Table of Contents

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

Filed by the Registrant x

Filed by a Party other than the Registrant ¨

Check the appropriate box:

RESMED INC.

(Name of Registrant as Specified in its Charter)

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

Payment of Filing Fee (Check the appropriate box):

Table of Contents

Dear Stockholder:

We cordially invite you to attend the Annual Meeting of Stockholders of ResMed Inc. on Wednesday, November 18, 2009, at 10:00 a.m. Australian Eastern Time (Tuesday, November 17, 2009, at 3:00 p.m. US Pacific Time) in the corporate offices of ResMed Limited, located at 1 Elizabeth Macarthur Drive, Bella Vista NSW 2153.

The attached Notice of Meeting and Proxy Statement contain information about the business of the meeting, the nominees for election as directors and the other proposals. This year we ask you to elect three directors of the Company, approve amendments to the Amended and Restated ResMed Inc. 2006 Incentive Award Plan, approve amendments to the ResMed Inc. Employee Stock Purchase Plan, and ratify the selection of our independent auditors for fiscal year 2010.

Your vote is important. If you cannot attend the Annual Meeting in person, you may vote your shares by Internet, or, if this proxy statement was mailed to you, by completing and signing the accompanying proxy card and promptly returning it in the envelope provided.

Very truly yours,

Peter C. Farrell

Executive Chairman of the Board

Table of Contents

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

OF RESMED INC.

Tuesday, November 17, 2009, at 3:00 p.m. (US Pacific Time)

1 Elizabeth Macarthur Drive

Bella Vista NSW 2153.

At the 2009 Annual Meeting, stockholders will act on the following matters:

Please refer to the accompanying proxy statement for a more complete description of the matters to be considered at the Annual Meeting. In addition, stockholders are advised that there are special voting and other requirements under the Australian Securities Exchange Listing Rules relating to the approval of the Amendment to the Amended and Restated ResMed Inc. 2006 Incentive Award Plan. Please see “Matter To Be Acted On – Proposal 2: Approval of the Amendment to the Amended and Restated ResMed Inc. 2006 Incentive Award Plan.

Stockholders of record of our common stock at the close of business on September 21, 2009 (US), will be entitled to vote at the Annual Meeting and at any adjournments or postponements of the meeting.

Only individuals with proof of share ownership are entitled to be admitted to the Annual Meeting. If you are a stockholder of record, you will need to bring proof of share ownership with you to the Annual Meeting, together with photo identification. If your shares are not registered in your name, you must bring proof of share ownership (such as a recent bank or brokerage firm account statement, together with proper identification) in order to be admitted to the Annual Meeting.

It is important that your shares be represented and voted at the Annual Meeting whether or not you plan to attend the Annual Meeting in person. If you are viewing the proxy statement on the Internet, you may grant your proxy electronically via the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials previously mailed to you and the instructions listed on the Internet site. If you are receiving a paper copy of the proxy statement, you may vote by completing and mailing the proxy card enclosed with the proxy statement, or you may grant your proxy electronically via the Internet by following the instructions on the proxy card. Submitting your proxy, in any permitted form, will ensure your shares are represented at the Annual Meeting.

By order of the Board of Directors,

David Pendarvis

Secretary

Dated: October 8, 2009

Table of Contents

Table of Contents

Table of Contents

PROXY STATEMENT

GENERAL INFORMATION

The Board of Directors of ResMed Inc. (“ResMed,” “we,” “us,” or “our”) is providing this proxy statement in connection with our 2009 Annual Meeting of Stockholders to be held on Wednesday, November 18, 2009, at 10:00 a.m. Australian Eastern Time (Tuesday, November 17, 2009 at 3:00 p.m. US Pacific Time), in the corporate offices of ResMed Limited, located at 1 Elizabeth Macarthur Drive, Bella Vista NSW 2153, or at any continuation, postponement or adjournment of the Annual Meeting, for the purposes discussed in this proxy statement and in the accompanying Notice of Annual Meeting and any business properly brought before the Annual Meeting.

DELIVERY OF AND ACCESS TO PROXY MATERIALS

We expect to first make available this proxy statement and the Annual Report to our stockholders and our holders of CHESS Units of Foreign Securities (CUFS) on the internet, and to mail notice and access materials on or about October 8, 2009.

Under rules recently adopted by the U.S. Securities and Exchange Commission (SEC), we are furnishing proxy materials to our stockholders via the Internet, instead of mailing printed copies of proxy materials to each stockholder. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders of record, while brokers and other nominees who hold shares on behalf of beneficial owners will be sending their own similar Notice if your shares are listed on the NYSE. If you hold our CHESS units of Foreign Securities (CUFS) listed on the Australian Stock Exchange (ASX), you will receive your Notice of Internet Availability of Proxy Materials from Computershare. If you received the Notice by mail, you will not automatically receive a printed copy of the proxy materials in the mail. Instead, the Notice instructs you on how to access and review this proxy statement, our Annual Report, and proxy voting card. The Notice also instructs you on how you may submit your proxy via the Internet.

You can, however, still receive a hard copy of our proxy materials by following the instructions contained in the Notice on how you may request to receive your materials in printed form on a one-time or on-going basis. There will also be instructions on how you may request to receive your materials electronically on a permanent basis.

Stockholders are cordially invited to attend the Meeting in person. However, please vote by internet or by completing and signing a proxy card and returning it promptly in the postage paid envelope provided. If you choose, you may still vote in person at the Meeting even though you previously voted by submitting a proxy card or through the internet.

VOTING INSTRUCTIONS AND INFORMATION

Who can vote?

You are entitled to vote or direct the voting of your ResMed Inc. shares if you were a stockholder on September 21, 2009 (US Time), the record date for the Annual Meeting.

How do I vote?

Your vote is important. The shares represented by proxies (in the forms solicited by the Board of Directors) received by us before, or, if submitted in person, at the Annual Meeting, will be voted at the Annual Meeting. If a choice is specified on the proxy with respect to a matter to be voted on, the shares represented by the proxy will be voted in accordance with that specification. If no choice is specified, the shares represented by a properly executed proxy will be voted: (i) FOR each of the three nominees to our board listed in this proxy statement; (ii) FOR approval of the Amendment to the Amended and Restated ResMed Inc. 2006 Incentive Award Plan, which approval will also constitute approval under ASX Listing Rule 10.14 as described further below; (iii) FOR approval of the Amendment to the ResMed Inc. Employee Stock Purchase Plan, and (iv) FOR ratification of the selection of KPMG LLP as our independent auditors to examine our consolidated financial statements for the fiscal year ending June 30, 2010. You may vote by attending the Annual Meeting and voting in person or you may vote by submitting your proxy. We encourage you to vote promptly.

1

Table of Contents

Holders of Common Stock Listed on the New York Stock Exchange (NYSE)

You may vote by attending the Annual Meeting and voting in person or you may vote by submitting a proxy. The method of voting by proxy differs (1) depending on whether you are viewing this proxy statement on the Internet or receiving a paper copy, and (2) for shares held as a record holder and shares held in “street name.” If you hold your shares of common stock as a record holder and you are viewing this proxy statement on the Internet, you may vote by submitting a proxy over the Internet by following the instructions on the website referred to in the Notice previously mailed to you. If you hold your shares of common stock as a record holder and you are reviewing a paper copy of this proxy statement, you may vote your shares by completing, dating and signing the proxy card that was included with the proxy statement and promptly returning it in the preaddressed, postage paid envelope provided to you, or by submitting a proxy over the Internet by following the instructions on the proxy card.

If you hold your shares of common stock in street name, which means your shares are held of record by a broker, bank or nominee, you will receive a Notice from your broker, bank or other nominee that includes instructions on how to vote your shares. Your broker, bank or nominee will allow you to deliver your voting instructions over the Internet. In addition, you may request paper copies of the proxy statement and proxy card from your broker by following the instructions on the Notice provided by your broker. If your broker holds your common stock in street name and you have not provided your broker with voting instructions, your broker will vote your shares in its discretion on proposals considered “routine” under NYSE rules. The election of directors and ratification of auditor selection are both considered routine proposals. Approval of the Amendment to the Amended and Restated ResMed Inc. 2006 Incentive Award Plan and approval of the Amendment to the ResMed Inc. Employee Stock Purchase Plan are not considered routine proposals, and brokers do not have discretionary authority to vote on these proposals without your direction.

