplemental Executive Retirement Plan which covers the executive officers who participate in the Pension Plan. This supplemental plan is intended to provide benefits which, except for the applicable limits of Section 415 and Section 401(a)(17) of the Internal Revenue Code, would have been payable under the Pension Plan. The supplemental plan is not qualified under the Internal Revenue Code and benefits payable under the plan are paid out of our general funds.

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Table of Contents

Our Articles of Incorporation and bylaws contain provisions permitted by the Kansas General Corporation Code which, in general terms, provide that officers and directors will be indemnified by us for all losses that may be incurred by them in connection with any claim or legal action in which they may become involved by reason of their service as our officer or director, if they meet certain specified conditions, and provide for the advancement by us to the officers and directors of expenses incurred by them in defending suits arising out of their service as an officer or director. The Board has authorized us to enter into indemnity agreements with officers and directors that provide for similar indemnification and advancement of expenses. The officers and directors are also covered by insurance indemnifying them against certain liabilities which might be incurred by them in their capacities as officers and directors. The premium for this insurance is paid by us.

With the exception of certain plans specifically referenced in this discussion, the executive officers participate in the same health and welfare plans and under the same plan provisions available to all our other employees.


Compensation Committee Report

The Committee has reviewed and discussed the Compensation Discussion and Analysis (which is set forth above) with management. Based on this review and discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Thomas M. Ohlmacher, Chairman
D. Randy Laney
Kenneth R. Allen
Paul R. Portney
Herbert J. Schmidt

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Table of Contents


Summary Compensation Table

Set forth below is summary compensation information for each person who was (1) at any time during 2013 our Chief Executive Officer or Chief Financial Officer and (2) at December 31, 2013, one of our three most highly compensated executive officers, other than the Chief Executive Officer and the Chief Financial Officer (collectively, the "Named Executive Officers").

Name and Principal
Position
(a)
Year
(b)
Salary
($)
(c)
Bonus(1)
($)
(d)
Stock
Awards(2)(3)
($)
(e)
Stock
Options
($)
(f)
Non-Equity
Incentive Plan
Compensation(4)
($)
(g)
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings(5)
($)
(h)
All Other
Compensation(6)(7)
($)
(i)
Total
($)
(j)

Bradley P. Beecher,

2013 459,000 0 397,286 0 402,405 62,628 12,185 1,333,504

President and Chief

2012 323,825 0 123,114 0 220,759 252,290 9,210 929,198

Executive Officer

2011 292,798 60,317 43,601 0 0 277,308 9,682 683,706

Laurie A. Delano,

2013 261,000 0 128,929 0 181,604 132,580 8,855 712,968

Vice President—

2012 177,677 0 19,312 0 86,995 114,080 5,865 403,929

Finance and Chief

2011 143,691 20,506 N/A 0 0 82,164 5,039 251,400

Financial Officer

Kelly S. Walters,

2013 266,000 0 133,051 0 170,092 24,124 8,834 602,101

Vice President and

2012 242,667 2,000 24,140 0 112,877 186,552 7,936 576,851

Chief Operating

2011 224,000 46,159 33,861 0 0 189,636 6,789 500,445

Officer-Electric

Ronald F. Gatz,

2013 250,000 0 124,808 0 142,750 90,571 10,535 618,664

Vice President and

2012 195,700 0 19,312 0 83,050 114,587 9,767 422,416

Chief Operating

2011 190,000 39,152 27,746 0 0 152,893 8,374 418,165

Officer-Gas

Michael E. Palmer,

2013 225,000 0 74,963 0 115,487 17,444 10,927 443,821

Vice President—

2012 203,425 0 21,726 0 93,272 211,760 11,599 540,445

Transmission Policy

2011 197,500 40,698 29,897 0 0 295,244 9,752 573,091

and Corporate

Services


(1)
Ms. Walters' 2012 award is related to efforts put forth during the implementation of our enterprise application software upgrade. 2011 awards represent discretionary cash awards paid to executives in recognition of exceptional performance during 2011 following the devastating EF-5 tornado that struck the Joplin, Missouri area in May 2011. This event subsequently led to the decision by the Board of Directors to temporarily suspend the common stock dividend, thereby triggering a limitation on incentive compensation. Ms. Delano's 2011 award also includes an amount earned related to goal performance prior to her election as Vice President—Finance and Chief Financial Officer.

(2)
Amounts shown for stock awards represent the grant date fair value determined in accordance with Financial Accounting Standards Board Accounting Standard Codification Topic 718 ("FASB ASC Topic 718") for the applicable year relating to such awards. A discussion of the assumptions used to value these awards can be found under Note 4 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 (the "2013 10-K").

(3)
Represents the grant date fair value (determined in accordance with FASB ASC Topic 718) for the applicable year relating to awards of time-vested restricted stock and performance-based restricted stock. Time-vested restricted stock was first granted in 2011. No time-vested restricted stock awards were made by the Compensation Committee in 2012 due to the triggering of the limitation on incentive compensation described in Note 1 above. The 2012 performance-based restricted stock awards were also subject to this same limitation on incentive compensation. However, in order to recognize outstanding efforts by management subsequent to the triggering event described in Note 1 above, the Compensation Committee granted discretionary performance-based restricted stock awards in 2012.

Includes amounts relating to grants of time-vested restricted stock as follows:


February

2011 2012 2013

B.P. Beecher

$ 19,940 $ 0 $ 160,511

L.A. Delano

N/A $ 0 $ 52,259

K.S. Walters

$ 14,502 $ 0 $ 54,126

R.F. Gatz

$ 12,689 $ 0 $ 50,393

M.E. Palmer

$ 12,689 $ 0 $ 29,863

Includes amounts relating to grants of performance-based restricted stock as follows:


February

2011 2012 2013

B.P. Beecher

$ 23,661 $ 123,114 $ 236,775

L.A. Delano

N/A $ 19,312 $ 76,670

K.S. Walters

$ 19,359 $ 24,140 $ 78,925

R.F. Gatz

$ 15,057 $ 19,312 $ 74,415

M.E. Palmer

$ 17,208 $ 21,726 $ 45,100

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Table of Contents

    The amounts set forth in the table relating to performance-based restricted stock represent the grant date fair value of such awards assuming the target level of performance is attained. Assuming the maximum level of performance is attained, the grant date fair value of such awards would be as follows:


February

2011 2012 2013

B.P. Beecher

$ 47,332 $ 246,228 $ 473,550

L.A. Delano

N/A $ 38,624 $ 153,340

K.S. Walters

$ 38,718 $ 48,280 $ 157,850

R.F. Gatz

$ 30,114 $ 38,624 $ 148,830

M.E. Palmer

$ 34,416 $ 43,452 $ 90,200
(4)
Represents cash awards under our Executive Officer Annual Incentive Plan (AIP). Ms. Delano and Mr. Palmer requested their 2012 awards, which were paid in 2013, be paid in the form of Empire common stock rather than cash. Mr. Palmer also requested his 2013 award, which was paid in 2014, be paid in the form of Empire common stock rather than cash. No earned awards were granted under the AIP for 2011 performance due to the triggering of the limitation on incentive compensation described in Note 1 above.

