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:
|X| Preliminary Proxy Statement
|_| Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12

GENELABS TECHNOLOGIES, 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):

|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
N/A
(4) Proposed maximum aggregate value of transaction:
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|_| Fee paid previously with preliminary materials:

|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:
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(4) Date Filed:
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[GENELABS LOGO]

April 29, 2005

To our Shareholders:

You are cordially invited to attend the 2005 annual meeting of the
shareholders of Genelabs Technologies, Inc. The meeting will be held at
Genelabs Technologies' principal executive offices located at 505 Penobscot
Drive, Redwood City, California 94063 on Tuesday, June 14, 2005, at 10:00 a.m.
Pacific Daylight Time.

At the meeting, you will be asked to elect five members to the Board
of Directors, to authorize the Board of Directors to effect a reverse stock
split of our of common stock in a ratio of one-for-five, to ratify the
selection of Ernst & Young LLP as the independent registered public accounting
firm for the Company for the fiscal year ending December 31, 2005, to approve
an amendment of our 2001 Stock Option Plan to, among other things, increase
the number of shares we are authorized to issue under it and to approve an
amendment to our 2001 Employee Stock Purchase Plan to increase the number of
shares we are authorized to issue under it. These matters are described more
fully in the proxy statement attached hereto and made a part hereof.

I would like to thank you for your support as a Genelabs Technologies
shareholder and urge you to please complete, date, sign and return the
enclosed proxy as soon as possible. We look forward to seeing you at the
meeting.

Sincerely,

James A.D. Smith
President and Chief Executive Officer

--------------------------------------------
2005 ANNUAL MEETING OF SHAREHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS

Page
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING............................... 1
CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS.......................... 4
PROPOSAL 1: ELECTION OF DIRECTORS........................................... 7
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM.......................................... 10
PROPOSAL 3: AUTHORIZATION FOR THE BOARD OF DIRECTORS TO EFFECT A
REVERSE STOCK SPLIT IN A RATIO OF ONE-FOR-FIVE.................. 11
PROPOSAL 4: AMENDMENT OF 2001 STOCK OPTION PLAN............................. 16
PROPOSAL 5: INCREASE IN NUMBER OF SHARES AVAILABLE UNDER THE 2001
EMPLOYEE STOCK PURCHASE PLAN.................................... 22
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............... 26
EXECUTIVE OFFICERS........................................................... 27
EXECUTIVE COMPENSATION AND OTHER INFORMATION................................. 29
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION.................................................. 33
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS...................... 37
PERFORMANCE MEASUREMENT COMPARISON........................................... 38
COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT.......................... 38
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................... 39
OTHER BUSINESS............................................................... 39
ADDITIONAL INFORMATION....................................................... 39

--------------------------------------------

GENELABS TECHNOLOGIES, INC.

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

DATE: TUESDAY, JUNE 14, 2005
TIME: 10:00 A.M. P.D.T.
PLACE: 505 PENOBSCOT DRIVE
REDWOOD CITY, CALIFORNIA 94063

NOTICE IS HEREBY GIVEN that the 2005 annual meeting of the
shareholders of Genelabs Technologies, Inc., a California corporation,
referred to as Genelabs or the Company, will be held at the place and time
indicated above for the following purposes:

1. ELECTION OF DIRECTORS. To elect five members to the Board of
Directors, each to serve until the next annual meeting of
shareholders and until his or her successor has been elected
and qualified or until his or her earlier resignation or
removal;

2. RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM. To ratify the selection of Ernst & Young
LLP as the Company's independent registered public
accounting firm for the fiscal year ending December 31,
2005;

3. AUTHORIZATION FOR THE BOARD OF DIRECTORS TO EFFECT A REVERSE
STOCK SPLIT IN A RATIO OF ONE-FOR-FIVE. To authorize the
board of directors to amend Genelabs' Amended and Restated
Articles of Incorporation to effect a reverse stock split of
Genelabs' common stock in a ratio of one-for-five, at any
time until the 2006 annual meeting of shareholders;

4. AMENDMENT OF OUR 2001 STOCK OPTION PLAN. To approve a
proposed amendment of the Company's 2001 Stock Option Plan
to, among other things, increase the number of shares of
common stock reserved and available for issuance under such
plan by 4,000,000 shares (or 800,000 shares if the proposed
reverse stock split is implemented) for purposes of Sections
162(m) and 422 of the Internal Revenue Code of 1986, as
amended and the National Association of Securities Dealers,
Inc. Rule 4350(i);

5. AMENDMENT OF OUR 2001 EMPLOYEE STOCK PURCHASE PLAN TO
INCREASE THE NUMBER OF SHARES AVAILABLE FOR ISSUANCE. To
approve a proposed amendment to the Company's 2001 Employee
Stock Purchase Plan to increase the number of shares of
common stock reserved and available for issuance under such
plan by 2,000,000 shares (or 400,000 shares if the proposed
reverse stock split is implemented) for purposes of Section
423 of the Internal Revenue Code of 1986, as amended; and

6. OTHER BUSINESS. To transact other business that may properly
come before the annual meeting and any adjournment or
postponement thereof.

The foregoing items of business are more fully described in the proxy
statement that is attached and made a part hereof. The Board of Directors has
fixed the close of business on Friday, April 22, 2005 as the record date for
determining the shareholders entitled to notice of, and to vote at, the annual
meeting and any adjournment or postponement thereof.

Whether or not you expect to attend the annual meeting in person, you
are urged to please mark, sign, date and return the enclosed proxy card as
promptly as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the annual meeting. If you send
in your proxy card and then decide to attend the annual meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the proxy statement. Please note, however,
that if your shares are held of record by a

broker, bank or other nominee and you wish to vote at the meeting, you must
obtain from the record holder a proxy issued in your name.

By Order of the Board of Directors

Heather Criss Keller
Secretary

Redwood City, California
April 29, 2005

GENELABS TECHNOLOGIES, INC.
505 Penobscot Drive
Redwood City, California 94063

PROXY STATEMENT

This Proxy Statement contains information relating to the Annual
Meeting of Shareholders of Genelabs Technologies, Inc., a California
corporation (the "Company", "Genelabs", "we or "us") to be held on June 14,
2005, beginning at 10:00 a.m. Pacific Daylight Time, at Genelabs' principal
executive offices located at 505 Penobscot Drive, Redwood City, California
94063, and at any adjournment of the Annual Meeting. The Proxy Statement and
accompanying proxy card are first being mailed to shareholders on or about May
, 2005.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

What is the purpose of the Annual Meeting?

At our Annual Meeting, shareholders will act upon the matters
outlined in the accompanying Notice of Annual Meeting, including the following
proposals:

*the election of five members to the Board of Directors, each to serve until
the next annual meeting of shareholders and until his or her successor has
been elected and qualified or until his or her earlier resignation or removal;

*to ratify the selection of Ernst & Young LLP as the Company's independent
registered public accounting firm for the fiscal year ending December 31,
2005;

*to authorize the board of directors to amend Genelabs' Amended and Restated
Articles of Incorporation to effect a reverse stock split of Genelabs' common
stock in a ratio of one-for-five, at any time until the 2006 annual meeting of
shareholders;

*to approve a proposed amendment of the Company's 2001 Stock Option Plan to,
among other things, increase the number of shares of common stock reserved and
available for issuance under such plan by 4,000,000 shares (or 800,000 shares
if the proposed reverse stock split is implemented), for purposes of Sections
162(m) and 422 of the Internal Revenue Code of 1986, as amended and the
National Association of Securities Dealers, Inc. Rule 4350(i); and

*to approve a proposed amendment to the Company's 2001 Employee Stock Purchase
Plan to increase the number of shares of common stock reserved and available
for issuance under such plan by 2,000,000 shares (or 400,000 shares if the
proposed reverse stock split is implemented) for purposes of Section 423 of
the Internal Revenue Code of 1986, as amended.

In addition, our management will report on our performance during
fiscal 2004 and respond to questions from shareholders.

What shares can I vote?

All shares of our common stock owned by you as of the close of
business on the record date, April 22, 2005, may be voted by you. These shares
include (1) shares held directly in your name as the shareholder of record and
(2) shares held for you as the beneficial owner through a stockbroker, bank or
other nominee.

Each share of common stock owned by you generally entitles you to
cast one vote on each matter to be voted upon. In electing directors, however,
each shareholder has cumulative voting rights and therefore is entitled to
cast a number of votes equal to the number of shares held multiplied by the
number of directors to be elected. The shareholder may cast these votes all
for a single candidate or may distribute the votes among some or all of the
candidates. No shareholder will be entitled to cumulate votes for a candidate,
however, unless that candidate's name has been placed in

nomination prior to the voting and the shareholder, or any other shareholder,
has given notice at the annual meeting prior to the voting of an intention to
cumulate votes. In this event, the proxy holder may allocate the votes
represented by proxies among the Board of Directors' nominees in the proxy
holder's sole discretion.

What is the difference between holding shares as a shareholder of record and
as a beneficial owner?

Most of our shareholders hold their shares through a stockbroker,
bank or other nominee rather than directly in their own name. As summarized
below, there are some distinctions between shares held of record and those
owned beneficially.

Shareholder of Record

If your shares are registered directly in your name with our transfer
agent, Mellon Investor Services, you are considered, with respect to those
shares, the shareholder of record, and these proxy materials are being sent
directly to you by us. As the shareholder of record, you have the right to
grant your voting proxy directly to us or to vote in person at the meeting. We
have enclosed or sent a proxy card for you to use.

Beneficial Owner

If your shares are held in a stock brokerage account or by a bank or
other nominee, you are considered the beneficial owner of shares held in
street name, and these proxy materials are being forwarded to you by your
broker, bank or nominee which is considered, with respect to those shares, the
shareholder of record. As the beneficial owner, you have the right to direct
your broker on how to vote and are also invited to attend the meeting.
However, because you are not the shareholder of record, you may not vote these
shares in person at the meeting unless you obtain a signed proxy from the
record holder giving you the right to vote the shares. Your broker, bank or
nominee has enclosed or provided a voting instruction card for you to use in
directing the broker or nominee how to vote your shares. If you do not provide
the shareholder of record with voting instructions, your shares may constitute
broker non-votes. The effect of broker non-votes is more specifically
described in "What vote is required to approve each item?" below.

How can I vote my shares in person at the meeting?

Shares held directly in your name as the shareholder of record may be
voted in person at the Annual Meeting. If you choose to do so, please bring
the enclosed proxy card or proof of identification.

EVEN IF YOU CURRENTLY PLAN TO ATTEND THE ANNUAL MEETING, WE RECOMMEND THAT YOU
ALSO SUBMIT YOUR PROXY AS DESCRIBED BELOW SO THAT YOUR VOTE WILL BE COUNTED IF
YOU LATER DECIDE NOT TO ATTEND THE MEETING. SHARES HELD BENEFICIALLY IN STREET
NAME MAY BE VOTED IN PERSON BY YOU ONLY IF YOU OBTAIN A SIGNED PROXY FROM THE
RECORD HOLDER GIVING YOU THE RIGHT TO VOTE THE SHARES.

How can I vote my shares without attending the meeting?

Whether you hold shares directly as the shareholder of record or
beneficially in street name, you may direct your vote without attending the
meeting. You may vote by granting a proxy or, for shares held in street name,
by submitting voting instructions to your broker, bank or nominee.

You may vote by signing your proxy card or, for shares held in street
name, the voting instruction card included by your broker, bank or nominee and
mailing it in the accompanying enclosed, pre-addressed envelope. If you
provide specific voting instructions, your shares will be voted as you
instruct.

Can I change my vote after I submit my proxy?

Yes. Even after you have submitted your proxy, you may change your
vote at any time prior to the close of voting at the Annual Meeting by filing
with our Corporate Secretary at 505 Penobscot Drive, Redwood City, California
94063 a notice of revocation or by submitting a duly executed proxy bearing a
later date or it may be revoked by attending the meeting and voting in person.

If your shares are held in a stock brokerage account or by a bank or
other nominee, you may revoke your proxy by following the instructions
provided by your broker, bank or nominee.

What constitutes a quorum?

The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the shares of common stock outstanding and entitled
to vote on the record date will constitute a quorum, permitting the Annual
Meeting to conduct its business. At the close of business on the record date,
shares of our common stock were issued and outstanding. Proxies received
but marked as abstentions and broker non-votes will be included in the
calculation of the number of shares considered to be present at the Annual
Meeting for purposes of a quorum.

What are the Board of Directors' recommendations?

Unless you give other instructions via your proxy card, the persons
named as proxy holders on the proxy card will vote in accordance with the
recommendations of our Board of Directors. The Board of Directors'
recommendation is set forth together with the description of each item in this
Proxy Statement. In summary, the Board of Directors recommends a vote:

*"FOR" the election of each of our nominees to the Board of Directors;

*"FOR" the ratification of the selection of Ernst & Young LLP as our
independent registered public accounting firm for our fiscal year
ending December 31, 2005;

*"FOR" the authorization of the board of directors to amend Genelabs'
Amended and Restated Articles of Incorporation to effect a reverse
stock split of Genelabs' common stock in a ratio of one-for-five,
at any time until the 2006 annual meeting of shareholders;

*"FOR" the amendment of our 2001 Stock Option Plan to, among other
things, increase the number of shares of common stock reserved and
available for issuance under such plan by 4,000,000 shares (or
800,000 shares if the proposed reverse stock split is implemented),
for purposes of Sections 162(m) and 422 of the Internal Revenue
Code of 1986, as amended and the National Association of Securities
Dealers, Inc. Rule 4350(i); AND

*"FOR" the amendment of our 2001 Employee Stock Purchase Plan to
increase the number of shares of common stock reserved and
available for issuance under such plan by 2,000,000 shares (or
400,000 shares if the proposed reverse stock split is implemented)
for purposes of Section 423 of the Internal Revenue Code of 1986,
as amended.

With respect to any other matter that properly comes before the Annual
Meeting, the proxy holders will vote in accordance with their judgment on such
matter.

What vote is required to approve each item?

For the election of directors, the director nominees who receive the
greatest number of votes at the Annual Meeting (up to the number of directors
to be elected) will be elected. Abstentions and broker non-votes, if any, will
not affect the outcome of the vote on the election of directors.

The affirmative vote of the holders of a majority of the outstanding
shares of the common stock will be required to authorize the board of
directors to amend Genelabs' Amended and Restated Articles of Incorporation to
effect a reverse stock split of Genelabs' common stock in a ratio of
one-for-five. As a result, abstentions and broker non-votes will have the same
effect as negative votes.

The remaining proposals will require the affirmative vote of a
majority of shares represented and voting on each proposal. In determining
whether a proposal received the requisite number of affirmative votes,
abstentions and broker non-votes, if any, will be disregarded and have no
effect on the outcome.

What does it mean if I receive more than one proxy or voting instruction card?

It means your shares are registered differently or are in more than
one account. Please provide voting instructions for all proxy and voting
instruction cards you receive.

Where can I find the voting results of the meeting?

We will announce preliminary voting results at the meeting and
publish final results in our quarterly report on Form 10-Q for the second
quarter of fiscal year 2005.

Who will count the votes?

A representative of our transfer agent, Mellon Investor Services,
will tabulate the votes and act as the inspector of election.

Who will bear the cost of this solicitation?

We are making this solicitation and will pay the entire cost of
preparing, assembling, printing, mailing and distributing these proxy
materials. In addition to the mailing of these proxy materials, the
solicitation of proxies or votes may be made in person, by telephone or by
electronic communication by our directors, officers and employees, who will
not receive any additional compensation for such solicitation activities. We
also have hired Mellon Investor Services to assist us in the distribution of
proxy materials and the solicitation of votes. We will pay Mellon Investor
Services a fee of approximately $8,500, plus fees for individual
solicitations, for these services. We will also reimburse brokerage houses and
other custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for forwarding proxy and solicitation materials to shareholders.

May I propose actions for consideration at next year's annual meeting of
shareholders?

For a shareholder's proposal to be included in our Proxy Statement
for the 2006 Annual Meeting of Shareholders, the shareholder must follow the
procedures of Rule 14a-8 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the proposal must be received by our Corporate
Secretary at 505 Penobscot Drive, Redwood City, California 94063 not later
than January 5, 2006. In order for proposals of shareholders made outside of
Rule 14a-8 under the Exchange Act to be considered timely, our bylaws require
that such proposals must be submitted to our Corporate Secretary not later
than April 15, 2006 and not earlier than March 16, 2006, unless the Annual
Meeting is called for on a date earlier than May 15, 2006 or later than July
14, 2006, in which case any such proposal must be received not earlier than
the 90th day prior to the annual meeting or later than the 60th day prior to
the annual meeting, or in the event public announcement of the annual meeting
is made less than 70 days prior to the annual meeting, any such proposal must
be made no later than the 10th day following the day on which notice of the
date of the meeting is mailed or public disclosure of the date of the meeting
is made, whichever occurs first.

CORPORATE GOVERNANCE AND BOARD OF DIRECTORS MATTERS

Who are the current members of the Board of Directors and are they
independent?

The members of the Board of Directors on the date of this proxy
statement, and the committees of the Board on which they serve, are identified
below:

Nominating Compensation
Director Audit Committee Committee Committee
-------- --------------- --------- ---------

Irene A. Chow, Ph.D. -- -- --
Arthur Gray, Jr. * * **
H.H. Haight ** * --
Alan Y. Kwan * ** *
James A.D. Smith -- -- --

____________
* Committee member
** Committee chairperson

Our Board of Directors has determined that each of Mr. Gray, Mr.
Haight and Mr. Kwan meet the independence requirements of the NASD listing
standards.

How often did the Board of Directors meet during fiscal 2004?

During the fiscal year ended December 31, 2004, the Board of
Directors held eight meetings. Each Board member attended 75% or more of the
aggregate of the meetings of the Board of Directors and of the committees on
which he or she served that were held during the period for which he or she
was a director or committee member, respectively.

In addition, it is Company policy that each of our directors be
invited and encouraged to attend the Annual Meeting. Two of our directors
attended the 2004 Annual Meeting.

How do shareholders communicate with the Board of Directors?

The Board of Directors has established a process to receive
communications from shareholders. To communicate with the Board of Directors,
correspondence should be addressed to the Board of Directors, Genelabs
Technologies, Inc. All such correspondence should be sent "Attn: Secretary" at
505 Penobscot Drive, Redwood City, CA 94063-4738.

All communications received as set forth in the preceding paragraph
will be opened by the Secretary for the sole purpose of determining whether
the contents represent a message to our directors. Any bona fide communication
to the directors will be summarized and presented to the Board of Directors at
its next regularly scheduled meeting.

Does the Company have a Code of Ethics?

Yes. We have adopted a code of business ethics and conduct for all of
our employees and directors, including our chief executive officer, chief
financial officer, other executive officers and senior financial personnel. A
copy of our code of business ethics and conduct is available on our website at
www.genelabs.com under the heading "Investor Information/Corporate
Governance." We intend to post on our website any material changes to, or
waiver from our code of business ethics and conduct, if any, within five
business days of such event.

What are the standing committees of the Board of Directors?

The Board of Directors has an Audit Committee, a Compensation
Committee and a Nominating Committee.

Audit Committee

The Audit Committee reviews our internal accounting procedures and
considers and reports to the Board of Directors with respect to other auditing
and accounting matters, including the selection of our independent registered
public accounting firm, the scope of annual audits, fees to be paid to our
independent registered public accounting firm and the performance of our
independent registered public accounting firm. The members of the Audit
Committee are Mr. Gray, Mr. Haight (Chairman) and Mr. Kwan, each of whom is an
independent director under the NASD listing standards. The Audit Committee
held six meetings during the fiscal year ended December 31, 2004. Additional
information regarding this Committee's activities in 2004 are set forth below
under the heading "Report of the Audit Committee of the Board of Directors."

Our Board of Directors has determined that both of Mr. Gray and Mr.
Haight, each a member of our Audit Committee, are qualified as an audit
committee financial expert within the meaning of SEC regulations.

Compensation Committee

The Compensation Committee reviews and recommends to the Board of
Directors certain salaries, benefits and stock option grants for employees,
consultants, directors and other individuals compensated by us. The
Compensation Committee also administers our stock option and other employee
benefit plans. The members of the Compensation Committee are Mr. Gray
(Chairman) and Mr. Kwan, each of whom is an independent director under the
NASD listing standards. The Compensation Committee held three meetings during
the fiscal year ended December 31, 2004. Additional information regarding this
Committee's activities in 2004 are set forth below under the heading "Report
of the Compensation Committee of the Board of Directors on Executive
Compensation."

Nominating Committee

The functions of the Nominating Committee include the following:
identifying and recommending to the Board individuals qualified to serve as
directors of the Company; recommending to the Board directors to serve on
committees of the Board; advising the Board with respect to matters of Board
composition and procedures. The Nominating Committee is governed by a charter,
a current copy of which is available on our corporate website at
www.genelabs.com under the heading "Investor Information/Corporate
Governance."

The members of the Nominating Committee are Mr. Gray, Mr. Haight and
Mr. Kwan (Chairman), each of whom is an independent director under the NASD
listing standards. The Nominating Committee held five meetings during the
fiscal year ended December 31, 2004.