Internet voting closes at 11:59 p.m. (US Eastern Time) on November 16, 2009.

Holders of CHESS Units of Foreign Securities Listed on the ASX

If you hold our CHESS Units of Foreign Securities (CUFS), you will receive a Notice from Computershare, which will allow you to deliver your voting instructions over the Internet. In addition, you may request paper copies of the proxy statement and voting instruction from Computershare by following the instructions on the Notice provided by Computershare.

Voting By Attending the Annual Meeting

If you attend the Annual Meeting and wish to vote in person, you may vote your shares in person by requesting a ballot at the Annual Meeting. You will need to have proof of ownership and valid photo identification with you for admission to the Annual Meeting. Please note, however, that if your shares are held in “street name,” which means your shares are held of record by a broker, bank or other nominee, and you wish to vote at the Annual Meeting, you must bring to the Annual Meeting a legal proxy from the record holder of the shares, which is the broker or other nominee, authorizing you to vote at the Annual Meeting

Your vote is important. We encourage you to submit your proxy, or provide instructions to your brokerage firm, bank or the CHESS nominee, as applicable. This will ensure that your shares are voted at the Annual Meeting.

Solicitation of Proxies. The cost of soliciting proxies will be borne by us. After the original delivery of the Notice and other proxy soliciting material, further solicitation of proxies may be made by mail, telephone, facsimile, electronic mail, and personal interview by our regular employees, who will not receive additional compensation for such solicitation. We will also request that brokerage firms and other nominees or fiduciaries deliver the notice and proxy soliciting material to beneficial owners of the stock held in their names, and we will reimburse them for reasonable out-of-pocket expenses incurred in doing so. We have engaged Morrow & Co., LLC to act as a proxy solicitor to assist in the solicitation of proxies and provide related advice and informational support, and will pay approximately $15,000 in fees (plus reimbursement of expenses) for these services in US and Australia.

List of Stockholders. In accordance with Delaware law, a list of stockholders entitled to vote at the Annual Meeting will be available at the meeting at the corporate offices of ResMed Limited, 1 Elizabeth Macarthur Drive, Bella Vista NSW 2153, and for 10 days before the Annual Meeting at the corporate offices of ResMed Inc., located at 9001 Spectrum Center Blvd., San Diego, California, 92123 USA, between the hours of 9:00 a.m. and 4:00 p.m. local time.

2

Table of Contents

How many votes are required?

Only record holders of our common stock as of the close of business on September 21, 2009 (the record date), are entitled to receive notice of and to vote at the Annual Meeting. At the record date we had 75,295,707 outstanding shares of common stock (excluding treasury shares), the holders of which are entitled to one vote per share. Accordingly, an aggregate of 75,295,707 votes may be cast on each matter to be considered at the Annual Meeting.

To constitute a quorum to conduct business, a majority of the outstanding shares entitled to vote must be represented at the Annual Meeting. Shares represented by proxies that reflect abstentions or “broker non-votes” (street name shares held by a broker or nominee which are represented at the meeting, but with respect to which the broker or nominee is not empowered to vote on a particular proposal and has not been instructed to vote on the proposal by the beneficial owner of such shares) will be counted as shares represented at the Annual Meeting for purposes of determining a quorum.

For Proposal 1, directors will be elected by a plurality of the votes cast. Thus, the three nominees receiving the largest number of votes will be elected. As a result, abstentions will not be counted in determining which nominees received the largest number of votes cast. Brokers generally have discretionary authority to vote on the election of directors and thus we do not expect broker non-votes to result from the vote on election of directors. Any broker non-votes that may result will not affect the outcome of the election.

For Proposals 2 and 3, the approval of the Amendment to the Amended and Restated ResMed Inc. 2006 Incentive Award Plan (the 2006 Plan), and the approval of the Amendment to the ResMed Inc. Employee Stock Purchase Plan (the ESPP), the affirmative vote of a majority of shares cast in person or by proxy is required for each proposal, provided that the total votes cast on the proposal represent over 50% of the outstanding shares of common stock entitled to vote on the proposal. Votes “for” and “against” and abstentions count as votes cast, while broker non-votes do not count as votes cast. All outstanding shares, including broker non-votes, count as shares entitled to vote. Thus, the total sum of votes “for,” plus votes “against,” plus abstentions, which are referred to as the “NYSE Votes Cast,” must be greater than 50% of the total outstanding shares of our common stock. Once this requirement is met, the number of votes “for” the proposal must be greater than 50% of the NYSE Votes Cast. The approval of an equity plan is a matter on which brokers or other nominees are not empowered to vote without direction from the beneficial owner. Thus, broker non-votes can result from these proposals and make it difficult to satisfy the NYSE Votes Cast requirement. Abstentions have the effect of a vote against each proposal. There are special voting and other requirements under the ASX Listing Rules relating to the approval of the Amendment to the 2006 Plan. Please see “Matter To Be Acted On – Proposal 2: Approval of the Amendment to the 2006 Incentive Plan” for a description of these requirements.

For Proposal 4, the affirmative vote of a majority of the shares cast in person or by proxy is required for the ratification of the selection of KPMG LLP as our independent auditors. Abstentions will not affect the outcome of this proposal. Brokers generally have discretionary authority to vote on the ratification of our independent auditors, thus we do not expect broker non-votes to result from the vote on Proposal 4. Any broker non-votes that may result will not affect the outcome of this proposal.

How can I revoke my proxy or change my vote?

You may revoke your proxy and change your vote at any time before the proxy is exercised by any of the following methods:

Holders of Record

Stock Held by Brokers, Banks and Nominees and CUFS

3

Table of Contents

COMMON STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT

The following table shows the number of shares of our common stock that, according to information supplied to us, are beneficially owned as of the record date by: (1) each person who, to our knowledge based on Schedule 13G filed with the SEC and Substantial Stockholder Notices filed with the ASX, is the beneficial owner of more than five percent of our outstanding common stock; (2) each person who is currently a director, three of whom are also nominees for election as directors; (3) each of the named executive officers; and (4) all current directors and executive officers as a group. In this proxy statement, “beneficial ownership” means the sole or shared power to vote, or to direct the voting of, a security, or the sole or shared investment power with respect to a security (that is, the power to dispose of, or to direct the disposition of, a security). All of the following calculations are based on 75,295,707 shares of common stock outstanding (excluding treasury shares) on September 21, 2009, the record date.

4

Table of Contents

Executive Officers

As of the record date, September 21, 2009, our executive officers were:

Effective as of January 1, 2009, Lasse Beijer resigned from his position as our Chief Operating Officer – Europe. Mr. Beijer continues to be employed by us in a non-executive officer capacity, as Senior Advisor to the Chief Operating Officer – Europe. Our Current Report on Form 8-K filed on December 15, 2008 provides additional details regarding his resignation.

ROBERT DOUGLAS

Chief Operating Officer, Asia Pacific

Robert Douglas has been Chief Operating Officer Asia Pacific since July 2008. Prior to this Mr. Douglas was Chief Operating Officer, Sydney. From April 2001 to November 2005, Mr. Douglas was Vice President of Operations and responsible for ResMed’s Australian manufacturing, and was Vice President of Corporate Marketing. Before joining ResMed in 2001, and beginning in 1995, Mr. Douglas was the General Manager, Strategy and New Business for Keycorp Ltd., an Australian electronic commerce company providing services to major banks and telecommunications companies around the world. Before Keycorp, he held senior R & D and operational roles in Telectronics Pty Ltd., mainly working on the development of an implantable defibrillator. Mr. Douglas sits on the Board of Directors of Continence Control Systems International Pty Ltd, a private startup medical device company unrelated to ResMed. Mr. Douglas also sits on the Board of Directors of the Australian Science Media Centre (AusSMC) a nonprofit organization that facilitates media reporting of science. ResMed is a sponsor of AusSMC. Mr. Douglas has an M.B.A. from Macquarie University and a B.S. in Electrical Engineering and Computer Sciences from New South Wales University, Sydney.

