[Company Letterhead]




April 30, 1997




To Our Stockholders:

On April 15, 1997, ResMed's Board of Directors adopted a stockholder
Rights Plan that is intended to protect your interests in the event you and
ResMed are confronted with coercive takeover tactics.

The Plan provides for a dividend distribution of Rights to purchase
shares of a newly created series of ResMed Preferred Stock. Under certain
circumstances, the Rights could become exercisable to purchase ResMed Common
Stock, or securities of an acquiring entity, at one-half market value. The
Rights may be exercised only if certain events occur. You are now the owner
of one Right for each share of ResMed Common Stock you own. The Plan has been
adopted in order to strengthen the ability of the Board to protect your
interests.

We are attaching a summary description that outlines the principal
features of the Plan, and we urge you to read the summary carefully. This
letter reviews our reasons for issuing the Rights.

NO ACTION BY STOCKHOLDERS IS REQUIRED OR PERMITTED AT THIS TIME, AND
NO MONEY SHOULD BE SENT TO RESMED. THE RIGHTS WILL AUTOMATICALLY ATTACH TO
THE SHARES OF COMMON STOCK YOU HOLD AND WILL TRADE WITH THEM. SEPARATE RIGHTS
CERTIFICATES WILL BE SENT TO STOCKHOLDERS ONLY IF A PERSON OR GROUP ACQUIRES
15% OR MORE OF RESMED'S OUTSTANDING COMMON STOCK OR MAKES A TENDER OFFER FOR
15% OR MORE OF THE COMMON STOCK. RESMED COMMON STOCK CERTIFICATES ISSUED AFTER
APRIL 30, 1997 WILL CONTAIN A REFERENCE TO THE RIGHTS PLAN, BUT THERE IS NO
NEED TO SEND IN YOUR CERTIFICATES TO HAVE THIS REFERENCE ADDED.

The Rights are not being distributed in response to any specific
effort to acquire control of the Company. The Rights are designed to protect
stockholders in the event of an unsolicited attempt to acquire the Company,
including through an accumulation of Common Stock in the open market, a
partial, two-tier or inadequate tender offer that does not treat all
stockholders equally and other abusive takeover tactics which the Board of
Directors believes are not in the best interests of stockholders. These
tactics unfairly pressure stockholders, squeeze them out of their investment
without giving them any real choice and deprive them of the full value of
their Common Stock. We consider these Rights to be a valuable means of
protecting both your right to retain your equity investment in ResMed and the
full value of that investment, while not foreclosing a fair acquisition bid
for the Company.

The Rights are not intended to prevent a takeover of ResMed and will
not do so. They are designed to deal with the possibility of unilateral
actions by hostile acquirors that could deprive the Board of Directors and
stockholders of ResMed of their ability to determine ResMed's destiny and
obtain the highest price for their Common Stock.


Adoption of the Plan should not by itself affect any prospective
acquiror who is willing to make an all-cash offer at a full and fair price or
who is willing to negotiate with the Company's Board of Directors. The Plan
certainly will not interfere with a merger or other business combination
transaction approved by the Board of Directors.

The issuance of the Rights has no dilutive effect, will not affect
reported earnings per share and is not taxable to the Company or to you.
Stockholders may, under certain circumstances, recognize taxable income if the
Rights become exercisable.

Our overriding objective is to continue building value for ResMed's
stockholders, and we feel that the Plan will assist in that effort.


Sincerely,



/S/ Dr. PETER FARRELL
Dr. Peter C. Farrell
President and Chief Executive Officer

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SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES

On April 15, 1997, the Board of Directors of ResMed Corporation (the
"Company") declared a dividend of one Right for each share of common stock,
$.004 par value (the "Common Shares"), of the Company outstanding at the
close of business on April 30, 1997 (the "Record Date"). As long as the
Rights are attached to the Common Shares, the Company will issue one Right
(subject to adjustment) with each new Common Share so that all such shares
will have attached Rights. When exercisable, each Right will entitle the
registered holder to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock (the "Preferred Shares") at a
price of $80.00 per one one-hundredth of a Preferred Share, subject to
adjustment (the "Purchase Price"). The description and terms of the Rights
are set forth in a Rights Agreement, dated as of April 23, 1997, as the same
may be amended from time to time (the "Rights Agreement"), between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").

Until the earlier to occur of (i) ten (10) days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the Common Shares or (ii) ten (10) days
following the commencement or announcement of an intention to make a tender
offer or exchange offer the consummation of which would result in the
beneficial owner-ship by a person or group of 15% or more of the Common Shares
(the earlier of (i) and (ii) being called the "Distribution Date," whether
or not either such date occurs prior to the Record Date), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate together with a copy of
this Summary of Rights.

The Rights Agreement provides that the Board of Directors, with the
concurrence of a majority of the Continuing Directors (as defined below), may
postpone the Distribution Date and that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the close of business on the Record
Date upon transfer or new issuance of the Common Shares will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption, exchange, termination or expiration
of the Rights), the surrender for transfer of any certificates for Common
Shares, with or without a copy of this Summary of Rights, will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business
on the Distribution Date and such separate Right Certificates alone will
evidence the Rights.