The Nominating Committee considers a nominee's experience, skills,
expertise, diversity, personal and professional integrity, character, business
judgment, time availability in light of other commitments, dedication,
conflicts of interest and such other relevant factors that the Committee
considers appropriate in the context of the needs of the Company. The
Nominating Committee identifies potential nominees by asking current directors
and executive officers to notify the Committee if they become aware of persons
meeting the criteria described above. The Nominating Committee also, from time
to time, may engage firms that specialize in identifying director candidates.

The Nominating Committee will consider director candidates
recommended by shareholders. To have a candidate considered by the Nominating
Committee, a shareholder must submit the recommendation in writing no later
than 60 days and no more than 90 days prior to the first anniversary of the
preceding year's annual meeting and the recommendation must include the
following information: the name, age, business address and residence address
of the nominee, the principal occupation or employment of the nominee, the
class and number of shares of the corporation beneficially owned by the
nominee, a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nominations are to be made by the
shareholder, and any other information relating to the nominee required to be
disclosed in solicitations of proxies for election of directors or otherwise
required by law.

Once a person has been identified by the Nominating Committee as a
potential candidate, the Committee may collect and review publicly available
information regarding the person to assess whether the person should be
considered further. If the Nominating Committee determines that the candidate
warrants further consideration, the Chairman or another member of the
Committee or their designee contacts the person. Generally, if the person
expresses a willingness to be considered and to serve on the Board, the
Nominating Committee requests information from the candidate, reviews the
person's accomplishments and qualifications, including in light of any other
candidates that the Committee might be considering, and conducts one or more
interviews with the candidate. In certain instances, Committee members may
contact one or more references provided by the candidate or may contact other
members of the business community or other persons that may have greater
first-hand knowledge of the candidate's accomplishments.

PROPOSAL NO. 1
ELECTION OF DIRECTORS

Nominees

Genelabs' bylaws state that the number of directors is not to be less
than five or more than nine. The number of directors on the board is currently
fixed at five. At the annual meeting, the shareholders will be asked to elect
all five directors, each of whom will serve until the next annual meeting of
shareholders or until a successor has been elected and qualified or until the
director's earlier resignation or removal. Shares represented by the
accompanying proxy will be voted for the election of the five nominees unless
the proxy is marked to withhold authority to do so. If any nominee is unable
to serve for any reason or will not serve for good cause, the proxies may be
voted for such substitute nominee as the Board of Directors may determine. The
Board of Directors has no reason to believe that any of the persons named
below will be unable or unwilling to serve as a director if elected.

The names of the nominees, their ages as of April 1, 2005, and
certain other information about each of them are set forth below:

Name Age Position
---- --- --------

Irene A. Chow, Ph.D. 66 Chairman of the Board of Directors

Arthur Gray, Jr. (1) (2) (3) 82 Director

H. H. Haight (2) (3) 71 Director

Alan Y. Kwan (1) (2) (3) 59 Director

James A. D. Smith 46 President & Chief Executive Officer and
Director
_______________________

(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Nominating Committee

Each of the directors listed above was elected to be a director at
Genelabs' 2004 annual meeting of shareholders held on June 10, 2004.

There are no family relationships among any of Genelabs' directors or
executive officers.

joined Genelabs as an officer and director in 1993. In addition to her duties
at the Company, Dr. Chow is also the chairman of the board of Genovate
Biotechnology Co., Ltd. (formerly Genelabs Biotechnology Co., Ltd.). Before
joining Genelabs, Dr. Chow held several positions at Ciba-Geigy Corporation,
most recently as Senior Vice President of Drug Development for the
pharmaceuticals division. Prior to joining Ciba-Geigy, Dr. Chow served as an
associate professor and assistant dean of Health Related Professions at
Downstate Medical School, State University of New York. Dr. Chow received her
B.A. degree in Literature from National Taiwan University, and both an M.A.
and a Ph.D. in Biostatistics from the University of California, Berkeley.

Arthur Gray, Jr. has been a director of Genelabs since March 1991.
Mr. Gray has been Senior Managing Director of Carret & Co. since October 1999.
Previously, Mr. Gray was a Managing Director of Cowen Investment Counselors, a
division of Cowen & Co., from July 1993 to September 1999. Before joining
Cowen, Mr. Gray was President and Chief Executive Officer of Dreyfus Personal
Management, Inc., a subsidiary of the Dreyfus Corporation, from January 1984
to June 1993. Mr. Gray is also a director of Seventh Generation, an
environmental product company.

H. H. Haight has been a director of Genelabs since May 1989. Since
1997, Mr. Haight has been President and Chief Executive Officer of Argo Global
Capital, Inc., a venture capital firm, where he specializes in high-technology
industries. Before joining Argo, Mr. Haight was a Managing Director of Advent
International Corporation, an advisor and manager of international venture
capital funds, where he was closely involved in Advent's Far East activities
and responsible for Advent's Far East Group and Advent Canada. Mr. Haight
received his B.S. in Forestry from the University of California, Berkeley and
his M.B.A. from Harvard University.

Alan Y. Kwan has been a director of Genelabs since January 1999.
Since 1994, Mr. Kwan has been an attorney at Kwan & Associates PC, based in
Houston, Texas, where he maintains a general legal practice with an emphasis
in business transactions and asset management. Since 1990, he also has been
President of Texas Pacific Properties, Inc., a real estate investment and
management firm. Previously, Mr. Kwan was active in real estate development
and general management for several Hong Kong-based international companies
including the Chinachem Group, Swire Properties, Ltd. and Tai Cheung
Properties, Ltd. Mr. Kwan previously was also a director of the Hong Kong
operation of China International Trust & Investment Corp. Mr. Kwan received
his B.A. from the University of Hong Kong and his J.D. from the South Texas
College of Law.

James A. D. Smith has been our Chief Executive Officer since March
2004. He has been President of Genelabs and a director since April 1999. Mr.
Smith also served as Chief Executive Officer from January 2000 to January
2001. From October 1996 through March 1999, Mr. Smith was Chief Operating
Officer. From June 1995 through September 1996, Mr. Smith was Vice President,
Marketing and Business Development, and from January 1994 through June 1995,
Mr. Smith was Director of Marketing. Before joining Genelabs, Mr. Smith was
with ICN Pharmaceuticals for more than ten years in various marketing and
business development positions, most recently as Director of Worldwide
Business Development. Mr. Smith received his B.S. in Molecular and Cellular
Biology from the University of California, San Diego.

Compensation of Directors

Before June 10, 2004, non-employee directors were eligible to receive
$1,500 for each board meeting he or she attended in person and $500 for each
meeting he or she attended by telephone. All directors also were reimbursed
for actual business expenses incurred in attending board and committee
meetings. Upon his or her first election to the board, each non-employee
director was granted an option to purchase 30,000 pre-split shares of Genelabs
common stock at an exercise price equal to the fair market value of the common
stock on the date of grant. At each annual meeting of shareholders after the
second anniversary of each director's election to the board, each non-employee
director was granted an additional option to purchase 15,000 pre-split shares.
Directors who are also employees were granted options under the 2001 Stock
Option Plan in accordance with Genelabs' general compensation policy.

Effective June 10, 2004, the compensation for non-employee directors
was amended to be as follows: non-employee directors receive an annual cash
retainer of $25,000 payable quarterly. The Chairperson of the Audit Committee
receives an annual cash retainer of $5,000 payable quarterly. The Chairperson
of the each other Committee

receives an annual cash retainer of $2,000 payable quarterly. A Committee
member who is not a Chairperson receives an annual cash retainer of $1,000
payable quarterly. Payments for service on a Committee are in addition to the
$25,000 annual retainer. Directors no longer are paid on a per-meeting basis.
All directors also are reimbursed for actual business expenses incurred in
attending board and committee meetings. Upon his or her first election to the
board, each non-employee director is granted an option to purchase 30,000
pre-split shares of Genelabs common stock at an exercise price equal to the
fair market value of the common stock on the date of grant. At each annual
meeting of shareholders after each director's election to the board, such
non-employee director is granted an additional option to purchase 20,000
pre-split shares. Directors who are also employees are granted options under
the 2001 Stock Option Plan in accordance with Genelabs' general compensation
policy.

In February 2004 the Board of Directors approved the appointment of
Irene A. Chow as Chairman and designated the position as a part-time employee
position with an annual salary of $200,000. As a part-time employee of the
Company, the Chairman is entitled to the health and other employee benefits
available to the Company's part-time employees, except that the Chairman does
not accrue vacation or sick leave. Vacation time which the Chairman had
previously accrued was paid out in cash. The Chairman is entitled to receive
stock options under the Company's 2001 Stock Option Plan at the discretion of
the Board. As an employee, the Chairman is eligible to continue vesting in,
and to exercise, previously granted stock options subject to the terms of such
option grants. The Chairman is not eligible for bonuses under the Company's
Annual and Long-Term Incentive Based Compensation Plan, and any unvested
amounts previously accrued under the Company's Annual and Long-Term Incentive
Based Compensation Plan were accelerated and paid out at the Chairman's
discretion. In July 2004, the Board of Directors granted the Chairman an
option grant of 306,905 shares at an exercise price of $2.50 which exceeded
the then fair market value of the Company's stock by approximately 22%. The
options were immediately vested and expire three years from the date of grant.

Vote Required

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE ELECTION OF ALL DIRECTORS NOMINATED.

PROPOSAL NO. 2
RATIFICATION OF SELECTION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors has selected Ernst & Young LLP as the
Company's independent registered public accounting firm to perform the audit
of Genelabs' financial statements for the fiscal year ending December 31,
2005, and the shareholders are being asked to ratify such selection.
Representatives of Ernst & Young LLP are expected to be present at the annual
meeting, are expected to have the opportunity to make a statement at the
annual meeting if they desire to do so and will be available to respond to
appropriate questions.

Shareholder ratification of the selection of Ernst & Young LLP as the
Company's independent registered public accounting firm is not required by the
Company's bylaws or otherwise. However, the Board of Directors is submitting
the selection of Ernst & Young LLP to shareholders for ratification as a
matter of good corporate practice. If the shareholders fail to ratify the
selection, the board will reconsider whether to retain Ernst & Young LLP. Even
if the selection is ratified, the board, in its discretion, may direct the
appointment of different independent registered public accounting firm at any
time during the year if it determines that such a change would be in the best
interests of Genelabs and its shareholders.

The Audit Committee has considered whether the provision of non-audit
services by Ernst & Young LLP is compatible with maintaining their
independence, and has determined that it is.

AUDIT FEES AND PRE-APPROVAL POLICIES

The following table presents fees for professional services rendered
by Ernst & Young LLP for the audit of our annual financial statements for
fiscal 2004 and fiscal 2003 and fees billed for audit-related services, tax
services and all other services rendered by Ernst & Young LLP for fiscal 2004
and fiscal 2003.

2004 2003
---------- ----------
Audit Fees.......................... $492,425 $307,466
Audit-Related Fees.................. -- --
Tax Fees $49,500 $59,230
All Other Fees...................... -- --
Total...................... $541,925 $366,696

"Tax Fees" consisted of aggregate fees billed for professional services
rendered for tax compliance, tax advice and tax planning, including
preparation of tax forms and consulting for domestic and foreign taxes.

The Audit Committee reviews, and in its sole discretion pre-approves,
the Independent Auditors' annual engagement letter including proposed fees and
all audit and non-audit services provided by the Independent Auditors. The
Audit Committee is barred from engaging the Independent Auditors to perform
the specific non-audit services proscribed by law or regulation. The Audit
Committee may delegate pre-approval authority to a member of the Audit
Committee, and decisions delegated in such manner must be reported at the next
scheduled meeting of the Audit Committee.

Vote Required

The affirmative vote of the holders of a majority of represented and
voting is required for the ratification of the appointment of Ernst & Young
LLP as the Company's independent registered public accounting firm for the
fiscal year ending December 31, 2005. In determining whether the proposal has
received the requisite number of affirmative votes, abstentions and broker
non-votes, if any, will have no effect on the outcome of the vote.

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR
THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP
AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

PROPOSAL NO. 3
AUTHORIZATION FOR THE BOARD TO EFFECT A
ONE-FOR-FIVE REVERSE STOCK SPLIT

General

Our shareholders are being asked at this annual meeting to act upon a
proposal to authorize the board of directors to effect a reverse stock split
in a ratio of one-for-five at any time before the 2006 annual meeting of
shareholders. If the reverse stock split is approved by the shareholders, the
board of directors may subsequently approve and effect, in its sole
discretion, the reverse stock split based on its determination of whether the
reverse stock split is necessary and advisable to retain Genelabs' Nasdaq
National Market listing, a listing on another market or to retain liquidity of
our common stock.

An amendment to Genelabs' Amended and Restated Articles of
Incorporation is required to effect the one-for-five reverse stock split. The
form of the proposed amendment to effect the reverse stock split is attached
hereto as Exhibit A (the "Certificate of Amendment"). The Certificate of
Amendment will effect a one-for-five reverse split of the shares of Genelabs'
issued and outstanding common stock, but will not change the number of
authorized shares of common stock or preferred stock, or the par value of
Genelabs' common stock or preferred stock (since there is no par value to our
common or preferred stock).

Genelabs' common stock is quoted on the Nasdaq National Market
("Nasdaq") under the symbol "GNLB." In order for our common stock to continue
to be quoted on the Nasdaq National Market, we must satisfy various listing
maintenance standards established by Nasdaq. Among other things, as such
requirements pertain to us, we are required to have either shareholders'
equity of at least $10 million or the market value of our listed securities
must be at least $50 million. On December 31, 2004 our shareholders' equity
was approximately $ million. At April 22, 2005, the market value of our
listed securities was $ million. Additionally, Nasdaq requires our common
stock to have a minimum bid price of at least $1.00 per share. On March 21,
2005 Nasdaq notified us of our non-compliance with the $1.00 bid price
requirement and gave us until September 19, 2005 to regain compliance with that
requirement.

If Nasdaq were to de-list our common stock, it may qualify to trade
on the Nasdaq SmallCap Market or the OTC Bulletin Board or in the "pink
sheets" maintained by the National Quotation Bureau, Inc., or another market.
Each of these markets is generally considered to be a less efficient market
and not as broad as the Nasdaq National Market. During the first half of 2005,
our common stock traded below Nasdaq's minimum bid price requirement of $1.00
per share for an extended period of time. To attempt to avoid de-listing in
the event that our common stock continues to trade below $1.00 per share, and
to provide liquidity to our shareholders, we propose that the board of
directors have the authority to effect a one-for-five reverse stock split for
the purpose of increasing the market price of our common stock above the
Nasdaq minimum bid requirement. Genelabs currently complies with all other
requirements for continued listing on the Nasdaq National Market, although we
may be unable to continue to meet these requirements in the future.

The board of directors considered the potential harm to Genelabs of
being de-listed from the Nasdaq National Market, and determined that a reverse
stock split, if necessary, would be the best way to attempt to comply with
Nasdaq's minimum bid price listing standard. The reverse split will not
satisfy any of the other listing requirements described above, but will
address Nasdaq's minimum bid price requirement, which is a condition of
continued listing on the Nasdaq National Market.

Purpose

One of the key requirements for continued listing on the Nasdaq
National Market is that our common stock must maintain a minimum bid price
above $1.00 per share. Our common stock traded below $1.00 for an extended
period of time during the first half of 2005. We believe a reverse split may
increase the price level of our common stock above $1.00 per share so that we
may maintain compliance with the Nasdaq minimum bid price listing standard.
Even if we fail

to meet the other requirements for listing on Nasdaq, a stock price of at
least $1.00 is also needed for listing on the Nasdaq SmallCap Market.

If the shareholders do not approve the reverse stock split proposal,
and if the stock price remains below $1.00 per share and does not otherwise
increase to and remain greater than $1.00 per share, Genelabs expects the
common stock would be delisted from Nasdaq after the periods set forth in the
Nasdaq listing maintenance standards have elapsed, or earlier if Genelabs
fails to meet the other requirements for continued listing on Nasdaq.

Shareholders should recognize that if the reverse split is
effectuated they will own a fewer number of shares than they currently own (a
number equal to the number of shares owned immediately prior to the reverse
stock split divided by five). While we expect that the reverse split will
result in an increase in the market price of our common stock, the reverse
split may not increase the market price of our common stock in proportion to
the reduction in the number of shares of our common stock outstanding
resulting from the reverse split or result in the permanent increase in the
market price (which is dependent upon many factors, including our performance,
prospects and other factors). The history of similar reverse stock splits for
companies in like circumstances is varied. The per-share market price of our
common stock after the reverse split may not exceed or remain in excess of the
$1.00 minimum bid price as required by Nasdaq. In addition, Genelabs could be
de-listed due to a failure to meet other continued Nasdaq listing requirements
even if the market price per share of our common stock after the reverse split
remains above $1.00.

The market price of Genelabs' common stock will also be based on
Genelabs' performance and other factors, some of which are unrelated to the
number of shares outstanding. If the reverse stock split is effected and the
market price of Genelabs' common stock declines, the percentage decline as an
absolute number and as a percentage of Genelabs' overall market capitalization
may be greater than would occur in the absence of a reverse stock split.
Furthermore, the liquidity of Genelabs' common stock could be adversely
affected by the reduced number of shares that would be outstanding after the
reverse stock split. In addition, the reverse split will likely increase the
number of shareholders of Genelabs who own odd lots (less than 100 shares).
Shareholders who hold odd lots typically will experience an increase in the
cost of selling their shares, as well as possible greater difficulty in
effecting such sales. Consequently, the reverse split may not achieve the
desired results that have been outlined above.

Principal Effects of the Reverse Stock Split

Number of Shares of Common Stock and Corporate Matters. The reverse stock
split would have the following effects on the number of shares of common stock
outstanding:

o each five (5) shares of Genelabs' common stock owned by a
shareholder prior to the reverse split would be exchanged for
one (1) share of common stock after the reverse split;

o based on the number of shares of common stock outstanding on
March 31, 2005, the number of shares of Genelabs' common stock
issued and outstanding will be reduced from approximately 88.5
million shares to approximately 17.7 million shares;

o all outstanding but unexercised options and warrants entitling
the holders thereof to purchase shares of Genelabs' common stock
will enable such holders to purchase, upon exercise of their
options or warrants, one-fifth (1/5) of the number of shares of
Genelabs' common stock that such holders would have been able to
purchase upon exercise of their options or warrants immediately
preceding the reverse stock split at an exercise price equal to
five times the exercise price specified before the reverse stock
split, resulting in approximately the same aggregate exercise
price being required to be paid upon exercise thereof
immediately preceding the reverse stock split; and

o the number of shares reserved for issuance (including the
maximum number of shares that may be subject to options) under
Genelabs' existing stock option plans and its employee stock
purchase plan will be reduced to one-fifth (1/5) of the number
of shares currently included in such plans, subject to increase
if Proposals 4 and/or 5 are approved by the shareholders at the
annual meeting.

The reverse stock split will affect all of Genelabs' shareholders
uniformly and will not change the proportionate equity interests of our
shareholders, nor will the respective voting rights and other rights of
shareholders be altered, except for possible immaterial changes due to the
treatment of fractional shares resulting from the reverse split. As described
below, shareholders holding fractional shares will be entitled to cash
payments in lieu of such fractional shares. Common stock issued pursuant to
the reverse stock split will remain fully paid and non-assessable. Genelabs
will continue to be subject to the periodic reporting requirements of the
Securities Exchange Act of 1934, as amended.

Fractional Shares. We will not issue fractional certificates for
post-reverse split shares in connection with the reverse split. Shareholders
who otherwise would be entitled to receive fractional shares because they hold
a number of pre-reverse split shares not evenly divisible by five (5) will be
entitled, upon surrender to the exchange agent of certificate(s) representing
such shares, to a cash payment in lieu thereof. The cash payment will equal
the fraction to which the shareholder would otherwise be entitled multiplied
by the average of the closing prices (as adjusted to reflect the reverse stock
split) of our common stock during the thirty (30) trading days preceding the
date that is five (5) days before the effective time of the reverse stock
split. If such price is not available, the fractional share payment will be
based on the average of the last bid and ask prices of our common stock on
such days or other prices determined by the Board. The ownership of a
fractional interest will not give the holder thereof any voting, dividend or
other rights except to receive payment therefor as described herein.

Shareholders should be aware that, under the escheat laws of the
various jurisdictions where shareholders reside, where Genelabs is domiciled
and where the funds will be deposited, sums due for fractional interests that
are not timely claimed after the effective time may be required to be paid to
the designated agent for each such jurisdiction. Thereafter, shareholders
otherwise entitled to receive such funds may have to seek to obtain them
directly from the state to which they were paid.

Authorized Shares; Future Stock Issuances. Upon effectiveness of the
reverse stock split, the number of authorized shares of common stock that are
not issued or outstanding would increase from approximately million
shares to approximately million shares, based on the number of shares of
common stock outstanding on March 31, 2005. We will continue to have 4,990,000
authorized but unissued shares of preferred stock. Authorized but unissued
shares will be available for issuance, and we may issue such shares in
financings or otherwise. If we issue additional shares, the ownership interest
of holders of Genelabs' common stock may be diluted. Also, the issued shares
may have rights, preferences or privileges senior to those of Genelabs' common
stock.