STEIN JACOBSEN

Chief Operating Officer, Europe

Stein Jacobsen has served as ResMed’s Chief Operating Officer – Europe since January 1, 2009. He joined ResMed in 2005 as Chief Operating Officer – Nordics, after the company’s acquisition of PolarMed Holding AS, a Scandinavian medical equipment distributor that Mr. Jacobsen founded in 1993. Mr. Jacobsen served as COO – Nordics until July 2007, when he became Senior

5

Table of Contents

Vice President of ResMed’s Ventilation Strategic Business Unit. He continues to lead the Ventilation Strategic Business Unit in addition to his responsibilities as COO – Europe. With over 20 years’ experience in the respiratory business, Mr. Jacobsen has founded and directed eight successful medical equipment distributors in the Scandinavian respiratory market. Mr. Jacobsen holds the equivalent of a B.Sc. in Clinical Engineering from the University of Stavanger, Norway.

DAVID PENDARVIS

Sr. Vice President, Organizational Development and General Counsel

David Pendarvis has been Sr. Vice President, Organizational Development since February 2005. Mr. Pendarvis has been Global General Counsel since he joined ResMed in September 2002, and from February 2003, has been Corporate Secretary. From September 2000 until September 2002, Mr. Pendarvis was a partner in the law firm of Gray Cary Ware & Freidenrich LLP, where he specialized in intellectual property and general business litigation. Until September 2000 he was a partner with Gibson, Dunn & Crutcher LLP, where he began working in 1986. From 1984 until 1986 he was a law clerk to the Hon. J. Lawrence Irving, US District Judge, Southern District of California. Mr. Pendarvis holds a B.A. from Rice University; a J.D., cum laude, from the University of Texas School of Law; and a Masters of Science in Executive Leadership from the University of San Diego.

BRETT SANDERCOCK

Chief Financial Officer

Brett Sandercock has been Chief Financial Officer since January 1, 2006. From November 2004 until December 31, 2005, Mr. Sandercock was Vice President, Treasury and Finance. Before that, from 1998 to November 2004, Mr. Sandercock was Group Accountant and then Controller. From March 1996 to August 1998 he was Manager, Financial Accounting and Group Reporting at Norton Abrasives, a division of the French multi-national, Saint Gobain. Mr. Sandercock also held finance and accounting roles from November 1994 to March 1996 at Health Care of Australia, a large private hospital operator in Australia. From 1989 to 1994, Mr. Sandercock worked at PricewaterhouseCoopers in Sydney, specializing in audits of clients predominantly focused on distribution and manufacturing, financial services and technology. Mr. Sandercock holds a B.Ec. from Macquarie University and is a Certified Chartered Accountant.

For a description of the business background of Dr. Farrell and Mr. Gallahue, see “Matters to be Acted On/Election of Directors.”

6

Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis (CD&A)

Introduction

This Compensation Discussion and Analysis section discusses the compensation policies and programs for our named executive officers. During fiscal year 2009, our named executive officers were the Chief Executive Officer, our Chief Financial Officer and our three next most highly paid executive officers. This section also discusses the Compensation Committee’s role in the design and administration of these programs and policies and in making compensation decisions for our executive officers.

The Compensation Committee is a subcommittee of our Board of Directors. It decides matters regarding compensation of our executive officers. Compensation Committee members are independent directors who meet the standards for independence set by the US Securities and Exchange Commission, the New York Stock Exchange, and the Australian Securities Exchange. The Committee operates under a written charter adopted by our Board of Directors. We have posted a copy of the charter of the Compensation Committee on our Website, at www.resmed.com. During fiscal year 2009, Donagh McCarthy, Gary Pace, Richard Sulpizio and Ronald Taylor served as members of the Compensation Committee. Mr. Taylor served as Chair of the Compensation Committee during the entire fiscal year. Mr. McCarthy resigned from the board effective November 20, 2008, and as a result did not serve as a member of the Compensation Committee after that date.

General Philosophy and Objectives

We desire to attract, motivate and retain high quality employees who will enable us to achieve our short- and long-term strategic goals and values. We participate in a high-growth environment where substantial competition exists for skilled employees. Our ability to attract, motivate and retain high caliber individuals depends in large part on the compensation packages we offer.

We believe that our executive compensation programs should reflect our financial and operating performance. In addition, individual contribution to our success should be supported and rewarded. The objectives of our compensation programs are to:

Each element of our compensation program is designed to satisfy one or more of these compensation objectives and each element is an integral part of and supports our overall compensation objectives. Our executive compensation program primarily consists of:

The Compensation Committee considers each of these components individually, considers total cash compensation (salary plus on-target bonus amounts), and considers total direct remuneration (total cash compensation plus equity compensation) as a whole in making its decisions. During fiscal year 2009, the Committee determined that total cash compensation (assuming on target cash bonus) for its executive officers should be targeted between the 60th and 70th percentile; and that total cash compensation should be adjusted so that executives have comparatively modest salaries and a higher percentage of pay at risk in the form of annual cash incentive compensation. For fiscal year 2010, the Committee is reviewing the use of restricted stock units in order to provide a mix of awards that increases the capability of the Compensation Committee to manage more effectively our use of shares under our stock option plan, balance the leverage and risk provided by various equity vehicles, more closely conform with practices at our peer companies, and provide more tax-effective equity awards (particularly for our Australian-based executives).

7

Table of Contents

We are committed to a philosophy of total pay (the sum of cash compensation, equity compensation and benefits programs) being competitive within relevant markets when our performance meets target performance criteria set forth in our bonus programs. Total pay will typically lag the market when our performance is below the target performance criteria set forth in the bonus programs and may significantly exceed competitive levels when our performance is above the target performance criteria set forth in the bonus program.

Compensation Process

The Compensation Committee reviews and approves salaries, bonuses, equity-based compensation, and all other elements of the compensation packages offered to our executive officers, including the named executive officers, and establishes our general compensation policies.

In making its decisions, the Committee reviews data obtained from peer group companies and considers the recommendations of management and the advice of its independent compensation consultants regarding each element of compensation. Since fiscal 2007, the Compensation Committee has retained Frederic W. Cook & Co., Inc., an independent compensation consultant, to advise the Committee with respect to executive compensation matters for US executive officers. During fiscal 2009 the Committee also engaged the services of Hewitt Associates to advise regarding the compensation paid in Australia to the positions of Chief Financial Officer and Chief Operating Officer. The Committee reviewed the market practices and benchmarking data from the consultants and considered the Company’s and the executive relative performance and the recommendations of the consultants when setting compensation. The Committee also considered the experience and knowledge of committee members regarding compensation practices for comparable positions. Although the Committee considers various sources of information and recommendations, ultimately, of course, the Committee relies on its own independent judgment.

Our Chief Executive Officer, our Executive Chairman, our Sr. Vice President – Organizational Development, and other members of management provide input and recommendations to the Committee for their review and approval. In particular, all three officers make recommendations regarding the compensation to be paid to the other members of management. While the Compensation Committee gives consideration to these recommendations, it exercises independent judgments. Management provides to the compensation consultants and to the Committee historical and prospective breakdowns of total compensation components for each executive officer. Management also provides recommendations that include financial goals and criteria for our annual and long-term incentive plans. Management gathers the information it provides from consultants, the market and internal resources, allowing designs and strategies to be tied directly to our business needs. While management typically attends Compensation Committee meetings, the Committee Chairman excuses individual management members when deemed necessary for independent review or decision-making.

2009 In Review

During fiscal year 2009, the philosophy and objectives of the Compensation Committee relating to performance-based pay were reflected in overall executive compensation. At the outset of the year, the Committee increased the bonus amounts payable, as expressed as a percentage of salary, for named executive officers, reflecting a desire to base more of their compensation on performance and put more at risk, with a goal of paying above peer comparables if we achieved our targets. The Compensation Committee increased the bonus payable at target to 120% (from 100%) of salary for the CEO and the Executive Chairmen and to 70% of salary (from 65%) for the other executive officers.

During fiscal 2009, we exceeded our performance targets, despite challenging overall economic conditions. Bonus payments to our executive officers and other executive officers reflected this over-performance and were paid at amounts ranging from 111% to 126% of target bonus opportunity. Bonus payments exceeded target payments, were higher than lower-performing peer companies, and resulted in above median total cash compensation when compared to our peers. In contrast, although ResMed’s stock price on the NYSE increased during the year (up 14% from June 30, 2008 through June 30, 2009), our stock price declined when measured on a 2- and 3- year basis (down 1% and down 13%, respectively). Thus, despite some short-term gains, at the end of the fiscal year our named executive officers had significant portions of their stock option portfolios out-of-the-money, aligning them with long-term shareholders. Together, this situation reflected our balanced pay-for-performance model where short-term cash incentives can be earned for goal achievement while there is no compensation delivered under the long-term plan because the stock price did not increase.