(5)
Represents the difference between the actuarial present value of each Named Executive Officer's accumulated benefit under all defined benefit plans at December 31 of the applicable year and the actuarial present value of each Named Executive Officer's accumulated benefit under all defined benefit plans at December 31 of the preceding year. Mr. Beecher, Ms. Delano, Ms. Walters, Mr. Gatz, and Mr. Palmer participate in The Empire District Electric Company Employees' Retirement Plan ("Retirement Plan") and The Empire District Electric Company Supplemental Executive Retirement Plan ("SERP"). The actuarial present value of each Named Executive Officer's accumulated benefit is affected in part by the discount rate assumption. The discount rate assumption used to determine the actuarial present value of each Named Executive Officer's accumulated benefit was 4.70%, 4.00%, and 4.90%, during the 2011, 2012 and 2013 measurement periods, respectively. The increase in the discount rate assumption from the 2012 measurement period to the 2013 measurement period was the driving factor in the reduced actuarial present value of the Retirement Plan benefit between the 2012 and the 2013 periods. Other factors that affected the accumulated benefit for each Named Executive Officer during the 2013 measurement period included an additional year of credited service, increased average annual earnings as a result of an additional year of compensated service, and decreased pension-eligible incentive compensation as a result of the triggering during 2011 of the limitation on incentive compensation described in Note 1 above. These factors are described more fully in the narrative discussion to the Pension Benefits table below. The amount of change in the pension value attributable to the Retirement Plan and the SERP is as follows:


2011 2012 2013

B.P. Beecher

Retirement Plan

$ 112,318 $ 134,915 $ (51,892 )

SERP

$ 164,990 $ 117,375 $ 114,520

L.A. Delano

Retirement Plan

$ 82,164 $ 114,080 $ 73,500

SERP

N/A $ 0 $ 59,080

K.S. Walters

Retirement Plan

$ 127,837 $ 153,527 $ (30,623 )

SERP

$ 61,799 $ 33,025 $ 54,747

R.F. Gatz

Retirement Plan

$ 98,693 $ 95,610 $ 42,168

SERP

$ 54,200 $ 18,977 $ 48,403

M.E. Palmer

Retirement Plan

$ 165,291 $ 165,544 $ (25,499 )

SERP

$ 129,953 $ 46,216 $ 42,943

None of the Named Executive Officers participated in a non-qualified deferred compensation arrangement.

(6)
Includes matching contributions under our 401(k) Retirement Plan and payment of term life insurance premiums as follows:


2011 2012 2013

B.P. Beecher

401(k) Matching Contribution

$ 7,972 $ 7,500 $ 7,650

Term Life premium

$ 1,710 $ 1,710 $ 1,710

L.A. Delano

401(k) Matching Contribution

$ 4,265 $ 5,091 $ 6,420

Term Life premium

$ 774 $ 774 $ 774

K.S. Walters

401(k) Matching Contribution

$ 6,122 $ 7,232 $ 7,650

Term Life premium

$ 667 $ 705 $ 1,184

R.F. Gatz

401(k) Matching Contribution

$ 5,688 $ 5,843 $ 7,403

Term Life premium

$ 2,686 $ 2,736 $ 3,132

M.E. Palmer

401(k) Matching Contribution

$ 5,919 $ 6,073 $ 6,697

Term Life premium

$ 3,833 $ 3,924 $ 4,230
(7)
Includes perquisites and personal benefits if the aggregate value of such perquisites and personal benefits for each Named Executive Officer exceeds $10,000. Perquisites and other personal benefits for 2011, 2012 and 2013 for Named Executive Officers were not included in the Summary Compensation Table because the aggregate value, based upon the actual cost to Empire of the perquisites, did not exceed $10,000. Other compensation for 2012 for Mr. Palmer includes a tax "gross-up" of $1,601 related to the provision of a medical examination. Other compensation for 2013 for Mr. Beecher and Ms. Delano includes a tax "gross-up" of $2,825 and $1,661, respectively, related to the provision of medical examinations.

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Grants of Plan-Based Awards

The following table shows information about plan-based awards granted during fiscal 2013 to the Named Executive Officers.









All other
Stock
Awards:
Number of
Shares of
Stock or
Units(3)
(#)
(i)



Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
Estimated Future Payouts
Under Equity Incentive Plan
Awards(2)
Grant Date
Fair Value
of Stock
Awards(4)
($)
(j)
Name
(a)
Grant
Date
(b)
Threshold
($)
(c)
Target
($)
(d)
Maximum
($)
(e)
Threshold
(#)
(f)
Target
(#)
(g)
Maximum
(#)
(h)

B.P. Beecher

02/06/2013 126,225 252,450 504,900 N/A

02/06/2013 5,250 10,500 21,000 236,775

02/06/2013 8,600 160,511

L.A. Delano

02/06/2013 52,200 104,400 208,800 N/A

02/06/2013 1,700 3,400 6,800 76,670

02/06/2013 2,800 52,259

K.S. Walters

02/06/2013 53,200 106,400 212,800 N/A

02/06/2013 1,750 3,500 7,000 78,925

02/06/2013 2,900 54,126

R.F. Gatz

02/06/2013 50,000 100,000 200,000 N/A

02/06/2013 1,650 3,300 6,600 74,415

02/06/2013 2,700 50,393

M.E. Palmer(5)

02/06/2013 39,375 78,750 157,500 N/A

02/06/2013 1,000 2,000 4,000 45,100

02/06/2013 1,600 29,863

(1)
Represents cash award opportunities under our Executive Officer AIP. Actual AIP cash award payouts are presented in the Summary Compensation Table, column g.

(2)
Represents grants of performance-based restricted stock.

(3)
Represents grants of time-vested restricted stock.

(4)
In the case of performance-based restricted stock, represents the value of such awards at the grant date based upon the target level of performance, which is consistent with the estimate of the aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures.

(5)
Mr. Palmer will be entitled to the distribution of a pro-rata portion of the non-equity and equity incentive awards due to his impending retirement from the Company on March 31, 2014.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

    Annual Cash Incentives

Grants of awards under our Executive Officer Annual Incentive Plan are disclosed in the Grants of Plan-Based Awards Table in the year they are granted. The value of the award is disclosed in the Summary Compensation Table in the year when the performance criteria under the plan are satisfied and the compensation earned. For example, the amount set forth in the Summary Compensation Table for 2013 represents the award made in the beginning of 2013 to be paid in early 2014 based on the performance during 2013. No awards were paid in early 2012 as a result of a limitation on incentive compensation in place in 2011. This limitation provided that, regardless of the extent to which any performance goals were met in any calendar year, no incentive compensation was to be provided to any executive for any year in which we did not pay dividends per share of common stock at least equal to the dividends per share paid in the preceding year. Ms. Delano and Mr. Palmer requested that their 2012 award be paid in the form of Empire common stock rather than cash. Mr. Palmer also requested his 2013 award be paid in the form of Empire common stock rather than cash.