Accounting Matters. The reverse stock split will not affect the par
value of Genelabs' common stock. The reverse stock split will not impact the
amounts reported as common stock or total shareholders' equity on Genelabs'
balance sheet. The per share net income or loss and net book value of
Genelabs' common stock will be increased because there will be fewer shares of
Genelabs' common stock outstanding.

Potential Anti-Takeover Effect. Although the increased proportion of
unissued authorized shares to issued shares could, under certain
circumstances, have an anti-takeover effect (for example, by permitting
issuances that would dilute the stock ownership of a person seeking to effect
a change in the composition of Genelabs' Board or contemplating a tender offer
or other transaction for the combination of Genelabs with another company),
the reverse stock split proposal is not being proposed in response to any
effort of which we are aware to accumulate Genelabs' shares of common stock or
obtain control of Genelabs, nor is it part of a plan by management to
recommend a series of similar amendments to Genelabs' Board and shareholders.
Other than the reverse stock split proposal, Genelabs' Board does not
currently contemplate recommending the adoption of any other amendments to
Genelabs' Amended and Restated Articles of Incorporation that could be
construed to affect the ability of third parties to take over or change the
control of Genelabs.

Procedure for Effecting the Reverse Stock Split and Exchange of Stock
Certificates

If Genelabs' shareholders approve the reverse stock split and the
Board subsequently determines prior to the 2006 annual meeting of shareholders
that effecting the reverse stock split is in the best interests of Genelabs
and its shareholders, we will file an amendment to our Amended and Restated
Articles of Incorporation with the Secretary of State of the State of
California. The reverse stock split will become effective at the time of the
filing of the amendment, which we refer to as the "effective time." Beginning
at the effective time, each certificate representing pre-reverse stock split
shares will be deemed for all corporate purposes to evidence ownership of
post-reverse stock split shares.

As soon as practicable after the effective time, shareholders will be
notified that the reverse stock split has been effected. Genelabs' transfer
agent, Mellon Investor Services, will act as exchange agent for purposes of
implementing the exchange of stock certificates. We refer to such person as
the "exchange agent." Holders of pre-reverse stock split shares will be asked
to surrender to the exchange agent certificates representing such shares in
exchange for certificates representing post-reverse stock split shares in
accordance with the procedures to be set forth in the letter of transmittal
Genelabs sends to its shareholders. No new certificates will be issued to a
shareholder until such shareholder has surrendered such shareholder's
outstanding certificate(s), together with the properly completed and executed
letter of transmittal, to the exchange agent. Any pre-reverse stock split
shares submitted for transfer, whether pursuant to a sale, other disposition
or otherwise, will automatically be exchanged for post-reverse stock split
shares. SHAREHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD
NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.

Even if the shareholders approve the reverse stock split, Genelabs
reserves the right not to effect the reverse stock split if in the Board's
opinion it would not be in the best interests of Genelabs and its shareholders
to effect such reverse stock split.

No Dissenter's Rights

Under the California Corporations Code, Genelabs' shareholders are
not entitled to dissenter's rights with respect to the reverse stock split,
and Genelabs will not independently provide shareholders with any such right.

Certain United States Federal Income Tax Consequences

The following is a summary of certain United States federal income
tax consequences of the reverse stock split generally applicable to the
holders of Genelabs shares. This summary addresses only such shareholders who
hold their pre-reverse stock split shares as capital assets and will hold the
post-reverse stock split shares as capital assets. This discussion does not
address all United States federal income tax considerations that may be
relevant to particular shareholders in light of their individual circumstances
or to shareholders that are subject to special rules, such as financial
institutions, tax-exempt organizations, insurance companies, dealers in
securities, holders who received their shares pursuant to the exercise of
employee stock options or otherwise as compensation, and foreign shareholders.
The following summary is based upon the provisions of the Internal Revenue
Code of 1986, as amended, applicable Treasury Regulations thereunder, judicial
decisions and current administrative rulings, as of the date hereof, all of
which are subject to change, possibly on a retroactive basis. Tax consequences
under state, local, foreign, and other laws are not addressed herein. Each
shareholder is advised to consult his or her tax advisor as to the particular
facts and circumstances which may be unique to such shareholder and also as to
any estate, gift, state, local or foreign tax considerations arising out of
the reverse stock split.

Exchange Pursuant to Reverse Stock Split. No gain or loss will be
recognized by a shareholder upon such shareholder's exchange of pre-reverse
stock split shares for post-reverse stock split shares pursuant to the reverse
stock split, except to the extent of cash, if any, received in lieu of
fractional shares. See "- Cash in Lieu of Fractional Shares" below. The
aggregate tax basis of the post-reverse stock split shares received in the
reverse stock split will be equal to the aggregate tax basis of the
pre-reverse stock split shares exchanged therefor (excluding any portion of
the holder's basis

allocated to fractional shares), and the holding period of the post-reverse
stock split shares will include the holding period of the pre-reverse stock
split shares.

Cash in Lieu of Fractional Shares. A holder of pre-reverse stock
split shares who receives cash in lieu of a fractional share of post-reverse
stock split shares will generally be treated as having received such
fractional share pursuant to the reverse stock split and then as having
exchanged such fractional share for cash in a redemption by Genelabs. In
general, the amount of any gain or loss will be equal to the difference
between the ratable portion of the tax basis of the pre-reverse stock split
shares exchanged in the reverse stock split that is allocated to such
fractional share and the cash received in lieu thereof. Any such gain or loss
will constitute long-term capital gain or loss if such pre-reverse stock split
shares have been held by the holder for more than one year at the time of the
reverse stock split.

Vote Required

The affirmative vote of the holders of a majority of the outstanding
shares of common stock will be required to approve the authorization of the
Board of Directors to effect the reverse stock split by amendment of the
Company's Amended and Restated Articles of Incorporation. As a result,
abstentions and broker non-votes, if any, will have the same effect as a vote
against this proposal.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL
OF THE ONE-FOR-FIVE REVERSE SPLIT OF COMMON STOCK.

PROPOSAL NO. 4
AMENDMENT OF 2001 STOCK OPTION PLAN

On April 23, 2001, the Board of Directors adopted the 2001 Stock
Option Plan that was approved by our shareholders on June 21, 2001. Initially,
the 2001 Stock Option Plan authorized 2,500,000 shares of Common Stock plus
all remaining shares available for grant under the Company's 1995 Stock Option
Plan (the "1995 Plan") as of April 23, 2001 and any shares that would
otherwise be returned to the 1995 Plan. As a result of prior option grants
under the 2001 Plan, the number of shares of common stock available for future
grants has been reduced to shares as of the record date. In April 2003, the
Board of Directors adopted an amendment to the 2001 Stock Option Plan, which
was approved by our shareholders on June 10, 2003, to increase the number of
shares reserved for issuance thereunder by an additional 2,000,000 shares. In
April 2005, the Board of Directors approved a proposed amendment of the 2001
Stock Option Plan, subject to shareholder approval, to increase the number of
shares reserved for issuance thereunder by an additional 4,000,000 shares. If
the reverse stock split in Proposal 3 is approved by the shareholders and
implemented by the Board, then the number of shares reserved for issuance will
reduced by the same ratio. The Board believes that the grant of options is a
highly effective way to align the interests of management with those of the
Company shareholders and provides a cost-effective means of recognizing
employee contributions to the success of the Company. The Board also believes
that increasing the number of shares of Common Stock available for this
purpose will be important to the future success of the Company by allowing it
to remain competitive in attracting and retaining highly qualified technical
and other key personnel.

The 2001 Stock Option Plan previously provided that the Plan
administrator could issue certain stock options at an exercise price below
fair market value so long as the exercise price was not below 85% of fair
market value. In April 2005, the Board of Directors approved an amendment of
the 2001 Stock Option Plan to require that stock options be granted at no less
than 100% of fair market value. The 2001 Stock Option Plan previously
permitted the Company to grant loans to optionees in connection with the
exercise of stock options. In April 2005, the Board of Directors approved an
amendment of the 2001 Stock Option Plan that eliminated that provision.

Section 162(m) of the Code generally provides that publicly held
companies may not deduct compensation paid to certain of our top executive
officers to the extent such compensation exceeds $1 million per officer in any
year. However, pursuant to regulations issued by the Treasury Department,
certain limited exceptions to Section 162(m) apply with respect to
"performance-based compensation." Options granted under the Plan are intended
to constitute qualified performance-based compensation eligible for such
exceptions, and we will continue to monitor the applicability of Section
162(m) to our ongoing compensation arrangements. We do not expect that amounts
of compensation paid to our executive officers will fail to be deductible on
account of Section 162(m).

At the Annual Meeting the shareholders are being requested to (1)
approve an amendment to the 2001 Plan to increase the number of shares
reserved for issuance under the 2001 Plan by 4,000,000 shares, and (2) qualify
the Plan for purposes of Sections 162(m) and 422 of the Internal Revenue Code
of 1986, as amended (the "Code") and the National Association of Securities
Dealers, Inc. Rule 4350(i).

Summary of the Amended and Restated 2001 Stock Option Plan.

The following summary of the material provisions of the amended and
restated 2001 Stock Option Plan does not purport to be complete, and is
subject to and qualified in its entirety by reference to the complete text of
the amended 2001 Stock Option Plan, which is attached as Exhibit B hereto.

Shares Subject to the 2001 Option Plan. The additional shares of
stock reserved for issuance pursuant to the exercise of options under the 2001
Stock Option Plan will consist of 4,000,000 shares of authorized but unissued
Genelabs common stock or treasury shares, subject to certain adjustments as
described below. If the reverse stock split in Proposal 3 is approved by the
shareholders and implemented by the Board, then the number of shares reserved
for issuance will be reduced by the same ratio. Generally, shares subject to
an award that remain unissued upon expiration or

cancellation of an award will be available for other awards under the 2001
Stock Option Plan. On April 22, 2005, the closing price of Genelabs common
stock as reported on the NASDAQ National Market, was $ per share.

Eligibility. The 2001 Option Plan provides that options may be
granted only to such employees, directors, consultants, officers, independent
contractors and advisors (provided that such consultants, independent
contractors and advisors render bona fide services not in connection with the
offer or sale of securities in a capital-raising transaction) of Genelabs or
any parent, subsidiary or affiliate of Genelabs as the Administrator (as
defined below) may determine (including directors who are also employees or
consultants). Approximately 70 employees and consultants are currently
eligible to participate in the 2001 Stock Option Plan, and currently there are
three non-employee directors eligible for automatic grants as described below.
The 2001 Stock Option Plan provides that no optionee shall receive options to
purchase more than 500,000 shares during in any single calendar year. (If the
reverse stock split in Proposal 3 is approved by the shareholders and
implemented by the Board, then the 500,000 shares will reduced by the same
ratio.)

Administration. The 2001 Stock Option Plan is administered by the
Compensation Committee or other committee appointed by the board of directors
or the board itself (in each case, the "Administrator"). The committee
consists of certain members who are intended to be "disinterested persons"
within the meaning of the provisions of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and "outside
directors" within the meaning of Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code"), unless otherwise determined by the
Administrator. The Administrator is authorized, amongst other things, to
construe, interpret and implement the provisions of the 2001 Stock Option
Plan, to select the persons to whom options will be granted and to determine
the terms and conditions of such options. The interpretation or construction
by the Administrator of any provision of the 2001 Stock Option Plan or of any
option granted thereunder will be final and binding on all optionees.

Awards Under the 2001 Stock Option Plan. The 2001 Stock Option Plan
authorizes the grant of incentive stock options ("ISOs") to eligible employees
or non-qualified stock options to eligible employees, directors, consultants,
independent contractors and advisors. The 2001 Stock Option Plan also provides
that upon the election or appointment of a non-employee director to the board,
he or she will be granted automatically a non-qualified stock option to
purchase 30,000 shares of Genelabs common stock. Additionally, at the annual
shareholders meeting after the second anniversary of such election or
appointment to the board and at each subsequent annual shareholders meeting,
each such director is granted an additional option to purchase 15,000 shares
of Genelabs common stock. Non-employee director options are fully vested and
exercisable in their entirety immediately upon grant except that no such
options are exercisable after the expiration of ten years from the date the
option is granted. If the reverse stock split in Proposal 3 is approved by
the shareholders and implemented by the Board, then the 30,000 share initial
grant and 15,000 share annual grant will be reduced by the same ratio,
however, the Board has the right to approve the grant of options for
additional shares to new and continuing directors.

Terms of Options. Subject to the terms and conditions of the 2001
Stock Option Plan, the Administrator, in its discretion, determines for each
option whether the option is to be an ISO or a non-qualified stock option, the
number of shares for which the option will be granted, the exercise price of
the option, the periods during which the option may be exercised and other
terms and conditions. Each option is evidenced by an option grant in such form
as the Administrator approves and is subject to the following conditions:

o Exercise Price. The exercise price of an option may not be less than
100% of the fair market value of the shares of Genelabs common stock
on the date of grant, and any ISO granted to a holder of greater than
10% of the total combined voting shares may not be less than 110% of
the fair market value of the shares of Genelabs common stock on the
date of the grant.

o Form of Payment. The exercise price is generally payable in cash or
by check. In addition, upon approval by the Administrator, the option
exercise price may also be payable by: (i) cancellation of
indebtedness of Genelabs owed to the optionee; (ii) surrender of
shares of fully paid common stock that have been owned by an optionee
for more than six months; (iii) by waiver of compensation due or
accrued to the optionee; (iv) through a "same day

sale"; (v) through a "margin commitment"; (vi) by any combination of
the foregoing that the Administrator may authorize; or (vii) by any
other method approved by the Administrator.

o Term of Options and Vesting. Under the 2001 Stock Option Plan,
options generally are permitted to be exercisable for up to ten
years, except that an ISO granted to a 10% shareholder can only be
exercisable for five years. All options are subject to earlier
expiration due to termination of employment or service with Genelabs.
Each stock option agreement specifies the vesting and exercisability
of the option granted thereunder.

o Limitations on ISOs. An individual is not eligible to receive an ISO
unless such individual is an employee of Genelabs or of a parent or
subsidiary of Genelabs. The 2001 Stock Option Plan also includes
other provisions intended to satisfy certain tax requirements
relating to ISOs.

o Transferability. Stock options granted under the 2001 Stock Option
Plan will not be transferable or assignable by an optionee except by
will or by the laws of descent and distribution, and are exercisable
during the lifetime of the optionee only by the optionee except that,
upon approval of the Administrator, a non-qualified stock option may
be transferred to family members, trusts and charitable institutions.

Change in Control and Adjustments. The number of shares subject to
the 2001 Stock Option Plan and any option will be adjusted in the event of,
amongst other things, a stock dividend, stock split, reverse stock split or
similar change relating to Genelabs common stock. In general, in the event of
a change in control of Genelabs, unless otherwise provided in the applicable
stock option agreement or other agreement, any or all outstanding options will
accelerate and become exercisable in full upon the occurrence of such change
in control.

Amendment and Termination of the 2001 Stock Option Plan. The
Administrator may, at any time, terminate or amend the 2001 Stock Option Plan
in any respect; provided, however, that the Administrator will not, without
shareholder approval, amend the plan in any manner that requires such
shareholder approval pursuant to the Code or the regulations promulgated
thereunder or pursuant to the Exchange Act or Rule 16b-3 (or its successor)
promulgated thereunder, to the extent the Administrator intends the plan to
comply with such foregoing requirement or law.

Term of the 2001 Stock Option Plan. Options may be granted pursuant
to the 2001 Stock Option Plan from time to time until April 23, 2011, which is
ten years after the date the 2001 Stock Option Plan was originally adopted by
the Board of Directors, unless earlier terminated.

United States Federal Income Tax Consequences

The following summarizes certain U.S. federal income tax
considerations generally applicable to options granted under the 2001 Stock
Option Plan. This summary does not purport to be complete and is based on
current provisions of the U.S. federal tax laws and regulations, all of which
are subject to change (possibly with retroactive effect) and does not address
any tax consequences arising under the laws of any state, local or foreign
jurisdiction.

Non-qualified Stock Options. Generally, an optionee will not be taxed
upon the grant of a non-qualified stock option. Rather, at the time that an
optionee exercises a non-qualified stock option (and in the case of an
untimely exercise of an ISO), the optionee will recognize ordinary income for
U.S. federal income tax purposes in an amount equal to the excess of the fair
market value of the shares purchased at the time of purchase over the option
price for such shares. Genelabs will generally be entitled to a tax deduction
at such time and in the same amount that the optionee recognizes as ordinary
income subject to the limits under Section 162(m) of the Code.

If the optionee sells or exchanges stock that was acquired upon
exercise of a non-qualified stock option (or upon an untimely exercise of an
ISO), then the optionee recognizes capital gain or loss equal to the
difference between (i) the sales price and (ii) the fair market value of such
stock on the date that ordinary income was recognized with respect thereto.
Any such capital gain or loss will be long-term capital gain or loss if such
stock was held for more than 12 months at the time of the sale or exchange.

Incentive Stock Options. If an optionee satisfies certain
requirements, the optionee will not be generally subject to U.S. federal
income tax upon the grant of an ISO or the timely exercise of an ISO (except
that the alternative minimum tax may apply). For purposes of the ISO rules
under the Code, exercise of an ISO will be timely if made during its term and
if the optionee remains an employee of Genelabs or its subsidiary at all times
during the period beginning on the grant date of the ISO and ending on the
date three months before the exercise date (or one year before the exercise
date in the case of a disabled optionee). Exercise of an ISO will also be
timely for this purpose if made by the optionee's legal representative and if
the optionee dies (i) while in the employ of Genelabs or its subsidiary or
(ii) within three months after termination of the optionee's employment. The
U.S. federal income tax consequences of an untimely exercise of an ISO are
determined in accordance with the rules applicable to non-qualified stock
options. (See "United States Federal Income Tax Consequences -- Non-Qualified
Stock Options" above.)

If an optionee disposes of stock that was acquired pursuant to the
timely exercise of an ISO, then such optionee, except as noted below, will
recognize long-term capital gain or loss equal to the difference between the
sales proceeds and the option price. Genelabs, under these circumstances, will
not be entitled to any U.S. federal income tax deduction in connection with
either the exercise of the ISO or the sale of such stock.

If, however, an optionee disposes of stock acquired pursuant to the
exercise of an ISO before the later of two years from the grant date of the
ISO or within one year from the date such stock is transferred to him or her
(a "disqualifying disposition") upon exercise, any gain that was realized
generally will be taxable at the time of such disqualifying disposition as
follows: (i) at ordinary income rates to the extent of the difference between
the option price and the lesser of the fair market value of the stock on the
exercise date or the amount realized on such disqualifying disposition and
(ii) as short-term or long-term capital gain to the extent of any excess of
the amount realized on such disqualifying disposition over the fair market
value of the stock on the date that governs the determination of ordinary
income. In such case, Genelabs generally may claim a U.S. federal income tax
deduction at the time of such disqualifying disposition for the amount taxable
to the optionee as ordinary income subject to the limits of Section 162(m) of
the Code. Any such capital gain or loss will be long-term capital gain or loss
if the optionee held such stock for more than 12 months at the time of the
disqualifying disposition.

New Plan Benefits

Genelabs cannot determine the amount of options under the 2001 Stock
Option Plan that will be granted in 2005 to specific executive officers, the
executive officers as a group, or non-executive officer employees as a group.
Grants under the 2001 Stock Option Plan will be made at the discretion of the
Compensation Committee or the board of directors and, accordingly, are not yet
determinable. In addition, benefits under the 2001 Stock Option Plan will
depend on a number of factors, including the fair market value of Genelabs
common stock on future dates and the exercise decisions made by optionees.
Consequently, it is not possible to determine the benefits that might be
received by participants (except in the case of non-employee directors) of
awards that will be made thereunder during 2005. The following chart sets
forth the awards that will be made during 2005 to the non-executive directors
as a group. These awards will be made whether or not the amendment to the 2001
Stock Option Plan is approved, as the Company currently has sufficient
reserved shares available to make such awards and the annual awards in excess
of 15,000 shares can be made as a discretionary award.

New Plan Benefits

Name And Position Dollar Value ($) Number Of Units
- ---------------------------- ---------------- ---------------
Non-Executive Director Group N/A 60,000 (1)
_______________________

(1) Each of the three non-executive directors will be granted options to
purchase 20,000 shares of common stock at the Annual Meeting of
Shareholders. If the reverse stock split of Proposal 3 is approved by
the shareholders and implemented by the Board, then these numbers will
be reduced by the same ratio, however, the Board has the right to
approve the grant of options for additional shares to new and
continuing directors.

The following table sets forth information with respect to the grant of
options to the named executive officers and the specified groups set forth
below since the adoption of the 2001 Stock Option Plan, each pursuant to the
2001 Stock Option Plan.