8

Table of Contents

Equity Ownership Guidelines for Officers and Directors

We believe that our officers and directors should be stockholders and have a financial stake in us, and we encourage them to own shares of our stock. In addition, our officers who are not board members are eligible (on the same basis as all other employees) to participate in our Employee Stock Purchase Plan, which provides them with the opportunity to purchase our stock at a discount through payroll deductions. Nevertheless, the number of shares of our stock any officer or director owns is a personal decision and, at this time, the board has chosen not to adopt a policy requiring ownership by officers or directors of a minimum number of shares.

Perquisites and Other Benefits

We provide certain of our named executive officers with perquisites and other personal benefits that the Compensation Committee believes are reasonable and consistent with our overall compensation programs and philosophy. These benefits are intended to be part of a competitive overall compensation program that will enable us to attract and retain these executives. These benefits are also intended to provide job satisfaction and enhance productivity, address healthcare needs, and provide stability of benefits. They are not tied to any formal individual or company performance criteria. The type and amount of these benefits is reviewed annually by our Compensation Committee. In reviewing these benefits, the Committee considers information from its independent compensation consultant on an annual basis regarding the prevalence and aggregate costs of benefits and perquisites at our peer companies.

Timing of Decisions

Generally, our executive officers’ compensation is adjusted each year effective as of October 1, the beginning of our second fiscal quarter. Accordingly, the Compensation Committee generally makes decisions on the principal components of executive officer compensation – base salary, bonus potential, stock options, and perquisites – during the first or second quarter. Specific performance bonus targets for executive officers are generally determined before or during the first month of the fiscal year for that year. Determination of actual performance versus targets and calculation of bonus payouts generally occur in the first two months following the end of our fiscal year. Bonus payments to our officers are made after the fiscal year-end audit is complete. If other executive compensation issues arise during the course of the year, the Compensation Committee takes those issues up on a case by case basis. Determinations regarding promotions are made contemporaneous with the promotions.

Peer Group Comparisons

In making its decisions on executive compensation, the Compensation Committee generally uses industry compensation surveys prepared by outside consultants. In August 2008, Frederic W. Cook & Co. Inc., the Committee’s independent compensation consultants, performed an executive compensation review based on current U.S. market compensation data from a peer group of 19 publicly traded medical device and medical technology companies. The companies comprising the peer group for the fiscal year 2009 review of executive compensation were:

The Compensation Committee believes that this peer group reflected a reasonable cross-section of our labor market for talent and included companies that our investors might consider in trying to determine the reasonableness of our pay and alignment of our pay with our performance. The Compensation Committee periodically reviews the composition of the peer group and the criteria

9

Table of Contents

and data used in compiling the list and considers modifications to the group. We select peer companies primarily on the basis of their being medical device or medical technology companies with a market capitalization, stockholder return, profitability, revenue and employee population roughly comparable to ours. In approving this peer group for fiscal year 2009, the Committee approved replacing two companies, Cytyc and Ventana, with Advanced Medical Optics and STERIS Corporation, as these companies appeared to be better aligned with the peer group.

The Compensation Committee also considered compensation survey data prepared by Hewitt Associates in August 2008. This report provided remuneration data for our Chief Financial Officer and our Chief Operating Officer-Sydney. In its analysis, Hewitt Associates compared these roles to approximately sixty large size Australian-based companies with annual revenues ranging from 500 million to 1 billion dollars, staff ranging from 10,001 to 25,000 employees and assets ranging from 2.5 billion to 10 billion in value.

The Committee determined that there was not an adequate comparable for Dr. Farrell’s position. As a founder and former Chief Executive Officer, it is not possible to develop meaningful market benchmarks; therefore, compensation is tailored to his role and time commitment.

Components of Compensation for 2009

Base Salary

Base salaries provide our executives with a degree of financial certainty and stability by guaranteeing a minimum amount of compensation for the role. In order to attract and retain highly qualified executives, we pay within salary ranges that are generally based on similar positions in companies of comparable size and complexity to us. The Compensation Committee begins its analysis by assessing each element of compensation (base salary, cash bonus and equity incentives) against peer company comparables. The peer group is comprised of companies in specific industry sectors that relate to our business. They are matched based on market capitalization, number of employees, net profit and numerous other factors to validate that the data is relevant in comparison to our executive positions. Using the peer group data, the Committee assesses base salaries at the 50^th and the 60^th percentiles with the goal of positioning base salary around the 60^th percentile. Adjustments are made based on the final Committee assessment.

Salary adjustments are generally made annually in October, at the start of the second quarter of our fiscal year. In fiscal year 2009, the Committee approved the following base salaries based on competitive information provided by the consultants. The Committee authorized various percentage increases in order to bring each individual position closer to the median salary of like positions within the peer group. For Mr. Sandercock and Mr. Douglas, the amounts represent the US dollar equivalent of their Australian dollar-denominated salaries, based on exchange rates at the time of the approval and compared to region-specific comparative data. Mr. Douglas’s compensation includes a retroactive adjustment effective since January 1, 2009, to reflect his promotion from Chief Operating Officer – Sydney, to Chief Operating Officer – Asia Pacific. In addition, the impact of the currency conversions account for approximately 10% of the increased amounts of approved base salary pay for Mr. Sandercock and Mr. Douglas in 2009.

10

Table of Contents

Annual Performance-Based Bonuses

The second compensation component is a cash bonus under our annual bonus program. The primary purpose of our annual bonus program is to motivate our executives to meet or exceed our company-wide and regional short-term operating performance objectives. The program is intended to share our success with eligible executives to the extent warranted by our performance and their individual performance, and to provide competitive compensation to eligible executives in a manner consistent with our philosophy of paying for performance. The bonus program is designed to qualify as a performance-based award under our 2006 Amended and Restated ResMed Inc. 2006 Incentive Award Plan as well as performance-based compensation for purposes of section 162(m) of the US Internal Revenue Code.

In setting appropriate bonus target amounts, the Compensation Committee reviewed the 50^th, 60^th, and 75^th percentiles of peer comparables (both in terms of target amounts and amounts actually earned). The Committee also considers the potential effect of bonus targets on total cash compensation. The Committee reviews total cash compensation at peer comparables at those percentiles.

During fiscal year 2009, the Committee approved target bonus percentages for named executive officers, other than the Chief Executive Officer and the Executive Chairman of the Board, at 70% of base salary, and at 120% of base salary for the Chief Executive Officer and the Executive Chairman of the Board, representing increases from 65% and 100% respectively. These increases reflected the Committee’s assessment that the performance targets have historically and for fiscal 2009 represented stretch goals. Increases in the bonus target percentages from fiscal year 2008 also reflected the Compensation Committee’s preference to place a higher proportion of total cash compensation for these individuals at risk. The increased bonus percentages were designed to deliver total cash compensation at roughly the 60th percentile of comparable peers if those performance goals were achieved, while increasing the percentage of our officers’ cash compensation at risk and based on performance.

For fiscal year 2009, all of our named executive officers participated in a bonus compensation program based on overall corporate financial performance as measured against pre-established performance measures. The performance measures, weighting and percentage payout based on performance are substantially similar to those in effect for fiscal 2008. The bonus program structure is described in the following table with linear interpolation between and above the payout milestones listed below.

Bonus payments for Dr. Farrell and Mr. Gallahue were based on a combination of global metrics as noted above, as well as specific target metrics. The company performance measures described above represented 80% of their total target bonus opportunity, or 96% of their salary at target. The additional specific performance targets represented 20% of their total target bonus opportunity, or 24% of their salary at target. The additional specific performance targets were as follows:

11

Table of Contents

The Compensation Committee approves the actual bonus amounts for executive officers before they are paid. For fiscal year 2009, applying the pre-determined bonus payment formula, the Committee approved a total global bonus percentage of 126% calculated with the following data:

In addition, the Committee determined that Dr. Farrell and Mr. Gallahue achieved the targets in their additional performance measures related to customer sales and pilot studies; but that they did not achieve the targets related to product launches. Accordingly, they earned 10% of their target bonus, or 12% of their salary, based on these additional performance measures, resulting in payout of 111% of target bonus opportunity based on 126% performance of financial goals, weighted at 80%, and 50% performance of other goals, weighted at 20%.