    Performance-Based Restricted Stock

Grants of awards of performance-based restricted stock and the grant date fair value (determined in accordance with FASB ASC Topic 718) of such awards are disclosed in the Grants of Plan-Based Awards Table in the year they are granted. The grant date fair value of such awards is also disclosed under Stock Awards in the

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Summary Compensation Table in the year when the awards are made. The performance-based restricted share awards underlying the Stock Awards in the Summary Compensation Table for each Named Executive Officer are as follows:


2011
Award
2012
Award
2013
Award

B.P. Beecher

1,100 5,100 10,500

L.A. Delano

N/A 800 3,400

K.S. Walters

900 1,000 3,500

R. F. Gatz

700 800 3,300

M.E. Palmer

800 900 2,000

    Time-Vested Restricted Stock

Beginning in 2011, as discussed in the Compensation Discussion and Analysis above, stock option and dividend equivalent awards were replaced with time-vested restricted stock awards. Grants of awards of time-vested restricted stock and the full grant date fair value (determined in accordance with FASB ASC Topic 718) of such awards are disclosed in the Grants of Plan-Based Awards Table in the year they are granted. The grant date fair value of such awards is also disclosed under Stock Awards in the Summary Compensation Table in the year when the awards are made. No time-vested restricted shares were granted in 2012 due to the triggering during 2011 of the limitation on incentive compensation described in Note 1 to the "Summary Compensation Table". The time-vested restricted stock awards underlying the Stock Awards in the Summary Compensation Table for each Named Executive Officer are as follows:


2011
Award
2012
Award
2013
Award

B.P. Beecher

1,100 0 8,600

L.A. Delano

N/A 0 2,800

K.S. Walters

800 0 2,900

R. F. Gatz

700 0 2,700

M.E. Palmer

700 0 1,600

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Outstanding Equity Awards at Fiscal Year-End

The following table provides information with respect to the common stock that may be issued upon the exercise of options and other awards under our existing equity compensation plans as of December 31, 2013.


Option Awards Stock Awards
Name
(a)
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1)
(b)
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(c)
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)
Option
Exercise
Price
($)
(e)
Option
Expiration
Date
(f)
Number
of
Shares
or Units
of Stock
That
Have Not
Vested
(#)
(g)(2)
Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested
($)
(h)(3)
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested(4)
(#)
(i)
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights That
Have Not
Vested(5)
($)
(j)

B.P. Beecher

3,500 0 0 22.770 02/02/2015 9,700 220,093 16,700 378,923

3,600 0 0 22.230 02/01/2016

8,400 0 0 23.805 01/31/2017

L.A. Delano(6)

N/A 0 0 N/A N/A 2,800 63,532 4,200 95,298

K.S. Walters

5,600 0 0 23.805 01/31/2017 3,700 83,953 5,400 122,526

R. F. Gatz

3,000 0 0 22.770 02/02/2015 3,400 77,146 4,800 108,912

3,100 0 0 22.230 02/01/2016

6,100 0 0 23.805 01/31/2017

5,400 0 0 21.915 01/30/2018

M.E. Palmer

3,400 0 0 22.770 02/02/2015 2,300 52,187 3,700 83,953

3,500 0 0 22.230 02/01/2016

6,600 0 0 23.805 01/31/2017

(1)
The vesting date for the exercisable options was (a) February 2, 2008, in the case of options with an expiration date of February 2, 2015, (b) February 1, 2009, in the case of options with an expiration date of February 1, 2016, (c) January 31, 2010, in the case of options with an expiration date of January 31, 2017, and (d) January 30, 2011, in the case of options with an expiration date of January 30, 2018.

(2)
Represents the number of shares attainable at fiscal year-end 2013 underlying the time-vested restricted stock granted in 2011 and 2013.

(3)
Represents the value, based on the stock price at December 31, 2013, of the time-vested restricted stock listed in column (g).

(4)
Represents the total number of shares attainable at the target level of performance for the 2011, 2012 and 2013 grants of performance-based restricted stock.

(5)
Represents the value, based on the stock price at December 31, 2013, of the performance-based restricted stock listed in column (i).

(6)
Ms. Delano was not eligible for equity awards prior to becoming an executive officer on August 1, 2011.


Option Exercises and Stock Vested

The following table provides information with respect to the number and value of shares acquired during 2013 from the exercise of vested stock options, dividend equivalents and the vesting of performance-based stock awards.


Option Awards Stock Awards
Name
(a)
Number of
Shares Acquired
on Exercise
(#)
(b)
Value Realized
on Exercise
($)
(c)
Number of
Shares Acquired
on Vesting(1)
(#)
(d)
Value Realized
on Vesting
($)
(e)

B.P. Beecher

528 11,418 1,178 25,164

L.A. Delano(2)

N/A N/A N/A N/A

K.S. Walters

347 7,504 799 17,068

R. F. Gatz

463 10,103 799 17,068

M.E. Palmer

362 7,828 813 17,367

(1)
Represents the vesting of the following awards granted in 2010: performance-based restricted stock and dividend equivalents.

(2)
Ms. Delano was not eligible for equity awards prior to becoming an executive officer on August 1, 2011.


Pension Benefits

We maintain The Empire District Electric Company Employees' Retirement Plan ("Retirement Plan") covering substantially all of our employees. The Retirement Plan is a noncontributory, trusteed pension plan

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designed to meet the requirements of Section 401(a) of the Internal Revenue Code. Each covered employee is eligible for retirement at normal retirement age, with early retirement at a reduced benefit level permitted under certain conditions. We also maintain The Empire District Electric Company Supplemental Executive Retirement Plan ("SERP") which covers our officers who are participants in the Retirement Plan. We desire to provide a retirement benefit to our executive officers that is proportional, with respect to percentage of final average annual earnings, to the retirement benefit available to all other eligible employees. However the amount of average annual earnings that can be used to calculate retirement benefits under the Retirement Plan is restricted by Internal Revenue Code limitations. As explained below, the SERP is designed to restore retirement benefits an executive officer would otherwise lose due to such limitations. The SERP is not qualified under the Internal Revenue Code and benefits payable under the plan are paid out of our general funds.

The following table sets forth, with respect to each Named Executive Officer, the actuarial present value at December 31, 2013 of accumulated benefits under the Retirement Plan and the SERP, the number of years of credited service and the payments made under such plans during 2013.

Name
(a)
Plan Name
(b)
Number
of Years
Credited
Service
(#)
(c)
Present
Value of
Accumulated
Benefit(1)
($)
(d)
Payments
During
Last
Fiscal
Year
($)
(e)

B.P. Beecher

The Empire District Electric Company Employee's Retirement Plan 24.1 476,011 0

The Empire District Electric Company Supplemental Executive Retirement Plan 24.1 529,281 0

L.A. Delano

The Empire District Electric Company Employee's Retirement Plan 21.8 506,426 0

The Empire District Electric Company Supplemental Executive Retirement Plan 21.8 59,080 0

K.S. Walters

The Empire District Electric Company Employee's Retirement Plan 21.5 473,577 0

The Empire District Electric Company Supplemental Executive Retirement Plan 21.5 175,217 0

R.F. Gatz

The Empire District Electric Company Employee's Retirement Plan 12.8 517,175 0

The Empire District Electric Company Supplemental Executive Retirement Plan 12.8 145,320 0

M.E. Palmer(2)

The Empire District Electric Company Employee's Retirement Plan 27.6 831,156 0

The Empire District Electric Company Supplemental Executive Retirement Plan 27.6 289,145 0

(1)
Value represents Actuarial Present Value of age 65 monthly benefit. Assumed discount rate of 4.90%, no pre-retirement mortality or decrements, no collar adjustment and post-retirement mortality tables for males and females (projected on a static basis) required by the Pension Protection Act of 2006 and published by the Internal Revenue Service for funding valuations in 2013.