Name and Position Options Granted
--------------------------------------------------- ---------------
Irene A. Chow, Ph.D................................. 819,905
James A.D. Smith.................................... 287,000
Mumtaz Ahmed, M.D., Ph.D............................ 170,000
Matthew M. Loar..................................... 272,000
Ronald Griffith, Ph.D............................... 250,000
Roy J. Wu........................................... 245,000

All Executive Officers.............................. 2,835,905
Directors who are not employees..................... 375,000
Nominees for election as directors.................. 1,388,905

Each associate of the above-mentioned directors,
officers or nominees................................ 0

Each other person who received or is to receive
five percent of such options, warrants, or rights... 0

Employee Group other than executive officer group... 3,557,627

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 123 (revised),
"Share-based Payment." This standard requires expensing of stock options and
other share-based payments in the statement of operations and supercedes the
original SFAS No. 123 that had allowed companies to choose between (1)
expensing stock options in the statement of operations and (2) footnote
disclosure of the pro-forma effect of expensing stock options. Under the
original SFAS No. 123 Genelabs elected to disclose the pro-forma effect of
expensing stock options in the footnotes. On April 14, 2005, the Securities
and Exchange Commission announced the adoption of a new rule extending the
compliance date for SFAS No. 123 (revised). Accordingly, Genelabs will be
required to implement the revised share-based payment standard at the
beginning of the fiscal year 2006, and this will increase our operating
expenses.

Certain Plan Information

The following table represents certain information with respect to
our equity compensation plans as of December 31, 2004. If the reverse stock
split in Proposal 3 is approved by the shareholders and implemented by the

Board, then the number of shares set forth in the table will reduced by the
same ratio and the price per share will increase by the same ratio.

EQUITY COMPENSATION PLAN INFORMATION
Number of securities
Number of securities remaining available
to be issued upon Weighted-average for future issuance under
exercise of outstanding price of outstanding equity compensation plans
options, warrants options, warrants (excluding securities
Plan Category and rights and rights reflected in column (a))
------------- ----------------------- -------------------- -------------------------

Equity compensation plans approved
by security holders:
Stock Option Plans 6,945,000 $2.76 2,004,000
Employee Stock Purchase Plan - 623,000
Equity compensation plans not approved by - -
security holders
----------------------- -------------------- -------------------------
Total 6,945,000 2,627,000
======================= ==================== =========================

Vote Required

For purposes of Sections 162(m) and 422 of the Internal Revenue Code
of 1986, as amended, the affirmative vote of a majority of the votes
represented and voting on this proposal will be required to approve the
amendment of the 2001 Stock Option Plan. In determining whether the proposal
has received the requisite number of affirmative votes, abstentions and broker
non-votes, if any, will be disregarded and will have no effect on the outcome
of the vote.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 4.

PROPOSAL 5
INCREASE IN NUMBER OF SHARES AVAILABLE UNDER THE
2001 EMPLOYEE STOCK PURCHASE PLAN

Our 2001 Employee Stock Purchase Plan (the "2001 ESPP") was
originally adopted by the Board of Directors and approved by shareholders on
June 21, 2001. We offer this 2001 ESPP to provide eligible employees an
opportunity to acquire an ownership interest in us through payroll deductions.
The 2001 ESPP is intended to operate in compliance with Section 423 of the
Internal Revenue Code, as amended.

The Board of Directors amended the 2001 ESPP in April 2005 to
increase the number of shares of our common stock reserved for issuance under
the 2001 ESPP by an additional 2,000,000 shares, subject to shareholder
approval at the Annual Meeting. If the reverse stock split in Proposal 3 is
approved by the shareholders and implemented by the Board, then the number of
shares reserved for issuance will reduced by the same ratio. The Board of
Directors believes it is in our best interests to continue a program of stock
ownership for our employees. The Board of Directors also believes that the
2001 ESPP provides a meaningful opportunity for employees to purchase
ownership interests in us and encourages alignment of the employees' interests
with those of other shareholders. In addition, although the purpose of the
2001 ESPP is to provide employees with the opportunity to acquire ownership
interests in us, we have received approximately $1.9 million from the purchase
of stock under this plan. Shareholders have approved the issuance of 2,000,000
shares of common stock under the 2001 ESPP; as of March 31, 2005 approximately
1,377,000 shares have been issued and approximately 623,000 shares currently
remain available for future issuance under this plan. The Board of Directors
estimates that the current shares remaining available for issuance under the
2001 ESPP may last for less than one additional year. The Board of Directors
approved an additional 2,000,000 shares for issuance under this plan in order
to avoid depleting the number of shares available under the 2001 ESPP. If the
reverse stock split in Proposal 3 is approved by the shareholders and
implemented by the Board, then the number of shares described above will be
reduced by the same ratio.

At the Annual Meeting the shareholders are being requested to (1)
approve an amendment to the 2001 ESPP to increase the number of shares
reserved for issuance under the 2001 ESPP by 2,000,000 shares, and (2) qualify
the Plan for purposes of Section 423 of the Code.

The following summary of the material provisions of the proposed 2001
ESPP, assuming approval of the above amendment, does not purport to be
complete, and is subject to and qualified in its entirety by reference to the
complete text of the amended 2001 ESPP, which is attached as Exhibit C to this
proxy statement.

Shares Subject to the 2001 ESPP. A total of 4,000,000 shares of
Genelabs common stock has been reserved for purchase by eligible employees
under the 2001 ESPP, subject to certain adjustments as described below. If the
reverse stock split in Proposal 3 is approved by the shareholders and
implemented by the Board, then the number of shares reserved for issuance will
reduced by the same ratio.

Eligibility. All employees of Genelabs, or any parent or subsidiary
thereof, are eligible to participate in the 2001 ESPP except the
following:

(1) employees who are not employed Genelabs or its subsidiaries, on
the day before the first day of the Purchase Period (as defined
below);
(2) employees who are customarily employed for less than 20 hours per
week;
(3) employees who are customarily employed for less than five
months in a calendar year; and
(4) employees who own or hold options to purchase or who, as a result
of participation in the 2001 ESPP, would own stock or hold options
to purchase stock possessing 5% or more of the total combined
voting power or value of all classes of Genelabs
stock of pursuant to Section 424(d) of the Code.

Approximately 70 employees are currently eligible to participate in
the 2001 ESPP.

Administration. The 2001 ESPP would be administered by the
Compensation Committee or other committee appointed by the Board (the
"Committee") or the Board itself (in each case, the "Administrator"). The
Committee consists of certain members who are intended to be "disinterested
persons" within the meaning of the provisions of Rule 16b-3 promulgated under
the Exchange Act unless otherwise determined by the Administrator. Subject to
the provisions of the 2001 ESPP and Section 423 of the Code, all questions of
interpretation or application of the 2001 ESPP will be determined by the
Administrator and its decisions shall be final and binding upon all employees.

Participation. The 2001 ESPP has 24-month Offering Periods (the
"Offering Periods") which consist of four six-month purchase periods
(individually, a "Purchase Period"). Offering Periods commence on January 1
and July 1 of each year. Purchase Periods commence on January 1 and July 1 of
each year and end on June 30 and December 31 of each year. The Administrator
has the power to change the timing and duration of Offering Periods and
Purchase Periods without shareholder approval.

Payroll Deductions. Employees may participate in the 2001 ESPP during
each pay period through payroll deductions. An employee sets the rate of such
payroll deductions, which may not be less than 1% nor more than 15% of the
employee's base salary or wages, bonuses, overtime, shift premiums and
commissions, plus draws against commissions, unreduced by the amount by which
the employee's salary is reduced pursuant to Sections 125 or 401(k) of the
Code. The amount of payroll deductions may not exceed $25,000 per year unless
otherwise determined by the Administrator. An employee may increase or lower
the rate of payroll deductions for any upcoming Purchase Period but may only
lower the rate of payroll deductions during the current Purchase Period.

Certain Limitations. As required by tax law, no employee may receive
an option under the 2001 ESPP to purchase shares of Genelabs common stock
which have a fair market value in excess of $25,000 for any calendar year,
determined at the time such option is granted. Additionally, the Administrator
may set a maximum number of shares of common stock that may be purchased by
any employee at any single purchase date. If the number of shares of common
stock to be purchased on the first day of the purchase period by all employees
participating in the 2001 ESPP exceeds the number of shares then available for
issuance under the 2001 ESPP, Genelabs will make a pro rata allocation of the
remaining shares in as uniform a manner as shall be practicable and as the
Administrator shall determine to be equitable.

Purchase Price. The purchase price of shares that may be acquired in
any Offering Period under the 2001 ESPP is 85% of the lesser of (a) the fair
market value of the shares on the first day of the Offering Period or (b) the
fair market value of the shares on the last business day of the Purchase
Period. If the reverse stock split in Proposal 3 is approved by the
shareholders and implemented by the Board, then the share price will be
adjusted accordingly.

Purchase of Stock. The number of whole shares that an employee may
purchase in any Purchase Period is determined by dividing the total amount of
payroll deductions from the employee's salary during the Purchase Period by
the price per share determined as described above. The purchase shall take
place automatically on the last day of the Purchase Period.

Withdrawal. An employee may withdraw from any Purchase Period at any
time at least 15 days prior to the end of a Purchase Period. No further
payroll deductions for the purchase of shares will be made for the remainder
of the Offering Period unless the employee enrolls in a new Purchase Period in
the same manner as for initial participation in the 2001 ESPP.

Termination of Employment. Termination of an employee's employment
for any reason, including retirement or death, immediately cancels his or her
participation in the 2001 ESPP. In such event, the payroll deductions credited
to the employee's account will be returned to such employee.

Change in Control and Adjustments. The number of shares subject to
the 2001 ESPP and any right to purchase stock thereunder will be adjusted in
the event of, amongst other things, a stock dividend, stock split, reverse
stock split or similar change relating to Genelabs common stock. In general,
in the event of a change in control of Genelabs, the

Offering Period will terminate on such date as determined by the Administrator
and all payroll deductions on such date shall be used to purchase such number
of applicable shares of Genelabs common stock, unless otherwise provided by
the Administrator.

Amendment and Termination of the 2001 ESPP. The Administrator may, at
any time, terminate or amend the 2001 ESPP in any respect except that any such
amendment or termination cannot adversely affect options previously granted
under the 2001 ESPP without the employees' consent and, further provided, that
the Administrator will not make certain amendments without shareholder
approval as set forth in the 2001 ESPP.

Term of the 2001 ESPP. Options may be granted pursuant to the 2001
ESPP from time to time until April 23, 2011, which is ten years after the date
the 2001 ESPP was originally adopted by the board of directors, unless earlier
terminated.

United States Federal Income Tax Consequences

The following summarizes certain U.S. federal income tax
considerations generally applicable to options granted under the 2001 ESPP, if
approved. This summary does not purport to be complete and is based on current
provisions of the U.S. federal tax laws and regulations, all of which are
subject to change (possibly with retroactive effect) and does not address any
tax consequences arising under the laws of any state, local or foreign
jurisdiction.

Tax Treatment of Employees Under the 2001 ESPP

The 2001 ESPP is intended to be an "employee stock purchase plan" as
defined in Section 423 of the Code. Amounts deducted from an employee's pay
under the 2001 ESPP would be included in the employee's compensation subject
to federal income and social security taxes.

Assuming the satisfaction of certain conditions, an employee will not
recognize income for federal income tax purposes either upon enrollment in the
2001 ESPP or upon the purchase of shares of Genelabs common stock under the
2001 ESPP. All tax consequences are deferred until a participating employee
sells the shares or otherwise disposes of the shares.

If shares of Genelabs common stock are held for more than one year
after the date of purchase and more than two years after the beginning of the
applicable Offering Period, upon a sale or disposition of such shares, the
employee will generally realize ordinary income to the extent of the lesser of
(i) the actual gain (the amount by which the fair market value of the shares
at the time of such sale or disposition exceeds the purchase price) or (ii) an
amount equal to 15% of the fair market value of the shares on the first day of
the Offering Period, if the shares were purchased at no less than 85% of the
fair market value of the shares on the first day of the Offering Period. Any
additional gain upon the sale or disposition of shares should be treated as
long-term capital gain.

If the shares are sold or otherwise disposed of within either the
one-year or the two-year holding periods described above (in either case a
"disqualifying disposition"), the employee would realize ordinary income at
the time of sale or other disposition taxable to the extent that the fair
market value of the shares at the date of purchase is greater than the
purchase price. Any additional gain or loss on such share or disposition will
be long-term or short-term capital gain or loss, depending on the holding
period.

Tax Treatment of Genelabs

Genelabs will be entitled to a deduction in connection with the
disposition of shares acquired under the 2001 ESPP to the extent that the
employee recognized ordinary income on a disqualifying disposition of such
shares.

New Plan Benefits

The participation levels for fiscal year 2004 under the ESPP are as
set forth below, based on the rates of deferral at that time projected through
the current Offering Period, and with the assumption that the purchase prices
are the fair market values of the shares on the first day of the applicable
Offering Periods currently in effect under the 2001 ESPP. The future benefits
to be distributed under the 2001 ESPP are not determinable at this time as the
rates of deferral may change, there may be withdrawals, the purchase price may
change based on changes in the fair market values of the shares on the last
day of the applicable Purchase Periods, deferrals and purchase prices may
change for subsequent Purchase Periods and other factors. If the reverse stock
split in Proposal 3 is approved by the shareholders and implemented by the
Board, then the number of shares in the table will reduced by the same ratio
and the dollar value will remain the same.

Number of
Name and Position Dollar Value ($) Shares
---------------------------- ---------------- ---------
Irene A. Chow, Ph.D. 21,384 16,772
James A.D. Smith 20,669 17,331
Mumtaz Ahmed, M.D., Ph.D. 1,610 1,263
Ronald C. Griffith, Ph.D. 0 0
Matthew M. Loar 7,817 6,131
Roy J. Wu 13,570 11,478
Executive Group 96,655 78,098
Non-Executive Director Group 0 0
All Other Employees 452,864 376,609

The above table shows the calendar year 2004 number of shares of our
common stock purchased for the names indicated, and the purchase price paid
for the common stock. The purchase price was 85% of the lower of the stock
price on the first day of the Offering Period or the last day of the Purchase
Period.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 123 (revised),
"Share-based Payment." This standard requires expensing of stock options and
other share-based payments in the statement of operations and supercedes the
original SFAS No. 123 that had allowed companies to choose between (1)
expensing stock options in the statement of operations and (2) footnote
disclosure of the pro-forma effect of expensing stock options. Included in
SFAS No. 123 (revised) is a requirement to expense discounts in excess of 5%
of the price of common stock on the date of purchase, such as the discount we
provide under our ESPP. Under the original SFAS No. 123 Genelabs elected to
disclose the pro-forma effect of expensing stock options in the footnotes,
which included the ESPP. On April 14, 2005, the Securities and Exchange
Commission announced the adoption of a new rule extending the compliance date
for SFAS No. 123 (revised). Accordingly, Genelabs will be required to
implement the revised share-based payment standard at the beginning of fiscal
year 2006, and this will increase our operating expenses.

Vote Required

Approval of the proposed amendment to the Plan for purposes of
Section 423 of the Internal Revenue Code of 1986, as amended, requires the
affirmative vote of a majority of votes represented and voting. In determining
whether the proposal has received the requisite number of affirmative votes,
abstentions and broker non-votes, if any, will be disregarded and will have no
effect on the outcome of the vote.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 5.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

How many shares of common stock do our directors, executive officers, and
largest shareholders own?

The following table sets forth certain information regarding the
ownership of our common stock as of April 22, 2005 by: (a) each director and
nominee for director named in "Proposal 1--Election of Directors"; (b) each of
the executive officers and individuals named in the Summary Compensation
Table; (c) all of our executive officers and directors as a group; and (d) all
those known by us to be beneficial owners of more than five percent of our
common stock.

Name and Address of Beneficial Owner Number of Shares Percent of Total (1)
--------------------------------------------------- ------------------- ----------------------

Veron International 5,391,633 6.1%
Top Floor Chinachem Golden
77 Mody Road
Tsimshatsui East
Kowloon, Hong Kong
Biotechnology Value Fund LP 5,030,529** 5.7%
227 West Monroe Street - Suite 4800
Chicago, Illinois 60606
Irene A. Chow, Ph.D. (2) 1,352,739 *
James A. D. Smith (3) 485,891 *
Matthew M. Loar (4) 398,099 *
H. H. Haight (5) 375,000 *
Arthur Gray, Jr. (6) 289,997 *
Roy J. Wu (7) 146,075 *
Ronald C. Griffith, Ph.D. (8) 123,713 *
Alan Y. Kwan (9) 99,500 *
Mumtaz Ahmed, M.D., Ph.D. (10) 52,161 *
All directors and executive officers as a group (12 3,897,017 4.3%
persons) (11)

* Represents less than 1%.
** Represents share holdings as provided to the Company as of
March 1, 2005, which the Company believes to be accurate. This
is the most recent date for which data are available.

(1) Based on 88,503,779 shares of Genelabs common stock
outstanding as of April 22, 2005.

(2) Represents 45,835 shares of common stock held by Dr. Chow and
1,306,904 shares underlying options exercisable within 60 days
of April 22, 2005.

(3) Represents 87,626 shares of common stock held by Mr. Smith and
398,265 shares underlying options exercisable within
60 days of April 22, 2005.

(4) Represents 83,369 shares of common stock held by Mr. Loar,
including 10,000 shares held by Mr. Loar's children, and
314,732 shares underlying options exercisable within 60 days
of April 22, 2005.

(5) Represents 260,000 shares of common stock held by Mr. Haight
and 115,000 shares underlying options exercisable within 60
days of April 22, 2005.

(6) Represents 225,000 shares of common stock held by Mr. Gray,
including 35,000 shares held by his spouse and 35,000 shares
held by a trust of which he is the beneficiary, and 65,000
shares underlying options exercisable within 60 days of April
22, 2005.

(7) Represents 27,951 shares of common stock held by Mr. Wu and
118,124 shares underlying options exercisable within 60 days
of April 22, 2005.

(8) Represents 4,964 shares of common stock held by Dr. Griffith
and 118,749 shares underlying options exercisable within 60
days of April 22, 2005.

(9) Represents 4,500 shares of common stock held by Mr. Kwan and
95,000 shares underlying options exercisable within 60 days of
April 22, 2005.

(10) Represents 2,161 shares of common stock held by Dr. Ahmed and
50,000 shares underlying options exercisable within 60 days of
April 22, 2005.

(11) Represents 906,016 shares of common stock held by all
directors and executive officers as a group, including three
executive officers not listed above, and 2,991,001 shares
underlying options exercisable within 60 days of April 22,
2005.

Compliance With Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires that our directors and
executive officers, and persons who own more than ten percent of a registered
class of our equity securities to file with the SEC initial reports of
ownership and changes in ownership of our common stock and other equity
securities. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish us with copies of all Section 16(a)
forms they file.

To our knowledge, based solely on a review of the copies of such
reports furnished to us and written representations that no other reports were
required during the fiscal year ended December 31, 2004, all Section 16(a)
filing requirements applicable to our officers, directors and greater than ten
percent beneficial owners were timely complied with.

EXECUTIVE OFFICERS

Who are our executive officers?

The executive officers of Genelabs are:

Name Age* Position
--------------------------------------- -------- ------------------------------------------------------------------------

James A.D. Smith 46 President & Chief Executive Officer
Mumtaz Ahmed, M.D., Ph.D. 68 Vice President, Drug Development
Adrian Arima 55 Vice President, General Counsel
Ronald C. Griffith, Ph.D. 57 Vice President, Research
Heather Criss Keller 39 Senior Business Strategy Advisor and Secretary
Matthew M. Loar 42 Chief Financial Officer
Kenneth E. Schwartz, M.D. 57 Vice President, Medical Affairs
Roy J. Wu 50 Vice President, Business Development
_____________
* Age at April 1, 2005

Irene A. Chow, Ph.D., has been Chairman of the Board since April 1999
and was Chief Executive Officer from January 2001 to March 2004. From 1995
through March 1999 she was President and Chief Executive Officer. Dr. Chow
joined Genelabs as an officer and director in 1993. In addition to her duties
at the Company, Dr. Chow is also the chairman of the board of Genovate
Biotechnology Co., Ltd. (formerly Genelabs Biotechnology Co., Ltd.). Before
joining Genelabs, Dr. Chow held several positions at Ciba-Geigy Corporation,
most recently as Senior Vice President of Drug Development for the
pharmaceuticals division. Prior to joining Ciba-Geigy, Dr. Chow served as an
associate professor and assistant dean of Health Related Professions at
Downstate Medical School, State University of New York. Dr. Chow

received her B.A. degree in Literature from National Taiwan University, and
both an M.A. and a Ph.D. in Biostatistics from the University of California,
Berkeley.

James A. D. Smith has been Chief Executive Officer since March 2004.
He has been President of Genelabs since April 1999. From January 2000 to
January 2001, Mr. Smith also served as Chief Executive Officer. From October
1996 through March 1999, Mr. Smith was Chief Operating Officer. From June 1995
through September 1996, Mr. Smith was Vice President, Marketing and Business
Development, and from January 1994 through June 1995, Mr. Smith was Director
of Marketing. Before joining Genelabs, Mr. Smith was with ICN Pharmaceuticals
for more than ten years in various marketing and business development
positions, most recently as Director of Worldwide Business Development. Mr.
Smith received his B.S. in Molecular and Cellular Biology from the University
of California, San Diego.