The following table sets forth the 2009 target and actual bonus payments. The bonus targets for our Australian-based officers are based on the estimated US dollar equivalent described in the “Base salary” section above. The actual bonus amounts are based on the US dollar equivalent based on applicable average annual exchange rates.

Stock Options

The third major component of the named executive officers’ compensation provides a long-term incentive through equity participation. During fiscal year 2009, we provided this opportunity by granting our executive officers stock options. The primary purpose of granting stock options is to link the officers’ financial success to that of our stockholders, with the value of the options increasing only as the stock price increases.

We have generally provided annual option grants to our named executive officers each fiscal year. Initially, the Committee reviews the option grant history, historical burn rates, dilution overhang, and costs, and similar statistics among our peer groups. The Compensation Committee, after consulting as it deem appropriate with other board members, then sets an annual pool of options available for grants to employees at that year’s annual grant, as well as available for new-hire, promotional, and special situations until the next year’s annual grant.

During fiscal year 2009, the Committee approved a pool of 2.5 million options for company-wide use, the same number it had approved during fiscal year 2008. The net share usage after forfeitures during fiscal year 2009 was 2.7% as a percentage of shares outstanding, consistent with its 3-year average of 2.7%. Gross share usage during the fiscal year was 3.3% slightly above the 3-year average of 3.2%. The fair value of all options granted is fiscal year 2009 was $26.4 million compared to $31.8 million for

12

Table of Contents

fiscal year 2008. As a percentage of market capitalization, gross expense was 1.1% slightly above the 3-year average of 1.0%, while the net expense was 0.8% of market capitalization for both fiscal year 20098 and the 3-year average.

In determining the number of options granted to specific named executive officers, the Compensation Committee reviews company performance, the number of outstanding options available and the percentage of the pool represented by the proposed grant, the present value of the proposed grant, the existing option ownership, the number of options granted in the prior year and the three prior years, the carried interest ownership, and the grant practices of our peer group companies. The Compensation Committee reviewed Frederic W. Cook’s August 2008 report concerning our historic equity grants and practices relative to those of our peer companies.

The consultant reported that our fiscal year 2008 and three-year average award levels were in a median range for the Chief Executive Officer and most other named executive officers. In fiscal year 2008, which is the data reviewed when making fiscal 2009 equity award determinations, the named executive officers’ option grants were below the market-cap adjusted median value in aggregate, and only the Chief Executive Officer was above the median, if his promotion award upon becoming CEO was compared to the regular annual awards provided to CEOs with ongoing service in the position.

The Committee considers adjustments to each of these elements of compensation based on market analysis, individual performance, the perceived value of the individual to the Company and other factors it deems relevant. The Committee also considers regional variation. For example, the base salaries for certain positions in other countries, when translated to US dollars, may reflect a different percentile when compared to US market peers than when compared to market peers in the executive’s home country. There are similar variations by region in the use of short-term and long-term incentives. The Committee attempts to balance the goal of paying consistent with the local market, with the goal of maintaining internal consistency in compensating executives in different regions.

Policies with Respect to Equity Compensation Awards

During fiscal year 2009, the Compensation Committee continued its preexisting policy to have its annual stock option grants to named executive officers and non-executive management effective on or about the annual stockholder meeting date. In setting this policy the Compensation Committee considered many factors, including the alignment of this date with the election of directors and the traditional October 1 salary adjustment date. This enables management and the Compensation Committee to combine the salary review process with the option grant process for consistency and administrative convenience and to make awards only after performance in the previous year is known. Also, given our traditional earnings release date in late October or early November, the stockholder meeting is likely to occur in an open window period. In addition, the stockholder meeting date is set and announced several months in advance, which provides transparency to the process. Based on these reasons, the Compensation Committee has set the Annual Meeting date as the target for our annual stock option grants, although the actual grant date (i.e., the date on which the Committee takes the formal action to make the grants) may vary by a few days from the Annual Meeting date due to administrative or other factors. The exercise price for such grants, however, will equal the closing price of our common stock on the actual grant date. In addition, the actual annual stockholder meeting date will be selected based on all relevant circumstances at the time.

The Compensation Committee’s policy with regard to granting stock options for promotions, new hire and other special situations is that such option grants must be properly approved in advance of or on the grant date and the grant date is to occur on the first business day of the month following the promotion, new hire or other special situation; unless the event occurs on the first business day of the month, in which case the grant may be made as of that day. The Compensation Committee has delegated authority to the Senior Vice President, Organizational Development to make grants to employees in connection with new hires, provided that the grants are not to executive officers, are within pre-determined guidelines approved by the Compensation Committee, and are consistent with the other practices relating to our stock option program. In fiscal year 2009, the Senior Vice President, Organizational Development made grants of an aggregate amount of 22,500 stock options, to individuals under this delegation.

Fiscal Year 2009 Equity Grants

For fiscal year 2009, the Committee reviewed survey data with median equity allocations for each officer’s position, except Dr. Farrell. The Committee determined there was not an adequate comparable for Dr. Farrell’s position. The Committee based Dr. Farrell’s grant on its perception of his level of contribution and effort, and the comparison to our other named executive

13

Table of Contents

officers. Mr. Gallahue’s grant was below median compared to ongoing CEOs, reflecting his short tenure in his current CEO role and the fact that his fiscal year 2008 grant was substantially above-median as a result of his promotion. The allocations for all other officers diverged from their individual market median comparables, but were equal to the median when measured in the aggregate. The Committee determined that setting grants at the median for all positions, inclusive of named executives and all other officers, was a more appropriate benchmark. The following table sets forth option grants provided to our named executive officers in fiscal year 2009 with comparisons to the relevant peer data.

Terms of Stock Options

Stock options were issued to our named executive officers during fiscal year 2009 in accordance with the 2006 Plan. The 2006 Plan requires that the exercise price of options equal the fair market value on the day of the grant, as measured by the closing price of our common stock on the NYSE on the grant date. Options are generally exercisable 25% per year on each anniversary of the grant date starting on the first anniversary of the grant date. In addition, as discussed below, vesting is automatically accelerated on a change of control. After vesting, options are exercisable for a maximum period of the earlier of: (1) seven years after the date of grant; or (2) one year after termination, retirement, death or disability.

Change of Control and Termination Arrangements

None of our named executive officers has an employment contract providing a right to continued employment. None has a contractual right to receive severance payments if employment is terminated (except in the event of certain change of control events, described below).

Our form of option award agreement for named executive officers provides:

These extended exercise provisions are intended to facilitate financial planning after employment terminates and to ensure that the executive would be able to exercise options and sell the underlying shares when not in possession of material public information about us. In addition, the accelerated vesting provisions are intended to protect the expected economic benefit of the executive’s equity participation in the event of certain change of control transactions, and to make it easier to attract, retain, and motivate our key executives.

We have change in control agreements with each of our named executive officers and certain other members of our senior management team. These agreements provide certain change of control payments and benefits, including accelerated option vesting on a change of control. These agreements also provide for certain additional compensation and benefits, including severance

14

Table of Contents

payments based on a multiplier (based on position) of salary, bonus and other benefits, and limited tax-gross up payments, to be made to the named executive officers if their employment is terminated under specified circumstances within six months before or one year after a change of control. A description of the material terms of our change of control arrangements can be found beginning on page 28 of this proxy statement under “Potential Payments on Termination or Change of Control – Change of Control Agreements”. These agreements are maintained in order to recruit and retain new executives, as well as to foster best efforts of management in the deliberation of a potential transaction. The Committee believes that such agreements may continue to attract senior level candidates to the Company in light of the relatively specialized nature of our product offerings and the continued potential for merger and acquisition activity in the medical technology market sector. Also, the Committee believes that the agreements assure appropriate motivation by senior management to evaluate potential transactions that may involve the Company. These agreements were reviewed and updated in immaterial ways to ensure compliance with section 162(m) and 409A of the US Internal Revenue Code during fiscal year 2009. These changes included slightly refined definitions for bonus compensation and good reason.