(2)
Mr. Palmer will retire from the Company on March 31, 2014.

Normal retirement under the Retirement Plan is age 65, or, for individuals hired after December 31, 1996 and within 5 years of their 65 th birthday, normal retirement will be the 5 th anniversary of their hire date. Retirement benefits are calculated based on credited service, average annual earnings, and Social Security covered compensation. The formula used to determine normal retirement benefits is as follows:

    •
    1.2625% of average annual earnings up to Social Security covered compensation times years of credited service up to 35 years, plus

    •
    1.64125% of average annual earnings in excess of Social Security covered compensation times years of credited service up to 35 years, plus

    •
    1.64125% of average annual earnings times years of credited service in excess of 35 years up to a maximum of 5 additional years of covered service.

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Earnings include base salary, cash incentive amounts, the value of performance-based restricted stock and time-vested restricted stock on the award date, and dividend equivalents. The 2013 calculation of pension benefits was impacted by the triggering of the limitation on incentive compensation described above which reduced the level of pension-eligible incentive compensation that was considered in the benefit calculation. Average annual earnings is the average of annual earnings over the five consecutive years within the ten-year period prior to termination of employment which produces the highest average. Early retirement is available at age 55 with 5 years of eligibility service. The benefit is calculated in the same manner as the normal retirement benefit before applying early retirement reduction factors which reduce the normal retirement benefit by a certain percentage. For instance, the normal retirement benefit is reduced by 25% if an employee elects to retire at age 55. If an employee terminates employment after completing five years of vesting service (a plan year after age 18 in which the employee completes 1,000 hours of service), such employee is entitled to a benefit beginning at age 65. The benefit is calculated in the same manner as the normal retirement benefit. Forms of benefits include life only, and 25%, 33 1 / 3 %, 50%, 66 2 / 3 %, or 75% joint and survivor ("J&S") benefits. Election of the J&S benefit (only available to married participants) has the effect of reducing the employee's benefit. The reduction is dependent on the employee's age, the spouse's age, and the J&S benefit percentage elected.

Executive officers whose accrued benefit under the Retirement Plan is reduced by the limits set forth in Section 401 or Section 415 of the Internal Revenue Code, or whose anticipated earnings for any year exceed $120,000, become a participant in the SERP. Generally, benefits payable under the SERP equal the difference between the benefit calculated under the Retirement Plan without regard to Internal Revenue Code limitations, and the benefit calculated under the Retirement Plan as limited by the Internal Revenue Code. Actuarial equivalencies are determined in accordance with the actuarial assumptions set forth in the Retirement Plan.

Ms. Delano, Mr. Gatz, and Mr. Palmer are eligible for early retirement under the terms of the Retirement Plan and the SERP. The present value of Ms. Delano's, Mr. Gatz's, and Mr. Palmer's approximate early retirement benefit under the Retirement Plan, payable as a single life annuity and assuming retirement at December 31, 2013, is $679,799, $572,801, and $1,163,112, respectively. The present value of Ms. Delano's, Mr. Gatz's, and Mr. Palmer's approximate early retirement benefit under the SERP, payable as a single life annuity and assuming retirement at December 31, 2013, is $79,299, $160,949, and $404,638, respectively. These amounts are not included in the table above. Mr. Palmer will retire from the Company on March 31, 2014.


Securities Authorized For Issuance Under Equity Compensation Plans

We have four equity compensation plans, all of which have been approved by stockholders, the 1996 Stock Incentive Plan, the 2006 Stock Incentive Plan, the Employee Stock Purchase Plan: (ESPP) and the Stock Unit Plan for Directors.

The following table summarizes information about our equity compensation plans as of December 31, 2013:

Plan Category
(a) Number of securities
to be issued upon
exercise of outstanding
options, warrants and
rights
(b) Weighted-average
exercise price of
outstanding options,
warrants and rights(1)
(c) Number of securities
remaining available for
future issuance under equity
compensation plans
(excluding securities
reflected in column (a))(2)

Equity compensation plans approved by security holders

386,202 $ 23.27 451,331

Equity compensation plans not approved by security holders

— — —

TOTAL

386,202 $ 23.27 451,331

(1)
The weighted average exercise price of $23.27 relates to 32,700 options granted to executive officers in 2005 under the 1996 Stock Incentive Plan and 5,400, 64,200 and 10,200 options granted to executive officers in 2008, 2007 and 2006, respectively, under the 2006 Stock Incentive Plan. There is no exercise price for 94,400 performance-based stock awards and 24,900 time-vested restricted stock awards awarded under the 2006 Stock Incentive Plan or for 154,402 units awarded under the Stock Unit Plan for Directors.

(2)
Includes 127,774 shares available for issuance under the ESPP of which 60,413 shares are subject to purchase under the current purchase period.


Potential Payments upon Termination and Change in Control

The Board of Directors adopted a Change In Control Severance Pay Plan ("Severance Plan") in 1991, amended most recently in 2008, that covers our executive officers as well as our other key employees who are not

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executive officers. The Severance Plan provides severance payments and other benefits upon involuntary or voluntary termination of employment after a Change In Control.

Change In Control

A Change In Control will be deemed to have occurred if:

    1.
    A merger or consolidation of Empire with any other corporation is consummated, other than a merger or consolidation which would result in our voting securities held by such stockholders outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by converting into voting securities of the surviving entity) more than 75% of the voting securities of Empire or such surviving entity outstanding immediately after such merger or consolidation;

    2.
    A sale, exchange or other disposition of all or substantially all the assets of Empire for the securities of another entity, cash or other property is consummated;

    3.
    Empire stockholders approve a plan of liquidation or dissolution of Empire;

    4.
    Any person, other than a trustee or other fiduciary holding securities under an employee benefit plan of Empire or other than a corporation owned directly or indirectly by the stockholders of Empire in substantially the same proportions as their ownership of voting securities of Empire, is or becomes the beneficial owner, directly or indirectly, of voting securities of Empire representing at least 25% of the total voting power represented by such securities then outstanding; or

    5.
    Individuals who on January 1, 2001 constituted the Empire Board of Directors and any new director whose election by the Empire Board of Directors or nomination for election by Empire's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors on January 1, 2001 or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof.

