EXHIBIT 10.70**CYBERONICS, INC.****2005 STOCK PLAN****STOCK OPTION AGREEMENT**     Unless otherwise defined herein, the terms defined in the Plan shall have the samedefined meanings in this Option Agreement.**I.NOTICE OF GRANT     You have been granted an option to purchase Common Stock of the Company, subject to theterms and conditions of the Plan and this Option Agreement, as follows:   Date of Grant:     Exercise Price per Share: $    Total Number of Shares Granted:     Type of Option: Nonstatutory Stock Option   Expiration Date: 10th Anniversary of Date of Grant    Vesting Schedule: 1/60th of the Shares subject to the Option shallvest each month after the Date of Grant, subjectto the Optionee continuing to be a ServiceProvider on such dates, until the Option is fullyvested.   Termination Period: To the extent vested, this Option maybeexercised for 90 days after Optionee ceases tobe a Service Provider and shall then terminate.Upon the death or Disability of the Optioneewhile a Service Provider, this Option maybeexercised one year after Optionee ceases to be aService Provider and shall then terminate.However, in no event may this Optionbeexercised after the Expiration Date as providedabove.
 

 
**II.****AGREEMENT**     1. Grantof Option. The Plan’s Administrator hereby grants to the Optionee named in theNotice of Grant attached as Part I of this Agreement (the “Optionee”) an option (the “Option”) topurchase the number of Shares, as set forth in the Notice of Grant, at the exercise price per shareset forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions of thePlan, which is incorporated herein by reference. Subject to Section 15(c) of the Plan, in the eventof a conflict between the terms and conditions of the Plan and the terms and conditions of thisOption Agreement, the terms and conditions of the Plan shall prevail.     If designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this Option isintended to qualify as an Incentive Stock Option under Section 422 of the Code. However, ifthis Option is intended to be an Incentive Stock Option, to the extent that it exceeds the$100,000 rule of Code Section 422(d) it shall be treated as a Nonstatutory Stock Option (“NSO”).     2. Exercise of Option.          (a) Right to Exercise. This Option is exercisable during its term in accordance withthe Vesting Schedule set out in the Notice of Grant and the applicable provisions of the Plan andthis Option Agreement.          (b) Method of Exercise. This Option is exercisable by delivery of an exercise notice,in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election toexercise the Option, the number of Shares in respect of which the Option is being exercised (the“Exercised Shares”), and such other representations and agreements as may be required by theCompany pursuant to the provisions of the Plan. The Exercise Notice shall be completed by theOptionee and delivered to the Director of Corporate Compliance or to the Secretary of the Company.The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to allExercised Shares. This Option shall be deemed to be exercised upon receipt by the Company of suchfully executed Exercise Notice accompanied by such aggregate Exercise Price.     No Shares shall be issued pursuant to the exercise of this Option unless such issuance andexercise complies with Applicable Laws. Assuming such compliance, for income tax purposes theExercised Shares shall be considered transferred to the Optionee on the date the Option isexercised with respect to such Exercised Shares.     3. Method of Payment. Payment of the aggregate Exercise Price shall be byany of the following, or a combination thereof, at the election of the Optionee:          (a) cash; or          (b) check; or          (c) consideration received by the Company under a cashless exercise program implemented by theCompany in connection with the Plan; or          (d) surrender of other Shares which (i) in the case of Shares acquired upon exercise of anoption, have been owned by the Optionee for more than six (6) months on the date of
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surrender, and (ii) have a Fair Market Value on the date ofsurrender equal to the aggregate Exercise Price of the Exercised Shares; or     4. Nontransferability of Option. This Option may not be transferred in anymanner otherwise than by will or by the laws of descent or distribution and may be exercised duringthe lifetime of Optionee only by the Optionee. The terms of the Plan and this Option Agreementshall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.     5. Term of Option. This Option may be exercised only within the term setout in the Notice of Grant and may be exercised during such term only in accordance with the Planand the terms of this Option Agreement.     6. Tax Consequences. Some of the federal tax consequences relating to this Option, asof the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, ANDTHE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULTA TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.          (a) Exercising the Option.               (i) Nonstatutory Stock Option. The Optionee may incur federal and other taxliabilities upon exercise of a NSO. The Optionee will be treated as having received compensationincome (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Valueof the Exercised Shares on the date of exercise over their aggregate Exercise Price. If theOptionee is an Employee or a former Employee, the Company will be required to withhold from his orher compensation or collect from Optionee and pay to the applicable taxing authorities an amount incash equal to a percentage of this compensation income at the time of exercise, and may refuse tohonor the exercise and refuse to deliver Shares if such withholding amounts are not delivered atthe time of exercise.               (ii) IncentiveStock Option. If this Option qualifies as an ISO at the time ofexercise, the Optionee will have no federal tax liabilities upon its exercise, although the excess,if any, of the Fair Market Value of the Exercised Shares on the date of exercise over theiraggregate Exercise Price will be treated as an adjustment to alternative minimum taxable income forfederal tax purposes and may subject the Optionee to alternative minimum tax in the year ofexercise. In the event that the Optionee ceases to be an Employee but remains a ServiceProvider, any Incentive Stock Option of the Optionee that remains unexercised shallcease to qualify as an Incentive Stock Option and will be treated for tax purposes as aNonstatutory Stock Option on the date three months and one day following such change of status.          (b) Disposition of Shares.               (i) NSO. If the Optionee holds NSO Shares for at least one year, anygain realized on disposition of the Shares will be treated as long-term capital gain for federalincome tax purposes.               (ii) ISO.If the Optionee holds ISO Shares for at least one year afterexercise and two years after the grant date, any gain realized on disposition of the Shares will be
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treated as long-term capital gain for federal income tax purposes. If the Optionee disposes of ISOShares within one year after exercise or two years after the grant date, any gain realized on suchdisposition will be treated as compensation income (taxable at ordinary income rates) to the extentof the excess, if any, of the lesser of (A) the difference between the Fair Market Value of theShares acquired on the date of exercise and the aggregate Exercise Price, or (B) the differencebetween the sale price of such Shares and the aggregate Exercise Price. Any additional gain will betaxed as capital gain, short-term or long-term depending on the period that the ISO Shares wereheld.          (c) Noticeof Disqualifying Disposition of ISO Shares. If the Optioneesells or otherwise disposes of any of the Shares acquired pursuant to an ISO on or before the laterof (i) two years after the grant date, or (ii) one year-after the exercise date, the Optionee shallimmediately notify the Company in writing of such disposition. The Optionee agrees that he or shemay be subject to tax withholding by the Company on the compensation income recognized from suchearly disposition of ISO Shares by payment in cash or out of the current earnings paid to theOptionee.     7. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. ThePlan and this Option Agreement constitute the entire agreement of the parties with respect to thesubject matter hereof and supersede in their entirety all prior undertakings and agreements of theCompany and Optionee with respect to the subject matter hereof, and may not be modified adverselyto the Optionee’s interest except by means of a writing signed by the Company and Optionee. ThisAgreement is governed by the internal substantive laws, but not the choice of law rules, of Texas.     8. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT THEVESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICEPROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED ANOPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THISAGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOTCONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THEVESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THECOMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH ORWITHOUT CAUSE.     By your signature and the signature of the Company’s representative below, you andthe Company agree that this Option is granted under and governed by the terms and conditions of thePlan and this Option Agreement. Optionee has reviewed the Plan and this Option Agreement in theirentirety, has had an opportunity to obtainthe advice of counsel prior to executing this Option Agreement and fully understands allprovisions of the Plan and Option Agreement. Optionee hereby agrees to accept as binding,conclusive and final all decisions or interpretations of the Administrator upon any questionsrelating to the Plan and Option Agreement. Optionee further agrees to notify the Company upon anychange in the residence address indicated below.
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     OPTIONEE: CYBERONICS, INC.                 By:       Pamela B. WestbrookSocial Security Number                 Title: Vice President, Finance &Administrationand Chief FinancialOfficer            Residence Address Date:     
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**EXHIBIT A****2005 STOCK PLAN****EXERCISE NOTICE**Cyberonics, Inc.**