We also have stock option agreements for all employees that provide for accelerated option vesting on a change of control. We provide these vesting terms for employees who are not executive officers for reasons similar to those described above for our named executive officers. In addition, we believe it is consistent with our culture to provide similar benefits to all employees holding options.

Perquisites and Other Benefits

After review of Frederic W. Cook’s report on August 18, 2009, the Committee did not make any material changes in the perquisites and other benefits we provided to our named executive officers. We provided the benefits described below. The incremental cost to us of these benefits is described in the Summary Compensation Table:

15

Table of Contents

Tax Considerations

Section 162(m) of the US Internal Revenue Code limits the US federal income tax deductions of publicly-traded companies to the extent total compensation for certain named executive officers exceeds $1 million in any one year. Under Section 162(m) the deduction limit does not apply to payments that constitute “qualified performance-based compensation.” Generally, objectively determinable performance bonus payments and option grants to our named executive officers are intended to constitute “qualified performance-based compensation” under Section 162(m) and not be subject to the Section 162(m) limit. However, in certain circumstances, the Committee may provide bonus payments, option grants, and other payments and awards that do not constitute “qualified performance-based compensation” if the Committee determines such payments and awards would be in the best interest of the Company. If compensation to certain named executive officers does not constitute “qualified performance-based compensation,” the Company’s deduction for US federal income tax purposes for such compensation may be wholly or partially disallowed under Section 162(m). Payments under our bonus program for fiscal 2009 and our stock options grants are each intended to qualify as performance-based compensation for purposes of section 162(m) of the US Internal Revenue Code.

Sections 280G and 4999 of the Internal Revenue Code impose certain adverse tax consequences on excess parachute payments, which are compensatory payments or benefits that are contingent on a change in the control and exceed in the aggregate three times the executive’s base amount. Excess parachute payments are subject to a 20% excise tax and our compensation deduction in respect of the excess parachute payments is disallowed. If we were to be subject to a change of control, certain amounts received by our executives (for example, amounts attributable to the accelerated vesting of stock options and certain of the severance payments) could be excess parachute payments. The change of control agreements generally provide that tax gross up payments will be made only if the aggregate payments and distributions to the executive are 10% or greater than 2.99 times the executive’s “base amount,” as calculated under relevant US Internal Revenue Code provisions. These agreements were amended in fiscal year 2009 to ensure compliance with Section 409A and Section 162(m) of the Internal Revenue Code; the amendments were not material.

16

Table of Contents

Summary Compensation Table

The following table sets forth summary information concerning the compensation awarded, paid to, or earned by each of our named executive officers for all services rendered in all capacities to us for the fiscal years ended June 30, 2009, and fiscal year ended June 30, 2008, and June 30, 2007. We compensate our executive officers in their residence’s local currency. The compensation amounts for Australian-based named executive officers are presented in US dollars based on an average annual conversion rate determined on June 30, 2009. Mr. Gallahue assumed the role of Chief Executive Officer January 1, 2008, the same date Dr. Farrell ceased serving this role.

17

Table of Contents

The table below shows how much of the overall amount of the compensation cost is attributable to each award.

Stock options granted to the named executive officers in fiscal years 2009, 2008 and 2007 were issued under our 2006 Plan, are exercisable for a maximum period of 7 years after the grant date and have an exercise price equal to closing price of our common stock on the NYSE on the grant date. Stock options granted to the named executive officers in fiscal year 2006 and earlier years were made under our 1997 Equity Participation Plan, are exercisable for a maximum of 10 years after the grant date, and have an exercise price equal to closing price of our common stock on the NYSE on the last trading day before the grant date. Stock options granted after December 1, 2005, through the end of fiscal year 2009 are exercisable 25% per year on each anniversary of the grant date. This exercise schedule may be accelerated in certain specific situations, subject to earlier termination in connection with a termination of service with us.

18

Table of Contents

19

Table of Contents

Grants of Plan-Based Awards

The following table sets forth summary information regarding all grants of plan-based awards made to our named executive officers for the fiscal year ended June 30, 2009.

20

Table of Contents

Outstanding Equity Awards at Fiscal Year(s) End

The following table sets forth summary information regarding the outstanding equity awards held by our named executive officers at June 30, 2009.

21

Table of Contents

Option Awards Vesting Schedule

Option Exercises and Stock Vested

The following table summarizes the option exercises for each of our named executive officers for the fiscal years ended June 30, 2009. None of our named executive officers currently holds or held during fiscal 2009 any stock awards.

Potential Payments on Termination or Change-of-Control

Beginning in July, 2007, we entered into agreements with each of our named executive officers and certain other members of senior management (a total of 16 currently employed people as of September 21, 2009), that provide certain change of control payments and benefits. In December 2008, the agreements were amended to conform to recent changes in IRS regulations, in particular, US Internal Revenue Code Sections 409A and 162(m). These changes included slightly refined definitions for bonus compensation and good reason.

On the effective date of a “change of control” as defined in the agreement and summarized below, all of the executive’s unvested stock options will vest in full.

In addition, if at any time during the period that commences six months before and ends one year after the effective date of a “change of control,” an executive terminates employment under certain conditions described below, then the executive will be entitled to receive certain additional compensation and benefits from us. The conditions that entitle an executive to additional compensation are:

22

Table of Contents

In the event of a qualifying termination, the executive will be entitled to compensation and benefits, including the following:

All payments under the change of control agreements are designed to be paid in lump sum, subject to certain restrictions set forth in US Internal Revenue Code section 409A.

Throughout the change of control payout period (two years in the cases of Dr. Farrell and Mr. Gallahue and 1.5 years in the cases of Mr. Sandercock, Mr. Pendarvis and Mr. Douglas), the executive will not induce any person in our employment to terminate employment or accept employment with anyone other than us or, subject to certain limited exceptions, engage in any business or activity or render any services or provide any advice to any person, activity, business or entity that directly or indirectly competes in any material manner with us or meaningfully support any such person, business, entity or activity or initiate or further any such business or activity. In addition, as a condition to payment and providing any benefits under the agreements, the executive must deliver a general release of claims in favor of us.

The initial term of the agreements terminates on December 1, 2011, the third anniversary of the effective date of the agreements. Unless either party gives notice of its intention not to renew, the term will be automatically extended for successive three-year periods.

“Cause” is generally defined as the executive’s (a) conviction or plea of guilty or nolo contendere of a misdemeanor involving moral turpitude, dishonesty or a breach of trust; (b) commission of any act of theft, fraud, embezzlement or misappropriation against us; (c) failure to devote substantially all of his or her business time to our business affairs or material breach of the terms of any employment-related agreement; (d) failure to comply with any corporate policies, which failure results or is likely to result in substantial injury, financial or otherwise, to us or our reputation; (e) unauthorized disclosure or use of our confidential information, which results or is likely to result in substantial injury, financial or otherwise, to us or our reputation; (f) violation of any rules or regulations of any governmental or regulatory body, which violation results or is likely to result in substantial injury, financial or otherwise, to us or our reputation; or (g) abuse of drugs, alcohol or illegal substances, which results or is likely to result in substantial injury, financial or otherwise, to us or our reputation.

A “change of control” is generally defined as (a) a transaction or series of transactions whereby any person or related group of people directly or indirectly acquires beneficial ownership of our securities possessing more than 50% of the total combined voting power of our securities outstanding immediately after such acquisition, subject to certain exceptions; (b) individuals who, as of the date hereof, constitute the board cease for any reason to constitute at least a majority of the board, subject to certain exceptions; (c) the consummation by us of (i) a merger, consolidation, reorganization, or business combination, subject to certain exceptions;

23

Table of Contents

(ii) a sale or other disposition of all or substantially all of our assets in any single transaction or series of related transactions, subject to certain exceptions; or (iii) the acquisition of assets or stock of another entity, subject to certain exceptions; or (d) our stockholders approve a liquidation or dissolution of us.