Involuntary Termination

An involuntary termination is deemed to occur if (1) we terminate the employment of the executive officer or key employee within two years after a Change In Control other than for certain reasons (such as specified acts of willful misconduct, felony convictions or failure to perform duties) or (2) the executive officer or key employee terminates the employment within two years after a Change In Control and within 180 days after a material reduction or material change in responsibilities or authority, reassignment to another geographic location, or a reduction in base salary or incentive compensation or other benefits. Should an involuntary termination occur, an executive officer would be eligible under the Severance Plan for a payment equal to 36 months of compensation. This compensation is based on the executive officer's annual base salary in effect immediately prior to the date of termination plus the average of annual awards of incentive compensation made to the executive in the form of cash or restricted stock in the three calendar years immediately preceding the calendar year of the involuntary termination. Payments pursuant to an involuntary termination of employment are made in the form of a lump sum within 30 days following termination.

Voluntary Termination

A voluntary termination is deemed to occur if the executive officer or key employee elects to terminate his or her employment between the first anniversary date of a Change In Control and the date that is 18 months after the Change In Control. In the case of a voluntary termination, the executive officer or key employee would be eligible for the same compensation as if it were an involuntary termination, with payment made in the form of a lump sum within 30 days following termination. In the event such executive officer becomes re-employed, including certain forms of self-employment, within the 36 month period following a voluntary termination, the executive officer is required to repay a pro-rata portion of the lump sum received under the Severance Plan to the Company.

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Estimated lump-sum severance payments and other benefits payable to named executive officers in the event of a Change In Control based on involuntary termination are as follows:

Name
Severance
Benefit
($)
Annual
Incentive
Bonus(1)
($)
Restricted
Stock
($)
Benefits
Continuation
($)
Excise
Tax and
Related
Gross-Up
($)
Retirement
Enhancement
($)
Total
Change in
Control
Benefit
($)

B.P. Beecher

1,769,189 402,405 206,825 51,343 1,807,297 574,812 4,811,871

L.A. Delano

895,346 181,604 54,099 14,299 1,424,191 890,684 3,460,223

K.S. Walters

1,040,189 170,092 58,648 26,647 891,892 238,689 2,426,157

R.F. Gatz

947,702 142,750 52,923 14,299 937,204 392,055 2,486,933

M.E. Palmer

911,740 115,487 38,208 51,343 802,511 269,065 2,188,354

(1)
Represents cash incentive awards under the AIP that were earned by the NEO prior to the assumed involuntary termination date, but not paid.

The amounts in the above table assume that the Change In Control and the involuntary termination occurred on December 31, 2013, and the price of our common stock was the closing market price on December 31, 2013. In order to receive Change in Control benefit payments outlined above, an executive officer is not required to satisfy any additional condition or obligation.

Executive officers or key employees are eligible for continuation (under similar cost sharing arrangements as immediately prior to a Change In Control) of benefits and service credit for benefits they would have received had they remained an employee of Empire (in the case of involuntary termination of an executive officer, a period of 36 months or, in the case of a voluntary termination, for the period during which the executive officer is entitled to receive the other severance benefits). Benefits include medical, life and accidental death and dismemberment insurance. Executive officers or key employees accumulate additional age and service credits as a result of a Change In Control equal to the period corresponding to the multiple used to calculate the severance benefit (e.g., 36 months in the case of an executive officer). Such executive officers or key employees are eligible to receive an enhanced retirement benefit equal to the difference between the retirement benefit they would receive (including Retirement Plan and SERP benefits) had they not received additional age and service credits and the retirement benefit they would receive when such additional age and service credits are included.

All stock options granted become immediately exercisable in full and all time-vested restricted stock and performance-based restricted stock granted becomes immediately payable in full upon an involuntary or voluntary termination following a Change In Control. If any payments to qualifying individuals are subject to the excise tax on "excess parachute payments" under Section 4999 of the Internal Revenue Code, such qualifying individual(s) will receive an additional gross-up amount designed to place them in the same after-tax position as if the excise tax had not been imposed.

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Director Compensation

Our non-employee Directors received the following aggregate amounts of compensation during the year ended December 31, 2013.

Name
(a)
Fees
Earned or
Paid in
Cash
($)
(b)
Stock
Awards
($)(1)
(c)
Option
Awards
($)
(d)
Non-Equity
Incentive
Plan
Compensation
($)
(e)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
(f)
All Other
Compensation
($)(2)
(g)
Total
($)
(h)

K.R. Allen

65,000 55,000 0 0 0 18,749 138,749

W.L. Gipson

65,000 55,000 0 0 0 6,824 126,824

R.C. Hartley

74,500 55,000 0 0 0 33,765 163,265

D.R. Laney

176,500 55,000 0 0 0 13,215 244,715

B.C. Lind

72,500 55,000 0 0 0 12,624 140,124

B.T. Mueller

75,000 55,000 0 0 0 24,718 154,718

T.M. Ohlmacher(3)

72,500 55,000 0 0 0 6,847 134,347

P.R. Portney

72,500 55,000 0 0 0 7,565 135,065

H.J. Schmidt

67,000 55,000 0 0 0 7,995 129,995

C.J. Sullivan(4)

65,000 55,000 0 0 0 8,351 128,351

(1)
Represents the annual award accrued to each Director under the Stock Unit Plan for Directors.

(2)
Represents dividends paid on accrued stock units earned under the Stock Unit Plan for Directors and interest on fees accumulated quarterly for Mr. Ohlmacher and Mr. Sullivan.

(3)
Mr. Ohlmacher has elected to receive 100% of his Director compensation in Empire common stock under the 2006 Stock Incentive Plan effective November 1, 2013. Of the $72,500 listed in column (b), $12,083.33 was paid in the form of common stock. He receives prime rate interest on his earned fees until the shares of common stock are issued quarterly. He earned $49.50 in interest in 2013 which is included in column (g).

(4)
Mr. Sullivan has elected to receive 100% of his Director compensation in Empire common stock under the 2006 Stock Incentive Plan. The entire amount of $65,000 listed in column (b) was paid in the form of common stock. He receives prime rate interest on his earned fees until the shares of common stock are issued quarterly. He earned $356 in interest in 2013 which is included in column (g).

An analysis of the fees and retainers earned by the non-employee Directors in 2013 is provided in the following table:

Name
(a)
Annual
Retainer
($)(b)
Chairman
and Committee
Chair Fees
($)
(c)
Director
Training
Fees
($)
(d)
Annual Award
of Stock Units
($)
(e)
All Other
Compensation
($)
(f)
Total
($)
(g)

K.R. Allen

65,000 0 0 55,000 18,749 138,749

W.L. Gipson

65,000 0 0 55,000 6,824 126,824

R.C. Hartley

65,000 7,500 2,000 55,000 33,765 163,265

D.R. Laney

65,000 107,500 4,000 55,000 13,215 244,715

B.C. Lind

65,000 7,500 0 55,000 12,624 140,124

B.T. Mueller

65,000 10,000 0 55,000 24,718 154,718

T.M. Ohlmacher

65,000 7,500 0 55,000 6,847 134,347

P.R. Portney

65,000 7,500 0 55,000 7,565 135,065

H.J. Schmidt

65,000 0 2,000 55,000 7,995 129,995

C.J. Sullivan

65,000 0 0 55,000 8,351 128,351

Narrative to Director Compensation Table

For 2013, each Director who was not an officer or full-time employee of Empire was paid a monthly retainer for his or her services as a Director at a rate of $65,000 per annum. The Chairman of each Committee received an additional annual retainer of $7,500 ($10,000 for the Chairman of the Audit Committee). The Chairman of the Board received an additional annual retainer of $100,000. One-twelfth of the annual retainers for the Directors, the Committee Chairman, and the Chairman of the Board are paid each month that the Director serves in that position. In addition, each non-employee Director is paid a $1,000 per day fee in the event an individual Committee or the Board meets more than 10 times per year and a $1,000 per day stipend for outside training.