Mumtaz Ahmed, M.D., Ph.D. has been Vice President, Drug Development
since June 2003. From 1993 through 2002, Dr. Ahmed was Vice President, Medical
Affairs of Ascent Pediatrics. Dr. Ahmed received his M.D. from UACJ School of
Medicine, Cd. Juarez, Mexico and his Ph.D. from the Indiana University School
of Medicine.

Adrian Arima has been Vice President, General Counsel since June
2004. From September 2001 until March 2004 he was at SangStat Medical
Corporation, first as Vice President, Associate General Counsel and Secretary
until August 2002 and then as Senior Vice President, General Counsel and
Secretary. From December 1997 until October 2000 he was employed within the
Novartis AG organization culminating in positions as Vice President, General
Counsel and Secretary of SyStemix, Inc., and Genetic Therapy, Inc. Mr. Arima
received his B.A. and M.S. degrees from Stanford University and his J.D. from
the University of California, Berkeley.

Ronald C. Griffith, Ph.D., has been Vice President, Research since
December 2001. From May 2001 until December 2001, Dr. Griffith was Vice
President of Medicinal Chemistry with Isis Pharmaceuticals Corp. From February
2000 through May 2001 he was Vice President of Chemistry at X-Ceptor
Therapeutics. Before that, Dr. Griffith was Director of Chemical Sciences at
Tanabe Research Laboratories, USA from 1997 through 2000. Dr. Griffith
received his B.S. degree from Alfred University and his Ph.D. in Organic
Chemistry from Syracuse University and was a post-doctoral fellow at
California Institute of Technology.

Heather Criss Keller has been Senior Business Strategy Advisor since
June 2004 and Secretary since August 1999. From January 2001 through June 2004
she served as Vice President, General Counsel, before which she was Vice
President, Legal Affairs from January 2000 until January 2001 and Director of
Legal Affairs from October 1998 through January 2000. From September 1996
until July 1998 Ms. Keller was Senior Corporate Counsel at Heartport, Inc. Ms.
Keller received her B.A. from Duke University and her J.D. from Vanderbilt
University School of Law.

Matthew M. Loar has been Chief Financial Officer since September
2001. From January 1999 to September 2001 he was Vice President, Finance, and
for approximately three years previously was Director of Finance and
Controller. Mr. Loar held various positions in finance and accounting for ten
years prior to joining the Company, including five years in public accounting
at Coopers & Lybrand. Mr. Loar is a Certified Public Accountant and received
his B.A. in Legal Studies from the University of California, Berkeley.

Kenneth E. Schwartz, M.D., has been Vice President, Medical Affairs
since February 2002, prior to which he served as Senior Medical Director
beginning in 1995. Before joining Genelabs, Dr. Schwartz held several
positions with Syntex Research and was an Assistant Clinical Professor in
Internal Medicine - Endocrinology and Metabolism at the University of
California, San Francisco. Dr. Schwartz received his B.S. in Chemistry from
University of California, Los Angeles and his M.D. from Stanford University.

Roy J. Wu has been Vice President of Business Development since
October 2001. From October 1997 to October 2001, he served as Vice President,
Corporate Secretary and member of the board of directors of Kissei Pharma,
USA. Mr. Wu received his B.S. in Biology from University of San Francisco and
his M.B.A. in International Finance from University of San Francisco.

There are no family relationships among any of our directors and
executive officers.

EXECUTIVE COMPENSATION

The following table indicates information concerning compensation of
our Chief Executive Officers and our four most highly compensated executive
officers other than the Chief Executive Officers whose salary and bonus
exceeded $100,000 for the last fiscal years ended 2004, 2003 and 2002 (the
"named executive officers").

SUMMARY COMPENSATION TABLE

Annual Compensation Long-Term Compensation
-------------------------------------------- ----------------------
Awards
----------------------
Other Annual Securities
Salary Bonus Compensation Underlying Options
Name and Principal Position Year ($) ($) (1) ($) (2) (#) (3) All Other Compensation
- ----------------------------- ------ ----------- -------- ------------ ----------------------- -----------------------

Irene A. Chow, Ph.D. (4) 2004 318,250 (5) 0 407,939 406,905 --
Chairman of the Board 2003 504,397 302,939 52,500 100,000 --
2002 495,833 0 0 180,000 --

James A. D. Smith (6) 2004 329,883 70,245 39,830 65,000 --
President and 2003 296,136 127,048 30,489 40,000 --
Chief Executive Officer 2002 292,838 0 27,709 72,000 --

Mumtaz Ahmed, M.D., Ph.D. 2004 277,500 39,200 0 30,000 --
Vice President,
Drug Development 2003 114,583 23,479 9,900(7) 80,000 --

Matthew M. Loar 2004 245,492 34,510 35,450 30,000 --
Chief Financial Officer 2003 229,003 78,598 29,083 40,000 --
2002 226,417 0 23,179 72,000 --

Ronald Griffith, Ph.D. 2004 242,108 34,020 63,500(8) 30,000 --
Vice President, Research 2003 226,983 77,900 50,000(9) 40,000 --
2002 225,000 0 75,989(10) 20,000 --

Roy J. Wu 2004 222,516 31,290 14,800 30,000 --
Vice President,
Business Development 2003 206,812 44,400 2,500 40,000 --
2002 204,586 0 0 20,000 --

___________________

(1) Represents incentive bonus amounts earned for the fiscal year, which are
generally paid out approximately February 15 of the following year.
However, no bonuses were paid out in February 2003 for 2002 services due
to financial constraints of the Company and contingency criteria the
board of directors established for payment of incentive bonuses.
Therefore, the bonus payments for 2003 represent two years of bonuses -
the 2002 contingent bonuses which were paid out in November 2003 as well
as the amount earned in 2003 which was paid out in February 2004.

(2) Unless otherwise noted, amounts in this column represent amounts vested
in the long-term portion of Genelabs' Annual and Long-Term Incentive
Based Compensation Program.

(3) Stock options generally vest over four years, with 25% of the shares
granted vesting on the one-year anniversary of the date of grant and the
remainder vesting over the next three years, except for the grants to
Dr. Chow which vested immediately.

(4) Dr. Chow was Chairman and Chief Executive Officer until March 8, 2004
when she retired as from her full-time position as Chief Executive
Officer, becoming Chairman of the Board and working a part-time
schedule. At her retirement from full-time responsibilities, the board
of directors immediately vested the previously unvested balance of
$302,939 in the long-term portion of Genelabs' Annual and Long-Term
Incentive Based Compensation Program, with timing of the payment to be
at Dr. Chow's discretion. This amount is included in "Other Annual
Compensation", as is $105,000 regular vesting in the long-term portion
of Genelabs' Annual and Long-Term Incentive Based Compensation Program.
As Chairman, Dr. Chow is paid an annual salary of $200,000, but she no
longer participates in the Company's Annual and Long-Term Incentive
Based Compensation Program and no longer accrues vacation. Immediately
prior to her retirement, Dr. Chow's annual salary as Chairman and Chief
Executive Officer was $516,200.

(5) Includes $59,561 in payout of accrued vacation at the time of retirement
from full-time responsibilities.

(6) Mr. Smith was President until March 8, 2004, when he also became Chief
Executive Officer. In connection with his increased responsibilities,
Mr. Smith's annual base salary was increased to $334,500.

(7) Dr. Ahmed's employment with the Company began on June 13, 2003. Other
annual compensation for Dr. Ahmed in 2003 represents temporary housing,
related costs and travel due to relocation.

(8) Represents $50,000 for housing allowance paid to Dr. Griffith and
$13,500 for the amount vested in the long-term portion of Genelabs'
Annual and Long-Term Incentive Based Compensation Program.

(9) Represents a housing allowance paid to Dr. Griffith.

(10) Represents $66,984 for temporary housing and related costs and $9,005
for travel due to relocation.

In July 2004, the board of directors granted Dr. Chow options to
purchase 306,905 shares of common stock, and also granted Mr. Smith options to
purchase 25,000 shares of common stock. Both of these grants were priced at
$2.50 per share, a premium of approximately 22% to the Company's stock price
on the date grant. The options granted in July 2004 were immediately vested
and expire three years from the date of grant. These options are included in
the table above.

Option Grants in Last Fiscal Year

The following table sets forth information regarding individual
grants of options to purchase shares of Genelabs common stock made during 2004
to each of the named executive officers.

In the fiscal year ended December 31, 2004, we granted options to
purchase up to an aggregate of 1,515,000 shares to employees, directors and
consultants. Stock options are awarded with an exercise price equal to or
exceeding the fair market value of Genelabs common stock on the date of award.
Generally, these stock option grants have a four-year vesting period with 25%
of the shares subject to the stock options vesting and becoming exercisable on
the first anniversary of the date of grant, and thereafter the remaining 75%
of the shares subject to the stock options vesting and becoming exercisable in
36 equal monthly installments, so long as employment or service with Genelabs
continues. The options granted generally have a 10-year term, however, in July
2004 the Board of Directors granted options for 306,905 shares to the Chairman
and for 25,000 shares to the Chief Executive Officer which were immediately
vested and expired in three years.

Individual Grants
---------------- ---- --------------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise Grant Date
Options Employees Price Expiration Present Value
Name Granted (#) in 2004 ($/Share) Date ($) (1)
---------------- -------------- ------------- ------------- ----------------

Irene A. Chow, Ph.D. 100,000(2) 6.9 2.50 8/23/2014 102,197
306,905(3) 21.1 2.50 7/23/2007 209,555

James A.D. Smith 40,000(4) 2.7 2.50 1/23/2014 65,824
25,000(3) 1.7 2.50 7/23/2007 17,070

Ronald C. Griffith, Ph.D. 30,000(1) 2.1 2.50 1/23/2014 49,368

Matthew M. Loar 30,000(1) 2.1 2.50 1/23/2014 49,368

Mumtaz Ahmed, M.D., Ph.D. 30,000(1) 2.1 2.50 1/23/2014 49,368

Roy J. Wu 30,000(1) 2.1 2.50 1/23/2014 49,368

___________________________

(1) The estimated "grant date present value" of options granted in 2004 is
based on a Black-Scholes option pricing model, which reflects certain
assumptions regarding variable factors such as interest rates and stock
price volatility. Stock options have value only as a result of
appreciation in the price of Genelabs common stock. If, at the time of
exercise, the price of Genelabs common stock is the same as or lower than
the option exercise price, there will be no gain to the optionee. For the
purposes of establishing the "grant date present value" shown in the
table, the model assumed a dividend yield of zero, risk-free interest
rate of 3.5%, volatility factor of the expected market price of the
Genelabs common stock of 1.0, and an expected life of the options of one
year subsequent to vesting.

(2) Stock options awarded with an exercise price equal to the fair market
value of Genelabs common stock on the date of grant and fully vested on
the date of grant. These options expire ten years from the date of grant.

(3) Stock options awarded with an exercise price approximately 22% higher
than the fair market value of Genelabs common stock on the date of grant
and fully vested on the date of grant. These options expire three years
from the date of grant.

(4) Stock options awarded with an exercise price equal to the fair market
value of Genelabs common stock on the date of grant. These stock option
grants have a four-year vesting period with 25% of the shares subject to
the stock options vesting and becoming exercisable on the first
anniversary of the date of grant, and thereafter the remaining 75% of the
shares subject to the stock options vesting and becoming exercisable in
36 equal monthly installments, so long as employment with Genelabs
continues. These options expire ten years from the date of grant.

Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End Option
Values

The following table describes for the named executive officers the
exercisable and unexercisable options held by them as of December 31, 2004. No
options were exercised by the named executive officers during the fiscal year
ended December 31, 2004.

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options Held at Fiscal Year-End (#) Fiscal Year-End ($)
----------------------------------- -----------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------- ------------ ------------ ----------- ------------- ----------- -------------

Irene A. Chow, Ph.D. ------ ------ 1,252,868 66,037 14,983 8,217
James A.D. Smith ------ ------ 390,766 83,834 5,993 3,287
Ronald C. Griffith, Ph.D. ------ ------ 91,249 78,751 3,746 2,054
Matthew M. Loar ------ ------ 290,733 74,667 5,993 3,287
Mumtaz Ahmed, M.D. Ph.D. ------ ------ 30,000 80,000 0 0
Roy J. Wu ------ ------ 93,019 71,981 1,873 1,027

___________________

The "Value of Unexercised In-the-Money Options at Fiscal Year-End" is
based on a value of $1.20 per share, the closing price of our common stock as
of December 31, 2004, less the per share exercise price, multiplied by the
number of shares issued upon exercise of the option. All options were granted
under our 2001 Stock Option Plan.

Employment Contracts, Termination of Employment and Change-in-Control
Arrangements

Employment Contracts

Except as described below, the Company has not entered into any
employment agreements with the named executive officers, and their employment
may be terminated at any time at the discretion of the Board of Directors.

The Company has entered into agreements with each of the named
executive officers providing certain compensation in the event of a change in
control of the Company. The Agreements are not employment contracts but are
intended to ensure that the Company will have the continued dedication and
objectivity of the employee, notwithstanding the possibility or occurrence of
a change of control. The agreements provide for the immediate vesting of all
unvested shares of stock options granted by Genelabs to the named executive
officers upon the effective date of a change in control (as defined in the
agreements) of the Company (referred to as the Effective Date). The agreements
also provide various severance benefits to such named executives if their
employment is terminated (other than for cause (as defined in the agreements),
disability or death) or an involuntary termination (as defined in the
agreements) occurs, in either case within eighteen (18) months following the
Effective Date (such terminations referred to as "Involuntary Termination").
Under the change of control agreement between the Company and Dr. Chow, upon
an Involuntary Termination she receives salary continuation for 24 months, a
lump sum payment of 150% of her target bonus potential for the calendar year
in which the Involuntary Termination takes place, payment of any accrued but
unpaid long-term incentive bonus and continuation of health care coverage for
18 months. Dr. Chow currently does not participate in the Company's annual
bonus plan and does not have any accrued bonus. Under the change of control
agreement with each other named executive officer, upon Involuntary
Termination the executive receives salary continuation for 12 months, a lump
sum payment of 100% of the executive's target bonus potential for the calendar
year in which the Involuntary Termination takes place, payment of any accrued
but unpaid long-term incentive bonus and continuation of health care coverage
for 12 months.

For each named executive officer, the amount of such payments shall
be either: (a) the full amount of the payments, or (b) a reduced amount which
would result in no portion of the payments being subject to the excise tax
imposed pursuant to Section 4999 of the Internal Revenue Code, whichever of
(a) or (b), taking into account the applicable federal, state and local income
taxes and the excise tax, results in the receipt by the employee, on an
after-tax basis, of the greatest amount of benefit.

Limitation of Liability and Indemnification

The Company's articles of incorporation and bylaws include provisions
that eliminate the liability of the directors for monetary damages to the
fullest extent under California law.

In addition to the indemnification set forth in the Company's
articles of incorporation and bylaws, as a general practice, the Company
enters into agreements with each director and officer pursuant to which the
Company agrees to indemnify such directors and officers. These agreements,
among other things, provide for indemnification for expenses, judgments, fines
and settlement amounts incurred by any of these people in any action or
proceeding arising out of his or her services as a director or executive
officer or at the Company's request. Genelabs believes that these provisions
and agreements are necessary to attract and retain qualified people as
directors and executive officers.

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION1

The Compensation Committee (the "Committee") acts on behalf of the
Board of Directors to oversee the implementation of the Company's general
compensation policy for all employees of the Company. The Committee consists
of two members of the Board of Directors. These Compensation Committee members
are not our employees. The Committee makes recommendations for the
compensation of the Company's executive officers to the Board of Directors,
which is responsible for determining and approving compensation levels. A copy
of the Compensation Committee's charter is available on our website at
www.genelabs.com under the heading "Investor Information/Corporate
Governance."

Section 162:

Section 162(m) of the Internal Revenue Code of 1986, as amended,
generally provides that publicly held companies may not deduct compensation
paid to certain of its top executive officers to the extent such compensation
exceeds $1 million per officer in any year. However, pursuant to regulations
issued by the Treasury Department, certain limited exceptions to Section
162(m) apply with respect to "performance-based compensation." Awards granted
under our 2001 Stock Option Plan are intended to constitute qualified
performance-based compensation eligible for such exceptions, and we will
continue to monitor the applicability of Section 162(m) to our ongoing
compensation arrangements. We do not expect that amounts of compensation paid
to our executive officers will fail to be deductible on account of Section
162(m). Our Board of Directors has the discretion to issue a bonus to our
Chairman of up to $1 million if our investigational drug for the treatment of
lupus, Prestara(TM), is approved by the U.S. Food and Drug Administration. If
such bonus is approved, a determination would be made at that time whether the
bonus would be deductible under Section 162(m).

Compensation Philosophy:

The Committee's philosophy in recommending compensation for executive
officers, including the chief executive officer, is to relate compensation
principally to corporate and executive performance within the context of
maintaining appropriate market competitiveness. Compensation for the chief
executive officer and each of the Company's other executive officers generally
consists of three elements: base salary, a performance-based bonus which has
both an annual component and a long-term incentive component, and long-term
equity incentives consisting of stock option grants with exercise prices set
at the fair market value, or greater, at the time of the grant and eligibility
to participate in the Company's Employee Stock Purchase Plan ("ESPP"). Base
salaries and cash bonuses are determined annually, based in part on the
achievement of corporate performance goals and objectives set by the board.
Under these performance

- -------------------

1 The material in this report is not "soliciting material," is not
deemed "filed" with the SEC, and is not to be incorporated by
reference into any filing of the Company under the Securities Act or
the Exchange Act, whether made before or after the date hereof and
irrespective of any general incorporation language contained in such
filing.

criteria, executive officers' compensation, including the chief executive
officer's compensation, is based on the Company's success in meeting these
established goals and objectives. In addition, regular employees generally
participate in the annual cash bonus program and stock option plan, and some
employees elect to participate in the ESPP, certain management employees also
participate in the long-term incentive based bonus program. The process for
bonus determinations is set forth in the Company's Annual and Long-Term
Incentive Based Compensation Plan adopted in 1994 and last amended in July
2003 (the "Bonus Plan").

In recommending compensation for all executive officers, the
Committee also takes into consideration the financial condition and prospects
for the Company as well as any promotions or changes in responsibilities that
may have taken place during the fiscal year. Total compensation paid by the
Company to its chief executive officer and other executive officers is
designed to be competitive with compensation packages paid to the management
of comparable companies in the biopharmaceutical industry. In making its
compensation decisions, the Committee takes into consideration information and
reports including surveys of compensation programs and practices of competing
biopharmaceutical companies as well as publicly available information and
reports from compensation consulting firms. In addition, custom survey data
are reviewed on a case-by-case, position-by-position basis as the Committee
deems necessary or appropriate. The Committee strives to provide compensation
packages that are competitive at or about the 50th percentile of the companies
surveyed.

Our stock option plans have been established to provide all our
employees with an opportunity to share, along with our shareholders, in our
long-term performance. Periodic grants of stock options are generally made
annually to eligible employees, with additional grants being made to employees
upon commencement of employment. Stock options granted under the plans
generally have a non-statutory four-year vesting schedule and generally expire
ten years from the date of grant. The Compensation Committee periodically
considers the grant of stock-based compensation to all executive officers.
Such grants are made on the basis of a quantitative and qualitative analysis
of individual performance, our financial performance, and the executive's
existing options.

The Company does not provide to any Director or employee as
compensation any personal benefits such as cars, corporate jets, tax or
financial advice, country club memberships, apartments or any similar personal
items, except that temporary housing may be provided to newly hired employees
at the Company's expense.

2004 Performance Review:

Goal achievement for purposes of the Company-wide Bonus Plan and
executive officers' compensation are normally reviewed in January. The Board
of Directors noted several significant accomplishments of the Company during
2004, including negotiation of a collaborative agreement with Tanabe Seiyaku
Co., Ltd. for development and marketing of the Company's Prestara(TM) drug
candidate in Japan, divestment of the Company's diagnostics business,
achievement of all research objectives in the Company's program to discover
potential drugs to treat infections by the hepatitis C virus ("HCV"),
successful and timely negotiation of a significant collaborative agreement for
the nucleoside HCV program with Gilead Sciences, Inc., achievement of key
financial objectives for the year, and successful implementation of
Sarbanes-Oxley corporate governance objectives for the Company. The Board of
Directors noted that certain other significant 2004 Company goals were not
met, including not achieving a positive result in Study GL02-01 which may have
allowed a filing for regulatory approval of Prestara with the U.S. Food and
Drug Administration if Study GL02-01 had it been positive, and not achieving
goals for European regulatory review and securing of a European collaborator
for Prestara.

