EXHIBIT 10.3B


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                                                  NetIQ Corporation
Notice of Grant of Stock Options                  ID: 77-0405505
and Option Agreement                              3553 North First Street
                                                  San Jose, CA  95134

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[Name of employee/optionee]                       Option Number: XXXXXXXX
[Street address]                                  Plan:          1995
[City,State,Zip/Country]                          ID:            XXX-XX-XXX

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Effective [date of grant], you have been granted a(n) [Type] Stock Option to
buy [X,XXX] shares of NetIQ shares] shares of NetIQ Corporation (the Company)
stock at $[XX.XX] per share.

The Vesting Commencement Date is [insert Date].

The total option price of the shares granted is $[XXX,XXX.00].

Shares in each period will become fully vested on the date shown.

     Shares     Vest Type     Full Vest     Expiration
     ------     ---------     ---------     ----------
       XXX      Quarterly           XXX            XXX
       XXX      Quarterly           XXX            XXX
       XXX      Quarterly           XXX            XXX
       XXX      Quarterly           XXX            XXX




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By your signature and the Company's signature below, you and the Company agree
that these options are granted under and governed by the terms and conditions
of the Company's 1995 Stock Plan as amended and restated and this Option
Agreement, each of which are attached and made a part of this document.


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Ching-Fa Hwang, Chief Executive Officer           Date
NetIQ Corporation


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[name of optionee]                                Date



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I.   NOTICE OF GRANT

     A. Vesting Schedule:

     Subject to accelerated vesting as set forth in the Plan, this Option may
be exercised, in whole or in part, in accordance with one of the following
three schedules as shown on page one of this Agreement:

     New Hire or Merit Options to Employees With Less Than One Year of
Employment: Twenty-five (25%) of the Share subject to the Option shall vest one
year after the Vesting Commencement Date, and 6.25% of the shares subject to
the Option shall vest each three-month period thereafter, provided that on such
three-month dates the Optionee remains in continuous status as a Service
Provider on such dates.

     Merit Options to Employees With More than One Year of Employment: Six and
one quarter percent (6.25%) of the Shares subject to the Option shall vest
three months after the Vesting Commencement Date, and each three-month period
thereafter, provided that on such three-month dates the Optionee remains in
continuous status as a Service Provider on such dates.

     Employee Referral Bonus: 100% of the Shares subject to the Option shall
vest and may be exercised, in whole or in part, after the Vesting Commencement
Date.

     B. Termination Period:

     This Option may be exercised for three months after Optionee ceases to be
a Service Provider. Upon the death or disability of the Optionee, this Option
may be exercised for twelve months after Optionee ceases to be a Service
Provider. In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.

II.  OPTION AGREEMENT

     A. Grant of Option.

     The Plan Administrator of the Company hereby grants to the Optionee named
on page one of this Agreement (the "Optionee") an option (the "Option") to
purchase the number of Shares, as set forth in the Notice of Grant of Stock
Options and Option Agreement ("Notice of Grant"), at the exercise price per
share set forth in the Notice of Grant (the "Exercise Price"), subject to the
terms and conditions of the Plan, which is incorporated herein by reference.
Subject to Section 16(c) of the Plan, in the event of a conflict between the
terms and conditions of the Plan and the terms and conditions of this Option
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 is intended to qualify as an Incentive Stock Option under Section
422 of the Code. However, if this 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").

     B. Exercise of Option.

          (a) Right to Exercise. This Option is exercisable during its term in
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this 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 to exercise 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 the Company
pursuant to the provisions of the Plan. The Exercise Notice shall be completed
by the Optionee and delivered to the Stock Services Department of the Company.
The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by such aggregate Exercise Price.


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     No Shares shall be issued pursuant to the exercise of this Option unless
such issuance and exercise complies with Applicable Laws. Assuming such
compliance, for income tax purposes the Exercised Shares shall be considered
transferred to the Optionee on the date the Option is exercised with respect to
such Exercised Shares.

     C. Method of Payment.

     Payment of the aggregate Exercise Price shall be by any of the following,
or a combination thereof, at the election of the Optionee:

     1. cash; or

     2. check; or

     3. consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan; or

     4. surrender of other Shares which (i) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six (6)
months on the date of surrender, and (ii) have a Fair Market Value on the date
of surrender equal to the aggregate Exercise Price of the Exercised Shares.