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Our 2006 Stock Incentive Plan permits (and our 2015 Stock Incentive Plan, if approved, will permit) our Directors to receive shares of common stock in lieu of all or a portion of any cash payment for services rendered as a Director. In addition, a Director may defer all or part of any compensation payable for his or her services under the terms of our Deferred Compensation Plan for Directors. Amounts so deferred are credited to an account for the benefit of the Director and accrue an interest equivalent at a rate equal to the prime rate. A Director is entitled to receive all amounts deferred in a number of annual installments following retirement, as elected by him or her.

In addition to the cash retainer and fees for non-employee Directors, we maintain a Stock Unit Plan for non-employee Directors, which we refer to as the Stock Unit Plan, to provide Directors the opportunity to accumulate compensation in the form of common stock units. When implemented in 1998, the Stock Unit Plan provided Directors the opportunity to convert cash retirement benefits earned under our prior cash retirement plan for Directors into common stock units. All eligible Directors who had benefits under the prior cash retirement plan converted their cash retirement benefits to common stock units. Each common stock unit earns dividends in the form of common stock units and can be redeemed for one share of common stock upon retirement or death of the Director, or on a date elected in advance by the Director with respect to awards made on or after January 1, 2006. The number of units granted annually is calculated by dividing the annual contribution rate, which is either the annual retainer fee or such other amount as is established by the Compensation Committee of the Board of Directors, by the fair-market value of our common stock on January 1 of the year the units are granted. The annual contribution rate for 2013 was $55,000. Common stock unit dividends are computed based on the fair market value of our common stock on the dividend's record date. During 2013, 22,908 units were converted to common stock by retired and current Directors, 27,255 units were granted for services provided in 2013 (based on an annual contribution rate of $55,000), and 6,998 units were granted pursuant to the provisions of the plan providing for the reinvestment of dividends on stock units in additional stock units.

In accordance with Empire's Corporate Governance Guidelines, Empire encourages Directors to attend education programs relating to the responsibilities of directors of public companies. The expenses for the Directors to attend these courses are paid by Empire. Empire reimburses Directors for expenses incurred in connection with their position as a Director including the reimbursement of expenses for transportation. Empire maintains $250,000 of business travel accident insurance for non-employee Directors while traveling on Empire business.


5. TRANSACTIONS WITH RELATED PERSONS

Transactions with Related Persons

There were no reportable transactions with related persons during 2013.


Review, Approval or Ratification of Transactions with Related Persons

Our Nominating/Corporate Governance Committee has adopted a written Policy and Procedures with Respect to Related Person Transactions (the "Policy"). The Policy is available on our website at www.empiredistrict.com . The Policy provides that any proposed Related Person Transaction be submitted to the Nominating/Corporate Governance Committee for consideration. In determining whether or not to approve the transaction, the Policy provides that the Committee shall consider all of the relevant facts and circumstances available to the Committee, including (if applicable) but not limited to: the benefits to us; the impact on a Director's independence; the availability of other sources for comparable products or services; the terms of the transaction; and the terms available to unrelated third parties or to employees generally. The Policy provides that the Committee will approve only those Related Person Transactions that are in, or are not inconsistent with, the best interests of Empire and its stockholders, as the Committee determines in good faith.

For purposes of the Policy, a "Related Person Transaction" is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which Empire (including any of its subsidiaries) was, is or will be a participant and the amount involved exceeds $25,000, and in which any Related Person had, has or will have a direct or indirect material interest.

For purposes of the Policy, a "Related Person" means:

    1.
    any person who is, or at any time since the beginning of our last fiscal year was, a Director or executive officer or a nominee to become a Director of Empire;

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    2.
    any person who is known to be the beneficial owner of more than 5% of any class of our voting securities; and

    3.
    any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Director, executive officer, nominee or more than 5% beneficial owner, and any person (other than a tenant or employee) sharing the household of such Director, executive officer, nominee or more than 5% beneficial owner.

The policy specifically provides that transactions involving the rendering of services by us (in our capacity as a public utility) to a Related Person at rates or charges fixed in conformity with law or governmental authority will not be considered Related Person Transactions.


6. OTHER MATTERS

Audit Committee Report

The Audit Committee reviews Empire's financial reporting process on behalf of the Board of Directors. In fulfilling its responsibilities, the Committee has reviewed and discussed the audited financial statements to be included in the 2013 Annual Report on Form 10-K with Empire's management and the Independent Registered Public Accounting Firm ("Independent Auditors"). Management is responsible for the financial statements and the reporting process, as well as maintaining effective internal control over financial reporting and assessing such effectiveness. The Independent Auditors are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, as well as expressing an opinion on whether Empire maintained effective internal control over financial reporting.

The Audit Committee has discussed with the Independent Auditors the matters required to be discussed by the statement on Auditing Standards No. 16, as amended (AICPA, Professional Standards, Vol. 1. AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. In addition, the Audit Committee has received the written disclosures and the letter from the Independent Auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the Independent Auditors' communications with the Audit Committee concerning independence, and has discussed with the Independent Auditors, the auditor's independence. The Audit Committee has considered whether the services provided by the Independent Auditors in 2013, described in this proxy statement, are compatible with maintaining the auditor's independence and has concluded that the auditor's independence has not been impaired by its engagement to perform these services.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in Empire's Annual Report on Form 10-K for the year ended December 31, 2013, for filing with the Securities and Exchange Commission.

B. Thomas Mueller, Chairman
Kenneth R. Allen
Ross C. Hartley
Bonnie C. Lind


Fees Billed by Our Independent Registered Public Accounting Firm During Each of the Fiscal Years Ended December 31, 2013 and December 31, 2012

Representatives of PricewaterhouseCoopers LLP are expected to be present at the meeting for the purpose of answering questions which any stockholder may wish to ask, and such representatives will have an opportunity to make a statement at the meeting.

Audit Fees

The aggregate fees billed by our Independent Auditors for professional services rendered in connection with the audit of our financial statements included in our Annual Report on Form 10-K, the audit of our internal control over financial reporting, the review of our interim financial statements included in our Quarterly Reports on Form 10-Q, as well as services provided in connection with certain of our equity and debt offerings, totaled $753,000 for the year ended December 31, 2013, as compared to $929,275 for the year ended December 31, 2012.