“Good reason” is generally defined as (a) the assignment to executive of duties, responsibilities and authority that are materially diminished when compared with executive’s duties, responsibilities and authority with us immediately before the change of control; (b) a material reduction in executive’s base salary as in effect at the time of the change of control; (c) any material diminution in the aggregate benefits provided to executive under the benefit plans and arrangements in which executive is participating at the time of the change of control; (d) any failure by us to continue in effect, or any material reduction in target bonus opportunity or any material increase in target performance objectives under any bonus or incentive plan or arrangement in which the executive is participating at the time of the change of control, which results in a material negative change in the executive’s bonus or incentive compensation; (e) material diminution in the budget over which executive retains authority at the time of the change of control; (f) any requirement by us that the executive be based anywhere that is at least fifty (50) miles away from both (i) the executive’s office location as of the date of the change of control and (ii) the executive’s then primary residence, except for required travel by the executive on our business; (g) any failure by us to obtain the assumption of this agreement by our successor or assign; or (h) any purported termination by us of executive’s employment which is not effected by a notice of termination satisfying the requirements set forth in the agreement.

In accordance with the requirements of the rules of the US Securities & Exchange Commission, the following table presents our reasonable estimate of the benefits payable to the named executive officers under our agreements assuming that a change of control and qualifying termination of employment occurred on June 30, 2009, the last business day of fiscal year 2009. Excluded are benefits provided to all employees, such as accrued vacation, and benefits provided by third parties under our life and other insurance policies. While we have made reasonable assumptions regarding the amounts payable, there can be no assurance that in the event of a qualifying termination in connection with a change of control, the named executive officers will receive, in addition to the cash compensation earned for such period, the amounts reflected below. The compensation amounts for Australian-based named executive officers are presented in US dollars based on the conversion rate in effect at the close of business June 30, 2009.

24

Table of Contents

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management, and based on the review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in our 2009 annual report on Form 10-K (where it is incorporated by reference) and in this proxy statement for the 2009 Annual Meeting of stockholders.

COMPENSATION COMMITTEE

Ronald Taylor, Chair

Gary Pace

Richard Sulpizio

The above report of the Compensation Committee will not be deemed to be incorporated by reference to any filing by ResMed under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that ResMed specifically incorporates it by reference.

25

Table of Contents

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes outstanding stock option plan balances as of June 30, 2009:

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers, and individuals who own more than ten percent of a registered class of our equity securities to file with the US Securities and Exchange Commission (“SEC”) initial reports of ownership and reports of change in ownership of our common stock and other equity securities. Executive officers, directors and greater than ten-percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.

Based solely on our review of copies of the forms we received, or written representations from certain reporting individuals, we believe that all Section 16(a) filing requirements applicable to our directors, named executive officers and 10% stockholders during fiscal year 2009 were satisfied.

26

Table of Contents

AUDIT MATTERS

Audit Fees

The following table presents fees for professional audit services by KPMG LLP for the audit of our annual financial statements for fiscal years 2009 and 2008, and fees billed for other services rendered by KPMG LLP.

KPMG did not perform any other non-audit services during fiscal year 2009.

Pre-Approval Policy

The Audit Committee pre-approves all audit and permissible non-audit fees.

Since the May 6, 2003 effective date of the SEC rules stating that an auditor is not independent of an audit client if the services it provides to the client are not appropriately approved, each new engagement of KPMG LLP was approved in advance by our Audit and Compliance Committee, and none of those engagements made use of the de minimus exception to pre-approval contained in the SEC’s rules.

Audit Committee Report

Following is the report of the Audit Committee with respect to ResMed’s audited financial statements for the fiscal year ended June 30, 2009, and the related consolidated statements of income, stockholders’ equity and comprehensive income and cash flows for each of the three years in the period ended June 30 and the notes thereto.

The role of the Audit Committee is to oversee ResMed’s financial reporting process on behalf of the Board of Directors. ResMed’s management has the primary responsibility for its financial statements as well as its financial reporting process, principles and internal controls. The independent auditors are responsible for performing an audit of ResMed’s financial statements and expressing an opinion as to the conformity of such financial statements with generally accepted accounting principles. In this context, the Audit Committee has reviewed and discussed with management and the independent auditors ResMed’s audited financial statements as of and for the year ended June 30, 2009. The Audit Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as currently in effect,” which includes, among other items, matters related to the conduct of the audit of our financial statements, and the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 2, “An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements.” In addition, the Audit Committee has received the written disclosures and the letter from the independent auditors required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), as currently in effect, and it has discussed with the auditors their independence from ResMed.

27

Table of Contents

The members of the Audit Committee are not engaged in the accounting or auditing profession and are not involved in day-to-day operations of ResMed. In the performance of their oversight function, the members of the Audit Committee necessarily rely on the information, opinion, reports and statements presented to them by ResMed’s management and by the independent auditors. As a result, the Audit Committee’s oversight and the review and discussions referred to above do not assure that management has maintained adequate financial reporting processes, principles and internal controls, that ResMed’s financial statements are accurate, that the audit of the financial statements has been conducted in accordance with generally accepted auditing standards or that ResMed’s auditors meet the applicable standards for auditor independence.

Based on the reports and discussions described above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in ResMed’s Annual Report on Form 10-K for the fiscal year ended June 30, 2009, for filing with the SEC.

AUDIT COMMITTEE

Michael A. Quinn, Chair

Christopher G. Roberts

John Wareham

The above report of the Audit Committee will not be deemed to be incorporated by reference to any filing by ResMed under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that ResMed specifically incorporates it by reference.

28

Table of Contents

MATTER TO BE ACTED ON – PROPOSAL 1:

ELECTION OF DIRECTORS

Our bylaws authorize a Board of Directors with between 1 and 13 members, with the exact number to be specified by the Board of Directors from time to time. The current authorized number of directors is eight.

The board is divided into three classes. One class is elected every year at the Annual Meeting of Stockholders for a term of three years. The class of directors whose term expires in 2009 has three members, Peter Farrell, Gary Pace, and Ronald Taylor. Accordingly, three directors are to be elected at this Annual Meeting of Stockholders, who will hold office until the 2012 Annual Meeting of Stockholders or until the director’s prior death, disability, resignation or removal.

On the Nominating and Governance Committee’s recommendation, the Board of Directors has nominated Peter Farrell, Gary Pace, and Ronald Taylor for re-election as a director at this Annual Meeting. We are soliciting proxies in favor of these nominees and proxies will be voted for them unless otherwise specified. If Peter Farrell, Gary Pace, or Ronald Taylor becomes unable or unwilling to serve as directors, the proxies will be voted for the election of such other person, if any, as the Board of Directors shall designate.

Information concerning the nominees for director and the other directors who will continue in office after the Annual Meeting is set forth below:

The following biographical information is furnished with regard to our directors (including nominees) as of June 30, 2009.

Nominees for Election at the Annual Meeting to Serve for a Three-Year Term Expiring at the 2012 Annual Meeting of Stockholders

Peter Farrell has served as our Executive Chairman of the Board since January 1, 2008. He has been a director of ResMed since June 1989 and served as Chief Executive Officer of ResMed from July 1990 until December 2007. From ResMed’s inception until September 2004, Dr. Farrell was also ResMed’s President. From July 1984 to June 1989, Dr. Farrell served as Vice President, Research and Development at various subsidiaries of Baxter International, Inc. (“Baxter”), and from August 1985 to June 1989, he also served as Managing Director of the Baxter Center for Medical Research Pty Ltd., a subsidiary of Baxter. From January 1978 to December 1989, he was Foundation Director of the Center (now Graduate School) for Biomedical Engineering at the University of New South Wales where he currently serves as a Visiting Professor. He holds a B.E. in chemical engineering with honors from the University of Sydney, an S.M. in chemical engineering from the Massachusetts Institute of Technology, a Ph.D. in chemical engineering and bioengineering from the University of Washington, Seattle and a D.Sc. from the University of New South Wales. Dr. Farrell was named 1998 San Diego Entrepreneur of the Year for Health Sciences, Australian Entrepreneur of the Year in 2001 and US National Entrepreneur of the Year for 2005 in Health Sciences. In August 2000, he was named Vice Chairman of the Executive Council of the Harvard Medical School Division of Sleep Medicine. In addition to his responsibilities with ResMed, Dr. Farrell is a director of NuVasive, Inc., a NASDAQ-listed company that develops and markets products for the surgical

29

Table of Contents

treatment of spine disorders; Pharmaxis Limited, an ASX and NASDAQ-listed specialist pharmaceutical company; and is the non-executive chair of QRxPharma, a clinical-stage specialty pharmaceutical company listed on the ASX. He is a Fellow or Honorary Fellow of several professional bodies.