     D. Non-Transferability of Option.

     This Option may not be transferred in any manner otherwise than by will or
by the laws of descent or distribution and may be exercised during the lifetime
of Optionee only by the Optionee. The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

     E. Term of Option.

     This Option may be exercised only within the term set out in the Notice of
Grant, and may be exercised during such term only in accordance with the Plan
and the terms of this Option Agreement.

     F. Tax Consequences.

     Some of the federal tax consequences relating to this Option, as of the
date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR
DISPOSING OF THE SHARES.

     G. Exercising the Option.

     1. Nonstatutory Stock Option. The Optionee may incur regular federal
income tax liability upon exercise of a NSO. The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates)
equal to the excess, if any, of the Fair Market Value of the Exercised Shares
on the date of exercise over their aggregate Exercise Price. If the Optionee is
an Employee or a former Employee, the Company will be required to withhold from
his or her compensation or collect from Optionee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise and refuse
to deliver Shares if such withholding amounts are not delivered at the time of
exercise.

     2. Incentive Stock Option. If this Option qualifies as an ISO, the
Optionee will have no regular federal income tax liability upon its exercise,
although the excess, if any, of the Fair Market Value of the Exercised Shares
on the date of exercise over their aggregate Exercise Price will be treated as
an adjustment to alternative minimum taxable income for federal tax purposes
and may subject the Optionee to alternative minimum tax in the year of
exercise. In the event that the Optionee ceases to be an Employee but remains a
Service Provider, any Incentive Stock Option of the Optionee that remains
unexercised shall cease to qualify as an Incentive Stock Option and will be
treated for tax purposes as a Nonstatutory Stock Option on the date three (3)
months and one (1) day following such change of status.


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     3. Disposition of Shares.

     (a) NSO. If the Optionee holds NSO Shares for at least one year, any gain
realized on disposition of the Shares will be treated as long-term capital gain
for federal income tax purposes.

     (b) ISO. If the Optionee holds ISO Shares for at least one year after
exercise and two years after the grant date, any gain realized on disposition
of the Shares will be treated as long-term capital gain for federal income tax
purposes. If the Optionee disposes of ISO Shares within one year after exercise
or two years after the grant date, any gain realized on such disposition will
be treated as compensation income (taxable at ordinary income rates) to the
extent of the excess, if any, of the lesser of (A) the difference between the
Fair Market Value of the Shares acquired on the date of exercise and the
aggregate Exercise Price, or (B) the difference between the sale price of such
Shares and the aggregate Exercise Price. Any additional gain will be taxed as
capital gain, short-term or long-term depending on the period that the ISO
Shares were held.

     (c) Notice of Disqualifying Disposition of ISO Shares. If the Optionee
sells or otherwise disposes of any of the Shares acquired pursuant to an ISO on
or before the later of (i) two years after the grant date, or (ii) one year
after the exercise date, the Optionee shall immediately notify the Company in
writing of such disposition. The Optionee agrees that he or she may be subject
to income tax withholding by the Company on the compensation income recognized
from such early disposition of ISO Shares by payment in cash or out of the
current earnings paid to the Optionee.

     (d) Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws, but not
the choice of law rules, of California.

     H. NO GUARANTEE OF CONTINUED SERVICE.

     OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR
THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH
OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE OPTIONEE'S RELATIONSHIP AS
A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

     By your signature and the signature of the Company's representative, you
and the Company agree that this Option is granted under and governed by the
terms and conditions of the Plan and this Option Agreement. Optionee has
reviewed the Plan and this Option Agreement in their entirety, has had an
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions 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 questions
relating to the Plan and Option Agreement. Optionee further agrees to notify
the Company upon any change in the residence address indicated on page one.


                               CONSENT OF SPOUSE

The undersigned spouse of Optionee has read and hereby approves the terms and
conditions of the Plan and this Option Agreement. In consideration of the
Company's granting his or her spouse the right to purchase Shares as set forth
in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall


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be similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.


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                                        Spouse of Optionee



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