The Board of Directors noted that the failure to achieve certain
goals relating to Prestara had a very significant impact on the Company's
valuation and business prospects and assigned zero credit under the Bonus Plan
for these objectives. However, the Board of Directors also determined that
other objectives were achieved which they believed were important to the
Company. Based on this determination and its evaluation of the employees'
contributions, achievements and performance, the board designated that the
Company's 2004 objectives had been achieved at 70% of the target level. The
2004 bonuses were paid out in the first quarter of 2005 at 70% of target, with
portions of the bonus for executives

deferred as specified in the Bonus Plan. Base salary increases and stock
options were granted as part of the annual performance and compensation
review.

Special Considerations Relating to Equity Compensation in 2004:

The Board of Directors addressed certain special situations in 2004
resulting in additional option grants. In July 2004, it was noted that certain
long-time employees held options that were to expire before the end of that
month. Given the urgency to complete the Company's clinical trial, among other
factors, the Board of Directors authorized a grant of additional stock options
to those employees who were continuing in the Company's employment. The only
officers affected by this grant were the Chairman who received an option grant
of 306,905 shares and the Chief Executive Officer who received an option grant
of 25,000 shares. All grants were at a strike price of $2.50 which exceeded
the then fair market value of the Company's stock by approximately 22%. The
options were immediately vested and expired three years from the date of
grant.

In November 2004, management recommended a special stock option grant
to non-officer employees in light of the results recently announced from the
Company's clinical trial, which had depressed the Company's stock price.
Consequently, in order to aid in the retention of employees and to continue to
motivate them to accomplish the Company's goals, the Board of Directors
authorized the grant of 200,000 shares at the then fair market value with
vesting through December 31, 2005. Officers of the Company were excluded from
these option grants.

As a result of these stock option grants and the grants made as a
result of the Board of Directors' annual review of 2004 performance and
compensation in January 2005, the Board of Directors recognized that the
number of shares available for grant under the Company's 2001 Stock Option
Plan have been substantially depleted, leaving less than 700,000 shares
available on February 28, 2005. The Board of Directors determined that the
option grants were necessary given a number of factors, including the current
business prospects of the Company, the need to continue progress on the
Company's HCV research programs, the additional work on the clinical
development of Prestara, including the open-label follow-on study and
assistance with the analysis of the prasterone trial by a licensee in Taiwan,
and the fact that the Company was operating with reduced staffing, partly as a
result of past reductions in force.

Chairman and Chief Executive Officer Compensation:

Dr. Irene A. Chow served as the Company's Chairman and Chief
Executive Officer until March 8, 2004, at which time she retired from her
position as Chief Executive Officer to be solely Chairman of the Board of
Directors. Dr. Chow's initial 2004 compensation as Chairman and Chief
Executive Officer at an annual salary of $516,200 (unchanged from her salary
at the end of 2003), was recommended by the Committee with due regard to her
industry experience, competitive salary information and current market
conditions. The amount of Dr. Chow's total compensation as Chief Executive
Officer, determined by the Board of Directors, was based on the Company's 2003
results and her individual performance with respect to meeting previously
established performance objectives.

Effective March 8, 2004, Dr. Chow became a part-time employee of the
Company with health benefits and other benefits normally made available to
part-time employees, but ceased participation in the Company's Bonus Plan,
certain insurance benefits, vacation and sick leave. Her accrued vacation was
paid out and all accrued amounts she had earned under the Bonus Plan were
accelerated and paid out. In her new role, Dr. Chow provides strategic advice
and counsel to management, strategic and tactical assistance with the
Company's drug development and drug discovery programs, and other assistance.
Her salary was set at $200,000 on an annualized basis. Dr. Chow's
responsibilities and compensation as Chairman are reviewed annually and were
not changed for 2005.

James A.D. Smith was appointed President and Chief Executive Officer
effective March 8, 2004. Before that time, he was President of the Company.
Before his promotion to Chief Executive Officer, Mr. Smith's salary was
$318,500, approximately a 5% increase from his salary at the end of 2003. The
Compensation Committee reviews total direct compensation for the chief
executive officer from the survey data gathered on companies in the
biopharmaceutical industry and/or of the Company's size and complexity. In
determining Mr. Smith's 2004 bonus and salary, the Committee

recognized his contributions to the performance of the Company, which included
continued progress of the Company's research and development programs, its
business development activities and financial condition. In addition, the
Committee took into consideration Mr. Smith's industry experience, competitive
salary information and current market conditions in accordance with the
objectives and policies as set forth above. The Committee also recognized the
value of Mr. Smith's performance and providing the leadership to achieve
results. Consequently, Mr. Smith's salary as President and Chief Executive
Officer was set at $334,500, approximately a 5% increase over his salary as
President. In making its determination with respect to the bonus to be awarded
to Mr. Smith for 2004, the Committee's assessment was that Mr. Smith's
performance was important to the achievement of the Company's performance
objectives, and the Board of Directors granted Mr. Smith's cash bonus for 2004
in the first quarter of 2005 at 70% of the target level. Mr. Smith's salary
for 2005 was not changed.

Changes in Composition of the Compensation Committee

Arthur Gray, Jr. was appointed as a member of the Compensation
Committee and its Chairman in June 2004, when the prior Committee Chairman, J.
Richard Crout, M.D., elected not to stand for re-election to the Board.

COMPENSATION COMMITTEE

/s/ ARTHUR GRAY, JR., CHAIR
/s/ ALAN Y. KWAN

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee for all or a portion of
fiscal 2004 were J. Richard Crout, M.D., Alan Y Kwan, and Arthur Gray, Jr.
None of the members of the Compensation Committee during fiscal 2004 (i) was
an officer or employee of the Company or any of its subsidiaries, (ii) was
formerly an officer of the Company or any of its subsidiaries or (iii) had any
relationship requiring disclosure by the Company under the SEC's rules
requiring disclosure of related party transactions.

REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS2

The Audit Committee is comprised of three outside directors, all of
whom are independent under Rule 4200(a)(14) of the National Association of
Securities Dealers' ("NASD") listing standards. On June 10, 2004, Alan Y. Kwan
was appointed to the Audit Committee, replacing Nina K. Wang who did not stand
for re-election to the Board. On January 23, 2004, the Board of Directors
approved and adopted a written charter, which sets forth the Audit Committee's
duties and responsibilities and reflects new SEC regulations and NASD rules. A
copy of the Audit Committee's charter was attached as an exhibit to our 2004
Proxy and is available on our website at www.genelabs.com under the heading
"Investor Information/Corporate Governance."

The Audit Committee oversees Genelabs' financial reporting process on
behalf of the board of directors. Genelabs' management has the primary
responsibility for the Company's financial statements and reporting process,
including the systems of internal controls. The Audit Committee and Genelabs'
independent auditors, Ernst & Young LLP, have discussed the overall scope and
plans for their audits. The Audit Committee periodically meets with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of Genelabs' internal
controls and the overall quality of Genelabs' financial reporting.

The Audit Committee has reviewed and discussed our audited financial
statements for the fiscal year ended December 31, 2004 with management and
with our independent registered public accounting firm, Ernst & Young LLP. The
Audit Committee has discussed with Ernst & Young LLP the matters required to
be discussed by Statement on Auditing Standards No. 61 relating to the conduct
of the audit. The Audit Committee has received the written disclosures and the
letter from Ernst & Young LLP required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees, and has
discussed with Ernst & Young LLP their independence. The Audit Committee has
considered the compatibility of the provision of non-audit services with
maintaining the independence of the independent registered public accounting
firm.

Based on the Audit Committee's review of the audited financial
statements and the review and discussions described in the foregoing
paragraph, the Audit Committee recommended to the Board of Directors that the
audited financial statements for the fiscal year ended December 31, 2004 be
included in our Annual Report on Form 10-K for the fiscal year ended December
31, 2004 for filing with the SEC.

AUDIT COMMITTEE
/s/ H.H. HAIGHT, CHAIR
/s/ ARTHUR GRAY, JR.
/s/ ALAN Y. KWAN

- -------------------

2 The material in this report is not "soliciting material," is not
deemed "filed" with the SEC, and is not to be incorporated by
reference into any filing of the Company under the Securities Act of
1933 (the "Securities Act") or the Exchange Act, whether made before
or after the date hereof and irrespective of any general
incorporation language in such filing.

PERFORMANCE MEASUREMENT COMPARISON(3)

The following graph shows the change in our cumulative total
shareholder return for the last five fiscal years, based upon the market price
of our common stock, compared with: (i) the cumulative total return on Nasdaq
Stock Market Index and (ii) the Nasdaq Pharmaceuticals Index. The graph
assumes a total initial investment of $100 as of December 31, 1999, and shows
a "Total Return" that assumes reinvestment of dividends, if any, and is based
on market capitalization at the beginning of each period. The performance on
the following graph is not necessarily indicative of future stock price
performance.

COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT

[OBJECT OMITTED]

- -------------------

3 The material in the following is not "soliciting material," is not
deemed "filed" with the SEC, and is not to be incorporated by
reference into any filing of the Company under the Securities Act or
the Exchange Act, whether made before or after the date hereof and
irrespective of any general incorporation language in such filing.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

From January 1, 2004 to the present, there have been no transactions
in which the amount involved exceeded $60,000 to which Genelabs or any of its
subsidiaries was a party and in which any executive officer, director, 5%
beneficial owner of common stock or member of the immediate family of any of
the foregoing persons had or has a direct or indirect material interest,
except the compensation arrangements described above.

Genelabs' Chairman, Irene A. Chow, Ph.D., is also chairman of the
board of directors of Genovate Biotechnology Co., Ltd., or Genovate. She
receives a salary of approximately $93,000 per year from Genovate. Dr. Chow
owns shares of Genovate representing less than 1% of the company. In 1995,
Genelabs licensed to Genovate, in exchange for an equity position in Genovate,
its rights to its prasterone drug candidate, known as Prestara(TM), for
Australia, New Zealand and the Asian countries (except Japan). From time to
time Genelabs has sold its Genovate shares and currently holds approximately
8% of the equity in Genovate. The companies have also agreed to share clinical
data related to prasterone.

OTHER BUSINESS

The Board of Directors knows of no other matters that will be
presented for consideration at the Annual Meeting. If any other matters are
properly brought before the meeting, it is the intention of the persons named
in the accompanying proxy to vote on such matters in accordance with their
best judgment.

No person is authorized to give any information or to make any
representation not contained in this Proxy Statement, and, if given or made,
such information or representation should not be relied upon as having been
authorized. This Proxy Statement does not constitute the solicitation of a
proxy, in any jurisdiction, from any person to whom it is unlawful to make
such proxy solicitation in such jurisdiction. The delivery of this Proxy
Statement shall not, under any circumstances, imply that there has not been
any change in the information set forth herein since the date of the Proxy
Statement.

ADDITIONAL INFORMATION

The Securities and Exchange Commission has adopted rules that permit
companies and intermediaries such as brokers to satisfy delivery requirements
for proxy statements with respect to multiple shareholders sharing the same
address by delivering a single proxy statement addressed to those
shareholders. This process of "householding" potentially provides extra
convenience for shareholders and cost savings for companies. The Company and
some brokers household proxy materials, delivering a single proxy statement
multiple shareholders sharing an address unless contrary instructions have
been received from the affected shareholders. Once you have received notice
from your broker or us that they or we will be householding materials to your
address, householding will continue until you are notified otherwise or until
you revoke your consent. If, at any time, you no longer wish to participate in
householding and would prefer to receive a separate proxy statement, or if you
are receiving multiple copies of the proxy statement and wish to receive only
one, please notify your broker if your shares are held in a brokerage account
or us if you hold registered shares. You can notify us by sending a written
request to Investor Relations, 505 Penobscot Drive, Redwood City, California
94063 or by calling Investor Relations at (650) 369-9500.

By Order of the Board of Directors

HEATHER CRISS KELLER
Secretary

April 29, 2005

A copy of our Annual Report to the SEC on Form 10-K for the fiscal
year ended December 31, 2004 has been included within the package of materials
sent to you as well as a copy of our 2004 Annual Report to Shareholders.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
GENELABS TECHNOLOGIES, INC.
FOR THE 2005 ANNUAL MEETING OF SHAREHOLDERS

JUNE 14, 2005

The undersigned shareholder of GENELABS TECHNOLOGIES, INC., a
California corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, each dated April 29, 2005, and
the 2004 Annual Report to Shareholders and hereby appoints James A.D. Smith
and Adrian Arima, and each of them, proxies, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 2005 Annual Meeting of Shareholders of GENELABS
TECHNOLOGIES, INC. to be held on June 14, 2005 at 10:00 a.m., Pacific Daylight
Time, at GENELABS TECHNOLOGIES, INC.'s principal executive offices located at
505 Penobscot Drive, Redwood City, California 94063, and at any adjournment
thereof, and to vote all shares of common stock that the undersigned would be
entitled to vote if then and there personally present on the matters set forth
below.

THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF THE NOMINATED DIRECTORS AND FOR
THE RATIFICATION OF SELECTION OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS
AS MAY PROPERLY COME BEFORE THE MEETING.

1. ELECTION OF DIRECTORS

NOMINEES: Irene A. Chow H. H. Haight
Arthur Gray, Jr. Alan Y. Kwan
James A. D. Smith

_____FOR ALL NOMINEES _____WITHHELD FROM ALL NOMINEES

______________________________________________
(INSTRUCTION): TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED ABOVE.

2. RATIFICATION OF SELECTION OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

______FOR ______AGAINST ______ABSTAIN

3. AUTHORIZE THE BOARD TO EFFECT A ONE-FOR-FIVE REVERSE SPLIT OF COMMON
STOCK

______FOR ______AGAINST ______ABSTAIN

4. AMENDMENT OF OUR 2001 STOCK OPTION PLAN

______FOR ______AGAINST ______ABSTAIN

5. AMENDMENT OF OUR 2001 EMPLOYEE STOCK PURCHASE PLAN TO INCREASE THE
NUMBER OF SHARES AVAILABLE FOR ISSUANCE

______FOR ______AGAINST ______ABSTAIN

Signature(s)_______________________________________ Dated:_____________, 2005

This Proxy should be marked, dated and signed by the shareholder(s) exactly as
his or her name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should sign.

Exhibit A
---------
Form of
Certificate of Amendment
of
Articles of Incorporation
of
Genelabs Technologies, Inc.

James A.D. Smith and Heather C. Keller certify that:

1. They are the Chief Executive Officer and Secretary, of
Genelabs Technologies, Inc., a California corporation.

2. The THIRD Article of the Articles of Incorporation of
this corporation is hereby amended such that the following paragraph shall be
inserted after the second paragraph thereof:

"(A) Upon the Certificate of Amendment becoming effective
pursuant to the California Corporations Code of the State of California and
without further action on the part of the Corporation or its shareholders,
each five (5) shares of Common Stock then issued and outstanding shall be
changed and reclassified into one (1) fully paid and nonassessable share of
Common Stock. To reflect the said change and reclassification, each
certificate representing shares of Common Stock then issued and outstanding,
shall represent one-fifth the number of shares of Common Stock issued and
outstanding after such change and reclassification; and the holder of record
of each five (5) shares of Common Stock will have or be entitled to a
certificate representing one (1) share of Common Stock of the kind authorized
by the Certificate of Amendment. All holders of fractional shares resulting
from the reverse stock split shall, in lieu thereof, be entitled to receive a
cash payment in an amount equal to the fraction to which the shareholder would
otherwise be entitled multiplied by the average of the closing prices of the
Common Stock on the thirty (30) trading days preceding the date that is five
(5) trading days before the effective time of the reverse stock split (as
adjusted for the reverse stock split, or if such prices are not available, the
average of the last bid and asked prices of the Common Stock on such days, as
adjusted for the reverse stock split, or other price determined by the Board
of Directors)."

3. The foregoing Amendment of Articles of Incorporation has
been duly approved by the required vote of the holders of Common Stock
pursuant to Section 903 of the California Corporations Code. The total number
of outstanding shares of Common Stock as of the record date of the vote, April
22, 2005, is . No shares of Preferred Stock are outstanding. The
number of shares voting in favor of the amendment equaled or exceeded the vote
required. The percentage vote required was more than 50% of the outstanding
shares of Common Stock.

We further declare under penalty of perjury under the laws
of the State of California that the matters set forth in this certificate are
true and correct of our own knowledge.

Dated:

--------------------------------
James A.D. Smith
Chief Executive Officer

--------------------------------
Heather C. Keller
Secretary

Exhibit B
---------

2001 Stock Option Plan

2001 STOCK OPTION PLAN
Amended and Restated April 4, 2005

Section 1. General Purpose of Plan; Definitions.

The name of this plan is the 2001 Stock Option Plan (the "Plan"). The
Plan was adopted by the Board (defined below) on April 23, 2001, subject to
the approval of the shareholders of Genelabs Technologies, Inc. (the
"Company"). The purpose of the Plan is to enable the Company to attract,
retain and provide equity incentives to selected persons to promote the
financial success of the Company.

For purposes of the Plan, the following terms shall be defined as set
forth below:

(1) "Administrator" means the Board, or if and to the extent the
Board does not administer the Plan, the Committee in accordance with Section 2
below.

(2) "Affiliate" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is under
common control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct
or indirect, of the power to cause the direction of the management and
policies of the corporation, whether through the ownership of voting
securities, by contract or otherwise.

(3) "Board" means the Board of Directors of the Company.

(4) "Change in Control" means a change in the ownership or control of
the Company, effected through any of the following events:

(a) any "person," as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company; any trustee or other
fiduciary holding securities under an employee benefit plan of the Company; or
any company owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportions as their ownership of Common Stock of
the Company) is or becomes, after the Effective Date (as defined herein), the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company (not including in the securities
beneficially owned by such person any securities acquired directly from the
Company or its affiliates) representing twenty-five percent (25%) or more of
the combined voting power of the Company's then outstanding securities;

(b) during any period of two consecutive years (not including
any period prior to the Effective Date), individuals who at the beginning of
such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (c) or (d) of this definition)
whose election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;

(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least sixty percent (60%) of the combined voting power of

the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no person acquires more than fifty percent (50%)
of the combined voting power of the Company's then outstanding securities; or

(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

(5) "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor thereto.

(6) "Committee" means the Compensation Committee of the Board plus
such additional individuals as the Board shall designate in order to meet the
qualifications referred to in Section 162(m) of the Code and Rule 16b-3 as
promulgated by the Securities and Exchange Commission under the Exchange Act
or any other committee the Board may subsequently appoint to administer the
Plan. Unless otherwise determined by the Board, the Committee shall be
composed entirely of members who meet the qualifications referred to in Rule
16b-3 under the Exchange Act ("Rule 16b-3") and Section 162(m) of the Code. If
at any time the Board shall not administer the Plan, then the functions of the
Board specified in the Plan shall be exercised by the Committee.

(7) "Common Stock" means the common stock, no par value per share, of
the Company.

(8) "Company" means Genelabs Technologies, Inc., a corporation
organized under the laws of the State of California (or any successor
corporation).

(9) "Disability" has the meaning as set forth in Section 22(e)(3) of
the Code.

(10) "Disinterested Person" shall have the meaning set forth in Rule
16b-3, and as such Rule may be amended from time to time, or any successor
definition adopted by the SEC.

(11) "Effective Date" shall mean the date provided pursuant to
Section 11.

(12) "Eligible Recipient" means an employee, officer, director,
consultant, independent contractor or advisor (provided such consultant,
independent contractor or advisor renders bona fide services not in connection
with the offer or sale of securities in a capital-raising transaction) of the
Company or any Parent, Subsidiary or Affiliate of the Company eligible to
participate in the Plan pursuant to Section 4.

(13) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor thereto.

(14) "Fair Market Value" means, as of any given date, the fair market
value of a Share as determined by the Committee from time to time in good
faith; provided that (i) if the Shares are admitted to trading on a national
securities exchange, the fair market value of a Share on any date shall be the
closing price per Share reported on the last date preceding such date on which
a sale was reported, (ii) if the Shares are admitted to quotation on the
National Association of Securities Dealers Automated Quotation ("Nasdaq")
System or other comparable quotation system and has been designated as a
National Market System ("NMS") security, the fair market value of a Share on
any date shall be the closing price per Share reported on the last trading day
preceding such date as quoted on the Nasdaq and as reported in the Wall Street
Journal.

(15) "Incentive Stock Option" means any Stock Option intended to be
designated as an "incentive stock option" within the meaning of Section 422 of
the Code.

(16) "Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option, including any Stock Option that provides (as of the
time such Stock Option is granted) that it will not be treated as an Incentive
Stock Option.

(17) "Optionee" means any Eligible Recipient selected by the
Administrator, pursuant to the Administrator's authority in Section 2 below,
to receive grants of Stock Options.

(18) "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations in the chain (other than the Company) owns stock possessing 50%
or more of the combined voting power of all classes of stock in one of the
other corporations in the chain.

(19) "SEC" means the Securities and Exchange Commission.

(20) "Securities Act" means the Securities Act of 1933, as amended,
from time to time, or any successor thereto.

(21) "Share" means a share of the Common Stock.

(22) "Stock Option" means an option to purchase Shares granted
pursuant to Sections 5 and 6 below.

