NOTICE OF MEETING OF HOLDERS OF 6.15% Convertible Debentures due September 30, 2017, 7.5% Convertible Debentures due January 31, 2019 and 7.5% Convertible Debentures due April 11, 2019 and NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS of NORTH AMERICAN PALLADIUM LTD. each to be held on July 30, 2015 MANAGEMENT PROXY CIRCULAR with respect to a proposed PLAN OF ARRANGEMENT (INCLUDING A RIGHTS OFFERING) June 30, 2015 These materials are important and require your immediate attention. They require you to make important decisions. If you are in doubt as to how to make such decisions, please contact your financial, legal or other professional advisors. No securities regulatory authority has in any way passed upon the merits of the transactions described in this management proxy circular or the accuracy or adequacy of this management proxy circular. Any representation to the contrary is a criminal offense. If you have any questions or require assistance voting your proxy, please contact D.F. King toll-free at 1-800-845-1507. (continued) The Rights Offering described in this management proxy circular is made by a Canadian issuer that is permitted, under a multijurisdictional disclosure system adopted by the United States and Canada, to prepare this management proxy circular in accordance with the disclosure requirements of Canada. Prospective purchasers of securities should be aware that such requirements are different from those of the United States. Financial statements and information included or incorporated by reference herein have been prepared in accordance with International Financial Reporting Standards and thus may not be comparable to financial statements of U.S. companies. Prospective purchasers of securities in the Rights Offering should be aware that the acquisition or disposition of such securities may have tax consequences in Canada, the United States or elsewhere. Such consequences for purchasers who are resident in, or citizens of, the United States may not be described fully herein. Prospective purchasers should consult their own tax advisors with respect to such tax considerations. The enforcement by investors of civil liabilities under the United States federal securities laws may be affected adversely by the fact that the Corporation is organized outside the United States, that some of its officers and directors may be residents of a country other than the United States, that some or all of the experts named in the Registration Statement (as defined below) may be residents of a country other than the United States, and that all or a substantial portion of the assets of the Corporation and said persons may be located outside the United States. These securities have not been recommended by, or approved or disapproved by the SEC or the securities regulatory authorities in any state of the United States nor has the SEC or the securities regulatory authorities in any state of the United States passed upon the accuracy or adequacy of this management proxy circular. Any representation to the contrary is a criminal offence. ( i ) HOW TO CAST YOUR VOTE IN SUPPORT OF THE ARRANGEMENT Time is running short. The Board believes that in light of the challenges posed by the Corporation’s existing capital structure, the Arrangement is the best alternative available to the Corporation and its securityholders. Failure to complete the Arrangement would likely negatively impact NAP’s share price, future business and operations. We recommend that you vote your proxy as soon as possible, and in any event, no later than 10:00 a.m. (Eastern Time) on July 28, 2015. VOTING METHOD BENEFICIAL (NON-REGISTERED) REGISTERED SECURITYHOLDERS SECURITYHOLDERS If your Common Shares are held in If your Common Shares are held with a your name and represented by a broker, bank or other intermediary physical certificate INTERNET Visit www.proxyvote.com and enter your 16 Please go to www.investorvote.com. digit control number located on the enclosed You will need the Control Number voting instruction form. located on your Form of Proxy to login and vote TELEPHONE Canada: Call 1-800-474-7493 Canada & US: US: Call 1-800-454-8683 Call 1-866-732-VOTE (8683) and provide your 16 digit control number International: Call 312-588-4290 located on the enclosed voting instruction and provide your 15 digit control form number located on the enclosed voting instruction form FACSIMILE Canada: Fax your voting instruction form toll N/A free to 905-507-7793 or toll free to 1-866-623- 5305 in order to ensure that your vote is received before the deadline. US: N/A MAIL N/A Please complete, sign and date the enclosed Form of Proxy and return it to Computershare Investor Services Inc., 100 University Avenue, 8th Floor, Toronto, ON M5J 2Y1 Attn: Proxy Department, in the envelope provided If you have any questions or require any assistance in executing your proxy, please call D.F. King Canada at: North American Toll Free Number: 1-866-822-1238 Outside North America, Banks, Brokers and Collect Calls: 1-201-806-7301 Email: [email protected] North American Toll Free Facsimile: 1-888-509-5907 Facsimile: 1-647-351-3176 ( ii ) TABLE OF CONTENTS NOTICE OF MEETING OF DEBENTUREHOLDERS ....................................................................................... 5 NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS .................................................. 7 CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS9 NOTE TO CANADIAN SECURITYHOLDERS ................................................................................................ 11 NOTE TO U.S. SECURITYHOLDERS ................................................................................................................ 12 DOCUMENTS INCORPORATED BY REFERENCE ........................................................................................ 13 CURRENCY AND FINANCIAL STATEMENT PRESENTATION ............................................................... 15 GLOSSARY OF TERMS ......................................................................................................................................... 16 SUMMARY ............................................................................................................................................................... 28 Share Capital ............................................................................................................................................................. 37 Debt ............................................................................................................................................................................ 37 GENERAL INFORMATION ................................................................................................................................. 43 General ....................................................................................................................................................................... 43 Meetings ..................................................................................................................................................................... 43 Solicitation of Proxies ............................................................................................................................................... 43 Notice-and-Access .................................................................................................................................................... 44 Entitlement to Vote and Attend .............................................................................................................................. 44 Revocation of Proxies ............................................................................................................................................... 45 Voting of Proxies ....................................................................................................................................................... 45 Non-Registered Holders .......................................................................................................................................... 45 Exercise of Discretion by Proxies ............................................................................................................................ 46 Quorum and Voting Requirements ........................................................................................................................ 47 Interest of Management and Others ...................................................................................................................... 48 BACKGROUND TO THE ARRANGEMENT ................................................................................................... 48 THE ARRANGEMENT .......................................................................................................................................... 50 Description of the Arrangement ............................................................................................................................. 50 Arrangement Agreement ......................................................................................................................................... 52 Court Approval and Completion of the Arrangement ........................................................................................ 52 Procedures for Share Consolidation......................................................................................................................