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Audit-Related Fees

The aggregate fees billed by our Independent Auditors for audit-related services during the years ended December 31, 2013 and 2012 totaled $23,500 and $690,000, respectively, related to services provided by PwC in connection with accounting consultations in 2013 and 2012 and a planned information system implementation in 2012.

Tax Fees

There were no fees billed by our Independent Auditors for tax services during each of the years ended December 31, 2013 and 2012.

All Other Fees

No other fees were billed by our Independent Auditors during the years ended December 31, 2013 and 2012.

Audit Committee Pre-Approval Policies and Procedures

All auditing services and non-audit services provided to us by our Independent Auditors must be pre-approved by the Audit Committee (other than the de minimis exceptions provided by the Exchange Act). All of the Audit, Audit-Related, Tax Fees and All Other Fees shown above for 2013 and 2012 satisfied these Audit Committee procedures.


Communications with the Board of Directors

The Board of Directors provides a process for interested parties (including security holders) to send communications to the Board, including those communications intended for non-management or independent Directors. These procedures may be found on our website at www.empiredistrict.com .


Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our Directors and executive officers to file reports of changes in ownership of our equity securities with the SEC and the NYSE. SEC regulations require that Directors and executive officers furnish to us copies of all Section 16(a) forms they file. To our knowledge, based solely on review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended December 31, 2013, all our executive officers and Directors complied with applicable Section 16(a) filing requirements.


Other Business

At the date of this proxy statement, the Board of Directors has no knowledge of any business other than that described herein which will be presented for consideration at the meeting. In the event any other business is presented at the meeting, the persons named in the enclosed proxy will vote such proxy thereon in accordance with their judgment in the best interests of Empire and its stockholders.


7. STOCKHOLDER PROPOSALS FOR 2015 ANNUAL MEETING

The 2015 Annual Meeting is tentatively scheduled to be held on April 30, 2015. Specific proposals of stockholders intended to be presented at that meeting (1) must comply with the requirements of the Exchange Act and the rules and regulations promulgated thereunder and our Articles of Incorporation, and (2) if intended to be included in our proxy materials for the 2015 Annual Meeting, must be received at Empire's principal office not later than November 19, 2014. If the date of the 2015 Annual Meeting is changed by more than 30 days from April 30, 2015, stockholders will be advised of such change and of the new date for submission of proposals. If a stockholder intends to submit a proposal that is not to be included in our proxy materials for the 2015 Annual Meeting, the stockholder must give us notice of not less than 35 days and no more than 50 days before the date of the 2015 Annual Meeting in accordance with the requirements set forth in our Articles of Incorporation.


8. HOUSEHOLDING

Pursuant to the SEC rules regarding delivery of proxy statements, annual reports or Notice of Internet availability of proxy materials to stockholders sharing the same address, we may deliver a single proxy statement,

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annual report or Notice of Internet availability of proxy materials to an address shared by two or more of our stockholders. This delivery method is referred to as "householding" and can result in significant cost savings for us. In order to take advantage of this opportunity, we may have delivered only one proxy statement, annual report or Notice of Internet availability of proxy materials to multiple stockholders who share an address, unless we received contrary instructions from the impacted stockholders prior to the mailing date. We undertake to deliver promptly, upon written or oral request, a separate copy of the proxy statement, annual report or Notice of Internet availability of proxy materials, as requested, to any stockholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of a proxy statement, annual report or Notice of Internet availability of proxy materials, either now or in the future, send your request in writing to us at the following address: Investor Relations Department, The Empire District Electric Company, 602 S. Joplin Avenue, Joplin, Missouri 64801.

If you are currently a stockholder sharing an address with another stockholder and wish to have your future proxy statements and annual reports householded (i.e., receive only one copy of each document for your household), please contact us at the above address.


9. ELECTRONIC PROXY VOTING

Registered stockholders can vote their shares via (1) a toll-free telephone call from the U.S. or Canada; (2) the Internet; or (3) by mailing their signed proxy card. The telephone and Internet voting procedures are designed to authenticate stockholders' identities, to allow stockholders to vote their shares and to confirm that their instructions have been properly recorded. Specific instructions to be followed by any registered stockholder interested in voting via telephone or the Internet are set forth on the enclosed proxy card.


10. INTERNET AVAILABILITY OF PROXY MATERIALS

This year, we are once again pleased to be using the new U.S. Securities and Exchange Commission rule that allows companies to furnish their proxy materials over the Internet. As a result, we are mailing to many of our stockholders a notice about the Internet availability of the proxy materials instead of a paper copy of the proxy materials. All stockholders receiving the notice will have the ability to access the proxy materials over the Internet. They may also request to receive a paper copy of the proxy materials by mail. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found on the notice.

The proxy statement and 2013 Annual Report are available online at www.ematerials.com/ede. Please have the 11-digit control number and the last 4 digits of your Social Security Number or Tax Identification Number available in order to vote your proxy. The 11-digit control number is located in the box in the upper right hand corner on the front of the proxy card and the Important Notice Regarding the Availability of Proxy Materials.


11. DIRECTIONS TO THE ANNUAL MEETING

Directions to the Annual Meeting being held at the Holiday Inn, 3615 South Range Line, Joplin, Missouri, are as follows:

    To Joplin from the West: Take I-44 East to Exit 8. Turn left onto I-49 BUS N/S Range Line Road for about 0.4 miles. Turn right onto Hammons Boulevard. The Holiday Inn will be on the right.

    To Joplin from the North: From MO-171, turn South onto S. Madison Street. Travel 1.2 miles. Continue on Range Line Road for 5 miles. Turn left onto Hammons Boulevard, just before the I-44 intersection. The Holiday Inn will be on the right.

    To Joplin from the East: Take I-44 West to Exit 8. Make right onto I-49 BUS N/S Range Line Road and turn right onto Hammons Boulevard. The Holiday Inn will be on the right.

Dated: March 19, 2014



It is important that proxies be returned promptly. Therefore, stockholders are urged to either vote the proxy through the Internet or by telephone or sign, date and return the proxy in the envelope provided, to which no postage need be affixed if mailed in the united states. A stockholder who plans to attend the meeting in person may withdraw the proxy and vote at the meeting.

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APPENDIX A

THE EMPIRE DISTRICT ELECTRIC COMPANY

AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN

Section 1. Purpose of the Plan

The Empire District Electric Company Employee Stock Purchase Plan (the "Plan") is intended and devised to provide a suitable means by which eligible employees ("Employees") of The Empire District Electric Company (the "Company") and any approved controlled corporations ("Subsidiary Companies") may accumulate, through voluntary, systematic payroll deductions (and interest thereon as and to the extent provided for herein), amounts regularly credited to their Stock Purchase Accounts and once every twelve (12) months have such credited amounts applied to the purchase of newly issued shares of the Common Stock of the Company (the "Stock") pursuant to the offerings which the Company is hereby making. The Plan, therefore, provides Employees with opportunities to acquire proprietary interests in the Company, and it will also provide them with additional incentives to continue their employment and promote the best interests of the Company.


Section 2. Effective Date and Term of the Plan

The Plan was adopted by the Board of Directors of the Company on October 24, 1969, and the Plan became effective June 1, 1970.The Plan will continue in effect until terminated by the Company in accordance with Section 25 of the Plan.


