Inspire Medical Systems Inc

This management proposal asks shareholders to cast a non-binding advisory vote to approve the fiscal 2025 compensation of the named executive officers as disclosed in the proxy statement. Management seeks this endorsement to validate its pay practices and to demonstrate alignment between executive pay and the Company’s performance. The Board emphasizes a pay-for-performance philosophy with a substantial portion of compensation variable and at-risk, the use of PSUs and RSUs, performance metrics tied to revenue and operating income, and retention-focused vesting. The committee engaged Aon as an independent advisor and considered prior shareholder feedback and a high prior say-on-pay approval (approximately 93% in 2025). The recommendation is “FOR”; the Board believes the program appropriately balances competitive market positioning, retention, and alignment with stockholder interests while incorporating governance safeguards such as clawbacks and double-trigger change-in-control protections.

This management proposal seeks a non-binding shareholder preference on how often advisory 'say-on-pay' votes should occur in the future—options are every one, two, or three years. Management recommends an annual (one year) frequency, arguing it enables more timely stockholder feedback on executive compensation and aligns with their engagement goals. The Organization and Compensation Committee considers past shareholder input (93% prior approval) and ongoing engagement when recommending one-year frequency. The vote is advisory only and will guide, but not bind, the Board’s future decisions on say-on-pay scheduling.

Proposal 5 requests shareholder approval to amend the Certificate of Incorporation to phase out the Company’s classified board—transitioning from staggered three-year terms to annual elections for all directors by 2029, with a staged implementation across the 2027–2029 annual meetings. Management frames the change as responsive to stockholder feedback favoring annual elections, aligning governance with market practices, and enhancing accountability and transparency. The staged approach preserves continuity and board experience during transition. The amendment would also modify removal and vacancy provisions so that, once fully declassified, directors may be removed with or without cause and vacancies are to be filled by the board as described. The board recommends the amendment 'FOR,' arguing it balances stability and increased accountability. The adoption requires a two-thirds voting threshold, making broker non-votes effectively negative on this item. This proposal has governance significance—declassification reduces incumbency protection and can make the company more responsive to activist campaigns or shareholder preferences, while the phased implementation reduces immediate disruption to board composition.

This management proposal seeks shareholder approval to amend and restate the Company’s 2018 Incentive Award Plan to increase the share reserve by 2.6 million shares (raising the cap to 9,903,857), remove the automatic evergreen replenishment mechanism, impose a one-year minimum vesting policy with limited exceptions, bar dividend equivalents on unvested time-based awards, and extend the plan term for ten years. Management frames the request as necessary to sustain a broad-based equity compensation program—to attract, retain and incentivize employees—particularly given a depleted share pool (575,367 shares remaining as of Feb 23, 2026) and many outstanding stock options being underwater. The Board highlights governance concessions (no evergreen, no liberal share recycling, non-repricing without shareholder approval, director award limits, clawbacks, minimum vesting, and no single-trigger acceleration on change in control) intended to mitigate dilution and align with market practice. The Board also notes share repurchases and that the requested shares represent approximately 9% of outstanding shares and are expected to support roughly one year of grants under current practices. The proposal is functionally material to compensation strategy and capital allocation; stockholders should weigh dilution versus the operational need to continue equity grants, the governance safeguards included, the company’s burn rate and overhang, and alternative retention mechanisms. The Board recommends a vote “FOR.”

Proposal 7 asks shareholders to grant the Board authority to adjourn the Annual Meeting to solicit additional proxies if there are insufficient votes to approve Proposal 5 (declassification) and/or Proposal 6 (plan amendment). Management contends approval is in the company’s best interest to facilitate obtaining sufficient shareholder votes on materially important proposals affecting governance and compensation. The adjournment proposal can be used strategically to continue solicitation efforts and potentially change outcomes, including approaching holders who have not voted or have voted against; this can raise governance concerns for some shareholders because it can provide management the opportunity to re-solicit and attempt to sway votes after initial shareholder opposition, but boards commonly include such proposals to avoid having to reconvene separate special meetings. The Board recommends a vote “FOR.”