(23) "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company, if each of the
corporations (other than the last corporation in the unbroken chain) owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.

(24) "Ten Percent Shareholder" means a person who owns or is deemed
to own (by reason of the attribution rules applicable under Section 424(d) of
the Code) more than 10% of the combined voting power of all classes of stock
of the Company or of any Parent or Subsidiary.

Section 2. Administration.

The Plan shall be administered in accordance with the requirements of
Section 162(m) of the Code (but only to the extent necessary and desirable to
maintain qualification of awards under the Plan under Section 162(m) of the
Code) and, to the extent applicable, Rule 16b-3, by the Board or, at the
Board's sole discretion, by the Committee, which shall be appointed by the
Board, and which shall serve at the pleasure of the Board.

Pursuant to the terms of the Plan, the Administrator shall have the
power and authority to grant Stock Options to Eligible Recipients pursuant to
the terms of the Plan. The Administrator may delegate to officers of the
Company the authority to grant Stock Options under this Plan to Eligible
Recipients who are not officers or directors of the Company whose transactions
in the Company's Common Stock are subject to Section 16(b) of the Exchange
Act.

Additionally, subject to the terms and provisions of the Plan, the
Administrator's powers shall include, without limitation, the authority to:

(1) select those Eligible Recipients who shall be Optionees;

(2) determine whether and to what extent Stock Options are to be
granted hereunder to Optionees including whether a Stock Option is to be an
Incentive Stock Option or a Non-Qualified Stock Option;

(3) determine the number of Shares to be covered by each such Stock
Option granted hereunder, the exercise price of a Stock Option and the period
during which the Stock Option may be exercised;

(4) determine other terms and conditions, not inconsistent with the
terms of the Plan, of each Stock Option granted hereunder;

(5) determine whether an Optionee has ceased to be employed or
retained by the Company or any Parent, Subsidiary or Affiliate of the Company
and the effective date on which such employment terminated and whether an

Optionee who is a director, consultant, independent contractor or advisor is
employed or retained by the Company or any Parent, Subsidiary or Affiliate of
the Company;

(6) adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall from time to time deem advisable;

(7) interpret the terms and provisions of the Plan and any award
issued under the Plan (and any agreements relating thereto); and

(8) otherwise supervise the administration of the Plan.

All decisions and interpretations made by the Administrator pursuant
to the provisions of the Plan shall be final, conclusive and binding on the
Company and all persons having an interest in any Stock Option or any Shares
purchased pursuant to a Stock Option.

Section 3. Stock Subject to Plan.

The total number of Shares reserved and available for issuance under
the Plan shall be 8,500,000. Such Shares may consist, in whole or in part, of
authorized and unissued shares or treasury shares. No one Optionee shall be
eligible to receive more than 500,000 Shares during any single calendar year
during the term of this Plan pursuant to the grant of Stock Options hereunder.
Upon shareholder approval of the Plan, (1) the Company's 1995 Stock Option
Plan (the "1995 Plan") shall be merged and incorporated into the Plan,
effective immediately prior to the 2001 annual meeting of the shareholders of
the Company, (2) all outstanding options under the 1995 Plan shall be treated
as outstanding under the Plan; provided however, that each outstanding option
so incorporated shall be governed solely by the express terms and conditions
of the 1995 Plan and all other instruments evidencing the grant of such
options, and (3) all available shares for grant under the 1995 Plan as of such
date shall be available for grant hereunder, and any and all shares that would
otherwise be returned to the 1995 Plan by reason of expiration of its term or
cancellation upon termination of employment or service shall be available
again for grant hereunder as of such date of cancellation or termination.
Effective immediately prior to the 2001 annual meeting of the shareholders of
the Company, and subject to shareholder approval of the Plan at such meeting,
the 1995 Plan shall terminate and no further option grants shall be made
therefrom.

Consistent with the provisions of Section 162(m) of the Code, as from
time to time applicable, to the extent that a Stock Option expires or is
otherwise terminated without being exercised, such Shares shall again be
available for issuance in connection with future awards granted under the
Plan. If any Shares have been pledged as collateral for indebtedness incurred
by an Optionee in connection with the exercise of a Stock Option and such
Shares are returned to the Company in satisfaction of such indebtedness, such
Shares shall again be available for issuance in connection with future awards
granted under the Plan.

In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, combination or other change in
the capital structure of the Company, as may be determined by the
Administrator, in its sole discretion and subject to any required action by
the Board or shareholders of the Company and compliance with applicable
securities laws, a substitution or adjustment shall be made in (i) the
aggregate number of Shares reserved for issuance under the Plan and (ii) the
kind, number and option price of Shares subject to outstanding Stock Options
granted under the Plan; provided, however, that the number of shares subject
to any award shall always be a whole number; and provided further, that the
exercise price may not be decreased to below the par value, if any, for the
Shares. Such other substitutions or adjustments shall be made as may be
determined by the Administrator, in its sole discretion. In connection with
any event described in this paragraph, the Administrator may provide, in its
sole discretion, for the cancellation of any outstanding awards and payment in
cash or other property therefor.

Section 4. Eligibility.

Non-Qualified Stock Options may be granted to employees, directors,
consultants, officers, independent contractors and advisors (provided such
consultants, independent contractors and advisors render bona fide services
not in connection with the offer or sale of securities in a capital-raising
transaction) of the Company or any Parent, Subsidiary or Affiliate of the
Company. Incentive Stock Options may be granted only to employees (including
officers and directors who are also employees) of the Company or a Parent or
Subsidiary of the Company.

Section 5. Stock Options.

The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options. The
Administrator shall have the authority to grant to any Eligible Recipient
Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock
Options. To the extent that any Stock Option does not qualify as an Incentive
Stock Option, it shall constitute a separate Non-Qualified Stock Option. More
than one Stock Option may be granted to the same Optionee and be outstanding
concurrently hereunder.

Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve, and the provisions of Stock
Option awards need not be the same with respect to each Optionee. Stock
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:

(1) Form of Stock Option Grant. Optionees who are granted Stock
Options shall enter into a stock option agreement with the Company, in such
form (which need not be the same for each Optionee) as the Administrator shall
from time to time approve, which stock option agreement shall comply with and
be subject to the terms and conditions of this Plan.

(2) Date of Grant. The date of grant of a Stock Option shall be the
date on which the Administrator makes the determination to grant such Stock
Option unless otherwise specified by the Administrator. The stock option
agreement representing the Stock Option will be delivered to the Optionee with
a copy of this Plan within a reasonable time after the granting of the Stock
Option.

(3) Exercise Price. The option price per Share purchasable under a
Stock Option shall be determined by the Administrator, in its sole discretion,
on the date the Stock Option is granted; provided that (i) the exercise price
of a Non-Qualified Stock Option shall not be less than 100% of the Fair Market
Value of the Shares on the date the Stock Option is granted; (ii) the exercise
price of an Incentive Stock Option shall be not less than 100% of the Fair
Market Value of the Shares on the date the Stock Option is granted; and (iii)
if an Incentive Stock Option is granted to a Ten Percent Shareholder, the
exercise price of such Incentive Stock Option, to the extent required at the
time of grant by the Code, shall be no less than 110% of the Fair Market Value
of the Common Stock on the date such Incentive Stock Option is granted.

(4) Exercise Period. Subject to this Section 5 and Section 10 herein,
Stock Options shall be exercisable within the times or upon the events
determined by the Administrator as set forth in the respective stock option
agreement; provided, however, that no Stock Option shall be exercisable after
the expiration of ten (10) years from the date the Stock Option is granted and
provided, further, that no Incentive Stock Option granted to a Ten Percent
Shareholder shall be exercisable after the expiration of five (5) years from
the date the Stock Option is granted.

(5) Limitations on Incentive Stock Options. The aggregate Fair Market
Value (determined as of the time the Incentive Stock Option is granted) of
Shares with respect to which Incentive Stock Options are exercisable for the
first time by an Optionee during any calendar year (under this Plan or under
any other incentive stock option plan of the Company or of any Parent or
Subsidiary) shall not exceed $100,000. If the Fair Market Value of Shares with
respect to which Incentive Stock Options are exercisable for the first time by
an Optionee during any calendar year exceeds $100,000, the Stock Options for
the first $100,000 worth of Shares to become exercisable in such year shall be
Incentive Stock Options and the Stock Options for the amount in excess of
$100,000 that become exercisable in that year shall be Non-Qualified Stock
Options. In the event that the Code or the regulations promulgated thereunder
are amended after the effective date of this Plan to provide for a different
limit on the Fair Market Value of Shares permitted to be subject to

Incentive Stock Options, such different limit shall be incorporated herein and
shall apply to any Stock Options granted after the effective date of such
amendment.

(6) Stock Options Non-Transferable. Stock Options granted under this
Plan, and any interest therein, shall not be transferable or assignable by an
Optionee, and may not be made subject to execution, attachment or similar
process, otherwise than by will or by the laws of descent and distribution,
and shall be exercisable during the lifetime of the Optionee only by such
Optionee; provided, however, that Non-Qualified Stock Options may be
transferred to such family members, trusts and charitable institutions as the
Administrator, in its sole discretion, shall approve at the time of the grant
of such Stock Option.

(7) Assumed Stock Options. In the event the Company assumes a stock
option granted by another company unless otherwise determined by the
Administrator, the terms and conditions of such option shall remain unchanged
(except the exercise price and the number and nature of shares issuable upon
exercise, which will be adjusted appropriately pursuant to Section 424(a) of
the Code). In the event the Company elects to grant a new stock option rather
than assuming an existing option, such new option may be granted with a
similarly adjusted exercise price.

(8) Exercise of Stock Options.

(a) Notice. Stock Options may be exercised only by delivery
(including electronic delivery or other delivery method approved by the
Administrator) to the Company of a written stock option exercise agreement in
a form approved by the Administrator (which need not be the same for each
Optionee), stating the number of Shares being purchased, the restrictions
imposed on the Shares, if any, and such representations and agreements
regarding the Optionee's investment intent and access to information, if any,
as may be required by the Company to comply with applicable securities laws,
together with payment in full of the exercise price for the number of Shares
being purchased.

(b) Payment. Payment for the Shares may be made in cash (by
check) or, where approved by the Administrator in its sole discretion at the
time of grant and where permitted by law: (i) by cancellation of indebtedness
of the Company to the Optionee; (ii) by surrender of Shares having a Fair
Market Value equal to the applicable exercise price of the Stock Options that
have been owned by the Optionee for more than six (6) months (and which have
been paid for within the meaning of SEC Rule 144 and, if such Shares were
purchased from the Company by use of a promissory note, such note has been
fully paid with respect to such shares), or were obtained by the Optionee in
the open public market; (iii) by waiver of compensation due or accrued to the
Optionee for services rendered; (iv) provided that a public market for the
Company's stock exists, through a "same day sale" commitment from the Optionee
and a broker-dealer that is a member of the National Association of Securities
Dealers (an "NASD Dealer") whereby the Optionee irrevocably elects to exercise
the Stock Option and to sell a portion of the Shares so purchased to pay for
the exercise price and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise price directly to the Company;
(v) provided that a public market for the Company's stock exists, through a
"margin" commitment from the Optionee and an NASD Dealer whereby the Optionee
irrevocably elects to exercise the Stock Option and to pledge the Shares so
purchased to the NASD Dealer in a margin account as security for a loan from
the NASD Dealer in the amount of the exercise price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the exercise
price directly to the Company; (vi) by any combination of the foregoing; or
(vii) by any other method approved by the Administrator.

(c) Withholding Taxes. Prior to issuance of the Shares upon
exercise of a Stock Option, the Optionee shall pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to such Stock Option. The obligations of the Company under the Plan
shall be conditional on the making of such payments or arrangements, and the
Company shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the Optionee.

(d) Limitations on Exercise. The exercisability of a Stock
Option shall be subject to the following:

(i) The Administrator may specify a reasonable minimum
number of Shares that may be purchased on any exercise of a Stock
Option, provided that such minimum number will not prevent an
Optionee from exercising the full number of Shares as to which the
Stock Option is then exercisable.

(ii) A Stock Option shall not be exercisable unless such
exercise is in compliance with the Securities Act, all applicable
state securities laws and the requirements of any stock exchange or
national market system upon which the Shares may then be listed, as
they are in effect on the date of exercise. The Company shall be
under no obligation to register the Shares with the SEC or to effect
compliance with the registration, qualification or listing
requirements of any state securities laws, stock exchange or national
market system, and the Company shall have no liability for any
inability or failure to do so.

(9) Termination of Employment or Service Other Than Due to Death or
Disability. Unless otherwise provided in the applicable stock option
agreement, if an Optionee ceases to be employed or retained by the Company or
any Parent, Subsidiary or Affiliate of the Company for any reason except death
or Disability, the Optionee may exercise such Optionee's Incentive Stock
Options or Non-Qualified Stock Options, to the extent that they are
exercisable on the date of termination, within three (3) months after the date
of termination or such other time period as may be specified in the applicable
stock option agreement (but in no event later than the expiration date of the
term of such Stock Option as set forth in Section 5(4) above). To the extent
an Optionee was not entitled to exercise a Stock Option at the date of
termination, or if an Optionee does not exercise such Stock Option to the
extent so entitled within the time specified herein, the Stock Option shall
terminate unless as otherwise provided in the applicable stock option
agreement.

(10) Termination of Employment or Service Due to Death or Disability.
Unless otherwise provided in the applicable stock option agreement, if an
Optionee's employment or retention with the Company or any Parent, Subsidiary
or Affiliate of the Company is terminated because of the Optionee's death or
Disability, the Optionee may exercise such Optionee's Incentive Stock Options
or Non-Qualified Stock Options, to the extent that they are exercisable on the
date of termination, by the Optionee (or the Optionee's legal representative)
within twelve (12) months after the date of termination or such other time
period as may be specified in the applicable stock option agreement (but in no
event later than the expiration date of the term of such Stock Option as set
forth in Section 5(4) above). To the extent an Optionee was not entitled to
exercise a Stock Option at the date of termination, or if an Optionee does not
exercise such Stock Option to the extent so entitled within the time specified
herein, the Stock Option shall terminate unless as otherwise provided in the
applicable stock option agreement.

Section 6. Option Grants for Non-Employee Directors

(1) Eligibility Generally. Non-employee directors of the Company or
any Parent, Subsidiary or Affiliate of the Company shall be granted automatic
Stock Options pursuant and subject to Sections 6(2) and (3) below. In addition
to the foregoing, Stock Options may be granted to such non-employee directors
of the Company or any Parent, Subsidiary or Affiliate of the Company as the
Administrator shall select from time to time in its sole discretion, and
subject to such terms and conditions as the Administrator shall determine, in
its sole discretion. Directors may be granted more than one Stock Option under
the Plan.

(2) Eligibility for Automatic Stock Options. Each non-employee
director, upon his or her first election or appointment to the Board, will be
granted a Stock Option to purchase 30,000 Shares. At the Company's Annual
Meeting of Shareholders following the second anniversary of his or her
election or appointment to the Board, and at each subsequent Annual Meeting of
Shareholders, each such director will be granted an additional Stock Option to
purchase 15,000 Shares.

(3) Terms and Conditions of Automatic Stock Options. The terms and
conditions of the automatic Stock Option grants to non-employee directors of
the Company or any Parent, Subsidiary or Affiliate of the Company pursuant to
Section 6(2) and this Section 6(3) are as follows:

(a) Date of Grant. The dates of grant of the automatic Stock
Options shall be the dates described in Section 6 (2) above. The stock option
agreement representing the Stock Option will be delivered to the Optionee
within a reasonable time after the granting of the Stock Option.

(b) Exercise Price. The exercise price of the automatic Stock
Option shall be the Fair Market Value of the Shares at the time that the Stock
Option is granted.

(c) Vesting and Exercise Period. The automatic Stock Options
shall be fully vested and exercisable in their entirety immediately upon grant
for the term set forth in the applicable stock option agreement; provided,
however, that no Stock Option shall be exercisable after the expiration of ten
(10) years from the date the Stock Option is granted.

(d) Limitation on Exercise. If the Optionee ceases to be a
director for any reason except death, the Optionee may exercise his or her
Stock Options, to the extent (and only to the extent) that they are
exercisable on the date of termination until the expiration dates of the Stock
Options, which shall be ten (10) years from the dates the Stock Options are
granted. If the Optionee ceases to be a director because of death, the
Optionee's legal representative may exercise his or her Stock Options to the
extent (and only to the extent) that they are exercisable on the date of
termination, within twelve (12) months after the date of termination, but not
after the expiration of ten (10) years from the date the Stock Options are
granted. To the extent an Optionee or an Optionee's legal representative was
not entitled to exercise a Stock Option at the date of termination, or if an
Optionee or an Optionee's legal representative does not exercise such Stock
Option to the extent so entitled within the time specified herein, the Stock
Option shall terminate unless as otherwise provided in the applicable stock
option agreement.

Section 7. Modification, Extension and Renewal of Stock Options

The Administrator shall have the power to modify, extend or renew
outstanding Stock Options and to authorize the grant of new Stock Options in
substitution therefor, provided that any such action may not, without the
written consent of an Optionee, impair any rights under any Stock Option
previously granted except as provided in Section 3 hereof. Any outstanding
Incentive Stock Option that is modified, extended, renewed or otherwise
altered shall be treated in accordance with Section 424(h) of the Code. The
Administrator shall not have the power to reduce the exercise price of
outstanding Stock Options.

Section 8. Privileges of Stock Ownership

No Optionee shall have any of the rights of a shareholder with
respect to any Shares subject to a Stock Option until such Stock Option is
properly exercised. No adjustment shall be made for dividends or distributions
or other rights for which the record date is prior to such date, except as
provided in this Plan. Upon written request, the Company shall provide to each
Optionee a copy of the annual financial statements of the Company at such time
after the close of each fiscal year of the Company as such statements are
released by the Company to its common shareholders generally.

Section 9. No Obligation to Employ

Nothing in this Plan nor any Stock Option granted under this Plan
shall confer on any Optionee any right to continue in the employ of, as a
director of, or other relationship with, the Company or any Parent, Subsidiary
or Affiliate of the Company or limit in any way the right of the Company or
any Parent, Subsidiary or Affiliate of the Company to terminate Optionee's
employment or other relationship at any time, with or without cause.

Section 10. Change in Control; Assumption of Stock Options by Successors

In the event of a Change in Control, any or all outstanding Stock
Options shall, unless otherwise provided in an applicable stock option
agreement or other agreement, accelerate and become exercisable in full upon
the occurrence of the Change in Control and shall expire immediately following
the occurrence of the Change in Control. To the extent required by applicable
law, the aggregate Fair Market Value of Incentive Stock Options which first
become exercisable in the year of such Change in Control cannot exceed
$100,000, and any remaining accelerated options shall be treated as
Non-Qualified Stock Options.

Section 11. Adoption and Shareholder Approval

This Plan shall become effective on April 23, 2001, the date the Plan
was adopted by the Board (the "Effective Date"). This Plan shall be approved
by the shareholders of the Company, in any manner permitted by applicable
corporate law, within twelve months before or after the date this Plan was
adopted by the Board. Upon the Effective Date, the Board may grant Stock
Options pursuant to this Plan; provided that, in the event that shareholder
approval is not obtained within the time period provided herein, all Stock
Options granted hereunder shall terminate. No Stock Option that is issued as a
result of any increase in the number of shares authorized to be issued under
this Plan shall be exercised prior to the time such increase has been approved
by the shareholders of the Company and all such Stock Options granted pursuant
to such increase shall similarly terminate if such shareholder approval is not
obtained.

Section 12. Term of Plan

Stock Options may be granted pursuant to this Plan from time to time
within a period of ten (10) years from the Effective Date.

Section 13. Amendment or Termination of Plan

Subject to Section 7 above, the Administrator may at any time
terminate or amend this Plan in any respect, including but not limited to,
amendment of any form of grant, exercise agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Administrator
shall not, without the approval of the shareholders of the Company, amend this
Plan in any manner that requires such shareholder approval pursuant to the
Code or the regulations promulgated thereunder or pursuant to the Exchange Act
or Rule 16b-3 (or its successor) promulgated thereunder, to the extent the
Administrator intends the Plan to comply with such foregoing requirement or
law.

Section 14. Unfunded Status of Plan.

The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to an Optionee by the
Company, nothing contained herein shall give any Optionee or persons any
rights that are greater than those of a general creditor of the Company.

Exhibit C
---------

GENELABS TECHNOLOGIES, INC.

2001 EMPLOYEE STOCK PURCHASE PLAN

Adopted by the Board of Directors on April 23, 2001

1. ESTABLISHMENT OF PLAN

The purpose of the Genelabs Technologies, Inc. 2001 Employee Stock
Purchase Plan (the "Plan") is to grant options for purchase of common stock,
no par value (the "Common Stock") of Genelabs Technologies, Inc. (the
"Company") to eligible employees of the Company and its Subsidiaries (as
hereinafter defined). For purposes of this Plan, "Parent Corporation" and
"Subsidiary" (collectively, "Subsidiaries") shall have the same meanings as
"parent corporation" and "subsidiary corporation" in Sections 424(e) and
424(f), respectively, of the Internal Revenue Code of 1986, as amended (the
"Code"). The Company intends the Plan to qualify as an "employee stock
purchase plan" under Section 423 of the Code (including any amendments to or
replacements of such Section), and the Plan shall be so construed. Any term
not expressly defined in the Plan but defined for purposes of Section 423 of
the Code shall have the same definition herein. A total of 4,000,000 shares of
the Company's Common Stock are reserved for issuance under the Plan subject to
certain adjustments as provided under Section 14 of the Plan.