The Rights are not exercisable until the Distribution Date. The
Rights will expire on April 30, 2007, subject to the Company's right to extend
such date (the "Final Expiration Date"), unless earlier redeemed or
exchanged by the Company or terminated.

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Each Preferred Share purchasable upon exercise of the Rights will be
entitled to a minimum preferential quarterly dividend payment of $1.00 per
share but will be entitled to an aggregate dividend of 100 times the dividend,
if any, declared per Common Share. In the event of liquidation, the holders
of the Preferred Shares will be entitled to a minimum preferential liquidation
payment of $100 per share but will be entitled to an aggregate payment of 100
times the payment made per Common Share. Each Preferred Share will have 100
votes and will vote together with the Common Shares. Finally, in the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive 100 times the
amount received per Common Share. These rights are protected by customary
antidilution provisions. Because of the nature of the Preferred Share's
dividend, liquidation and voting rights, the value of one one-hundredth of a
Preferred Share purchasable upon exercise of each Right should approximate the
value of one Common Share.

The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares or
convertible securities at less than the current market price of the Preferred
Shares or (iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness, cash, securities or assets (excluding regular
periodic cash dividends at a rate not in excess of 125% of the rate of the
last regular periodic cash dividend theretofore paid or, in case regular
periodic cash dividends have not theretofore been paid, at a rate not in
excess of 50% of the average net income per share of the Company for the four
quarters ended immediately prior to the payment of such dividend, or dividends
payable in Preferred Shares (which dividends will be subject to the adjustment
described in clause (i) above)) or of subscription rights or warrants (other
than those referred to above).

In the event that a Person becomes an Acquiring Person (except
pursuant to certain cash offers for all outstanding Common Shares approved by
the Board) or if the Company were the surviving corporation in a merger with
an Acquiring Person or any affiliate or associate of an Acquiring Person and
the Common Shares were not changed or exchanged, each holder of a Right, other
than Rights that are or were acquired or beneficially owned by the 15%
stockholder (which Rights will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares having a market
value of two times the then current Purchase Price of the Right. With certain
exceptions, in the event that the Company were acquired in a merger or other
business combination transaction or more than 50% of its assets or earning
power were sold, proper provision shall be made so that each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction would
have a market value of two times the then current Purchase Price of the Right.

At any time after a Person becomes an Acquiring Person and prior to
the acquisition by such Acquiring Person of 50% or more of the outstanding
Common Shares, the Board of Directors may cause the Company to acquire the
Rights (other than Rights owned by an Acquiring Person which have become
void), in whole or in part, in exchange for that number of Common Shares
having an aggregate value equal to the Spread (the excess of the value of the
Common Shares issuable upon exercise of a Right after a Person becomes an
Acquiring Person over the Purchase Price) per Right (subject to adjustment).

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No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional shares will be issued and in lieu thereof, a payment in
cash will be made based on the market price of the Preferred Shares on the
last trading date prior to the date of exercise.

The Rights may be redeemed in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price") by the Board of Directors at any
time prior to the close of business on the tenth day following the first date
of public announcement that a Person has become an Acquiring Person. The
Board of Directors, with the concurrence of a majority of the Continuing
Directors (as defined below), may extend the period during which the Rights
are redeemable beyond the ten (10) days following the public announcement that
a Person has become an Acquiring Person. Under certain circumstances set
forth in the Rights Agreement, the decision to redeem shall require the
concurrence of a majority of the Continuing Directors. Immediately upon the
action of the Board of Directors of the Company electing to redeem the Rights,
the Company shall make an announcement thereof, and upon such election, the
right to exercise the Rights will terminate and the only right of the holders
of Rights will be to receive the Redemption Price.

The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the time that
any Person becomes an Acquiring Person, and any person who is subsequently
elected to the Board if such person is recommended or approved by a majority
of the Continuing Directors. Continuing Directors do not include an Acquiring
Person, or an affiliate or associate of an Acquiring Person, or any
representative of the foregoing.

Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company beyond those as an existing
stockholder, including, without limitation, the right to vote or to receive
dividends.

Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the Company and the Rights Agent may amend or supplement
the Rights Agreement without the approval of any holders of Right Certificates
to cure any ambiguity, to correct or supplement any provision contained
therein which may be defective or inconsistent with any other provisions
therein, to shorten or lengthen any time period under the Rights Agreement (so
long as, under certain circumstances, a majority of Continuing Directors
approve such shortening or lengthening) or so long as the interests of the
holders of Right Certificates (other than an Acquiring Person or an affiliate
or associate of an Acquiring Person) are not adversely affected thereby, to
make any other provisions in regard to matters or questions arising thereunder
which the Company and the Rights Agent may deem necessary or desirable,
including but not limited to extending the Final Expiration Date. The Company
may at any time prior to such time as any Person becomes an Acquiring Person
amend the Rights Agreement to lower the thresholds described above to not less
than the greater of (i) any percentage greater than the largest percentage of
the outstanding Common Shares then known by the Company to be beneficially
owned by any person or group of affiliated or associated persons and (ii) 10%.

A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A.
A copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.

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