Section 3. Number of Shares Reserved Under the Plan

Two million, four hundred twelve thousand, one hundred seventy-five (2,412,175) is the maximum number of shares of the Stock which may be issued and sold under the Plan.


Section 4. Eligible Employees

All regular full-time employees (including officers), and all employees whose customary employment is for more than five months in any calendar Year or 20 hours per week, of the Company or a Subsidiary Company are eligible to participate in the Plan.


Section 5. Entry Into, and Participation in, the Plan

An Employee may enter into the Plan only as of the beginning of a Purchase Period. If an individual becomes an Employee after the commencement of a Purchase Period, he may not enter into the Plan until the beginning of the next Purchase Period. A copy of the Plan will be furnished to each Employee prior to the Date of Grant of the first Purchase Period during which he is eligible to participate. To enter into the Plan an Employee must give notice as provided for in Section 8 of the Plan to the Human Resources Department of the Company or such other person as designated by the Company, on a form which the Company shall furnish to him, a contingent subscription for Stock and authorization for payroll deductions to effect the purchase of Stock (hereinafter called a "Participation Election"). In his Participation Election an Employee must:

    (i)  authorize payroll deductions in a full dollar amount within the limits prescribed in Sections 8 and 9 of the Plan and specify the number of dollars per pay period to be deducted regularly from his compensation,

    (ii)  elect and authorize the purchase in each Purchase Period of shares of Stock by him on the Exercise Date specified in Section 7 which falls at or near the close of each Purchase Period, not to exceed the number of shares purchasable at a price equal to 90% of the closing price of the Stock on the New York Stock Exchange on the Date of Grant of the Purchase Period with the aggregate amount of payroll deductions authorized for the Purchase Period and interest thereon, and

    (iii)  furnish the exact name or names and address or addresses in which shares of Stock purchased by him through the Plan are to be issued, and

    (iv)  agree to notify the Human Resources Department of the Company if he should dispose of Stock purchased through the Plan.

Shares of Stock purchased under the Plan may be issued in the Employee's name or, if so designated by the Employee, jointly in his name and the name of another person, with right of survivorship.

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Participation in the Plan is entirely voluntary, and a participating Employee may withdraw from participation as provided in Section 16 of the Plan during any Purchase Period at any time prior to the Exercise Date of such Purchase Period.

Nothing in the Plan shall confer upon any Employee any right to continue in employment or interfere in any way with the right of the Company or any other Employer-corporation to terminate his employment at any time.


Section 6. Purchase Periods and Offerings

A twelve-month period shall be a Purchase Period, during which installment payments shall be made through payroll deductions, commencing with the beginning date of each June 1 (hereinafter called the "Date of Grant") and extending through the ending date of May 31 (hereinafter called the "Closing Date"):

If any Date of Grant shall become a holiday or half-holiday in the State of New York, the next succeeding day which is not such a holiday or half-holiday shall be the Date of Grant. Each Purchase Period shall include all pay periods ending within it. During each Purchase Period participating Employees are to accumulate credits through payroll deductions to be made at the close of each pay period for the purchase of shares of Stock under the Plan. Any interest to which an Employee may be entitled under the Plan for participation during a Purchase Period will be credited on the Exercise Date (specified in Section 7 of the Plan) for the Purchase Period or, in the event his employment shall terminate prior to the Exercise Date, on the date of the termination of his employment. With respect to each Purchase Period the Company is hereby making a separate offer to sell (or granting a separate option to buy) to participating Employees the number of shares (subject to the provisions of Sections 3, 5, 11 and 12 of the Plan) which shall be purchasable through the application of amounts credited to such Employee's Stock Purchase Accounts at the purchase price per share determined on the Exercise Date which falls within the Purchase Period (such number of shares to be subject to reduction in the event of a pro rata apportionment provided for in Section 22).


Section 7. Purchase Price and Exercise Date

In each Purchase Period there shall be a date called the "Exercise Date", which shall be the closing date of the Purchase Period. If any Closing Date is or shall become a holiday or half-holiday in the State of New York, the day next preceding such date which is not such a holiday or half-holiday shall be the Exercise Date.

The purchase price per share of Stock to be purchased pursuant to any of the offerings herein provided for shall be not less than $1 the present par value per share of the Stock, or not less than any future par value thereof. Subject to such minimum price and the provisions of Section 12 of the Plan the purchase price per share of Stock to be purchased on an Exercise Date through the application of amounts credited during the Purchase Period in which falls the Exercise Date to the Stock Purchase Accounts of participating Employees shall be the lesser of

    (A)  an amount equal to 90% of the fair market value of the Stock at the time such option is granted or

    (B)  an amount which under the terms of the option may not be less than 90% of the fair market value of the Stock at the time such option is exercised.

The fair market value of the Stock at the time specified in clause (A) above shall be determined by using the closing price of the Stock on the New York Stock Exchange on the Date of Grant; and the fair market value of the Stock at the time specified in clause (B) above shall be determined by using the closing price of the Stock on the New York Stock Exchange on the Date of Exercise.

Any Date of Grant or Exercise Date is subject to change for a holiday or half-holiday as provided in Section 6 and this Section 7 and for the unavailability of a closing price on the New York Stock Exchange as provided in Section 11.


Section 8. Payroll Deductions—Authorization and Amount

Employees shall deliver (or cause to be delivered) to the Human Resources Department of the Company their Participation Elections within seven days following the Date of Grant of the first Purchase Period during which they wish to participate in the Plan.

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The full dollar amounts which Employees shall authorize in their Participation Elections may not be less than 2% nor in excess of 20% of their base pay determined as of the date by which their Participation Elections must be received (subject to the limitations of Section 9 of the Plan).

The base pay of an Employee shall mean the gross amount of his pay determined on the basis of his regular, straight-time hourly, weekly or monthly rate for the number of hours normally worked exclusive of overtime, shift premiums or other compensation; provided, however, that in the case of an Employee whose compensation consists of salary, sales commissions and sales bonuses, his base pay shall also include his average sales commissions and sales bonuses received during the twelve-month period ended one month prior to the Date of Grant of each Purchase Period during which he participates in the Plan.

By delivering at least ten days prior to the close of a pay period to the Human Resources Department of the Company a Revision of Authorization, a participating Employee may change, subject to the limitations of this Section 8 and Section 9 of the Plan, once during a Purchase Period the amount to be deducted from his pay during the next and following pay periods in such Purchase Period.

A participating Employee's authorization for payroll deductions will remain in effect for the duration of the Purchase Period unless suspended pursuant to the provisions of Section 11 or 15 of the Plan, unless his election to purchase Stock shall have been terminated pursuant to the provisions of Section 13 of the Plan, unless the amount of the deduction is changed as provided in this Section 8 of the Plan or unless the Employee withdraws or is considered to have withdrawn from the Plan under Sections 15, 16 or 17 thereof.

All amounts credited to the Stock Purchase Accounts of participating Employees shall be held in the general funds of the Company but shall be used from time to time in accordance with the provisions of the Plan.