2. PURPOSE

The purpose of the Plan is to provide employees of the Company and
Subsidiaries designated by the Board of Directors of the Company (the "Board")
as eligible to participate in the Plan with a convenient means of acquiring an
equity interest in the Company through payroll deductions, to enhance such
employees' sense of participation in the affairs of the Company and
Subsidiaries, and to provide an incentive for continued employment.

3. ADMINISTRATION

This Plan shall be administered by the Administrator. For purposes of
this plan, the "Administrator" shall mean the Board, or if and to the extent
the Board does not administer the Plan, a committee appointed by the Board
(the "Committee"). If the Committee is not comprised of "disinterested
persons" ("Disinterested Persons") as defined in Rule 16b-3(d) promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), at
the time the Company is registered under the Exchange Act, unless otherwise
determined by the Administrator, the Administrator shall appoint a Committee
consisting of not less than three (3) persons (who need not be members of the
Board), each of whom is a Disinterested Person. After registration of the
Company under the Exchange Act, unless otherwise determined by the
Administrator or the Board, Committee members who are not Disinterested
Persons may not vote on any matters affecting the administration of this Plan,
but any such member may be counted for determining the existence of a quorum
at any meeting of the Committee. Subject to the provisions of the Plan and the
limitations of Section 423 of the Code or any successor provision in the Code,
all questions of interpretation or application of the Plan shall be determined
by the Administrator and its

decisions shall be final and binding upon all participants. Members of the
Board shall receive no compensation for their services in connection with the
administration of the Plan, other than standard fees as established from time
to time by the Board for services rendered by Board members serving on Board
committees. All expenses incurred in connection with the administration of the
Plan shall be paid by the Company.

4. ELIGIBILITY

Any employee of the Company or the Subsidiaries is eligible to
participate in the Plan except the following:

(a) employees who are not employed by the Company or Subsidiaries on
the day before the Offering Date (as hereinafter defined);

(b) employees who are customarily employed for less than twenty (20)
hours per week;

(d) employees who, together with any other person whose stock would
be attributed to such employee pursuant to Section 424(d) of the Code, own
stock or hold options to purchase stock or who, as a result of being granted
an option under the Plan with respect to such Offering Period, would own stock
or hold options to purchase stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company or
any of its Subsidiaries.

5. OFFERING DATES

The offering periods of the Plan (each, an "Offering Period") shall
be of twenty-four (24) months duration commencing on January 1 and July 1 of
each year and ending on June 30 and December 31 of each year. Each Offering
Period shall consist of four (4) six-month purchase periods (individually, a
"Purchase Period") during which payroll deductions of the participants are
accumulated under the Plan. The first business day of each Offering Period is
referred to as the "Offering Date." The last business day of each Purchase
Period is referred to as the "Purchase Date." Notwithstanding the foregoing,
if the fair market value of the Company's Common Stock on any Purchase Date is
equal to or is less than such fair market value on an Offering Date, then the
Offering Period(s) for such Offering Date(s) shall immediately terminate and a
new Offering Period shall commence for those employees participating in such
terminated Offering Period(s) (See also Section 11(c) hereof). The
Administrator shall have the power to change the duration of Offering Periods
or Purchase Periods with respect to offerings without shareholder approval if
such change is announced at least fifteen (15) days prior to the scheduled
beginning of the first Offering Period or Purchase Period to be affected.

6. PARTICIPATION IN THE PLAN

Eligible employees may become participants in an Offering Period
under the Plan upon the commencement of the next Purchase Period after
satisfying the eligibility requirements by delivering a subscription agreement
to the Company's or Subsidiary's (whichever employs such employee) Treasury
Department (the "Treasury Department") not

later than the business day before such Offering Period begins unless an
earlier time for filing the subscription agreement authorizing payroll
deductions is set by the Administrator for all eligible employees with respect
to a given Offering Period. An eligible employee who does not deliver a
subscription agreement to the Treasury Department by such date after becoming
eligible to participate in such Offering Period shall not participate in that
Offering Period or any subsequent Offering Period unless such employee enrolls
in the Plan by filing a subscription agreement with the Treasury Department
not later than the business day preceding the beginning of a subsequent
Offering Period. Once an employee becomes a participant in an Offering Period,
such employee will automatically participate in the next Offering Period
unless the employee withdraws from the Plan or terminates further
participation in a Purchase Period as set forth in Section 11 hereof. Such
participant is not required to file any additional subscription agreement in
order to continue participation in the Plan.

7. GRANT OF OPTION ON ENROLLMENT

Enrollment by an eligible employee in the Plan with respect to an
Offering Period will constitute the grant (as of the Offering Date) by the
Company to such employee of an option to purchase on the Purchase Date up to
that number of shares of Common Stock of the Company determined by dividing
the amount accumulated in such employee's payroll deduction account during
such Purchase Period by the lesser of (i) eighty-five percent (85%) of the
fair market value of a share of the Company's Common Stock on the Offering
Date or (ii) eighty-five percent (85%) of the fair market value of a share of
the Company's Common Stock on the Purchase Date; provided, however, that the
number of shares of the Company's Common Stock subject to any option granted
pursuant to this Plan shall not exceed the limitations provided under Sections
10(a) and 10(b) below. Fair market value of a share of the Company's Common
Stock shall be determined as provided in Section 8 hereof.

8. PURCHASE PRICE

The purchase price per share at which a share of Common Stock will be
sold during any Offering Period shall be eighty-five percent (85%) of the
lesser of:

(a) The fair market value on the Offering Date; or

(b) The fair market value on the Purchase Date.

For purposes of the Plan, the term "fair market value" on a given
date shall mean the closing price from the previous day's trading of a share
of the Company's Common Stock as reported on the National Association of
Securities Dealers Automated Quotation ("Nasdaq") System or such other system
or exchange to which the shares of the Company's Common Stock are admitted to
trading or quotation, as determined by the Administrator.

9. PAYMENT OF PURCHASE PRICE; CHANGES IN PAYROLL
DEDUCTIONS; ISSUANCE OF SHARES

(a) The purchase price of the shares is accumulated by regular
payroll deductions made during each Purchase Period. The deductions are made
as a percentage of the participant's compensation in one percent (1%)
increments not less than one percent (1%) nor greater than fifteen percent
(15%), not to exceed $25,000 per year or such other limit set by the
Administrator. Compensation shall mean all cash compensation including, but
not

limited to, base salary, wages, commissions, overtime, shift premiums and
bonuses, plus draws against commissions; provided, however, that for purposes
of determining a participant's compensation, any election by such participant
to reduce his or her regular cash remuneration under Sections 125 or 401(k) of
the Code shall be treated as if the participant did not make such election.
Payroll deductions shall commence on the first payday following the Offering
Date and shall continue to the end of the Purchase Period unless sooner
altered or terminated as provided in the Plan.

(b) A participant may decrease (but not increase) the rate of payroll
deductions during a Purchase Period by filing with the Treasury Department a
new authorization for payroll deductions, in which case the new rate shall
become effective for the next payroll period commencing more than fifteen (15)
days after the Treasury Department's receipt of the authorization and shall
continue for the remainder of the Purchase Period unless changed as described
below. Such change in the rate of payroll deductions may be made at any time
during a Purchase Period, but not more than one change may be made effective
during any Purchase Period. A participant may increase or decrease the rate of
payroll deductions for any subsequent Purchase Period by filing with the
Treasury Department a new authorization for payroll deductions not later than
the business day before the beginning of such Purchase Period. An increase or
decrease in a participant's payroll deduction does not start a new Offering
Period.

(c) All payroll deductions made for a participant are credited to his
or her account under the Plan and are deposited with the general funds of the
Company. No interest accrues on the payroll deductions. All payroll deductions
received or held by the Company or a Subsidiary, respectively, may be used by
the Company or a Subsidiary, respectively, for any corporate purposes, and
neither the Company nor a Subsidiary shall be obligated to segregate such
payroll deductions.

(d) On each Purchase Date, so long as the Plan remains in effect and
provided that the participant has not submitted a signed and completed
withdrawal form before that date which notifies the Company or a Subsidiary,
respectively, that the participant wishes to withdraw from that Purchase
Period under the Plan and have all payroll deductions accumulated in the
account maintained on behalf of the participant as of that date returned to
the participant, the Company shall apply the funds then in the participant's
account to the purchase of whole shares of Common Stock reserved under the
option granted to such participant with respect to the Purchase Period to the
extent that such option is exercisable on the Purchase Date. The purchase
price per share shall be as specified in Section 8 of the Plan. Any cash
remaining in a participant's account after such purchase of shares shall be
refunded to such participant in cash, without interest; provided, however,
that any amount remaining in such participant's account on a Purchase Date
which is less than the amount necessary to purchase a full share of Common
Stock of the Company shall be carried forward, without interest, into the next
Purchase Period. In the event that the Plan has been oversubscribed, all funds
not used to purchase shares on the Purchase Date shall be returned to the
participant, without interest. No Common Stock shall be purchased on a
Purchase Date on behalf of any employee whose participation in the Plan has
terminated prior to such Purchase Date.

(e) As promptly as practicable after the Purchase Date, the Company
shall arrange the delivery to each participant of a certificate representing
the shares purchased upon exercise of his or her option; provided, however,
that the Administrator may deliver certificates to a broker or brokers that
hold such certificate in a street name for the benefit of each such
participant.

(f) During a participant's lifetime, such participant's option to
purchase shares hereunder is exercisable only by him or her. The participant
will have no interest or voting right in shares covered by his or her option
until such option has been exercised. Shares to be delivered to a participant
under the Plan will be registered in the name of the participant or in the
name of the participant and his or her spouse.

10. LIMITATIONS ON SHARES TO BE PURCHASED

(a) No employee shall be entitled to purchase stock under the Plan at
a rate which, when aggregated with his or her rights to purchase stock under
all other employee stock purchase plans of the Company or any Subsidiary,
exceeds $25,000 in fair market value, determined as of the Offering Date (or
such other limit as may be imposed by the Code) for each calendar year in
which the employee participates in the Plan.

(b) No employee shall be entitled to purchase more than the Maximum
Share Amount (as defined below) on any single Purchase Date. Not less than
thirty (30) days prior to the commencement of any Purchase Period, the
Administrator may, in its sole discretion, set a maximum number of shares
which may be purchased by any employee at any single Purchase Date
(hereinafter the "Maximum Share Amount"). If a new Maximum Share Amount is
set, then all participants must be notified of such Maximum Share Amount not
less than fifteen (15) days prior to the commencement of the next Purchase
Period. Once the Maximum Share Amount is set, it shall continue to apply with
respect to all succeeding Purchase Dates and Purchase Periods unless revised
by the Administrator as set forth above.

(c) If the number of shares to be purchased on a Purchase Date by all
employees participating in the Plan exceeds the number of shares then
available for issuance under the Plan, the Company will make a pro rata
allocation of the remaining shares in as uniform a manner as shall be
practicable and as the Administrator shall determine to be equitable. In such
event, the Company shall give written notice of such reduction of the number
of shares to be purchased under a participant's option to each participant
affected thereby.

(d) Subject to the provisions of Section 9(d) hereof, any payroll
deductions accumulated in a participant's account which are not used to
purchase stock due to the limitations in this Section 10 shall be returned to
the participant as soon as practicable after the end of the Purchase Period,
without interest.

11. WITHDRAWAL

(a) Each participant may withdraw from a Purchase Period under the
Plan by signing and delivering to the Treasury Department notice on a form
provided for such purpose. Such withdrawal may be elected at any time at least
fifteen (15) days prior to the end of a Purchase Period.

(b) Upon withdrawal from the Plan, the accumulated payroll deductions
shall be returned to the withdrawn participant, without interest, and his or
her interest in the Plan shall terminate. In the event a participant
voluntarily elects to withdraw from the Plan, he or she may not resume his or
her participation in the Plan during the same Purchase Period, but

he or she may participate in any Purchase Period under the Plan which
commences on a date subsequent to such withdrawal by filing a new
authorization for payroll deductions in the same manner as set forth above for
initial participation in the Plan.

(c) For an Offering Period in which a participant is enrolled, if the
fair market value of the Company's Common Stock on the Purchase Date is less
than it was on the Offering Date, the Company will automatically enroll such
participant in the subsequent Offering Period. A participant does not need to
file any forms with the Company to automatically be enrolled in the subsequent
Offering Period.

12. TERMINATION OF EMPLOYMENT

Termination of a participant's employment for any reason, including
retirement, death or the failure of a participant to remain an eligible
employee, immediately terminates his or her participation in the Plan. In such
event, the payroll deductions credited to the participant's account will be
returned to him or her or, in the case of his or her death, to his or her
legal representative, without interest. For purposes of this Section 12, an
employee will not be deemed to have terminated employment or failed to remain
in the continuous employ of the Company in the case of sick leave, military
leave, or any other leave of absence approved by the Administrator; provided,
however, that such leave is for a period of not more than ninety (90) days or
reemployment upon the expiration of such leave is guaranteed by contract or
statute.

13. RETURN OF PAYROLL DEDUCTIONS

In the event a participant's interest in the Plan is terminated by
withdrawal, termination of employment or otherwise, or in the event the Plan
is terminated by the Administrator, the Company shall promptly deliver to the
participant all payroll deductions credited to his or her account. No interest
shall accrue on the payroll deductions of a participant in the Plan.

14. CAPITAL CHANGES; CHANGE IN CONTROL

Subject to any required action by the shareholders of the Company,
the number of shares of Common Stock covered by each option under the Plan
which has not yet been exercised and the number of shares of Common Stock
which have been authorized for issuance under the Plan but have not yet been
placed under option (collectively, the "Reserves"), as well as the price per
share of Common Stock covered by each option under the Plan which has not yet
been exercised, shall be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock resulting from a stock split or
the payment of a stock dividend (but only on the Common Stock) or any other
increase or decrease in the number of shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Administrator, whose determination shall be final, binding and conclusive.
Except as expressly provided herein, no issue by the Company of shares of
stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an
option.

In the event of a Change in Control of the Company, the Offering
Periods shall terminate on such date as determined by the Administrator and
all payroll deductions on such date shall be used to purchase such number of
applicable shares of Common Stock unless otherwise provided by the
Administrator. For purposes of this Plan, "Change in Control" means a change
in the ownership or control of the Company, effected through any of the
following events:

(e) any "person," as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company; any trustee or other fiduciary
holding securities under an employee benefit plan of the Company; or any
company owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of Common Stock of the
Company) is or becomes, after the Effective Date (as defined in Section 25
hereof), the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company (not including in
the securities beneficially owned by such person any securities acquired
directly from the Company or its affiliates) representing twenty-five percent
(25%) or more of the combined voting power of the Company's then outstanding
securities;

(f) during any period of two consecutive years (not including any
period prior to the Effective Date), individuals who at the beginning of such
period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (c) or (d) of this definition)
whose election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;

(g) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least sixty percent (60%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (B) a merger or consolidation effected
to implement a recapitalization of the Company (or similar transaction) in
which no person acquires more than fifty percent (50%) of the combined voting
power of the Company's then outstanding securities; or

(h) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.

The Administrator may, if it so determines in the exercise of its
sole discretion, also make provision for adjusting the Reserves, as well as
the price per share of Common Stock covered by each outstanding option, in the
event that the Company effects one or more reorganizations, recapitalizations,
rights offerings or other increases or reductions of shares of its outstanding
Common Stock, or in the event of the Company being consolidated with or merged
into any other corporation.

15. NONASSIGNABILITY

Neither payroll deductions credited to a participant's account nor
any rights with regard to the exercise of an option or to receive shares under
the Plan may be assigned, transferred, pledged or otherwise disposed of in any
way (other than by will, the laws of descent and distribution or as provided
in Section 22 hereof) by the participant. Any such attempt at assignment,
transfer, pledge or other disposition shall be without effect.

16. REPORTS

Individual accounts will be maintained for each participant in the
Plan. Each participant shall receive promptly after the end of each Purchase
Period a report of his or her account setting forth the total payroll
deductions accumulated, the number of shares purchased, the per share price
thereof and the remaining cash balance, if any, carried forward to the next
Purchase Period.

17. NOTICE OF DISPOSITION

Each participant shall notify the Company if the participant disposes
of any of the shares of Common Stock purchased in any Purchase Period pursuant
to this Plan if such disposition occurs within two years from the Offering
Date or within one year from the Purchase Date on which such shares were
purchased (the "Notice Period"). Unless such participant is disposing of any
of such shares during the Notice Period, such participant shall keep the
certificates representing such shares in his or her name (and not in the name
of a nominee) during the Notice Period. The Company may, at any time during
the Notice Period, place a legend or legends on any certificate representing
shares acquired pursuant to the Plan requesting the Company's transfer agent
to notify the Company of any transfer of the shares. The obligation of the
participant to provide such notice shall continue notwithstanding the
placement of any such legend on the certificates.

18. NO RIGHTS TO CONTINUED EMPLOYMENT

Neither this Plan nor the grant of any option hereunder shall confer
any right on any employee to remain in the employ of the Company or any
Subsidiary, or restrict the right of the Company or any Subsidiary to
terminate such employee's employment.

19. EQUAL RIGHTS AND PRIVILEGES

All eligible employees shall have equal rights and privileges with
respect to the Plan so that the Plan qualifies as an "employee stock purchase
plan" within the meaning of Section 423 or any successor provision of the Code
and the related regulations. Any provision of the Plan which is inconsistent
with Section 423 or any successor provision of the Code shall, without further
act or amendment by the Company or the Administrator, be reformed to comply
with the requirements of Section 423. This Section 19 shall take precedence
over all other provisions in the Plan.

20. NOTICES

All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form

specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof.

21. SHAREHOLDER APPROVAL OF AMENDMENTS

Any required approval by the shareholders of the Company shall be
solicited substantially in accordance with Section 14(a) of the Exchange Act,
and the rules and regulations promulgated thereunder. Such approval of an
amendment shall be solicited at or prior to the first annual meeting of
shareholders held subsequent to the grant of an option under the Plan to an
employee of the Company. If such shareholder approval is obtained at a duly
held shareholders' meeting, it must be obtained by a majority of all of the
outstanding shares of the Company, or if such shareholder approval is obtained
by written consent, it must be obtained by a majority of all shareholders of
the Company; provided, however, that approval at a meeting or by written
consent may be obtained by a lesser degree of shareholder approval if the
Administrator determines, in its discretion after consultation with the
Company's legal counsel, that such lesser degree of shareholder approval will
comply with all applicable laws and will not adversely affect the
qualification of the Plan under Section 423 of the Code or Rule 16b-3
promulgated under the Exchange Act ("Rule 16b-3").

22. DESIGNATION OF BENEFICIARY

(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account
under the Plan in the event of such participant's death subsequent to the end
of a Purchase Period but prior to delivery to him or her of such shares and
cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under
the Plan in the event of such participant's death prior to a Purchase Date.

(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is
living at the time of such participant's death, the Company shall deliver such
shares or cash to the executor or administrator of the estate of the
participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver
such shares or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may designate.

23. CONDITIONS UPON ISSUANCE OF SHARES;
LIMITATION ON SALE OF SHARES

Shares shall not be issued with respect to an option unless the
exercise of such option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law, domestic or
foreign, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
and the requirements of any stock exchange upon which the shares may then be
listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

24. APPLICABLE LAW

The Plan shall be governed by the substantive laws (excluding the
conflict of laws rules) of the State of California.

25. AMENDMENT OR TERMINATION OF THE PLAN

This Plan shall be effective April 23, 2001 (the "Effective Date"),
subject to approval by the shareholders of the Company within twelve (12)
months after the date the Plan is adopted by the Board and the Plan shall
continue until the earlier to occur of termination by the Administrator,
issuance of all of the shares of Common Stock reserved for issuance under the
Plan, or ten (10) years from the adoption of the Plan by the Board. No
purchase of shares of Common Stock pursuant to the Plan shall occur prior to
such shareholder approval. The Administrator may at any time amend or
terminate the Plan, except that any such termination cannot affect options
previously granted under the Plan, nor may any amendment make any change in an
option previously granted which would adversely affect the right of any
participant without such participant's consent, nor may any amendment be made
without approval of the shareholders of the Company obtained in accordance
with Section 21 hereof within 12 months of the adoption of such amendment (or
earlier if required by Section 21) if such amendment would:

(a) increase the number of shares that may be issued under the Plan;

(b) change the designation of the employees (or class of employees)
eligible for participation in the Plan; or

(c) constitute an amendment for which shareholder approval is
required in order to comply with Rule 16b-3 (or any successor rule) of the
Exchange Act.