Gary Pace has served as our director since July 1994. Dr. Pace is a co-founder, director, and consultant to QRxPharma, a clinical-stage specialty pharmaceutical company listed on the ASX, and he was formerly the chairman and Chief Executive Officer of a predecessor company to QRxPharma. Dr. Pace is also a Visiting Scientist at the Massachusetts Institute of Technology (MIT). In addition to ResMed, he serves as a Director of Transition Therapeutics, a Canadian Venture Exchange-listed Canadian biopharmaceutical company developing new therapies; Celsion Corp., an AMEX- listed device and drug development company; and Peplin Ltd., an ASX-listed biopharmaceutical company. From 1995 to 2001, Dr. Pace was President and Chief Executive Officer of RTP Pharma, a developer of nano-articulate technology. From 2000 to 2002, Dr. Pace was Chairman and Chief Executive Officer of Waratah Pharmaceuticals Inc., a spin-off company from RTP Pharma. From 1993 to 1994, Dr. Pace was the founding President and Chief Executive Officer of Transcend Therapeutics Inc. (formerly Free Radical Sciences Inc.), a biopharmaceutical company. From 1989 to 1993, he was Senior Vice President of Clintec International, Inc., a Baxter/Nestle joint venture and manufacturer of clinical nutritional products. Dr. Pace holds a B.Sc. with honors from the University of New South Wales and a Ph.D. from MIT.

Ronald Taylor has served as our director since January 2005. Mr. Taylor is a director of Watson Pharmaceuticals, Inc., a NYSE-listed specialty pharmaceutical company; Red Lion Hotels Corp, a NYSE-listed hospitality company; Safelife Corporation, a developer of antimicrobial technology, and Aethon Corp, a privately-held provider of robotic delivery systems for hospitals. Mr. Taylor is Chairman of the Board of three privately-held companies: 3E Company, an outsourcing business for environmental health and safety; EMN8 Corporation, a manufacturer of self-service terminals for quick service restaurants; and Asteres, Inc., a manufacturer of automated pharmaceutical prescription dispensers for chain drug stores. From 2002 until 2005, he served as chair of the ResMed Foundation. Mr. Taylor resigned from the Foundation board in connection with his appointment to the ResMed Board of Directors. In 1987, Mr. Taylor founded Pyxis Corporation, a manufacturer of automated drug dispensers for hospitals, where he served as Chairman, President, and Chief Executive Officer until its purchase by Cardinal Health, Inc., in 1996. Before founding Pyxis, Mr. Taylor was responsible for the operations and international sales at Hybritech, Inc., a biotechnology company, for six years. Before joining Hybritech, he served over ten years in management roles at Allergan Pharmaceuticals. Mr. Taylor received a B.A. from the University of Saskatchewan and an M.A. from the University of California, Irvine.

BOARD RECOMMENDATION

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE THREE NOMINEES TO THE BOARD OF DIRECTORS.

Directors Continuing in Office until the 2010 Annual Meeting of Stockholders

Kieran Gallahue has served as our Chief Executive Officer and director since January 1, 2008, and has been our President since September 2004. He began his career at ResMed in January 2003 as President and Chief Operating Officer of the Americas. Before joining ResMed, Mr. Gallahue served as President of Nanogen, Inc., a San Diego-based DNA research and medical diagnostics company. Mr. Gallahue also held roles of Chief Financial Officer and Vice President of Strategic Marketing for Nanogen. From 1995 to 1997 he served as Vice President of the Critical Care Business Unit for Instrumentation Laboratory, or IL. Before 1995, Mr. Gallahue held various marketing, sales and financial positions within IL, Procter & Gamble and GE. Mr. Gallahue holds a B.A. from Rutgers University and an M.B.A. from Harvard Business School.

Michael Quinn has served as our director since September 1992. Since April 1999, Mr. Quinn has been the Chief Executive Officer of Innovation Capital, an Australian/U.S. venture capital fund. From February 1992 to April 1999, he was a management and financial consultant. From July 1988 to January 1992, Mr. Quinn served as Executive Chairman of the Board of Phoenix Scientific Industries Limited, a manufacturer of health care and scientific products and listed on the ASX. Before that, Mr. Quinn was a co-founder and managing director of Memtec, a NYSE-listed environmental filtration company. Mr. Quinn holds both a B.Sc. in physics and applied mathematics and a B.Ec. from the University of Western Australia and an M.B.A. from Harvard

30

Table of Contents

University. He is currently a member of the Board of Directors of QRxPharma, a clinical-stage specialty pharmaceutical company listed on the ASX, and of CAP-XX Limited, a London Stock Exchange-listed company that manufactures and markets super capacitors.

Richard Sulpizio has served as our director since August 2005. Mr. Sulpizio retired in July 2001 as President and Chief Operating Officer of QUALCOMM, INC., a NASDAQ-listed wireless communication company. After his retirement, QUALCOMM asked Mr. Sulpizio to serve as President of QUALCOMM China from May 2002 to March 2003, and then as President of QUALCOMM Europe from January 2004 to September 2004. In March 2005, Mr. Sulpizio returned to QUALCOMM and served until December 2005 as President and CEO of MediaFLO, USA, Inc, a QUALCOMM subsidiary, chartered with bringing multimedia services to the wireless industry. Before joining QUALCOMM, Mr. Sulpizio spent eight years with Unisys Corporation, a diversified computer and electronics company, and 10 years with Fluor Corporation, an engineering and construction company. Mr. Sulpizio was a member of the Board of Directors of QUALCOMM, INC., from 2000 until 2007. Mr. Sulpizio is also on the Advisory Board of Focus Ventures, a Palo Alto based venture capital company. Mr. Sulpizio is on the advisory board of the University of California San Diego’s Sulpizio Family Cardiovascular Center and chairs the board of the Danny Thompson Memorial Leukemia Foundation. Mr. Sulpizio holds a B.A. from California State University, Los Angeles, and an M.S. in Systems Management from the University of Southern California.

Directors Continuing in Office until the 2011 Annual Meeting of Stockholders

Christopher Roberts has served as our director since September 1992. He also served as our director from August 1989 to November 1990. Since February 2004, he has been Chief Executive Officer and President of Cochlear Limited, an ASX-listed cochlear implant company for the treatment of severe and profound deafness. Between August 1992 and January 2004, he was ResMed’s Executive Vice President responsible for European and Asia-Pacific activities. Between 1976 and 1992 he served in various positions in medical device companies, including President of BGS Medical (Denver, Colorado), an orthopedic implant company. Dr. Roberts holds a B.E. in chemical engineering with honors from the University of New South Wales, an M.B.A. from Macquarie University and a Ph.D. in biomedical engineering from the University of New South Wales. He is a Fellow of the Australian Academy of Technological Sciences and Engineering (FTSE) and a Fellow of the Australian Institute of Company Directors (FAICD). He was a member of the National Health and Medical Research Council (NHMRC), Australia’s health and medical research and advisory body for the 2003-2006 triennium, and is the Chairman of Research Australia, a non-profit organization.

John Wareham has served as our director since January 2005. From September 1993 to January 2004, Mr. Wareham was the President of Beckman Coulter, Inc. a NYSE-listed biomedical company that develops and markets instruments, chemistries, software and supplies to simplify and automate laboratory processes. Mr. Wareham also served as Chief Executive Officer from August 1998 to February 2005 and Chairman from January 1999 to April 2005. Before joining Beckman Coulter in 1984, Mr. Wareham was President of Norden Laboratories, Inc., a wholly-owned subsidiary of SmithKline Beckman. He first joined a predecessor of SmithKline Beckman Corporation in 1968. Mr. Wareham is a director and non-Executive Chairman of the Board of STERIS Corporation, a NYSE-listed market leader in infection prevention, decontamination and health science technologies, products and services, and a director of Greatbatch Inc., a NYSE-listed developer and manufacturer of critical components used in implantable medical devices and other technically demanding applications. Mr. Wareham joined the Board of Accuray, Inc. in February, 2008. Accuray is involved in the radiosurgery market. Mr. Wareham holds a B.S. in Pharmacy from Creighton University in Omaha, Nebraska, and an MBA from Washington University in St. Louis, Missouri.

31

Table of Contents

CORPORATE GOVERNANCE

Board Independence